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EXHIBIT 10.5
NONQUALIFIED STOCK OPTION AGREEMENT BETWEEN
FRONTIER NATIONAL CORPORATION AND
XXXXX X. XXXXX, XX.
SIGNED ON DECEMBER 20, 1999
EFFECTIVE AUGUST 24, 1998
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APPENDIX B
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this "Agreement") is made as
of the 20TH day of DECEMBER 1999 effective AUGUST 24, 1998 (the "Date of
Grant"), by and between Frontier National Corporation, an Alabama corporation
("Corporation"), and XXXXX X. XXXXX, XX. ("Participant").
WHEREAS, Corporation has adopted its 1999 Statutory-Nonstatutory Stock
Option Plan (the "Plan"); and
WHEREAS, the committee chosen by Corporation to administer the Plan
(the "Committee") has determined that Participant is eligible to receive an
option to purchase shares of common stock, $5.00 par value, of Corporation
("Stock") under a non-qualified stock option and has determined that it is in
the best interest of Corporation to grant the stock option documented herein to
Participant.
NOW, THEREFORE, in consideration of the foregoing, of the mutual
promises hereinafter set forth and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto do
hereby agree as follows:
XVIII. Grant of Option. Corporation hereby grants to Participant the
right to purchase TEN THOUSAND (10,000) shares of Stock (the "Option Shares") at
a price of TEN DOLLARS ($10.00) per Option Share (the "Option Price"), in
accordance with the terms of this Agreement and the Plan (the "Option"). The
Committee, exercising good faith, has determined that the Option Price is equal
to at least one hundred percent (100%) of the fair market value of a share of
Stock on the date hereof. The Option is not intended by the parties hereto to
be, and shall not be treated as, an incentive stock option (as such term is
defined under section 422 of the Internal Revenue Code of 1986 (the "Code")).
XIX. Termination of Option.
(i) Termination Date. The Option and all rights hereunder with
respect thereto, to the extent such rights shall not have been previously
exercised or otherwise terminated, shall terminate and become null and void on
AUGUST 24, 2008 at 5:00 P.M. (the "Termination Date").
(ii) Death or Disability. Upon Participant's death or
disability (within the meaning of Section 22(e)(3) of the Code), the Option may
be exercised, to the extent not previously exercised, by Participant's legal
representative, the legatees of the Option under Participant's Will or the
distributees of the Option under the applicable laws of descent and distribution
until the Termination Date, but only to the extent that the Option would
otherwise have been exercisable by Participant.
(iii) Termination of Participant's Service to Corporation. The
termination of Participant's service as an employee, director or advisory
director of Corporation shall have no effect on the Option, provided, however,
notwithstanding any other provisions set forth herein or in the Plan, if
Participant shall commit any act of malfeasance or wrongdoing affecting
Corporation or any affiliated corporation as determined by the Committee in its
sole discretion, any unexercised portion of the Option shall immediately
terminate and become void.
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XX. Installment Exercise. Subject to such further limitations as are
provided herein, the Option shall become fully vested and exercisable, in whole
or in part, upon this Agreement being duly executed by the Corporation and
Participant.
XXI. Exercise of Option. The Option, or any portion of the Option
eligible to be exercised by the Participant and not previously exercised, may be
exercised at any time or times prior to the termination of the Option pursuant
to the provisions hereof. The Option may be exercised only if compliance with
all Federal and state securities laws can be effected and only by (i)
Participant's completion, execution and delivery to Corporation of a notice of
exercise and "investment letter" in the form attached hereto as Exhibit A, and
(ii) Participant's payment to Corporation of an amount equal to the sum of the
amount obtained by multiplying the Option Price by the number of Option Shares
being purchased plus any withholding tax required by law as determined by
Corporation. Payment shall be made by check payable to Corporation or such other
medium of payment as the Committee shall approve. Upon the exercise of the
Option by Participant, or as soon thereafter as is practicable, Corporation
shall issue and deliver to Participant a certificate or certificates evidencing
such number of Option Shares as Participant has so elected to purchase. Such
certificate or certificates shall be registered in the name of Participant and
shall bear any legend required by any Federal or state securities law or
agreement as Corporation shall determine.
XXII. Transferability of Option. The Option may not be transferred,
assigned, pledged or hypothecated (whether by operation of law or otherwise),
except that the Option may be transferred upon the death of Participant as
provided by Participant's Will or the applicable laws of descent or
distribution. The Option shall not be subject to execution, attachment or
similar process. Any attempted assignment, transfer, pledge, hypothecation or
other disposition of the Option, or levy of attachment or similar process upon
the Option not specifically permitted herein shall be null and void and without
effect. Notwithstanding the provisions of this Section, Participant, at any time
prior to his death, may assign all or any portion of the Option to (i) his
spouse or lineal descendant, (ii) the trustee of a trust for the primary benefit
of his spouse and lineal descendant, (iii) a partnership of which his spouse and
lineal descendants are the only partners, or (iv) a tax exempt organization as
described in Section 501(c)(3) of the Code. Any such assignment will be
permitted only if (i) Participant does not receive any consideration therefore,
and (ii) the assignment is permitted by the Plan. Any such assignment shall be
evidenced by an appropriate written document executed by Participant, and a copy
thereof shall be delivered to Corporation prior to the effective date of the
assignment. Any permitted transferee will be entitled to all of the rights of
Participant with respect to the assigned portion of the Option, and such portion
of the Option will continue to be subject to all of the then existing terms,
conditions and restrictions applicable to the Option, as set forth herein and in
the Plan.
XXIII. Adjustments. In the event of the declaration of any stock
dividend on the Stock or in the event of any reorganization, merger,
consolidation, acquisition, separation, recapitalization, split-up, combination
or exchange of shares of Stock, or like adjustment, the number of shares of
Stock and the class of shares of Stock available pursuant to the Option, and the
Option Price, shall be adjusted proportionately as determined by the Committee,
whose determination shall be conclusive. Notwithstanding the foregoing, in the
event of such a reorganization, merger, consolidation, acquisition, separation,
recapitalization, split-up, combination or exchange of shares of stock, or like
adjustment which results in substantially all the shares of the Stock of
Corporation being exchanged for, or converted into cash or other property, the
Committee or Corporation shall have the right to terminate the Option as of the
date of the exchange or conversion in which case the Option shall convert into
the right to receive such cash or property net of the Option Price of the
Options.
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XXIV. Termination, Suspension or Amendment of Option. The Committee or
Corporation may at any time terminate, suspend or amend the Plan or this
Agreement.
XXV. Postponement of Exercise. The Committee or Corporation may
postpone any exercise of the Option for such time as it may deem necessary in
order to permit Corporation (i) to effect, amend or maintain any necessary
registration of the Plan or the shares of Stock issuable upon the exercise of
the Option under the Securities Act of 1933, as amended (the "Act"), or the
securities laws of any applicable jurisdiction, (ii) to permit any action to be
taken in order to (A) list such shares of Stock on a stock exchange if shares of
Stock are then listed on such exchange or (B) comply with restrictions or
regulations incident to the maintenance of a public market for its shares of
Stock, including any rules or regulations of any stock exchange on which the
shares of Stock are listed, or (iii) to determine that such shares of Stock and
the Plan are exempt from such registration or that no action of the kind
referred to in (ii)(B) above needs to be taken; and Corporation shall not be
obligated by virtue of any terms and conditions of this Agreement or any
provision of the Plan to recognize the exercise of the Option or to sell or
issue shares of Stock in violation of the Act or any state's securities laws.
Any such postponement shall not extend the terms of the Option and neither
Corporation nor its directors or officers or the Committee shall have any
obligation or liability to Participant or to any other person with respect to
any shares of Stock as to which the Option shall lapse because of such
postponement.
XXVI. Participant's Rights. The granting of the Option shall impose no
obligation upon Participant to exercise such Option. Participant shall have no
equity interest in Corporation, nor shall Participant have any voting, dividend,
liquidation or dissolution rights with respect to any capital stock of
Corporation solely by reason of having the Option or having executed this
Agreement. Upon the issuance and delivery of a certificate for Option Shares
after exercise of the Option, Participant shall have the rights of a stockholder
with respect to such Option Shares and to receive all dividends or other
distributions paid or made with respect thereto. Nothing in this Agreement or
the Plan shall confer upon Participant the right to continue as a member of the
Board of Directors of Corporation or affect any right which Corporation may have
to remove such Participant as a director of Corporation.
XXVII. Elimination of Fractional Shares. If this Agreement requires a
computation of the number of shares of Stock subject to the Option, and the
number so computed is not a whole number of shares of Stock, such number of
shares of Stock shall be rounded down to the next whole number.
XXVIII. Shareholders' Agreement. Participant agrees to execute any
Shareholders' Agreement which all other shareholders of Corporation are subject
prior to delivery of any Stock upon the exercise of the Option. All Stock
delivered to Participant pursuant to the exercise of the Option shall be subject
to any Shareholders' Agreement previously entered into by Participant relating
to the Stock.
XXIX. Incorporation of Plan by Reference. The Option is granted
pursuant to the terms of the Plan, a copy of which is attached hereto as Exhibit
"B" and the terms of which are incorporated herein by reference. The Option
shall in all respects be interpreted in accordance with the Plan. The Committee
shall interpret and construe the Plan and this Agreement, and its
interpretations and determinations shall be conclusive and binding on the
parties hereto and any other person claiming an interest hereunder, with respect
to any issue arising hereunder or thereunder. The provisions of the Plan shall
control in the event of any inconsistencies between this Agreement and the Plan.
XXX. Entire Agreement. This Agreement sets forth all of the promises,
agreements, conditions, understandings, warranties and representations between
the parties hereto with respect to the Option and
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the Shares. This Agreement is an integration of any and all prior agreements or
understandings, oral or written, with respect to the Option and the Shares.
XXXI. Notices. Any and all notices provided for herein shall be
sufficient if in writing, and sent by hand delivery or by certified or
registered mail (return receipt requested and first class postage prepaid), in
the case of Corporation, to its principal office, and, in the case of
Participant, to Participant's address as shown on Corporation's records.
XXXII. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Alabama.
XXXIII. Modifications. Except as otherwise provided in Section 5, 6 and
7 herein, no change or modification of this Agreement shall be valid unless the
same is in writing and signed by the parties hereto.
XXXIV. Successors. This Agreement shall be binding on all permitted
successors and assigns of Participant including any estate, executors or
administrators, trustees, or personal or legal representatives, and, in such
event all references herein to Participant shall, to the extent applicable, be
deemed to refer to and include such estate, executors or administrators,
trustees or personal or legal representatives, as the case may be.
IN WITNESS WHEREOF, Corporation and Participant have executed this
Agreement as of the day and year first above written.
FRONTIER NATIONAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
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Title: Chairman, Compensation Committee
PARTICIPANT:
/s/ Xxxxx X. Xxxxx, Xx.
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Signature of Participant
Xxxxx X. Xxxxx, Xx.
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Printed Name of Participant
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