Exhibit 4.4
RESOURCE BANK
AMENDED AND RESTATED
1996 LONG-TERM INCENTIVE PLAN
1. General.
1.1 Purpose. The purpose of the 1996 Long-Term Incentive Plan (the "Plan") is to
enable Resource Bank, a Virginia corporation (the "Bank"), to attract and retain
qualified corporate directors ("Bank Directors") and key employees ("Key
Employees"), and increase the proprietary interest of such Bank Directors and
Key Employees in the Bank in order to provide them with additional motivation to
continue serving the Bank and to further its profitable growth. The awards
granted under the Plan will consist of incentive stock options available to
certain Key Employees ("Incentive Stock Options"), and stock options available
to Bank Directors ("Bank Director Stock Options").
1.2 Incentive Stock Options. The purpose of Incentive Stock Options granted
under the Plan is (i) to give certain Key Employees of the Bank an opportunity
to acquire shares of the common stock of the Bank ("Common Stock"), (ii) to
provide an incentive for Key Employees to continue to promote the best interests
of the Bank and enhance its long-term performance, and (iii) to provide an
incentive for Key Employees to join or remain with the Bank. The Bank intends
that the Incentive Stock Options will qualify as "incentive stock options" for
the purposes of Section 422 of the Internal Revenue Code, as amended (the
"Code"); provided, however, that the Bank may issue some options that do not
qualify under Section 422 of the Code. The Bank intends that the Incentive Stock
Options will constitute an exempt transaction pursuant to Rule 16b-3 promulgated
by the Securities and Exchange Commission (the "Commission") under the
Securities Exchange Act of 1934, as amended (the "Act").
1.3 Bank Director Stock Options. The purpose of Bank Director Stock Options
granted under the Plan is to provide a means by which the Bank Directors may be
given an opportunity to acquire shares of Common Stock, so that the Bank may
secure and retain the services of persons best qualified to serve as directors
of the Bank and so that the Bank may provide incentives for such persons to
exert maximum efforts for the success of the Bank. The Bank does not intend that
the Bank Director Stock Options will qualify as "incentive stock options" for
the purposes of Section 422 of the Code. Accordingly, the Bank Director Stock
Options will be subject to taxation under Section 83 of the Code. The Bank
intends that the Bank Director Stock Options granted prior to November 1, 1996,
will constitute a formula award plan as described in Rule 16b-3(c)(2)(ii)
promulgated by the Commission under the Act in effect on the date of grant, such
that the Bank Director Stock Options granted under the Plan shall not affect the
recipients' disinterested status (as described in Rule 16b-3(c)(2)(i) under the
Act in effect on the date of grant) for the purposes of administering any
stock-related plan of the Bank established pursuant to Rule 16b-3 under the Act.
The Bank intends that Bank Director Stock Options granted after November 1, 1996
will constitute an exempt transaction pursuant to Rule 16b-3 in effect on the
date of grant.
2. Administration.
2.1 Incentive Stock Options.
(a) Incentive Stock Option Committee. Incentive Stock Options shall be
administered by an incentive stock option committee (the "Committee") appointed
by the Board and composed of not less than two. No members of the Board who are
employees of the Bank and who are eligible to receive Incentive Stock Options
shall be eligible for appointment to the Committee. After November 1, 1996, each
member of the Committee shall be a "Non-Employee Director" as that term is
defined in Rule 16b-3(b)(3) under the Act in effect on the date of grant.
(b) Powers of the Committee. Within the limits of the express provisions of the
Plan, the Committee shall determine: (i) the Key Employees to whom Incentive
Stock Options hereunder shall be granted, (ii) the time or times at which such
Incentive Stock Options shall be granted, (iii) the form and amount of the
Incentive Stock Options and (iv) the limitations, restrictions and conditions
applicable to any such Incentive Stock Options. In making such determinations,
the Committee may take into account the nature of the services rendered by such
Key Employees, their present and potential contributions to the Bank's success
and such other factors as the Committee in its discretion shall deem relevant.
(c) Interpretations. Subject to the express provisions of the Plan, the
Committee may prescribe, amend and rescind rules and regulations relating to
Incentive Stock Options, determine the terms and provisions of the Incentive
Stock Options and make all other determinations it deems necessary or advisable
for the administration of the Incentive Stock Options.
(d) Determinations. The determinations of the Committee on all matters regarding
the Incentive Stock Options shall be conclusive. A member of the Committee shall
only be liable for any action taken or determination made in bad faith.
(e) Nonuniform Determinations. The Committee's determinations with respect to
Incentive Stock Options, including without limitation, determinations as to the
Key Employees to receive Incentive Stock Options, the terms and provisions of
such Incentive Stock Options and the agreements evidencing the same, need not be
uniform and may be made by it selectively among the Key Employees who receive or
are eligible to receive Incentive Stock Options, whether or not such Key
Employees are similarly situated.
2.2 Bank Director Stock Options.
(a) Administration by Board. The Bank Director Stock Options shall be
administered by the Board of Directors of the Bank (the "Board"). Prior to
November 1, 1996, the Board had no authority, discretion or power to select the
individuals who were eligible to receive the Bank Director Stock Options under
the Plan, nor did it have any discretion to determine the amount, price or
timing of any Bank Director Stock Option granted hereunder, as the specific
grants were set forth in the Plan, which Plan was approved by the shareholders
of the Bank.
With respect to grants made after November 1, 1996, the Board shall
have authority to select the individuals who are or will be eligible to receive
the Bank Director Stock Options under the Plan. The Board shall determine the
amount, price and timing of any Bank Director Stock Options granted or to be
granted hereunder, and shall administer the Bank Director Stock Options pursuant
to the terms of the Plan.
(b) Powers of Board. The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(i) to determine the Bank Directors to receive Bank Director Stock Options, and
set the amounts, place, timing, and terms of any Bank Director Stock Options
granted hereunder;
(ii) to construe and interpret the Plan with respect to any Bank Director Stock
Options, to construe and interpret any conditions or restrictions imposed on the
Common Stock acquired pursuant to the exercise of Bank Director Stock Options,
to define the terms used herein (to the extent not already defined) and to
establish, amend, and revoke rules and regulations for administration of the
Bank Director Stock Options. The Board, in the exercise of this power, may
correct any defect, omission, or inconsistency in the Bank Director Stock
Options in a manner and to the extent it shall deem necessary or expedient to
make the Bank Director Stock Options fully effective;
(iii) to amend, modify, suspend, or terminate the Bank Director Stock Options in
accordance with Section 13; and
(iv) generally, to exercise such powers and to perform such acts as the Board
deems necessary or expedient to promote the best interests of the Bank in
connection with the Bank Director Stock Options.
3. Maximum Limitations; Option Shares.
3.1 Maximum Limitations with Respect to Incentive Stock Options. The aggregate
number of shares of Common Stock for which Incentive Stock Options may be
granted under the Plan is 80,000, subject to adjustment pursuant to Section 8.
If, prior to the end of the period during which Incentive Stock Options may be
granted under the Plan, any Incentive Stock Option expires unexercised or is
terminated, surrendered or canceled without being exercised, in whole or in
part, for any reason, the number of shares subject to such Incentive Stock
Option, or the unexercised, terminated, surrendered or canceled portion thereof,
shall be added to the remaining number of shares of Common Stock available for
issuance pursuant to exercise of Incentive Stock Options under the Plan,
including a grant to a former holder of such Incentive Stock Option, upon such
terms and conditions as the Committee shall determine, which terms may be more
or less favorable than those applicable to the holder of such former Incentive
Stock Option.
3.2 Maximum Limitations with Respect to Bank Director Stock Options. The
aggregate number of shares of Common Stock for which Bank Director Stock Options
may be granted under the Plan is 43,750, subject to adjustment pursuant to
Section 8.
3.3 Option Shares. Shares of Common Stock issued pursuant to
the Plan shall be authorized but unissued shares.
4. Incentive Stock Options.
4.1 Taxation of Incentive Stock Options; Nonqualified Stock Options. The Bank
intends that Incentive Stock Options granted under the Plan shall constitute
"incentive stock options" within the meaning of, and taxed under, Section 422 of
the Code. However, the Committee may in its discretion choose to issue
"nonqualified options" to Key Employees, within the aggregate number of shares
of Common Stock available under the Plan, which violate one or more of the
requirements of this Section 4 ("Nonqualified Options"), (i) as long as the Key
Employees to whom such Nonqualified Options are granted are advised that such
options will be taxable under Section 83 of the Code, rather than Section 422,
and (ii) as long as Nonqualified Options are not issued in tandem with Incentive
Stock Options as described in Internal Revenue Service Treas. Reg. ss.
14a.422A-1 (Q&A-39).
4.2 Provisions Applicable to Incentive Stock Options. Incentive Stock Options
granted under the Plan for the purchase of shares of Common Stock shall be in
such form and upon such conditions as the Committee shall from time to time
determine, subject to the following:
(a) Option Price. The option price for each share of Common Stock issuable under
each Incentive Stock Option shall be at least 100% of the fair market value of
the Common Stock (as defined in Section 16.7 herein) subject to such Incentive
Stock Option on the date of grant.
(b) Condition Precedent to Exercise; Duration. The Incentive Stock Options will
not become exercisable until the average price of a share of Common Stock traded
on NASDAQ National Market (or any other over-the-counter automated quotation
system or national exchange on which the Common Stock is actively traded) for
thirty (30) consecutive trading days has been at least $25.00. After this
requirement has been fulfilled, the Incentive Stock Options may be exercised
regardless of the price at which the Common Stock is trading at the time
Optionee elects to exercise the Incentive Stock Options. If Incentive Stock
Options are granted after this requirement has been fulfilled, such Incentive
Stock Options may be exercised regardless of the price at which the Common Stock
is trading at the time the Optionee elects to exercise the Incentive Stock
Options. No Incentive Stock Option shall be exercisable after the date ten (10)
years from the date such Incentive Stock Option is granted.
(c) Limitation on Amounts. The aggregate fair market value (determined with
respect to each Incentive Stock Option as of the time such Incentive Stock
Option is granted) of the Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by a Key Employee during any calendar
year shall not exceed $100,000. This limitation (i) only applies in the first
year of exercise and does not limit the right to exercise Incentive Stock
Options cumulatively in excess of $100,000 once the $100,000 limitation has been
met, and (ii) does not apply to any Nonqualified Options granted by the
Committee, if any.
(d) Ten percent Shareholder. Notwithstanding any other provision contained in
the Plan, if, at the time an Incentive Stock Option is granted, a Key Employee
"owns" (as defined in Section 424(d) of the Code) stock possessing more than 10%
of the total combined voting power of all classes of stock of the Bank, the
option price for such Incentive Stock Option shall be at least 110% of the fair
market value of the Common Stock (as defined in Section 16.7 herein) subject to
such Incentive Stock Option on the date of grant and such Incentive Stock Option
shall not be exercisable after the date five years from the date such Incentive
Stock Option is granted.
5. Bank Director Stock Options
5.1 Taxation of Bank Director Stock Options. The Bank does not intend that Bank
Director Stock Options granted under the Plan shall constitute "incentive stock
options" within the meaning of Section 422 of the Code. Accordingly, the Bank
Director Stock Options shall be subject to taxation under Section 83 of the
Code.
5.2 Option Grant; Number of Shares.
(a) In consideration for services performed for and to be performed for, past
and future contributions to, and benefits conferred upon and to be conferred
upon the Bank, the Bank granted Bank Director Stock Options to the following
Bank Directors to purchase the following number of shares of Common Stock:
Shares of Common Stock
Director Subject to Option
- -------- -----------------
Alfred E. Abiouness 6,750
John B. Bernhardt 6,750
Louis Jones 6,750
A. Russell Kirk 6,750
Elizabeth A. Twohy 6,750
-----
TOTAL 33,750
(b) The Board of Directors may issue further
Bank Director Stock Options available for grant under the Plan to such Bank
Directors as the Board deems reasonable and appropriate.
5.3 Option Price. The option price for each share of Common
Stock issuable under each Bank Director Stock Option shall be equal to 100% of
the fair market value of the Common Stock (as defined in Section 16.7 herein) on
the date the Bank Director Stock Option is granted, but in no event can the
exercise price be less than the per share book value.
5.4 Condition Precedent to Exercise; Duration. Bank Director
Stock Options will not become exercisable until the average price of a share of
Common Stock traded on NASDAQ National Market (or any other over-the-counter
automated quotation system or national exchange on which the Common Stock is
actively traded) for thirty (30) consecutive trading days has been at least
$25.00. After this requirement has been fulfilled, the Bank Director Stock
Options may be exercised regardless of the price at which the Common Stock is
trading at the time Optionee elects to exercise the Bank Director Stock Options.
If Bank Director Stock Options are granted after this requirement has been
fulfilled, such Bank Director Stock Options may be exercised regardless of the
price at which the Common Stock is trading at the time the Optionee elects to
exercise the Bank Director Stock Options. No Bank Director Stock Option shall be
exercisable after the date ten (10) years from the date such Bank Director Stock
Option is granted.
6. Option Agreement. Incentive Stock Options and Bank Director Stock
Options (sometimes collectively referred to hereinafter as the "Options") shall
be evidenced by such form of written option agreement (the "Option Agreement")
between a Plan participant (a Plan participant who is granted an Option is
sometimes hereinafter referred to as the "optionee") and the Bank as the
Committee (or the Board in the case of Bank Director Stock Options) shall
determine, provided that such Option Agreements are not inconsistent with the
other provisions of the Plan, or in the case of Incentive Stock Options, with
Section 422 of the Code or the regulations thereunder. Option Agreements shall
require the optionee to refrain from disposing shares of Common Stock acquired
pursuant to an exercise of an Option for the length of time necessary to comply
with Rule 16b-3 under the Act.
7. Transferability. No Option may be transferred, assigned, pledged or
hypothecated (whether by operation of law or otherwise), except as provided by
will or the applicable laws of descent or distribution, and no Option shall be
subject to execution, attachment or similar process. Any attempted assignment,
transfer, pledge, hypothecation or other disposition of an Option, or levy of
attachment or similar process upon the Option not specifically permitted herein
shall be null and void and without effect. An Option may be exercised only by an
optionee during his or her lifetime or, pursuant to Sections 11 and 12, by his
or her estate or the person who acquires the right to exercise such Option upon
his or her death by bequest or inheritance.
8. Adjustment Provisions. The aggregate number of shares of Common
Stock with respect to which Options may be granted, the aggregate number of
shares of Common Stock subject to each outstanding Option, and the option price
per share of each such Option, may all be appropriately adjusted as the
Committee (or the Board in the case of Bank Director Stock Options) may
determine for any increase or decrease in the number of shares of issued Common
Stock resulting from a subdivision or consolidation of shares, whether through
reorganization, recapitalization, stock split, stock distribution or combination
of shares, or the payment of a share dividend or other increase or decrease in
the number of such shares outstanding effected without receipt of consideration
by the Bank ("Change in Capitalization"). If, by reason of a Change in
Capitalization, an optionee shall be entitled to exercise an Option with respect
to new, additional or different shares of stock or securities, such new,
additional or different shares shall thereupon be subject to all of the
conditions which were applicable to the Common Stock subject to the Option prior
to such Change in Capitalization. Any adjustment in the Common Stock subject to
an outstanding Option shall be made only to the extent necessary to maintain the
proportionate interest of the optionee and preserve, without exceeding, the
value of such Option. Adjustments under this Section 8 shall be made according
to the sole discretion of the Committee (or the Board in the case of Bank
Director Stock Options), and its decisions shall be binding and conclusive.
9. Dissolution, Merger and Consolidation. Upon the dissolution or
liquidation of the Bank, or upon a merger or consolidation of the Bank in which
the Bank is not the surviving corporation, each Option granted pursuant to the
Plan shall expire as of the effective date of such transaction; provided,
however, that the Committee (or the Board in the case of Bank Director Stock
Options) shall give at least 30 days' prior written notice of such event to each
optionee during which time he or she shall have a right to exercise his or her
wholly or partially unexercised Option (without regard to installment exercise
limitations, if any) and, subject to prior expiration pursuant to Sections 11
and 12, each Option shall be exercisable after receipt of such written notice
and prior to the effective date of such transaction.
10. Effective Date; Limitations on Grants of Options.
10.1 Effective Date. The original Plan became effective on
July 2, 1996. This Amended and Restated Plan shall become effective on the date
of its approval by the holders of a majority of the shares of Common Stock of
the Bank voting on such matter.
10.2 Grants of Options. No Option shall be granted under the
Plan more than ten (10) years from the earlier of the date of adoption of the
Plan by the Board or shareholder approval hereof.
10.3 Grants of Bank Director Stock Options. No Bank Director
Stock Options shall be granted under the Plan other than as set forth in Section
5.2 herein.
10.4 Existing Options. The Plan and all Options that are
actually granted under the Plan shall remain in effect and be subject to
adjustment and amendment as herein provided until they have been satisfied or
terminated in accordance with the terms of the grants and the applicable Option
Agreement.
11. Termination of Service of Key Employee. Each Incentive Stock Option
shall, unless sooner expired pursuant to Sections 11.1 or 11.2 below, expire on
the first to occur of (i) the tenth (10th) anniversary of the date of grant
thereof or (ii) the expiration date set forth in the applicable Option Agreement
(the "Expiration Date").
11.1 Termination other than for Death or Disability.
Notwithstanding any provision in the Plan to the contrary, an Incentive Stock
Option shall expire on the date that the employment of the Key Employee with the
Company terminates for any reason other than death or disability; provided,
however, that the Committee in its sole discretion may, by written notice given
to an ex-employee, permit the ex-employee to exercise Incentive Stock Options
during a period following his or her termination of employment, which period
shall not exceed three months. In no event, however, may the Committee permit an
ex-employee to exercise an Incentive Stock Option after the expiration date
contained in the Option Agreement evidencing such Incentive Stock Option. If the
Committee permits an ex-employee to exercise an Incentive Stock Option during a
period following his or her termination of employment pursuant to this Section
11.1, such Incentive Stock Option shall, to the extent unexercised, expire on
the date that such ex-employee violates (as determined by the Committee in its
sole and absolute discretion) any covenant not to compete in effect between the
Bank and the ex-employee.
11.2 Termination for Death or Disability. Notwithstanding any
provision in the Plan to the contrary, if the employment of a Key Employee with
the Company terminates by reason of the Key Employee's disability (as defined in
Section 422(c)(9) of the Code and as determined by the Committee in its sole and
absolute discretion) or death, his or her Incentive Stock Option shall expire on
the first to occur of the Expiration Date or the first anniversary of such
termination of employment.
11.3 Terms of Incentive Stock Options Not Extended. Sections
11.1 and 11.2 shall not be construed to extend the term of any Incentive Stock
Option or to permit anyone to exercise any Incentive Stock Option after the
expiration of its term, nor shall it be construed to increase the number of
shares of Common Stock as to which any Incentive Stock Option is exercisable
from the amount exercisable on the date of termination of the Key Employee's
service to the Bank.
12. Termination of Service of Bank Director. Each Bank Director Stock
Option shall, unless sooner expired pursuant to Sections 12.1 or 12.2 below,
expire on the first to occur of (i) the tenth (10th) anniversary of the date of
grant thereof or (ii) the Expiration Date.
12.1 Termination for Cause. If an optionee's service as a Bank
Director terminates for cause (as defined in Section 16.6 herein), the Bank
Director Stock Options granted to the optionee hereunder shall immediately
terminate in full and no rights thereunder may be exercised.
12.2 Termination Not for Cause. If an optionee's service as a
Bank Director terminates for any reason other than cause, the optionee (or any
guardian, legal representative, heir or successor of the optionee) may exercise
his Bank Director Stock Options in accordance with their terms to the extent,
and only to the extent, that such Bank Director Stock Options or portions
thereof were vested as of the date the optionee's service as a Bank Director
terminated, after which time the Bank Director Stock Options that are not vested
shall automatically terminate.
12.3 Terms of Bank Director Options Not Extended. Sections
12.1 and 12.2 shall not be construed to extend the term of any Bank Director
Stock Option or to permit anyone to exercise any Bank Director Stock Option
after the expiration of its term, nor shall it be construed to increase the
number of shares of Common Stock as to which any Bank Director Stock Option is
exercisable from the amount exercisable on the date of termination of the
optionee's service to the Bank.
13. Termination and Amendment of the Plan. The Committee (or the Board
in the case of Bank Director Stock Options) may from time to time amend, modify,
terminate or suspend the Plan; provided, however, that:
13.1 Except as provided in Sections 8 and 9, no such
amendment, modification, suspension, or termination shall impair or adversely
alter any Options or rights theretofore granted under the Plan, except with the
consent of the optionee, nor shall any amendment, modification, suspension, or
termination deprive any optionee of any Common Stock which he may have acquired
through or as a result of the Plan;
13.2 To the extent necessary under Section 16(b) of the Act
and the rules and regulations promulgated thereunder, no amendment shall be
effective unless approved by the shareholders of the Bank in accordance with
applicable law. Specifically, the Committee (or the Board in the case of Bank
Director Stock Options) may not without the approval of the shareholders of the
Bank:
(i) materially increase the total number of shares of Common
Stock available for grant under the Plan;
(ii) materially modify the class of eligible individuals
under the Plan; or
(iii) materially increase the benefits to any Plan
participant who is subject to the restrictions of Section 16 of
the Act.
13.3 With respect to Bank Director Stock Options, the
provisions of the Plan governing:
(i) the number of Bank Director Stock Options to be awarded
to Bank Directors;
(ii) the Common Stock to be covered by each Bank Director
Stock Option;
(iii) the exercise price per share under each Bank Director
Stock Option;
(iv) when and under what circumstances each Bank Director
Stock Option will be granted; and
(v) the period within which each Bank Director Stock Option
may be exercised
shall in no event be amended more often than once every six (6) months, other
than to comport with changes in the Code, the Employee Retirement Income
Security Act of 1974, as amended, or the rules and regulations promulgated
thereunder.
14. Non-Exclusivity of the Plan. Nothing contained in the Plan
prohibits a Bank Director from being appointed as an officer or employee of the
Bank at any time, nor does anything contained in the Plan specifically require a
Bank Director to surrender or forfeit a Bank Director Stock Option solely
because he accepts an appointment as an officer or employee of the Bank at any
time after being granted a Bank Director Stock Option hereunder.
15. Limitation of Liability. Nothing in the Plan shall be construed to:
15.1 give any Key Employee or Bank Director any right to be
granted an Option other than as specifically provided by the Plan;
15.2 give any Key Employee or Bank Director any rights
whatsoever with respect to Common Stock except as specifically provided in the
Plan;
15.3 limit in any way the right of the Bank to terminate the
service of any Bank Director as a member of the Board pursuant to the Bank's
bylaws and articles of incorporation;
15.4 be evidence of any agreement or understanding, express or
implied, that the Bank will nominate or appoint any person as a member of the
Board; or
15.5 confer upon any Key Employee or optionee the right to
continue in the employment of the Bank or affect any right which the Bank may
have to terminate the employment of each Key Employee or optionee.
16. Miscellaneous.
16.1 Legal Requirements. The obligation of the Bank to sell
and deliver Common Stock under the Plan shall be subject to all applicable laws,
regulations, rules and approvals. Certificates for shares of Common Stock issued
hereunder may be legended as the Committee (or the Board in the case of Bank
Director Stock Options) shall deem appropriate.
16.2 No Obligation To Exercise Options. The granting of
an Option shall impose no obligation upon an optionee to exercise such Option.
16.3 Application of Funds. The proceeds received by the Bank
from the sale of Common Stock pursuant to Options issued hereunder will be used
for general corporate purposes.
16.4 Withholding Taxes. The Bank is authorized to withhold
from any Option, any payment relating to an Option under the Plan, including
from a distribution of Common Stock, or any payroll or other payment to an
optionee, amounts of withholding and other taxes due with respect thereto, the
exercise thereof, or any payment thereunder, and to take such other action as
the Committee (or the Board in the case of Bank Director Stock Options) may deem
necessary or advisable to enable the Bank and any optionee to satisfy
obligations for the payment of withholding taxes and other tax liabilities
relating to any Option. The authority shall include authority to withhold Common
Stock and to make cash payments in respect thereof in satisfaction of an
optionee's tax obligations. The Bank may also require, as a condition to
delivery of Common Stock upon exercise of an Option, that all taxes required to
be withheld (if any) in connection with such exercise be paid to the Bank.
16.5 Leaves of Absence and Disability. The Committee shall be
entitled to make such rules, regulations and determinations as it deems
appropriate under the Plan in respect of any leave of absence taken by, or
disability of, any Key Employee. Without limiting the generality of the
foregoing, the Committee shall be entitled to determine (i) whether or not any
such leave of absence shall constitute a termination of employment within the
meaning of the Plan, and (ii) the impact, if any, of any such leave of absence
on Incentive Stock Options granted under the Plan to any Key Employee who takes
such leave of absence.
16.6 Cause. For the purposes of Section 12.1, "cause" shall
mean the commission of an act of fraud or intentional misrepresentation or an
act of embezzlement, misappropriation or conversion of the assets or
opportunities of the Bank.
16.7 Fair Market Value. Whenever the fair market value of
Common Stock is to be determined under the Plan as of a given date, such fair
market value shall be:
(a) If the Common Stock is admitted to
quotation on the National Association of Securities Dealers Automated
Quotation System ("NASDAQ") or other comparable quotation system and has been
designated as a National Market System ("NMS") security, the last sale price
reported for the Common Stock on such system on such given date;
(b) If the Common Stock is admitted to
quotation on NASDAQ and has not been designated a NMS security, the
closing bid price for the Common Stock at the close of trading on such
given date;
(c) If the Common Stock is listed on a national
securities exchange, the closing price of the Common Stock of the Composite
Tape on such given date; and
(d) If the Common Stock is neither admitted to
quotation on NASDAQ (or other comparable quotation system) nor listed on a
national securities exchange, such value as the Committee (or the Board in the
case of Bank Director Stock Options) shall attribute to the Common Stock.
(e) Notwithstanding any provision in this
Section 16.7 to the contrary, the fair market value of Common Stock for the
purposes of this Plan shall in no event be less than $1.925 per share.
16.8 Payment Upon Exercise. Upon the exercise of Options
pursuant to the Plan, optionees must tender cash to the Bank in payment for
Common Stock purchased.
16.9 Notices. Every direction, revocation or notice authorized
or required by the Plan shall be deemed delivered to the Bank (1) on the date it
is personally delivered to the Secretary of the Bank at its principal executive
offices, or (2) three business days after it is sent by registered or certified
mail, postage prepaid, addressed to the Secretary at such offices, and shall be
deemed delivered to an optionee (1) on the date it is personally delivered to
him or her, or (2) three business days after it is sent by registered or
certified mail, postage prepaid, addressed to him or her at the last address
shown for him or her on the records of the Bank.
16.10 Applicable Law. All questions pertaining to the
validity, construction and administration of the Plan and Options granted
hereunder shall be determined in conformity with the laws of the Commonwealth of
Virginia, to the extent not inconsistent with the Act and Sections 83 and 422 of
the Code and regulations thereunder.
16.11 Elimination of Fractional Shares. If, under any
provision of the Plan which requires a computation of the number of shares of
Common Stock subject to an Option, the number so computed is not a whole number
of shares of Common Stock, such number of shares of Common Stock shall be
rounded down to the next whole number.
16.12 Applicability of Plan Provisions to Nonqualified
Options. Other than the provisions of the Plan that are explicitly required by
Section 422 of the Code, all of the provisions of the Plan that apply to
Incentive Stock Options shall also apply to any Nonqualified Options granted
under the Plan to Key Employees.
16.13 Compliance with Rule 16b-3. It is the intent of the Bank
that this Plan comply in all respects with Rule 16b-3 under the Act in
connection with any Option granted to a person who is subject to Section 16 of
the Act. Accordingly, if any provision of this Plan, any Option, or any Option
Agreement does not comply with the requirements of Rule 16b-3 as then applicable
to any such person, such provision shall be construed or deemed amended to the
extent necessary to conform to such requirements with respect to such person.