Exhibit 10.2
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (the "Agreement"), between The Tredegar
Trust Company, a Virginia corporation ("Issuer"), and Independent Community
Bankshares, Inc., a Virginia corporation ("Grantee"), is dated as of __________
__, 1997.
WHEREAS, Grantee and Issuer have entered into a letter of intent dated
_______ __, 1997 (the "Letter") concerning the proposed acquisition by Grantee
of Issuer pursuant to an Agreement and Plan of Reorganization (the "Plan"),
providing for, among other things, the merger of Issuer with a wholly-owned
subsidiary of Grantee (the "Subsidiary") with Issuer as the surviving
corporation; and
WHEREAS, as a condition and inducement to Grantee's execution of the
Letter and the Plan, Grantee has required that Issuer agree, and Issuer has
agreed, to grant Grantee the Option (as defined below);
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and in
the Plan, and intending to be legally bound hereby, Issuer and Grantee agree as
follows:
1. Defined Terms. Capitalized terms which are used but not
defined herein shall have the meanings ascribed to such terms in the Letter.
2. Grant of Option. Subject to the terms and conditions set
forth herein, Issuer hereby grants to Grantee an irrevocable option (the
"Option") to purchase up to 68,800 shares (the "Option Shares") of the Issuer's
Common Stock at a purchase price of $7.00 per Option Share (the "Purchase
Price").
3. Exercise of Option.
(a) Provided that Grantee shall not be in material breach
of the agreements or covenants contained in this Agreement or in the
Letter or, when executed, the Plan, Grantee may exercise the Option, in
whole or in part, at any time and from time to time following the
occurrence of a Purchase Event; provided, that the Option shall
terminate and be of no further force and effect upon the earliest to
occur of (A) the effective time of the merger of the Subsidiary into
Issuer, (B) termination of the Letter (including any termination of
negotiations undertaken pursuant to the Letter because of the inability
of the parties to reach agreement on the Plan despite their good faith
efforts) or, when executed, Plan in accordance with the terms thereof
prior to the occurrence of a Purchase Event or a Preliminary Purchase
Event (other than a termination of the Letter or, when executed, the
Plan by Grantee due to a breach by Issuer of a covenant or agreement
contained in the Letter or Plan, as the case may be (a "Default
Termination")), (C) twelve (12) months after the termination of the
Letter or Plan by Grantee pursuant to a Default Termination (provided,
however, that if within twelve (12) months after such a termination of
the Letter or Plan, a Purchase Event or Preliminary Purchase Event
shall occur, then notwithstanding anything to the contrary contained
herein this Option shall terminate twelve (12) months after the first
occurrence of such an event), and (D) twelve (12) months after
termination of the Letter or Plan (other than pursuant to a Default
Termination) following the occurrence of a Purchase Event or a
Preliminary Purchase Event; and provided, further, that any purchase of
Option Shares upon exercise of the Option shall be
subject to compliance with applicable law, including, without
limitation, the Bank Holding Company Act of 1956, as amended (the "BHC
Act"). The rights set forth in Section 8 shall terminate when the right
to exercise the Option terminates (other than as a result of a complete
exercise of the Option) as set forth above.
(b) As used herein, a "Purchase Event" means any of the
following events:
(i) Issuer shall have authorized, recommended or
publicly-proposed, or publicly announced an intention to
authorize, recommend or propose, or entered into an agreement
with any person (other than Grantee or any subsidiary of
Grantee) to effect an Acquisition Transaction (as defined
below). As used herein, the term Acquisition Transaction shall
mean (A) a merger, consolidation or similar transaction
involving Issuer or any of its subsidiaries (other than
transactions solely between Issuer's subsidiaries), (B) the
disposition, by sale, lease, exchange or otherwise, of assets
of Issuer or any of its subsidiaries representing
substantially all of the consolidated assets of Issuer and its
subsidiaries, or (C) the issuance, sale or other disposition
of (including by way of merger, consolidation, share exchange
or any similar transaction) securities representing 9.9% or
more of the voting power of Issuer or any of its subsidiaries
(any of the foregoing an "Acquisition Transaction"); or
(ii) any person (other than Grantee or any
subsidiary of Grantee) shall have acquired beneficial
ownership (as such term is defined in Rule 13d-3 promulgated
under the Securities Exchange Act of 1934, as amended (the
"1934 Act")) of or the right to acquire beneficial ownership
of, or any "group" (as such term is defined under the 0000
Xxx) shall have been formed which beneficially owns or has
the right to acquire beneficial ownership of, 9.9% or more
of the then outstanding shares of Issuer, Common Stock.
(c) As used herein, a "Preliminary Purchase Event" means
any of the following events:
(i) any person (other than Grantee or any
subsidiary of Grantee) shall have commenced (as such term is
defined in Rule 14d-2 under the 0000 Xxx) or shall have
filed a registration statement under the Securities Act of
1933, as amended (the "1933 Act"), with respect to, a tender
offer or exchange offer to purchase any shares of Issuer
Common Stock such that, upon consummation of such offer,
such person would own or control five percent (5%) or more
of the then outstanding shares of Issuer Common Stock (such
an offer being referred to herein as a "Tender Offer" or an
"Exchange Offer", respectively); or
(ii) the holders of Issuer Common Stock shall not
have approved the Plan at the meeting of such stockholders
held for the purpose of voting on the Plan, such meeting shall
not have been held or shall have been canceled prior to
termination of the Plan or Issuer's Board of Directors shall
have withdrawn or modified in a manner adverse to Grantee the
recommendation of Issuer's Board of Directors with respect to
the Plan, in each case after it shall have been publicly
announced that any person (other than Grantee or any
subsidiary of Grantee) shall have (A) made, or disclosed an
intention to make, a proposal to engage in an Acquisition
Transaction, (B) commenced a Tender Offer or filed a
registration statement under the 1933 Act with respect to an
Exchange Offer, or (C) filed an application (or given a
notice), whether in draft or final form, under applicable law
for approval to engage in an Acquisition Transaction.
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As used in this Agreement, "person" shall have the meaning
specified in Sections 3(a)(9) and 13(d)(3) of the 1934 Act.
(d) In the event Grantee wishes to exercise the Option,
it shall send to Issuer a written notice (the date of which being
herein referred to as the "Notice Date") specifying (i) the total
number of Option Shares it intends to purchase pursuant to such
exercise, and (ii) a place and date not earlier than three business
days nor later than fifteen (15) business days from the Notice Date
for the closing (the "Closing") of such purchase (the "Closing Date").
If prior notification to or approval of the Board of Governors of the
Federal Reserve System (the "Federal Reserve Board") or any other
regulatory authority is required in connection with such purchase,
Issuer shall cooperate with Grantee in the filing of the required
notice of application for approval and the obtaining of such approval
and the Closing shall occur immediately following such regulatory
approvals (and any mandatory waiting periods).
4. Payment and Delivery of Certificates.
(a) On each Closing Date, Grantee shall (i) pay to
Issuer, in immediately available funds by wire transfer to a bank
account designated by Issuer, an amount equal to the Purchase Price
multiplied by the number of Option Shares to be purchased on such
Closing Date, and (ii) present and surrender this Agreement to Issuer
at the address of Issuer specified in Section 12(f) hereof.
(b) At each Closing, simultaneously with the delivery of
immediately available funds and surrender of this Agreement as provided
in Section 4(a), (i) Issuer shall deliver to Grantee (A) a certificate
or certificates representing the Option Shares to be purchased at such
Closing, which Option Shares shall be free and clear of all liens,
claims, charges and encumbrances of any kind whatsoever and subject to
no preemptive rights, and (B) if the Option is exercised in part only,
an executed new agreement with the same terms as this Agreement
evidencing the right to purchase the balance of the shares of Issuer
Common Stock purchasable hereunder, and (ii) Grantee shall deliver to
Issuer a letter agreeing that Grantee shall not offer to sell or
otherwise dispose of such Option Shares in violation of applicable
federal and state law or of the provisions of this Agreement.
(c) In addition to any other legend that is required by
applicable law, certificates for the Option Shares delivered at each
Closing shall be endorsed with a restrictive legend which shall read
substantially as follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND PURSUANT TO THE TERMS OF A STOCK OPTION
AGREEMENT DATED AS OF __________ __, 1997. A COPY OF SUCH
AGREEMENT WILL BE PROVIDED TO THE HOLDER HEREOF WITHOUT CHARGE
UPON RECEIPT BY ISSUER OF A WRITTEN REQUEST THEREFOR.
It is understood and agreed that the above legend shall be
removed by delivery of substitute certificate(s) without such legend if
Grantee shall have delivered to Issuer a copy of a letter from the
staff of the Securities and Exchange Commission (the "SEC"), or an
opinion of counsel in form and substance reasonably satisfactory to
Issuer and its counsel, to the effect that such legend is not required
for purposes of the 1933 Act.
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5. Representations and Warranties of Issuer. Issuer hereby
represents and warrants to Grantee as follows:
(a) Due Authorization. Issuer has all requisite
corporate power and authority to enter into this Agreement and,
subject to any approvals referred to herein, to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the
part of Issuer. This Agreement has been duly executed and delivered by
Issuer and is a valid and binding obligation of Issuer enforceable in
accordance with its terms. The execution and delivery of this
Agreement, the consummation of the transactions contemplated hereby
and compliance by Issuer with any of the provisions hereof will not
(i) conflict with or result in a breach of any provision of its
Articles of Incorporation or Bylaws or a default (or give rise to any
right of termination, cancellation or acceleration) under any of the
terms, conditions or provisions of any note, bond, debenture,
mortgage, indenture, license, material agreement or other material
instrument or obligation to which Issuer is a party, by which it or
any of its properties or assets may be bound (except for such
conflict, breach or default as to which requisite waivers or consents
shall have been obtained by Issuer prior to the date hereof or the
obtaining of which shall have been waived by Grantee), or (ii) violate
any order, writ, injunction, decree, statute, rule or regulation
applicable to Issuer or any of its properties or assets. No consent or
approval by any governmental authority, other than compliance with
applicable federal and state securities and banking laws, and
regulations of the State Corporation Commission of Virginia, is
required of Issuer in connection with the execution and delivery by
Issuer of this Agreement or the consummation by Issuer of the
transactions contemplated hereby.
(b) Authorized Stock. Issuer has taken all necessary
corporate and other action to authorize and reserve and to permit it
to issue, and, at all times from the date hereof until the obligation
to deliver Issuer Common Stock upon the exercise of the Option
terminates, will have reserved for issuance, upon exercise of the
Option, the number of shares of Issuer Common Stock necessary for
Grantee to exercise the Option, and Issuer will take all necessary
corporate action to authorize and reserve for issuance all additional
shares of Issuer Common Stock or other securities which may be issued
pursuant to Section 7 upon exercise of the Option. The shares of
Issuer Common Stock to be issued upon due exercise of the Option,
including all additional shares of Issuer Common Stock or other
securities which may be issuable pursuant to Section 7, upon issuance
pursuant hereto, shall be duly and validly issued, fully paid and
nonassessable, and shall be free of any preemptive rights of any
stockholder of Issuer.
6. Representations and Warranties of Grantee. Grantee hereby
represents and warrants to Issuer that:
(a) Due Authorization. Grantee has all requisite
corporate power and authority to enter into this Agreement and,
subject to any approvals or consents referred to herein, to consummate
the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on
the part of Grantee. This Agreement has been duly executed and
delivered by Grantee.
(b) Purchase Not for Distribution. This Option is not
being, and any Option Shares or other securities acquired by Grantee
upon exercise of the Option will not be,
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acquired with a view to the public distribution thereof and will not
be transferred or otherwise disposed of except in a transaction
registered or exempt from registration under the 1933 Act.
7. Adjustment Upon Changes in Capitalization, Etc.
(a) In the event of any change in Issuer Common Stock by
reason of a stock dividend, stock split, split-up, recapitalization,
combination, exchange of shares or similar transaction, the type and
number of shares or securities subject to the Option, and the Purchase
Price therefor, shall be adjusted appropriately, and proper provision
shall be made in the agreements governing such transaction so that
Grantee shall receive, upon exercise of the Option, the number and
class of shares or other securities or property that Grantee would have
received in respect of Issuer Common Stock if the Option had been
exercised immediately prior to such event, or the record date therefor,
as applicable.
(b) In the event that Issuer shall enter in an agreement:
(i) to consolidate with or merge into any person, other than Grantee
or one of its subsidiaries, and shall not be the continuing or
surviving corporation of such consolidation or merger (ii) to permit
any person, other than the Subsidiary, to merge into issuer and Issuer
shall be the continuing or surviving corporation, but, in connection
with such merger, the then outstanding shares of Issuer Common Stock
shall be changed into or exchanged for stock or other securities of
Issuer or any other person or cash or any other property or the
outstanding shares of Issuer Common Stock immediately prior to such
merger shall after such merger represent less than fifty percent (50%)
of the outstanding shares and share equivalents of the merged company,
or (iii) to sell or otherwise transfer all or substantially all of its
assets to any person, other than Grantee or one of its subsidiaries,
then, and in each such case, the agreement governing such transaction
shall make proper provisions so that upon the consummation of any such
transaction and upon the terms and conditions set forth herein,
Grantee shall receive for each Option Share with respect to which the
Option has not been exercised an amount of consideration in the form
of and equal to the per share amount of consideration that would be
received by the holder of one share of Issuer Common Stock less the
Purchase Price (and, in the event of an election or similar
arrangement with respect to the type of consideration to be received
by the holders of Issuer Common Stock, subject to the foregoing,
proper provision shall be made so that the holder of the Option would
have the same election or similar rights as would the holder of the
number of shares of Issuer Common Stock for which the Option is then
exercisable).
(c) Issuer shall not enter into any agreement of the type
described in Section 7(b) unless the other party thereto commits to
provide the funding required for Issuer to pay the Section 8 Repurchase
Consideration to the extent required by Section 8 hereof.
8. Repurchase at the Option of Grantee.
(a) Subject to the last sentence of Section 3(a), at the
request of Grantee at any time commencing upon the first occurrence of
a Repurchase Event (as defined in Section 8(d)) and ending twelve (12)
months immediately thereafter, Issuer shall repurchase from Grantee (i)
the Option and (ii) all shares of Issuer Common Stock purchased by
Grantee pursuant hereto with respect to which Grantee then has
beneficial ownership. The date on which Grantee exercises its rights
under this Section 8 is referred to as the "Request Date". Such
repurchase shall be at an aggregate price (the "Section 8 Repurchase
Consideration") equal to the sum of:
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(i) the aggregate Purchase Price paid by Grantee
for any shares of Issuer Common Stock acquired pursuant to
the Option with respect to which rantee then has beneficial
ownership;
(ii) the excess, if any, of (x) the Applicable Price
(as defined below) for each share of Issuer Common Stock over
(y) the Purchase Price (subject to adjustment pursuant to
Section 7), multiplied by the number of shares of Issuer
Common Stock with respect to which the Option has not been
exercised; and
(iii) the excess, if any, of the Applicable Price
over the Purchase Price (subject to adjustment pursuant to
Section 7) paid (or, in the case of Option Shares with respect
to which the Option has been exercised but the Closing Date
has not occurred, payable) by Grantee for each share of Issuer
Common Stock with respect to which the Option has been
exercised and with respect to which Grantee then has
beneficial ownership, multiplied by the number of such shares.
(b) If Grantee exercises its rights under this Section 8,
Issuer shall, within ten (10) business days after the Request Date, pay
the Section 8 Repurchase Consideration to Grantee in immediately
available funds, and contemporaneously with such payment Grantee shall
surrender to Issuer the Option and the certificates evidencing the
shares of Issuer Common Stock purchased thereunder with respect to
which Grantee then has beneficial ownership, and Grantee shall warrant
that it has sole record and beneficial ownership of such shares and
that the same are then free and clear of all liens, claims, charges and
encumbrances of any kind whatsoever. Notwithstanding the foregoing, to
the extent that prior notification to or approval of the State
Corporation Commission or other regulatory authority is required in
connection with the payment of all or any portion of the Section 8
Repurchase Consideration, Grantee shall have the ongoing option to
revoke its request for repurchase pursuant to Section 8, in whole or in
part, or to require that Issuer deliver from time to time that portion
of the Section 8 Repurchase Consideration that it is not then so
prohibited from paying and promptly file the required notice or
application for approval and expeditiously process the same (and each
party shall cooperate with the other in the filing of any such notice
or application and the obtaining of any such approval). If the State
Corporation Commission or any other regulatory authority disapproves of
any part of Issuer's proposed repurchase pursuant to this Section 8,
Issuer shall promptly give notice of such fact to Grantee. If the State
Corporation Commission or other agency prohibits the repurchase in part
but not in whole, then Grantee shall have the right (i) to revoke the
repurchase request, or (ii) to the extent permitted by the State
Corporation Commission or other agency, determine whether the
repurchase should apply to the Option and or Option Shares and to what
extent to each, and Grantee shall thereupon have the right to exercise
the Option as to the number of Option Shares for which the Option was
exercisable at the Request Date less the sum of the number of shares
covered by the Option in respect of which payment has been made
pursuant to Section 8(a)(ii) and the number of shares covered by the
portion of the Option (if any) that has been repurchased. Grantee shall
notify Issuer of its determination under the preceding sentence within
five (5) business days of receipt of notice of disapproval of the
repurchase.
Notwithstanding anything herein to the contrary, all of
Grantee's rights under this Section 8 shall terminate on the date of
termination of this Option pursuant to Section 3(a).
(c) For purposes of this Agreement, the "Applicable
Price" means the highest of (i) the highest price per share of Issuer
Common Stock paid for any such share by the person or groups described
in Section 8(d)(i) or (ii) the price per share of Issuer Common Stock
received
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by holders of Issuer Common Stock in connection with any merger
or other business combination transaction described in Section
7(b)(i), 7(b)(ii) or 7(b)(iii), or provided, however, that in the event
of a sale of less than all of Issuer's assets, the Applicable Price
shall be the sum of the price paid in such sale for such assets and the
current market value of the remaining assets of Issuer as determined by
a regionally recognized investment banking firm selected by Grantee,
divided by the number of shares of Issuer Common Stock outstanding at
the time of such sale. If the consideration to be offered, paid or
received pursuant to either of the foregoing clauses (i) or (ii) shall
be other than in cash, the value of such consideration shall be
determined in good faith by an independent regionally recognized
investment banking firm selected by Grantee and reasonably acceptable
to Issuer, which determination shall be conclusive for all purposes of
this Agreement.
(d) As used herein, "Repurchase Event" shall occur if (i)
any person (other than Grantee or any subsidiary of Grantee) shall
have acquired actual ownership or control, or any "group" (as such
term is defined under the 0000 Xxx) shall have been formed which shall
have acquired actual ownership or control, of fifty percent (50%) or
more of the then outstanding shares of Issuer Common Stock, or (ii)
any of the transactions described in Section 7(b)(i), 7(b)(ii) or
7(b)(iii) shall be consummated.
9. Registration Rights.
(a) Registration Rights. If Issuer at any time after the
exercise of the Option proposes to register any shares of Issuer Common
Stock under the 1933 Act in connection with an underwritten public
offering of such Issuer Common Stock, Issuer will promptly give written
notice to Grantee (and any permitted transferee) of its intention to do
so and, upon the written request of Grantee (or any such permitted
transferee of Grantee) given within thirty (30) days after receipt of
any such notice (which request shall specify the number of shares of
Issuer Common Stock intended to be included in such underwritten public
offering by Grantee (or such permitted transferee)), Issuer will cause
all such shares, the holders of which shall have requested
participation in such registration, to be so registered and included in
such underwritten public offering; provided, however, that Issuer may
elect to not cause any such shares to be so registered (i) if the
underwriters in good faith object for valid business reasons, or (ii)
in the case of a registration solely to implement an employee benefit
plan or a registration filed on Form S-4; provided, further, however,
that such election pursuant to (i) may only be made one time. If some
but not all the shares of Issuer Common Stock, with respect to which
Issuer shall have received requests for registration pursuant to this
subparagraph (b), shall be excluded from such registration, Issuer
shall make appropriate allocation of shares to be registered among
Grantee and any other person (other than the Issuer) who or which is
permitted to register their shares of Issuer Common Stock in connection
with such registration pro rata in the proportion that the number of
shares requested to be registered by each such holder bears to the
total number of shares requested to be registered by all such holders
then desiring to have Issuer Common Stock registered for sale.
(b) Expenses. Except where applicable state law prohibits
such payments, Issuer will pay all expenses (including without
limitation registration fees, qualification fees, blue sky fees and
expenses, accounting expenses and printing expenses incurred by it) in
connection with each registration pursuant to subparagraph (a) above
and all other qualifications, notifications or exemptions pursuant to
subparagraph (a) above. Underwriting discounts and commissions relating
to Option Shares, fees and disbursements of counsel to the holders of
Option Shares being registered and any other expenses incurred by such
holders in connection with any such registration shall be borne by such
holders.
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(c) Indemnification. In connection with any registration
under subparagraph (a) above, Issuer hereby indemnifies the holder of
the Option Shares, and each underwriter thereof, including each
person, if any, who controls such holder or underwriter within the
meaning of Section 15 of the 1933 Act, against all expenses, losses,
claims, damages and liabilities caused by any untrue, or alleged
untrue, statement of a material fact contained in any registration
statement or prospectus or notification or offering circular
(including any amendments or supplements thereto) or any preliminary
prospectus, or caused by any omission, or alleged omission, to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such
expenses, losses, claims, damages or liabilities of such indemnified
party are caused by any untrue statement or alleged untrue statement
that was included by Issuer in any such registration statement or
prospectus or notification or offering circular (including any
amendments or supplements thereto) in reliance upon and in conformity
with, information furnished in writing to Issuer by such indemnified
party expressly for use therein, and Issuer and each officer, director
and controlling person of Issuer shall be indemnified by such holder
of the Option Shares, or by such underwriter, as the case may be, for
all such expenses, losses, claims, damages and liabilities caused by
any untrue, or alleged untrue, statement that was included by Issuer
in any such registration statement or prospectus or notification or
offering circular (including any amendments or supplements thereto) in
reliance upon, and in conformity with, information furnished in
writing to Issuer by such holder or such underwriter, as the case may
be, expressly for such use.
Promptly upon receipt by a party indemnified under this
subparagraph (c) of notice of the commencement of any action against
such indemnified party in respect of which indemnity or reimbursement
may be sought against any indemnifying party under this subparagraph
(c), such indemnified party shall notify the indemnifying party in
writing of the commencement of such action, but, except to the extent
of any actual prejudice to the indemnifying party, the failure so to
notify the indemnifying party shall not relieve it of any liability
which it may otherwise have to any indemnified party under this
subparagraph (c). In case notice of commencement of any such action
shall be given to the indemnifying party as above provided, the
indemnifying party shall be entitled to participate in and, to the
extent it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense of such action at its own expense, with
counsel chosen by it and reasonably satisfactory to such indemnified
party. The indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel (other than reasonable costs of
investigation) shall be paid by the indemnified party unless (i) the
indemnifying party agrees to pay the same (ii) the indemnifying party
fails to assume the defense of such action with counsel reasonably
satisfactory to the indemnified party, or (iii) the indemnified party
has been advised by counsel that one or more legal defenses may be
available to the indemnifying party that may be contrary to the
interest of the indemnified party, in which case the indemnifying party
shall be entitled to assume the defense of such action notwithstanding
its obligation to bear fees and expenses of such counsel.. No
indemnifying party shall be liable for any settlement entered into
without its consent, which consent may not be unreasonably withheld.
If the indemnification provided for in this subparagraph (c)
is unavailable to a party otherwise entitled to be indemnified in
respect of any expenses, losses, claims, damages or liabilities
referred to herein, then the indemnifying party, in lieu of
indemnifying such party otherwise entitled to be indemnified, shall
contribute to the amount paid or payable by such party to be
indemnified as a result of such expenses, losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the
relative benefits received by Issuer, the selling
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shareholders and the underwriters from the offering of the securities
and also the relative fault of Issuer, the selling shareholders and the
underwriters in connection with the statements or omissions which
resulted in such expenses, losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The amount paid
or payable by a party as a result of the expenses, losses, claims,
damages and liabilities referred to above shall be deemed to include
any legal or other fees or expenses reasonably incurred by such party
in connection with investigating or defending any action or claim;
provided however, that in no case shall the holders of the Option
Shares be responsible, in the aggregate, for any amount in excess of
the net offering proceeds attributable to its Option Shares included
in the offering. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Any obligation by any holder to indemnify
shall -be several and not joint with other holders.
In connection with any registration pursuant to subparagraph
(a) above, Issuer and each holder of any Option Shares (other than
Grantee) shall enter into an agreement containing the indemnification
provisions of this subparagraph (c).
(d) Miscellaneous Reporting. Issuer shall comply with
all reporting requirements and will do all such other things as may be
necessary to permit the expeditious sale at any time of any Option
Shares by the holder thereof in accordance with and to the extent
permitted by any rule or regulation permitting nonregistered sales of
securities promulgated by the SEC from time to time, including,
without limitation, Rule 144A under the 1933 Act. Issuer shall at its
expense provide the holder of any Option Shares with any information
necessary in connection with the completion and filing of any reports
or forms required to be filed by them under the 1933 Act or the 1934
Act, or required pursuant to any state securities laws or the rules of
any stock exchange.
(e) Issue Taxes. Issuer will pay all stamp taxes in
connection with the issuance and the sale of the Option Shares and in
connection with the exercise of the Option, and will save Grantee
harmless, without limitation as to time, against any and all
liabilities, with respect to all such taxes.
10. Division of Option. Upon the occurrence of a Purchase Event
or a Preliminary Purchase Event, this Agreement (and the Option granted hereby)
are exchangeable, without expense, at the option of Grantee, upon presentation
and surrender of this Agreement at the principal office of Issuer for other
Agreements providing for Options of different denominations entitling the holder
thereof to purchase in the aggregate the same number of shares of Issuer Common
Stock purchasable hereunder. The terms "Agreement" and "Option" as used herein
include any other Agreements and related Options for which this Agreement (and
the Option granted hereby) may be exchanged. Upon receipt by Issuer of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Agreement, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Agreement, if mutilated, Issuer will execute and deliver a new Agreement of like
tenor and date. Any such new Agreement executed and delivered shall constitute
an additional contractual obligation on the part of Issuer, whether or not the
Agreement so lost, stolen, destroyed or mutilated shall at any time be
enforceable by anyone.
11. Miscellaneous.
(a) Expenses. Except as otherwise provided in Section 9,
each of the parties hereto shall bear and pay all costs and expenses
incurred by it or on its behalf in connection
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with the transactions contemplated hereunder, including fees and
expenses of its own financial consultants, investment bankers,
accountants and counsel.
(b) Waiver and Amendment. Any provision of this
Agreement may be waived at any time by the party that is entitled to
the benefits of such provision. This Agreement may not be modified,
amended, altered or supplemented except upon the execution and
delivery of a written agreement executed by the parties hereto.
(c) Entire Agreement: No Third-Party Beneficiary;
Severability. This Agreement, together with the Letter and, when
executed, Plan and the other documents and instruments referred to
herein and therein, between Grantee and Issuer (i) constitutes the
entire agreement and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect
to the subject matter hereof, and (ii) is not intended to confer upon
any person other than the parties hereto (other than any transferees of
the Option Shares or any permitted transferee of this Agreement
pursuant to Section 11(h)) any rights or remedies hereunder. If any
term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction or a federal or state regulatory agency
to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated. If for any reason such court or regulatory agency
determines that the Option does not permit Grantee to acquire, or does
not require Issuer to repurchase, the full number of shares of Issuer
Common Stock as provided in Sections 3 and 8 (as adjusted pursuant to
Section 7), it is the express intention of Issuer to allow Grantee to
acquire or to require Issuer to repurchase such lesser number of shares
as may be permissible without any amendment or modification hereof.
(d) Governing Law. This Agreement shall be governed and
construed in accordance with the laws of Virginia without regard to
any applicable conflicts of law rules.
(e) Descriptive Heading. The descriptive headings
contained herein are for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.
(f) Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered
personally, telecopied (with confirmation) or mailed by registered or
certified mail (return receipt requested) to the parties at the
following addresses (or at such other address for a party as shall be
specified by like notice):
If to Issuer to: The Tredegar Trust Company
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
with a copy to: Xxxxxx X. T Xxxxx, Esq.
XxXxxxx, Xxxx
000 X. Xxxx Xxxxxx, #0000
Xxxxxxxx, Xxxxxxxx 00000
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If to Grantee to: Independent Community Bankshares, Inc.
000 Xxxx Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
President and Chief Executive Officer
with a copy to: Xxxxx X. Xxxxxxx, Xx.
Williams, Mullen, Christian & Xxxxxxx
Two Xxxxx Center, 16th Floor
0000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
(g) Counterparts. This Agreement and any amendments
hereto may be executed in two counterparts, each of which shall be
considered one and the same agreement and shall become effective when
both counterparts have been signed, it being understood that both
parties need not sign the same counterpart.
(h) Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder or under the Option shall
be assigned by any of the parties hereto (whether by operation of law
or otherwise) without the prior written consent of the other party,
except that Grantee may assign this Agreement to a wholly owned
subsidiary of Grantee and Grantee may assign its rights hereunder in
whole or in part after the occurrence of a Purchase Event. Subject to
the preceding sentence, this Agreement shall be binding upon, inure to
the benefit and be enforceable by the parties and their respective
successors and assigns.
(i) Further Assurances. In the event of any exercise of
the Option by Grantee, Issuer and Grantee shall execute and deliver
all other documents and instruments and take all other action that may
be reasonably necessary in order to consummate the transactions
provided for by such exercise.
(j) Specific Performance. The parties hereto agree that
this Agreement may be enforced by either party through specific
performance, injunctive relief and other equitable relief. Both
parties further agree to waive any requirement for the securing or
posting of any bond in connection with the obtaining of any such
equitable relief and that this provision is without prejudice to any
other rights that the parties hereto may have for any failure to
perform this Agreement.
IN WITNESS WHEREOF, Issuer and Grantee have caused this Stock Option
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the day and year first written above.
THE TREDEGAR TRUST COMPANY
By: /s/X. X. Xxxxxx, III
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Its: President and CEO
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XXXXXXXXXXX XXXXXXXXX BANKSHARES, INC.
By: /s/Xxxxxx X. Xxxxxx
------------------------------------
Its: President and CEO
------------------------------------
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