1
EXHIBIT 4.3
COMMUNITY BANCSHARES, INC.
INCENTIVE STOCK OPTION AGREEMENT
THIS INCENTIVE STOCK OPTION AGREEMENT ("Option Agreement") made and
entered into this _______ day of ____________________, 199___ by and between
Community Bancshares, Inc. (the "Company") and ___________________________
("Employee");
W I T N E S S E T H:
The Board of Directors of the Company has adopted that certain 1993
Stock Option Plan (the "Plan"), a copy of which is attached hereto as Exhibit
"A" and incorporated herein by reference. Pursuant to the terms of the Plan,
the Board of Directors has selected Employee to participate in the Plan and
desires to grant to Employee certain incentive stock options to purchase shares
of the Company's authorized $3.00 par value common stock ("Stock"), subject to
the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises, agreements
and covenants contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1. INCORPORATION OF PLAN PROVISIONS
This Option Agreement is subject to and is to be construed in all
respects in a manner which is consistent with the terms of the Plan, the
provisions of which are hereby incorporated by reference into this Option
Agreement. Unless specifically provided otherwise, all terms used in this
Option Agreement shall have the same meaning as in the Plan.
2. GRANT OF OPTION
Subject to the further terms and conditions of this Option Agreement,
Employee is hereby granted a stock option to purchase ______________ shares of
Stock, effective as of the date first written above. This stock option is
intended to be an Incentive Stock Option as provided in ss. 422 of the Internal
Revenue Code.
3. FAIR MARKET VALUE OF STOCK
The Board of Directors has determined, in good faith and in its best
judgment, that the fair market value per share of Stock as of the date this
stock option is granted is $__________.
2
4. OPTION PRICE
The Board of Directors has determined that the price for each share of
Stock purchased under this Option Agreement shall be $_________.
5. EXPIRATION OF OPTIONS
The option to acquire Stock pursuant to this Option Agreement shall
expire (to the extent not previously fully exercised) upon the first to occur
of the following:
(a) ___________________ (the tenth anniversary of the date of
grant of the option);
(b) The date which is three (3) months following the date
which Employee ceases his employment with the Company or any subsidiary of the
Company, otherwise than as a result of Employee's death or total disability;
(c) The date which is the first anniversary of the date upon
which Employee ceases to be employed by the Company, or any subsidiary of the
Company, by reason of Employee's death or total disability.
(d) The date upon which Employee ceases his employment with
the Company or any subsidiary of the Company, for any reason, including death
or total disability, with respect to any portion of this option that is not
then exercisable on the date Employee ceases his employment with the Company.
6. EXERCISE OF OPTION
Unless options hereunder shall earlier lapse or expire pursuant to
Article 5 hereof, this option may be exercised with respect to the aggregate
number of shares subject to this Option Agreement as follows:
(a) as of _____________, 19__ (first anniversary of date of
grant), _____ shares (33-1/3% of the shares subject to this option);
(b) as of _____________, 19__ (second anniversary of date of
grant), an additional _____ shares (33-1/3% of the shares subject to this
option); and
(c) as of _____________, 19__ (third anniversary of date of
grant), an additional _____ shares (33-1/3% of the shares subject to this
option).
To the extent such options become exercisable in accordance with the
foregoing, Employee may exercise this stock option, in whole or in part, from
time to time. The option exercise price may be paid by Employee either in cash,
or, in the event that an organized trading market in the
-2-
3
Stock exists on the date of exercise of the option, by surrender of other
shares held by Employee of the Stock of the Company.
For the purposes of this Article 6, an "organized trading market"
shall be deemed to exist on the date of exercise of the option if: (a) the
Stock is listed on a national securities exchange, or (b) the Stock has been
quoted on the National Association of Securities Dealers Automated Quotation
System ("NASDAQ") for the 15 trading days preceding the date of exercise of the
option, or (c) bid and asked quotations for the Stock have been published by
the National Quotation Bureau or other recognized inter-dealer quotation
publication (other than NASDAQ) during 20 of the 30 trading days preceding the
date of exercise of the option. In the event that an organized trading market
for the Stock exists on the date of exercise of the option, Employee shall be
given credit against the option exercise price hereunder for such shares
surrendered equal to (i) if the Stock is listed on a national securities
exchange or is quoted on the NASDAQ National Market System, the last actual
sales transaction price reported on the day preceding exercise of the option,
or, if there were no actual sales transactions reported for such date, on the
date next preceding such date on which actual sales transactions were reported,
or (ii) if the Stock is quoted on NASDAQ (other than the NASDAQ National Market
System) or by the National Quotation Bureau or other recognized inter-dealer
quotation publication, the average of the high and low price quotations on the
day preceding exercise of the option, or, if there were no price quotations for
such date, on the date next preceding such date on which there were high and
low price quotations for the Stock.
7. MANNER OF EXERCISE
This stock option may be exercised by written notice to the Secretary
of the Company specifying the number of shares to be purchased and signed by
Employee or such other person who may be entitled to acquire Stock under this
Option Agreement. If any such notice is signed by a person other than Employee,
such person shall also provide such other information and documentation as the
Secretary of the Company may reasonably require to assume that such person is
entitled to acquire Stock under the terms of the Plan and this Option
Agreement. After receipt of the notice and any other assurances requested by
the Company under this Article 7, and upon receipt of the full option price,
the Company shall issue to the person giving notice of exercise under this
Option Agreement the number of shares specified in such notice.
8. RESTRICTIONS ON TRANSFERABILITY
The stock option granted hereunder shall not be transferable by
Employee otherwise than by will or by the laws of descent and distribution, and
such stock option shall be exercisable during Employee's lifetime only by
Employee.
9. FURTHER RESTRICTIONS ON EXERCISE AND SALE OF STOCK
Employee acknowledges and understands that the Stock subject to this
Option Agreement is not registered under the Federal Securities Act of 1933, as
amended ("Federal Act") or under the North Carolina Securities Act, as amended
("State Act"). Each option shall be subject to the
-3-
4
requirement that if at any time the Board of Directors shall determine, in its
discretion, that the listing, registration or qualification of the shares
subject to such option upon any securities exchange or under any state or
federal law, or the consent or approval of any government regulatory body, is
necessary or desirable as a condition of, or in connection with, the granting
of such option or the issue or purchase of shares thereunder, such option may
not be exercised in whole or in part unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Board of Directors. The costs of any such
listing, registration, qualification, consent or approval shall be paid by the
Company. Alternatively, the Company shall not permit any exercise of this stock
option unless it receives such representations, factual assurances, and legal
opinions as it may deem necessary to determine and document the availability of
an exemption from registration under both the Federal Act and the State Act
with respect to any particular issuance of shares under this Option Agreement.
Further, the Board of Directors shall require that Stock issued in respect of
any exercise of this stock option shall bear such restrictions on further
transfer as shall be necessary to insure the availability of any exemption so
claimed.
10. REORGANIZATION
In the event that dividends are payable in Common Stock of the Company
or in the event there are splits, subdivisions or combinations of shares of
Common Stock of the Company, the number of Shares available under the Plan
shall be increased or decreased proportionately, as the case may be, and the
number of Shares deliverable upon the exercise thereafter of any Option
theretofore granted shall be increased or decreased proportionately, as the
case may be, without change in the aggregate purchase price.
In case the Company is merged or consolidated with another corporation
and the Company is not the surviving corporation, or in case the property or
stock of the Company is acquired by another corporation, or in case of a
separation, reorganization, recapitalization or liquidation of the Company, the
Board of Directors of the Company, or the Board of Directors of any corporation
assuming the obligations of the Company hereunder, shall either (i) make
appropriate provision for the protection of any outstanding Options by the
substitution on an equitable basis of appropriate stock of the Company, or of
the merged, consolidated or otherwise reorganized corporation which will be
issuable in respect to the shares of Common Stock of the Company, provided only
that the excess of the aggregate fair market value of the shares subject to
option immediately after such substitution over the purchase price thereof is
not more than the excess of the aggregate fair market value of the shares
subject to option immediately before such substitution over the purchase price
thereof, or (ii) upon written notice to the Optionee provide that the Option
(including the shares not then exercisable) must be exercised within sixty (60)
days of the date of such notice or it will be terminated.
-4-
5
IN WITNESS WHEREOF, the Company has caused this Option Agreement to be
executed by a member of the Board of Directors or a duly authorized officer of
the Company, and Employee has executed this Option Agreement as of the date
first written above.
COMMUNITY BANCSHARES, INC.
By:
-----------------------------------
Xxxxxx X. Xxxxxxxxx, President
Attest:
----------------------------------
Xxxxx X. Xxxxx, Secretary
"EMPLOYEE"
--------------------------------------
-5-
