Exhibit 10.6
THIS AGREEMENT, made as of the 18th day of March, 1998 (the "Grant
Date"), by and between FIRST CHEROKEE BANCSHARES, INC. (the "Company") and
___________________ (the "Optionee");
W I T N E S S E T H:
WHEREAS, in recognition of services performed and as an incentive in
connection with the performance of future services as a member of the Board of
Directors of the Company, the Optionee has been granted options to purchase
shares of Company common stock, $1.00 par value per share (the "Common Stock");
and
WHEREAS, the Company and Optionee wish to confirm the terms and conditions
of those options;
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
it is hereby agreed between the parties hereto as follows:
1.OPTIONS GRANTED. Subject to the terms, restrictions, limitations and
conditions stated herein, the Optionee is granted a non-qualified stock option
(the "Option") to purchase all or any part of 1,200 shares of Common Stock (the
"Shares").
2.TERM AND EXERCISE OF OPTION.Subject to the provisions of this Agreement:
(a) The Option shall vest and become exercisable in twenty
percent (20%) annual increments beginning with the first anniversary of
the Grant Date and continuing over the next four anniversaries thereof
so long as the Optionee continues to serve as a member of the Board of
Directors of the Company; provided further, however, that the Option
shall become fully vested and exercisable thirty (30) days (or any
earlier date determined by the Compensation Committee of the Company)
prior to the effective date of any dissolution or liquidation of the
Company or any merger or consolidation in which the Company is not the
surviving entity.
(b) Subject to Section 7 hereof, the Option may be exercised
with respect to all or any portion of the vested Shares at any time
during the Option Period by the delivery to the Company, at its
principal place of business, of (i) a written notice of exercise in
substantially the form attached hereto as Exhibit 1, which shall be
actually delivered to the Company no earlier than thirty (30) days and
no later than ten (10) days prior to the date upon which Optionee
desires to exercise of all or any portion of the Option; (ii) payment
to the Company of the Exercise Price, defined in Section 3 below,
multiplied by the number of Shares being purchased (the "Purchase
Price") in the manner provided in Subsection (c) hereof; and (iii)
payment of all applicable withholding tax obligations (whether federal,
state or local) imposed by reason of the exercise of the Option. Upon
acceptance of such notice, receipt of payment in full of the Purchase
Price, and receipt of payment of all withholding tax obligations, the
Company shall cause to be issued a certificate representing the Shares
purchased.
(c) The Purchase Price and all applicable withholding tax
obligations shall be paid in full upon the exercise of an Option and no
Shares shall be issued or delivered until full payment therefor has
been made. Payment of the Purchase Price for all Shares purchased
pursuant to the exercise of an Option and of any tax withholding
obligations shall be made in cash or by certified check; by tendering
shares of previously owned Common Stock held at least six (6) months;
or, to the extent available, by a cashless exercise through a broker.
3. EXERCISE PRICE. The exercise price for each of the Shares for which
the Option is exercised shall be $17.71, subject to adjustment as set forth in
Section 7 hereof (the "Exercise Price").
4. TERM AND TERMINATION OF OPTION. Except as otherwise provided herein,
the term of the Option (the "Option Period") shall expire on the date of the
first to occur of the following events:
(a) March 18, 2008; or
(b) the ninetieth (90th) day following the date the Optionee
no longer serves upon the Board of Directors of the Company.
Upon the expiration of the Option Period, this Option, and all unexercised
rights granted to Optionee hereunder shall terminate, and thereafter be null and
void.
5. RIGHTS AS SHAREHOLDER. Until the stock certificates reflecting the
Shares accruing to the Optionee upon exercise of the Option are issued to the
Optionee, the Optionee shall have no rights as a shareholder with respect to
such Shares. The Company shall make no adjustment for any dividends or
distributions or other rights on or with respect to Shares purchased pursuant to
the Option for which the record date is prior to the issuance of that stock
certificate, except as this Agreement otherwise provides.
6. RESTRICTION ON TRANSFER OF OPTION. The Option evidenced hereby is
nontransferable other than by will or the laws of descent and distribution, and,
shall be exercisable during the lifetime of the Optionee only by the Optionee
(or in the event of his disability, by his personal representative) and after
his death, only by his personal representative.
7. CHANGE IN CAPITALIZATION, CHANGE IN CONTROL, ETC. If the number of
shares of the Common Stock shall be increased or reduced by a stock split,
payment of a stock dividend, a subdivision or combination of shares,
reclassification, merger or consolidation, or similar capital adjustment, an
appropriate adjustment shall be made by the Company in the number and kind of
shares as to which the Option, or the portion thereof then unexercised, shall be
or become exercisable, to the end that the Optionee's proportionate interest
shall be maintained as before the occurrence of the event. The adjustment shall
be made without change in the total price applicable to the unexercised portion
of the Option and with a corresponding adjustment in the Exercise Price. No
fractional shares shall be issued or optioned in making the adjustment. All
adjustments made by the Board of Directors of the Company under this Section
shall be conclusive.
8. SPECIAL LIMITATION ON EXERCISE. Notwithstanding anything contained
herein to the contrary, no purported exercise of the Option shall be effective
without the written approval of the Company, which may be withheld to the extent
that its exercise, either individually or in the aggregate together with the
exercise of other previously exercised stock options and/or offers and sales
pursuant to any prior or contemplated offering of securities, would, in the sole
and absolute judgment of the Company, require the filing of a registration
statement with the United States Securities and Exchange Commission, or with the
securities commission of any state. The Company shall avail itself of any
exemptions from registration contained in applicable federal and state
securities laws which are reasonably available to the Company on terms which, in
its sole and absolute discretion, it deems reasonable and not unduly burdensome
or costly. If the Option cannot be exercised at the time it would otherwise
expire due to the restrictions contained in this Section, the exercise period
shall be extended for successive one-year periods until it can be exercised in
accordance with this Section. The Optionee shall deliver to the Company, prior
to the exercise of the Option, such information, representations and warranties
as the Company may reasonably request in order for the Company to be able to
satisfy itself that the stock to be acquired pursuant to the exercise of the
Option is being acquired in accordance with the terms of an applicable exemption
from the securities registration requirements of applicable federal and state
securities laws.
9. LEGEND ON STOCK CERTIFICATES. Certificates evidencing the stock to
be distributed pursuant to the Agreement shall, to the extent appropriate at the
time, have noted conspicuously on the certificates a legend to the following
effect, which is intended to give all persons full notice of the existence of
the conditions, restrictions, rights and obligations set forth in this
Agreement:
(a) That the securities evidenced by the certificate were
issued without registration under the Securities Act of 1933, as
amended (the "1933 Act"), or under the applicable laws of any state or
states (collectively referred to as the "State Acts"), in reliance upon
certain exemptive provisions of the 1933 Act or any applicable State
Acts;
(b) That the securities cannot be sold or transferred unless,
in the opinion of counsel reasonably acceptable to the Company, the
sale or transfer would be:
(1) Pursuant to an effective registration statement
under the 1933 Act or pursuant to an available exemption form
registration; and
(2) A transaction which is exempt under any
applicable State Acts or pursuant to an effective registration
statement under or in a transaction which is otherwise in
compliance with the State Acts; and
(c) That the securities evidenced by the certificate were
issued in accordance with the provisions of the Agreement and are
subject to the provisions thereof and may not be sold or transferred
except in compliance with said provisions.
10. GOVERNING LAWS. This Agreement shall be construed, administered and
enforced according to the laws of the State of Georgia; provided, however, the
Option may not be exercised except, in the reasonable judgment of the Board of
Directors of the Company, in compliance with exemptions under applicable state
securities laws of the state in which the Optionee resides, if applicable, and
any other applicable securities laws.
11. SUCCESSORS. This Agreement shall be binding upon and inure to
the benefit of the heirs, legal representatives,successors and permitted
assigns of the parties.
12. NOTICE. Except as otherwise specified herein, all notices and other
communications under this Agreement shall be in writing and shall be deemed to
have been given if personally delivered or if sent by registered or certified
United States mail, return receipt requested, postage prepaid, addressed to the
proposed recipient at the last known address of the recipient. Any party may
designate any other address to which notices shall be sent by giving notice of
the address to the other parties in the same manner as provided herein.
13. SEVERABILITY. In the event that any one or more of the provisions
or portion thereof contained in this Agreement shall for any reason be held to
be invalid, illegal or unenforceable in any respect, the same shall not
invalidate or otherwise affect any other provisions of this Agreement, and this
Agreement shall be construed as if the invalid, illegal or unenforceable
provision or portion thereof had never been contained herein.
14. ENTIRE AGREEMENT. This Agreement expresses the entire understanding
and agreement of the parties regarding the Option. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original
but all of which shall constitute one and the same instrument.
15. VIOLATION. Any transfer, pledge, sale, assignment, or hypothecation
of the Option or any portion thereof shall be a violation of the terms of this
Agreement and shall be void and without effect.
16. HEADINGS. Paragraph headings used herein are for convenience of
reference only and shall not be considered in construing this Agreement.
17. SPECIFIC PERFORMANCE. In the event of any actual or threatened
default in, or breach of, any of the terms, conditions and provisions of this
Agreement, the party or parties who are thereby aggrieved shall have the right
to specific performance and injunction in addition to any and all other rights
and remedies at law or in equity, and all such rights and remedies shall be
cumulative.
IN WITNESS WHEREOF, the parties have executed and sealed this Agreement
as of the day and year first set forth above.
FIRST CHEROKEE BANCSHARES, INC.
By:
______________________________
Title:
ATTEST: ______________________________
______________________________
Title:
______________________________
[CORPORATE SEAL]
OPTIONEE
______________________________
EXHIBIT 1 TO NONQUALIFIED STOCK OPTION AGREEMENT
NOTICE OF EXERCISE OF
FIRST CHEROKEE BANCSHARES, INC.
STOCK OPTION TO PURCHASE
COMMON STOCK
Name______________________
Address___________________
__________________________
Date______________________
First Cherokee Bancshares, Inc.
_______________________________
_______________________________
_______________________________
Re: Exercise of Non-Qualified Stock Option
Gentlemen:
Subject to acceptance hereof in writing by First Cherokee Bancshares,
Inc. (the "Company"), I hereby give at least ten days but not more than thirty
days prior notice of my election to exercise options granted to me to purchase
______________ shares of common stock of the Company (the "Common Stock") under
the Non-Qualified Stock Option Agreement dated as of March 18, 1998. The
purchase shall take place as of __________, 199_ (the "Exercise Date").
On or before the Exercise Date, I will pay the applicable purchase
price as follows by delivery of cash or a certified check payable to the order
of First Cherokee Bancshares, Inc. for $___________ for the full purchase price.
I understand that I must also pay the required federal, state and local
tax withholding obligations, if any, on the exercise of the option on or before
the Exercise Date.
As soon as the stock certificate is registered in my name, please
delivery it to me at the above address.
If the Common Stock being acquired is not registered for issuance to
and resale by the Optionee pursuant to an effective registration statement on
Form S-8 (or successor form) filed under the Securities Act of 1933, as amended
(the "1933 Act"), I hereby represent, warrant, covenant, and agree with the
Company as follows:
The shares of the Common Stock being acquired by me will be
acquired for my own account without the participation of any other
person, with the intent of holding the Common Stock for investment and
without the intent of participating, directly or indirectly, in a
distribution of the Common Stock and not with a view to, or for resale
in connection with, any distribution of the Common Stock, nor am I
aware of the existence of any distribution of the Common Stock;
I am not acquiring the Common Stock based upon any
representation, oral or written, by any person with respect to the
future value of, or income from, the Common Stock but rather upon an
independent examination and judgment as to the prospects of the
Company;
The Common Stock was not offered to me by means of publicly
disseminated advertisements or sales literature, nor am I aware of any
offers made to other persons by such means;
I am able to bear the economic risks of the investment in the
Common Stock, including the risk of a complete loss of my investment
therein;
I understand and agree that the Common Stock will be issued
and sold to me without registration under any state law relating to the
registration of securities for sale, and will be issued and sold in
reliance on the exemptions from registration under the 1933 Act,
provided by Sections 3(b) and/or 4(2) thereof and the rules and
regulations promulgated thereunder;
The Common Stock cannot be offered for sale, sold or
transferred by me other than pursuant to: (A) an effective registration
under the 1933 Act or in a transaction otherwise in compliance with the
1933 Act; and (B) evidence satisfactory to the Company of compliance
with the applicable securities laws of other jurisdictions. The Company
shall be entitled to rely upon an opinion of counsel satisfactory to it
with respect to compliance with the above laws;
The Company will be under no obligation to register the Common
Stock or to comply with any exemption available for sale of the Common
Stock without registration or filing, and the information or conditions
necessary to permit routine sales of securities of the Company under
Rule 144 under the 1933 Act are not now available and no assurance has
been given that it or they will become available. The Company is under
no obligation to act in any manner so as to make Rule 144 available
with respect to the Common Stock;
I have and have had complete access to and the opportunity to
review and make copies of all material documents related to the
business of the Company, including, but not limited to, contracts,
financial statements, tax returns, leases, deeds and other books and
records. I have examined such of these documents as I wished and am
familiar with the business and affairs of the Company. I realize that
the purchase of the Common Stock is a speculative investment and that
any possible profit therefrom is uncertain;
I have had the opportunity to ask questions of and receive
answers from the Company and any person acting on its behalf and to
obtain all material information reasonably available with respect to
the Company and its affairs. I have received all information and data
with respect to the Company which I have requested and which I have
deemed relevant in connection with the evaluation of the merits and
risks of my investment in the Company;
I have such knowledge and experience in financial and business
matters that I am capable of evaluating the merits and risks of the
purchase of the Common Stock hereunder and I am able to bear the
economic risk of such purchase; and
The agreements, representations, warranties and covenants made
by me herein extend to and apply to all of the Common Stock of the
Company issued to me pursuant to this Option. Acceptance by me of the
certificate representing such Common Stock shall constitute a
confirmation by me that all such agreements, representations,
warranties and covenants made herein shall be true and correct at that
time.
I understand that the certificates representing the shares being
purchased by me in accordance with this notice shall bear a legend referring to
the foregoing covenants, representations and warranties and restrictions on
transfer, and I agree that a legend to that effect may be placed on any
certificate which may be issued to me as a substitute for the certificates being
acquired by me in accordance with this notice.
Very truly yours,
__________________________
AGREED TO AND ACCEPTED:
FIRST CHEROKEE BANCSHARES, INC.
By:_____________________________
Title:__________________________
Number of Shares
Exercised:______________________
Number of Shares
Remaining:______________________ Date:_____________________
