HERITAGE BANCORP, INC.
OUTSIDE DIRECTORS STOCK OPTION
THIS OUTSIDE DIRECTORS STOCK OPTION entered into as of the 23rd day of
September, 1998, by and between HERITAGE BANCORP, INC., a Virginia corporation
(hereinafter referred to as "HBI") and _________________________________________
____________ , a Director of HBI (hereinafter referred to as "the Director").
WHEREAS, the Stockholders and the Board of Directors of The Heritage Bank
(the "Bank") determined that it was in the best interest of the Bank to
establish an Outside Directors Stock Option Plan (the "Plan"), the obligations
of which Plan have been fully assumed by HBI, the sole shareholder of capital
stock in the Bank. Under the terms of the Plan certain Directors of HBI may be
granted the option to acquire shares of common stock in HBI (the "Stock
Option"); and
WHEREAS, it was determined by the Stock Option Committee (the "Stock Option
Committee") appointed by the Board of Directors of HBI (the "Board of
Directors") and ratified by the Board of Directors that such stock should be
sold to the Director, upon exercise of the Stock Option, at a price no less than
fair market value of the stock on the declaration date (such amount being the
"Option Price"); and
WHEREAS, the Stock Option Committee has determined, and the Board of
Directors has ratified such determination, that the Option Price should properly
be established at Three and 87 1/2/100 Dollars ($3.875) per share; and
WHEREAS, the Director shall be granted this Stock Option to acquire ___
___________ (_______)shares of common stock of HBI; and
WHEREAS, the Director has sufficient knowledge and experience in financial
and business matters to be capable of evaluating the merits and risks of a
prospective investor in HBI's stock and has acquired extensive knowledge of the
operations of HBI by virtue of the Director's position as a member of the Board
of Directors of the Bank and, upon exercise of the Stock Option, will acquire
the stock in the Bank for investment purposes and not for speculation.
W I T N E S S E T H :
THAT FOR AND IN CONSIDERATION of the foregoing and the mutual covenants
hereinafter contained and other good and
valuable consideration, the parties hereto agree as follows:
1. OPTION GRANT.
HBI grants to the Director a Stock Option to purchase ( )
shares of the common stock of HBI at a price of Three and 87 1/2/100 Dollars
($3.875) per share, which HBI and the Board of Directors deem to be fair value
for such stock.
2. TERM OF OPTION.
The right to exercise this Stock Option shall continue for ten
(10) years following the effective date hereof as defined in Section 8 hereof,
unless the Director resigns or is removed from the Board of Directors, as
defined in the Bank's Plan assumed by HBI, in which case this Stock Option shall
expire sixty (60) days following his or her departure from the Board of
Directors.
3. NON-ASSIGNABILITY OF THIS OPTION.
This Stock Option shall not be sold, pledged, assigned,
hypothecated, transferred or disposed of by the Director during the Director's
lifetime, provided however, should the Director die during the period within
which this Stock Option may be exercised, it may be exercised by the Director's
duly qualified personal representative, heirs or distributees within the sixty
(60) days next following the Director's death.
4. EXERCISE OF OPTION.
The Stock Option shall be deemed to have been exercised by the
Director upon delivery to HBI of written notice thereof, together with payment
in full in cleared funds for the stock to be acquired, by certified mail,
postage prepaid, addressed to HBI or by hand-delivery of such notice and payment
to the President of HBI.
5. DELIVERY OF SHARES.
Upon the exercise of the Stock Option and the tender to HBI of
the purchase price for the full________________________(___________) shares of
stock, HBI shall deliver to the Director a stock certificate reflecting the
stock in HBI for which the Stock Option was exercised.
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6. TERMS OF THE PLAN.
This Option is granted in accordance with the Plan and the
provisions of the Plan are incorporated herein by reference. A copy of the Plan
can be obtained from the Office of the President of HBI.
7. SUCCESSORS AND ASSIGNS.
All terms of this Agreement shall be binding upon and inure to
the benefit of, and be enforceable by or against, the respective legal
representatives, successors and assigns of HBI.
8. EFFECTIVE DATE.
The Effective Date of this Agreement shall be October 23,
1998.
9. GOVERNING LAW.
This Agreement is intended to be performed in the Commonwealth
of Virginia and shall be construed and enforced in accordance with the laws of
the Commonwealth.
IN WITNESS whereof the parties have duly executed this Agreement.
HBI:
Date: HERITAGE BANCORP, INC.
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By:
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DIRECTOR:
Date:
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