Exhibit 4.6
RESOURCE BANK
1993 LONG-TERM INCENTIVE PLAN
1. General.
1.1 Purpose. The purpose of the 1993 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 all 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 a disinterested administration plan as described in Rule
16b-3(c)(2)(i) 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 will constitute a formula award plan as described in Rule
16b-3(c)(2)(ii) promulgated by the Commission under the Act, 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) for the purposes of administering any stock-related plan of the Bank
established pursuant to Rule 16b-3 under the Act.
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 members of the Board. 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, it being intended that
each member of the Committee shall be a "disinterested person" as that term is
defined in Rule 16b-3(c)(2)(i) under the Act. Accordingly, no member of the
Board may exercise any discretion with respect to, or participate in any
manner in, the administration of the Incentive Stock Options if, at any time
within one year prior to or during such service, he or she has received
equity securities pursuant to the Plan or any other plan of the Bank under
which any discretion is exercised; provided, however, that a Bank Director
is not ineligible to serve on the Committee and exercise discretion with
respect to the administration of the Incentive Stock Options merely because
such Bank Director participates in a formula award plan as described in Rule
16b-3(c)(2)(ii) under the Act, or participates in other benefit plans or
receives an annual retainer fee as more particularly described in Rule
16b-3(c)(2)(i) under the Act.
(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"). The Board shall have no authority, discretion or
power to select the individuals who are or will be eligible to receive the
Bank Director Stock Options under the Plan. The Board shall not have any
discretion to determine the amount, price or timing of any Bank Director Stock
Options granted or to be granted hereunder, and shall only administer the
Bank Director Stock Options pursuant to the express 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 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;
(ii) to amend, modify, suspend, or
terminate the Bank Director Stock Options in accordance with Section 13; and
(iii) 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 130,000, 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 50,000,
subject to adjustment pursuant to Section 8. If, prior to the end of the
period during which Bank Director Stock Options may be granted under the Plan,
any Bank Director 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 Bank Director 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 Bank Director Stock Options
under the Plan.
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. 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) Terms of 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. 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 intends to grant Bank Director Stock Options to the following
Bank Directors to purchase the following number of shares of Common Stock:
Bank Director Shares of Common Stock
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(1) John B. Bernhardt 25,000
(2) John L. Gibson, II 25,000
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.
5.4 Duration. 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(c)(1) 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 Plan shall become effective
on the date of the approval of the Plan by the holders of a majority of the
shares of Common Stock of the Bank; provided, however, that the Plan shall be
submitted to shareholders for approval within twelve (12) months before or
after the date of adoption of the Plan by the Board. The Plan shall be null
and void and of no effect if the shareholders do not approve the Plan as
provided herein. If the shareholders do not approve the Plan, each Option
granted hereunder shall, notwithstanding any of the preceding provisions of
the Plan, be null and void and of no effect.
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 not 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 to the extent, and only to the extent
that such Bank Director Stock Options or portion thereof were vested and
exercisable as of the date the optionee's service as a Bank Director terminated.
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 render 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.
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.