Appendix K
STOCK APPRECIATION RIGHTS AGREEMENT
This Agreement made and entered into on the 26th day of April, 1996, by
and between AMERICAN INDUSTRIAL LOAN ASSOCIATION (the "Corporation"), a
Virginia corporation, and XXXX XXXXXXXX ("Xxxxxxxx").
RECITALS
1. Xxxxxxxx, who is a Director of the Corporation, has provided consulting
services in addition to her services as Director, which consulting services have
resulted in substantial benefit to the Corporation.
2. The Corporation desires to provide to Xxxxxxxx Stock Appreciation
Rights for the exceptional services rendered by Xxxxxxxx.
I
GRANT OF STOCK APPRECIATION RIGHTS
The Corporation grants to Xxxxxxxx, on the terms and conditions stated
below, Stock Appreciation Rights covering two thousand (2,000) shares of common
stock of the Corporation (subject to adjustment as provided in Article III of
this Agreement). Except as otherwise provided in Article III of this Agreement,
a Stock Appreciation Right is a right to receive One Hundred percent (100%) of
the excess of the fair market value of a share of common stock on the date on
which an appreciation right is exercised over the fair market value on the date
of this Agreement. That amount is referred to herein as the "Spread." The fair
market value as of the date of this Agreement is $21.00 per share.
II
FAIR MARKET VALUE
For the purpose of this Agreement, the fair market value of a share of
common stock on any date subsequent to the date of this Agreement, shall be the
mean of the closing bid and asked price of the common stock in the
over-the-counter market on such subsequent date, as reported by NASDAQ, or the
Bulletin Board, or if no report is available on that date, the next preceding
date for which a report is available. If the common stock is subsequently listed
on a stock exchange or exchanges, fair market value thereafter shall be the
highest closing price on any exchange for that date, or, if that date is not a
trading date, the trading date next preceding that date.
III
SHARES AFFECTED; ADJUSTMENTS
The number of shares of common stock covered by the Stock Appreciation
Rights awarded by this Agreement shall be proportionately adjusted for any
increase or decrease in the number
of issued and outstanding shares of common stock which causes the number of
shares of common stock covered by this Agreement to be so adjusted.
If this Corporation shall be the surviving corporation in any merger or
consolidation, the Stock Appreciation Rights granted under this Agreement (to
the extent that they are still outstanding) shall pertain to and apply to the
securities to which a holder of the same number of shares of common stock would
have been entitled. A dissolution or liquidation of this Corporation or a merger
or consolidation in which this Corporation is not the surviving corporation,
shall cause the stock Appreciation Rights granted under this Agreement to
terminate, unless the agreement of merger or consolidation shall otherwise
provide, provided that Xxxxxxxx shall in that event have the right immediately
prior to a dissolution, liquidation, merger, or consolidation in which this
Corporation is not the surviving corporation, to exercise the Stock Appreciation
Rights granted under this Agreement without regard to any limitations on
exercisability.
The grant of Stock Appreciation Rights under this Agreement shall not
affect in any way the right or power of this Corporation to make adjustments,
reclassifications, reorganizations, or changes of its capital or business
structure or to merge, consolidate, or dissolve, or to liquidate, sell, or
transfer all or any part of its business or assets.
IV
EXERCISE OF RIGHTS GRANTED
Subject to the terms of this Agreement a Stock Appreciation Right may be
exercised by written notice to the Corporation at any time within a period of
three (3) years from the date of this Agreement. Partial exercises of the Stock
Appreciation Rights granted under this Agreement shall be permitted subject to
the right of the Board of Directors to reasonably limit the number of partial
exercises and the minimum amount of any partial exercises.
V
PAYMENT ON EXERCISE OF RIGHTS
On the exercise of a Stock Appreciation Right, this Corporation shall
deliver an amount equivalent to the spread in cash.
VI
EXERCISE OF RIGHTS; DESCENT ON DEATH
The Stock Appreciation Rights granted under this Agreement shall be
exercisable during Xxxxxxxx'x lifetime only by Xxxxxxxx. The rights shall be
nontransferable by Xxxxxxxx otherwise than by will or the laws of descent and
distribution.
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VII
METHOD OF EXERCISING RIGHTS
The Stock Appreciation Rights under this Agreement may be exercised by the
person then entitled to do so to the extent that the right to exercise has then
accrued by giving written notice of exercise to the Corporation.
VIII
RIGHTS AND PRIVILEGES AS STOCKHOLDER
Neither Xxxxxxxx nor any person claiming under or through Xxxxxxxx shall
be or have any of the rights or privileges of a shareholder of the corporation
in respect of any of the Stock Appreciation Rights granted under this Agreement.
IX
NOTICE
Any notice to be given to the Corporation under the terms of this
Agreement shall be addressed to the Corporation, in care of its President, at
American Industrial Loan Association, 0000 Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx
Xxxxx, Xxxxxxxx 00000, or at such other address as the Corporation may designate
in writing. Any notice to be given to Xxxxxxxx shall be addressed to Xxxxxxxx at
the address set forth beneath her signature below, or at any other address as
Xxxxxxxx may designate in writing. Notice shall be deemed to have been duly
given if and when enclosed in a properly sealed envelope, addressed as stated
above, registered and deposited, postage and registry fee prepaid, in a post
office or branch post office regularly maintained by the United States
Government.
X
TRANSFERABILITY OF STOCK APPRECIATION RIGHTS
Except as otherwise provided in this Agreement, the rights and privileges
conferred by this Agreement shall not be transferred, assigned, pledged, or
hypothecated in any way (whether by operation of law or otherwise) and shall not
be subject to sale under execution, attachment, or similar process. Any attempt
to transfer, assign, pledge, or otherwise dispose of the rights and privileges,
contrary to the provisions of this Agreement, or on attempted sale under any
execution, attachment, or similar process on the rights and privileges, the
rights and privileges shall immediately become null and void.
XI
TERMINATION OF STOCK APPRECIATION RIGHTS
Each Stock Appreciation Right and all rights and obligations thereunder
shall terminate and may no longer be exercised after the 24th day of April,
1999.
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XII
BINDING EFFECT OF AGREEMENT
Subject to the limitations on transferability stated above, this Agreement
shall be binding on and inure to the benefit of the heirs, legal
representatives, successors, and assignors of the parties.
XIII
PAYMENT OF TAXES ON EXERCISE OF RIGHTS
Whenever shares of common stock are to be issued in satisfaction or
payment of the rights conferred by this Agreement, the Corporation shall have
the right to require the grantee to remit the Corporation an amount sufficient
to satisfy federal, state, and local withholding tax requirements prior to the
delivery of any certificate or certificates for the shares. Whenever payments
are to be made in cash, the payments shall be net of an amount sufficient to
satisfy federal, state, and local withholding tax requirements.
XIV
LIMITATION ON OBLIGATIONS OF THE COMPANY
All obligations of the Corporation arising under or as a result of this
Plan or options granted hereunder shall constitute the general unsecured
obligations of the Corporation, any member thereof, the committee, any member
thereof, any officer of the Corporation, or any other person or any Subsidiary,
and none of the foregoing, except the Corporation, shall be liable for any debt,
obligation, cost or expense hereunder.
XV
SEVERABILITY
If any provision of this Agreement is applied to any person or to any
circumstance shall be adjudged by a court of competent jurisdiction to be void,
invalid, or unenforceable, the same shall in no way affect any other provision
hereof, the application of any such provision in any other circumstances, or the
validity or enforceability hereof.
XVI
CONSTRUCTION
Where the context or construction requires, all words applied in the
plural herein shall be deemed to have been used in the singular and vice versa,
and the masculine gender shall include the feminine and the neuter and vice
versa.
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XVII
HEADINGS
The headings of the several paragraphs herein are inserted solely for
convenience of reference and are not intended to form a part of and are not
intended to govern, limit or aid in the construction of any term or provision
hereof.
XVIII
SUCCESSORS
This Plan shall be binding upon the respective successors, assigns, heirs,
executors, administrators, guardians and personal representatives of the Company
and Optionee.
XX
GOVERNING LAW
The provisions of this Plan shall be construed in accordance with the Laws
of the State of Virginia.
IN WITNESS WHEREOF, the parties have attached their signatures as follows:
AMERICAN INDUSTRIAL LOAN ASSOCIATION
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx Xxxxx, Xxxxxxxx 00000
By: /s/ Xxxxx X. Xxxxx, President
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/s/ Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx
