EXHIBIT 10.3
FORM OF
WARRANT AGREEMENT
THIS AGREEMENT is made and entered into as of the ____ day of ___________,
2003 by and between XXX COUNTY BANCSHARES, INC., a Georgia corporation (the
"Corporation"), and _________________________ (the "Warrant Holder").
W I T N E S S E T H
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WHEREAS, the Warrant Holder has served as an organizer in the formation of
the Corporation and the formation and establishment of First National Bank of
Xxx County (Proposed) (the "Bank"), the wholly owned subsidiary of the
Corporation; and
WHEREAS, the Warrant Holder has purchased __________ shares of the
Corporation's common stock, $1.00 par value per share (the "Common Stock"), at a
price of $_____ per share; and
WHEREAS, the Warrant Holder will provide services to the Corporation as a
director of the Corporation and the Bank; and
WHEREAS, the Corporation, in recognition of the financial risk undertaken
by the Warrant Holder in organizing the Bank and the Corporation and in order to
encourage the Warrant Holder's continued involvement in the successful operation
of the Corporation and the Bank, desires to issue to the Warrant Holder the
right to acquire additional shares of the Corporation's Common Stock.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement agree as follows:
1. Grant of Warrant. Subject to the terms, restrictions, limitations
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and conditions stated in this Agreement, the Corporation hereby grants to the
Warrant Holder the right (the "Warrant") to purchase all or any part of an
aggregate of _____________ shares of the Common Stock, subject to adjustment in
accordance with Section 6 of this Agreement. The aggregate number of shares of
Common Stock which the Company grants the Warrant Holder the right to purchase
under this Agreement shall be no greater than the number of shares of Common
Stock subscribed by the Warrant Holder upon organizing the Bank.
2. (a). Term. The term for the exercise of this Warrant begins at
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9:00 a.m., Eastern Time, on the first anniversary of the date that the
Corporation first issues its common stock (the "Issue Date"). The term for the
exercise of this Warrant ends at 5:00 p.m., Eastern Time (the "Expiration
Time"), on the earlier of:
(i) the tenth anniversary of the Issue Date, or
(ii) 90 days after the Warrant Holder ceases to serve as a director of
the Corporation; provided, however, that if the Warrant Holder ceases to be
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a director because he is disabled or is deceased, then the Warrant Holder
(or his estate) will have until twelve months after the Warrant Holder
ceases to serve as a director of the Company to exercise this Warrant.
(b) Required Exercise. Notwithstanding any other provision of this
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Agreement, if the Bank's capital falls below the minimum requirements as
determined by the primary federal or state regulator of the Corporation or
the Bank (the "Regulator"), the Regulator may direct the Corporation to
require the Warrant Holder to exercise or forfeit his or her Warrant. The
Corporation will notify the Warrant Holder within 45 days from the date the
Regulator notifies the Corporation in writing that the Warrant Holder must
exercise or forfeit his or her Warrant. The Corporation will cancel this
Warrant if it is not exercised within 21 days of the Corporation's
notification to the Warrant Holder. The Corporation agrees to comply with
any Regulator's request that the Corporation invoke its right to require
the Warrant Holder to exercise or forfeit his or her Warrant under the
circumstances stated above.
(c) Vesting. The Warrant will vest in annual one-third (1/3)
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increments over a period of three years, beginning on the first anniversary
of the Issue Date. The vested portion of the Warrant may be exercised in
whole, or from time to time in part, at any time prior to the Expiration
Time. In the event of permanent disability or death of the Warrant Holder,
any unvested portion of the Warrant shall become fully vested to the
Warrant Holder (or his or her estate).
3. Purchase Price. The price per share to be paid by the Warrant
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Holder for the shares of Common Stock subject to this Warrant shall be $10,
subject to adjustment as set forth in Section 6 of this Agreement (the price, as
adjusted, is called the "Purchase Price").
4. Exercise of Warrant. The Warrant Holder may exercise this Warrant
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from time to time, in whole or in part, by delivering the following to the
Corporation:
(a) Written notice of exercise specifying the number of shares of
Common Stock with respect to which this Warrant is being exercised at such
time; And
(b) A cashier's or certified check payable to the Corporation for the
full amount of the aggregate Purchase Price for the number of shares as to
which this Warrant is being exercised at such time.
The Warrant Holder must deliver the notice of exercise and the cashier's or
certified check to the address of the Corporation as set forth in Section 11(a)
of this Agreement or any other address that the Corporation requests.
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5. Issuance of Shares. Upon receipt of the items set forth in Section
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4 of this Agreement, and subject to the terms of this Agreement, the Corporation
shall deliver to the Warrant Holder stock certificates for the number of shares
specified in the notice to exercise, and shall register the share or shares in
the name of the Warrant Holder. In no event shall the Corporation be required to
issue or deliver any certificate for shares of Common Stock purchased upon the
exercise of this Warrant or any portion of this Warrant prior to the fulfillment
of the following conditions:
(a) The admission of such shares for listing on all stock exchanges on
which the Common Stock is then listed;
(b) The completion of any registration or other qualification of such
shares which the Corporation shall deem necessary or advisable under any
federal or state law or under the rulings or regulations of the Securities
and Exchange Commission or any other governmental regulatory body; or
(c) The obtaining of any approval or other clearance from any federal
agency or body, which the Corporation shall determine to be necessary or
advisable.
(d) The lapse of such reasonable period of time following the exercise
of this Warrant as the Corporation may from time to time establish for
reasons of administrative convenience.
The Corporation shall have no obligation to obtain the fulfillment of these
conditions; provided, however, that the Warrant Holder shall have one full
calendar year after these conditions have been fulfilled to exercise his or her
Warrant, notwithstanding any other provision in this Agreement.
6. Antidilution, Etc.
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(a) If, prior to the Expiration Time, the Corporation shall subdivide
its outstanding shares of Common Stock into a greater number of shares, or
declare and pay a dividend of its Common Stock payable in additional shares
of its Common Stock, the Purchase Price, as then in effect, shall be
proportionately reduced, and the Corporation shall proportionately increase
the number of shares of Common Stock then subject to exercise under this
Warrant (and not previously exercised).
(b) If, prior to the Expiration Time, the Corporation shall combine
its outstanding shares of the Common Stock into a smaller number of shares,
the Purchase Price, as then in effect, shall be proportionately increased,
and the Corporation shall proportionately reduce the number of shares of
Common Stock then subject to exercise under this Warrant (and not
previously exercised).
7. Reorganization, Reclassification, Consolidation or Merger. If,
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prior to the Expiration Time, there shall be any reorganization or
reclassification of the Common Stock (other than a subdivision or combination of
shares provided for in Section 6 of this Agreement), or any consolidation or
merger of the Corporation with another entity, the Warrant Holder shall be
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entitled to receive, during the remainder of the term of this Agreement and upon
payment of the Purchase Price, the number of shares of stock or other securities
or property of the Corporation or of the successor entity (or its parent
company) resulting from such consolidation or merger, as the case may be, to
which a holder of the Common Stock, deliverable upon the exercise of this
Warrant, would have been entitled upon such reorganization, reclassification,
consolidation or merger; and in any case, the Corporation shall make appropriate
adjustments (as determined by the Board of Directors of the Corporation in its
sole discretion) in the application of the provisions with respect to the rights
and interests of the Warrant Holder so that the provisions set forth in this
Agreement (including the adjustment of the Purchase Price and the number of
shares issuable upon the exercise of this Warrant) shall be applicable, as near
as may reasonably be practicable, to any shares or other property thereafter
deliverable upon the exercise of this Warrant.
8. Transfer and Assignment.
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(a) During the Warrant Holder's lifetime, this Warrant and any rights
under this Agreement shall be exercisable only by the Warrant Holder (or by
the Warrant Holder's guardian or legal representative, should one be
appointed). Except assignments or transfers of the vested portion of this
Warrant made by will or under the laws of descent and distribution, this
Warrant or any rights under this Agreement may not be assigned,
transferred, pledged or hypothecated in any way (whether by operation of
law or otherwise) and shall not be subject to execution, attachment or
similar process. Any attempted assignment, transfer, pledge, hypothecation
or other disposition of this Warrant except as provided for in this Section
8 shall be null and void and without legal effect.
(b) Shares of Common Stock acquired by exercise of this Warrant
granted in this Agreement may not be transferred or sold unless the
transfer is exempt from further regulatory approval or otherwise
permissible under applicable law, including state and federal securities
laws, and will bear a legend to this effect.
9. Notice of Adjustments. Within thirty (30) days following the
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determination of any adjustment provided for in Section 6 or Section 7 of this
Agreement, the Corporation shall give written notice of such adjustment to the
Warrant Holder at the address set forth in Section 10(a) of this Agreement or
such other address as the Warrant Holder may request. The notice shall state the
Warrant Purchase Price as adjusted and the increased or decreased number of
shares purchasable upon the exercise of this Warrant and shall set forth in
reasonable detail the method of calculation of each.
10. Miscellaneous.
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(a) All notices, requests, demands and other communications required
or permitted hereunder shall be in writing and shall be deemed to have been
duly given when delivered by hand, telegram or facsimile transmission, or
if mailed, by postage prepaid first class mail, on the third business day
after mailing, to the following address (or at such other address as a
party may notify the other hereunder):
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To the Corporation:
Xxx County Bancshares, Inc.
Executive Xxxx Xxxxx
Xxxxx 0000X
Xxxxxxx, Xxxxxxx 00000
Attention: __________
To the Warrant Holder:
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(b) The Corporation covenants that it has reserved and will keep
available, solely for the purpose of issue upon the exercise of this
Warrant, a sufficient number of shares of Common Stock to permit the
exercise hereof in full.
(c) No holder of this Warrant, as such, shall be entitled to vote or
receive dividends with respect to the shares of Common Stock subject to
this Warrant or be deemed to be a shareholder of the Corporation for any
purpose until such Common Stock has been issued.
(d) This Agreement shall constitute the entire agreement contemplated
by the Corporation and the Warrant Holder and may be amended only by an
instrument in writing executed by the party against whom enforcement of the
amendment is sought.
(e) This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the
same instrument.
(f) This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Georgia.
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IN WITNESS WHEREOF, the Corporation has caused this Agreement to be signed
by its duly authorized officers and its corporate seal to be affixed hereto, and
the Warrant Holder has executed this Agreement under seal, all as of the day and
year first above written.
XXX COUNTY BANCSHARES, INC.
By:
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Print Name:
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Title:
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WARRANT HOLDER
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Print Name:
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