As filed with the Securities and Exchange Commission on June 25,1997.
Registration No.333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
____________________
COMMUNITY BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Delaware 63-0868361
(State or other juris- (I.R.S. Employer
diction of incorporation Identification No.)
or organization)
Main Street
P.O. Box 1000
Blountsville, Alabama 35031
(Address of Principal Executive Offices) (Zip Code)
____________________
Nonqualified Stock Option Agreements under the
Community Bancshares, Inc. 1996 Stock Option Plan For Directors
(Full title of the Plan)
Copies To:
Bishop K. Walker, Jr. Kevin D. Norwood, Esq.
Community Bancshares, Inc. Waller Lansden Dortch & Davis,
Main Street, P.O. Box 1000 A Professional Limited Liability Company
Blountsville, Alabama 35031 511 Union Street, Suite 2100
(Name and address of agent for service) Nashville, Tennessee 37219
(205) 429-1000
(Telephone number,
including area code,
of agent for service)
CALCULATION OF REGISTRATION FEE
Title of Proposed maximum Proposed maximum Amount
securities to Amount to be offering price per aggregate offering of
be registered registered share price registration
fee
Common stock, par
value $0.10 per 135,000 shares $20 (1) $2,700,000 $819
share
TOTAL 135,000 shares $2,700,000 $819
(1) Based upon the exercise price under the plan.
<PAGE>
PROSPECTUS
135,000 Shares
COMMUNITY BANCSHARES, INC.
Common Stock
This Reoffer Prospectus ("Prospectus") has been prepared for use by
certain affiliates ("Selling Stockholders") of Community Bancshares, Inc.
(the "Company") in connection with the resale of up to 135,000 shares of the
Company's common stock, $.10 par value per share (the "Common Stock"), which may
be issued to such Selling Stockholders pursuant to Nonqualified Stock Option
Agreements under the Community Bancshares, Inc. 1996 Stock Option Plan for
Directors (the "Plan"). See "Selling Stockholders."
None of the proceeds from the resale of the shares by the Selling
Stockholders will be received by the Company. The Company will bear all
expenses (other than underwriting discounts and selling commissions, and fees
and expenses of counsel and other advisors to the Selling Stockholders)
in connection with the registration of the shares of Common Stock being offered
by the Selling Stockholders.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS
THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRE-
SENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
THE SHARES OF COMMON STOCK OFFERED HEREBY
ARE NOT SAVINGS ACCOUNTS AND ARE NOT INSURED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION.
The date of this Prospectus is June 25, 1997.
<PAGE>
AVAILABLE INFORMATION
The Company has filed a Registration Statement (the "Registration Statement")
on Form S-8, including any amendments thereto, with the Securities and Exchange
Commission (the "Commission") with respect to the Common Stock. This Prospectus
does not contain all of the information set forth in the Registration Statement
and the exhibits and schedules thereto. Statements contained in this
Prospectus as to the contents of any contract or other document referred to are
not necessarily complete and in each instance reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement or as previously filed with the Commission and incorporated
herein by reference. For further information with respect to the Company and
the Common Stock, reference is made to the Registration Statement, exhibits and
schedules. A copy of the Registration Statement may be inspected by
anyone without charge at the Commission's principal office at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and copies of all or any part
thereof may be obtained from the Commission upon payment of certain fees
prescribed by the Commission.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information filed by the
Company can be inspected and copied at the public reference facilities
maintained by the Commission, at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, as well as the following Commission Regional
Offices: New York Regional Office, 7 World Trade Center, Suite 1300,
New York, New York 10048; and Chicago Regional Office, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60601-2511. Copies can be obtained by
mail at prescribed rates. Requests should be directed to the Commission's
Public Reference Section, Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Commission maintains an Internet web site at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed with the Commission by the Company
pursuant to the Exchange Act are incorporated by reference into this
Prospectus: (i) the Company's Annual Report on Form 10-K for the year ended
December 31, 1996; (ii) the Company's Quarterly Report on Form 10-Q for the
three months ended March 31, 1997; and (iii) the description of the Common
Stock contained in the Company's Registration Statement on Form 8-A.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus shall
be deemed to be incorporated by reference into this Prospectus. Any
statement contained herein, or in a document incorporated or deemed to be
incorporated by reference herein, shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein, modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
This Prospectus incorporates documents by reference which are not
presented herein or delivered herewith. A copy of these documents is available,
without charge, upon written or oral request from the Company.Requests should
be directed to Paul W. Williams, Chief Accounting Officer, Community Bancshares,
Inc., Main Street, P.O. Box 1000, Blountsville, Alabama 35031, or at
(205) 429-1000.
2 <PAGE>
TABLE OF CONTENTS
Page
AVAILABLE INFORMATION . . . . . . . . . . . . 2
DOCUMENTS INCORPORATED BY REFERENCE 2
THE COMPANY 4
USE OF PROCEEDS 4
SELLING STOCKHOLDERS 4
PLAN OF DISTRIBUTION 5
LEGAL MATTERS 5
EXPERTS 6
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED
IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING HEREIN CONTAINED AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING STOCKHOLDERS. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF ANY
OFFER TO BUY, THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE AN OFFER OR SOLICITATION. NEITHER THE DELIVERY
OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL,UNDER ANY CIRCUMSTANCES,
CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF OR THAT ANY INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
3 <PAGE>
PROSPECTUS SUMMARY
The following is qualified in its entirety by the more detailed information
in this Prospectus and in the documents and financial statements, including the
notes thereto, incorporated herein by reference, and should be read together
therewith. Unless otherwise specified, all information in this Prospectus has
been adjusted to reflect a three-for-one split of the Common Stock effected
in the form of a stock dividend as of June 1, 1993. Unless the context
otherwise indicates, the "Company" refers to and includes the Company and its
direct and indirect subsidiaries.
The Company
Community Bancshares, Inc. (the "Company") is a Delaware corporation and a
bank holding company registered with the Board of Governors of the Federal
Reserve System under the Bank Holding Company Act of 1956, as amended. The
Company was organized in 1983 and commenced operations in 1985. The Company has
two operating bank subsidiaries, Community Bank, an Alabama banking corporation,
and Community Bank, a Tennessee banking corporation, which conduct a
general commercial banking business in northern Alabama and southern Tennessee.
The majority of loans by the Company are to individuals and small to mid-sized
businesses in Alabama and Tennessee.
The Company, as of the date of this prospectus, operates through a total
of 23 bank offices located in Blount, DeKalb, Lauderdale, Limestone,
Madison, Marshall and Morgan Counties in Alabama and Giles County in Tennessee.
At December 31, 1996, the Company had approximately $454 million in assets.
The Company operates a real estate appraisal business through it
subsidiary, Community Appraisals, Inc., and, through its subsidiary, Community
Insurance Corp., serves as an agent in the sale of title, life, automobile,
homeowners and farmowners insurance policies, which are offered at the
Company's bank locations by employees of the Company who are licensed as
insurance agents.
USE OF PROCEEDS
The Company will not receive any proceeds from the resale of shares of
Common Stock by the Selling Stockholders.
SELLING STOCKHOLDERS
The Company intends to issue a total of 135,000 shares of Common Stock
to the individuals identified below, each of whom is a member or former member
of the Company's Board of Directors, in connection with the exercise by such
individuals of stock options granted to them under the Plan. The expenses of
such issuance, other than the exercise price of such options, will be borne by
the Company. No commissions, discounts, concessions or other compensation will
be paid to any underwriter or broker-dealer in connection with such issuance.
4 <PAGE>
This Prospectus may be used by the following Selling Stockholders, each of
whom may be considered an "affiliate" of the Company within the meaning of the
Securities Act of 1933, in connection with the resale of up to 135,000 shares of
Common Stock:
Selling Stockholder Number of Shares
Kennon R. Patterson, Sr. 26,000
Bishop K. Walker, Jr. 18,000
Denny Kelly 11,000
Loy McGruder 9,000
Hodge Patterson, III 10,000
R.C. Corr, Jr. 11,000
C.K. Copeland 10,000
Jon M. Owings 3,000
Merritt Robbins 9,000
R. Wayne Washam 10,000
Glynn Debter 9,000
Robert O. Summerford, Jr. 9,000
PLAN OF DISTRIBUTION
The shares may be offered by the Selling Stockholders from time to
time in negotiated transactions, through the writing of options on the
shares or a combination of such methods of sale, at prices related to
prevailing market prices or at negotiated prices. The Selling Stockholders may
effect such transactions by selling the shares to or through broker-dealers
and such broker-dealers may receive compensation in the form of discounts,
concessions or commissions from the Selling Stockholders and/or the purchasers
of the shares for which such broker-dealers may act as agent or to whom they
sell as principal or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions).
LEGAL MATTERS
The validity of the shares of the Common Stock offered hereby will be passed
upon for the Company by Waller Lansden Dortch & Davis, A Professional
Limited Liability Company, Nashville, Tennessee.
{page 5}
EXPERTS
The audited financial statements of the Company have been included in
the Company's Annual Report on Form 10-K for the year ended December 31,
1996, and incorporated herein by reference, in reliance upon the report of
Dudley, Hopton-Jones, Sims & Freeman PLLP, independent certified public
accountants, and upon the authority of said firm as experts in accounting and
auditing.
6 <PAGE>
II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT.
Item 3. Incorporation of Documents By Reference.
The following documents filed with the Commission by the Company are
incorporated herein by reference as of the dates thereof:
(1) the Company's Annual Report on Form 10-K for the year ended
December 31, 1996;
(2) the Company's Quarterly Report on Form 10-Q for the three months
ended March 31, 1997; and
(3) the description of the Common Stock contained in the Company's
Registration Statement on Form 8-A.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c),14 and 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference into this registration statement and to be a part
hereof from the date of filing of such documents.
Any statements contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes hereof to the extent
that a statement contained herein (or in any other subsequently filed
document which is also incorporated by reference herein) modifies or
supersedes such statement. Any statement so modified or superseded shall not
be deemed to constitute part hereof except as so modified or superseded.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
The Company's Bylaws contain provisions similar to those of Section 145
of the General Corporation Law of the State of Delaware, and authorize
the Company to indemnify its officers, directors, employees and agents to
the full extent permitted by law. The Company has directors' and officers'
liability and indemnification insurance pursuant to standard form policies.
The risks covered by such policies may include certain liabilities under the
securities laws.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted pursuant to the foregoing provisions to directors, officers or
persons controlling the Company, the Company has been informed that in the
opinion of the Commission, such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
Item 7. Exemption from Registration Claimed.
Not applicable.
II-1 <PAGE>
Item 8. Exhibits.
5. Opinion of Waller Lansden Dortch & Davis, A Professional Limited
Liability Company.
23(a). Consent of Dudley, Hopton-Jones, Sims & Freeman PLLP.
23(b). Consent of Waller Lansden Dortch & Davis, A Professional Limited
Liability Company (included in opinion filed as Exhibit 5).
24. Power of Attorney (included on page II-4).
99. Nonqualified Stock Option Agreement under the Community Bancshares,
Inc. 1996 Stock Option Plan For Directors
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement. Notwith-
standing the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low and high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) under the Securities
Act if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in
the registration statement.
II-2 <PAGE>
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the Registration Statement is on Form S-3, Form S-8 or Form F-3 and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d)
of the Exchange Act that are incorporated by reference in the Registration
Statement.
(2) That, for the purposes of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
II-3 <PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Blountsville, State of Alabama, on June 25, 1997.
COMMUNITY BANCSHARES, INC.
By: /s/ Kennon R. Patterson, Sr.
Kennon R. Patterson, Sr.
Chairman and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS,that each person whose signature appears below
constitutes and appoints Kennon R. Patterson, Sr. and Bishop K. Walker, Jr.,
his true and lawful attorney-in-fact and agent, with full power of substitution
and resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments to this registration statement, and
to file the same, with all exhibits thereto, and other documents in
connection therewith with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agent full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about
the premises, as fully and to all intents and purposes as he might or could do
in person hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
/s/ Kennon R. Patterson, Sr. Chairman, Chief Executive June 25, 1997
Kennon R. Patterson, Sr. Officer and Director (Principal
Executive Officer)
/s/ Paul W. Williams Chief Accounting Officer, June 25, 1997
Paul W. Williams (Principal Financial
and Accounting Officer)
/s/ C.K. Copeland Director June 25, 1997
C.K. Copeland
/s/ Bryan A.Corr Director June 25, 1997
Bryan A. Corr
/s/ R.C. Corr, Jr. Director June 25, 1997
R.C. Corr, Jr.
/s/ Glynn Debtor Director June 25, 1997
Glynn Debtor
/s/ Edward Ferguson Director June 25, 1997
Edward Ferguson
/s/ Denny Kelly Director June 25, 1997
Denny Kelly
II-4 <PAGE>
/s/ John J. Lewis, Jr. Director June 25, 1997
John J. Lewis, Jr.
/s/ Stacey W. Mann Director June 25, 1997
Stacey W. Mann
/s/ Loy McGruder Director June 25, 1997
Loy McGruder
/s/ Hodge Patterson III Director June 25, 1997
Hodge Patterson III
/s/ Kennon R. Patterson, Jr. Director June 25, 1997
Hodge Patterson III
/s/ Merritt Robbins Director June 25, 1997
Merritt Robbins
/s/ Robert O. Summerford Director June 25, 1997
Robert O. Summerford
/s/ Wayne Washam Director June 25, 1997
Wayne Washam
/s/ Bishop K. Walker, Jr. Director June 25, 1997
Bishop K. Walker, Jr.
II-5 <PAGE>
EXHIBIT INDEX
EXHIBIT
5. Opinion of Waller Lansden Dortch & Davis, A Professional
Limited Liability Company.
23(a). Consent of Dudley, Hopton-Jones, Sims & Freeman PLLP
23(b). Consent of Waller Lansden Dortch & Davis, A Professional
Limited Liability Company (included in opinion filed as Exhibit 5).
24. Power of Attorney (included on page II-4).
99. Nonqualified Stock Option Agreement under the Community Bancshares,
Inc. 1996 Stock Option Plan For Directors
<PAGE>
Exhibit 5
WALLER LANSDEN DORTCH & DAVIS,
A PROFESSIONAL LIMITED LIABILITY COMPANY
511 Union Street, Suite 2100
Post Office Box 198966
Nashville, Tennessee 37219-8966
(615) 244-6380
Facsimiles: (615) 244-6804; (615) 244-5686
June 25, 1997
Securities and Exchange Commission 450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Community Bancshares, Inc.
Registration Statement on Form S-8
Ladies and Gentlemen:
We are acting as counsel to Community Bancshares, Inc., a Delaware
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933 (the "Act"), of 135,000 shares of the Company's Common
Stock, $.10 par value per share (the "Shares"), pursuant to the above-
referenced Registration Statement (the "Registration Statement"). In
connection with this opinion, we have examined and relied upon such records,
documents and other instruments as in our judgment are necessary or
appropriate in order to express the opinions hereinafter set forth and have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as originals and the conformity to original documents of all
documents submitted to us as certified or photostatic copies.
Based upon the foregoing, we are of the opinion that the Shares, when
issued and delivered in the manner and on the terms described in the
Registration Statement, will be duly authorized, validly issued, fully paid
and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and further consent to the reference to us under the
caption "Legal Matters" in the prospectus included in the Registration
Statement.
Very truly yours,
/s/ Waller Lansden Dortch & Davis,
A Professional Limited Liability Company<PAGE>
CONSENT OF DUDLEY, HOPTON-JONES, SIMS & FREEMAN PLLP,
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the reference of our firm under the caption
Experts in the Registration Statement of Community Bancshares, Inc. For the
registration of 135,000 shares of its common stock and to the incorporation by
reference therein of our report dated February 14, 1997, with respect to the
consolidated financial statements of Community Bancshares, Inc. Included and
incorporated by reference in its Annual Report (Form 10-K) for the year ended
December 31, 1996, filed with the Securities and Exchange Commission.
Dudley, Hopton-Jones, Sims & Freeman PLLP
Birmingham, Alabama
June 24, 1997
<PAGE>
Exhibit 99
NONQUALIFIED STOCK OPTION AGREEMENT
under the
COMMUNITY BANCSHARES, INC.
1996 STOCK OPTION PLAN FOR DIRECTORS
Grantee: ____________
Number Shares Subject to Option: ____________
Option Price Per Share: $20.00
Date of Grant: March 28, 1996
1. Grant of Option: Community Bancshares, Inc. (the "Company")
hereby grants to the Grantee named above (the "Grantee"), under the Community
Bancshares, Inc. 1996 Stock Option Plan for Directors (the "Plan"), a
Nonqualified Stock Option to purchase, on the terms and conditions set forth
in this agreement (this "Option Agreement"), the number of shares indicated
above the Company's Common Stock of the par value of $.10 each (the "Stock"),
at the option price per share set forth above, which is the Fair Market Value
per share of Stock on the date of grant. Capitalized terms used herein and
not otherwise defined shall have the meanings assigned such terms of the Plan.
2. Period of Option and Limitations on Right to Exercise. The
Nonqualified Stock Option granted hereby will, to the extent not previously
exercised, lapse at 5:00 p.m., Central Time, on the day immediately prior to
the fifth anniversary of the date of grant (the "Expiration Date") unless
sooner terminated in whole or in part as follows:
(a) Termination of Directorship. Upon termination of the Grantee's
membership on the Board of Directors of the Company for any reason other than
for cause of death, the Option granted hereby shall terminate ninety (90) days
following the date of termination of the Grantee's membership on the board or,
if earlier, on the Expiration Date. If the Grantee exercised the Option after
termination of the Grantee's service on the Board of Directors, the Grantee
may exercise the Option only with respect to the shares that were otherwise
exercisable on the date of termination on the Grantee's service on the Board.
If the Grantee's membership on the Board of Directors is terminated for cause,
the Option granted hereby shall expire upon such termination.
(b) Death. In the event of the death of the Grantees, the Grantee's
personal representatives, heirs or legatees (the "Grantee's Successors") may
exercise the Option granted hereby on the date of death, upon proof satisfactory
to the company of their authority. The Grantee's Successors must exercise such
Option within one (1) year after the Grantee's death and in any event prior to
the Expiration Date.
3. Exercise of Option. The terms, times and conditions of exercise
of the Nonqualified Stock Option granted hereby are as follows: <PAGE>
The Option shall be exercisable at any time after the date of grant
prior to its lapse as stated in paragraph "2.".
The Option granted hereby shall be exercised by written notice directed
to the Secretary of the Company at the principal executive offices of the
Company. Such written notice shall be accompanied by full payment in cash or
by check for the number of Shares specified in such written notice. To the
extent permitted under Regulation T of the Federal Reserve Board, and subject
to applicable securities laws, the Option may be exercised through a broker in
a so-called "cashless exercise" whereby the broker sells the option shares and
delivers cash sales proceeds to the Company in payment of the exercise price.
Subject to the terms of this Option Agreement, the Nonqualified Stock
Option granted hereby may be exercised at any time and without regard to any
other option held by the Grantee to purchase stock of the Company.
In addition, the terms contained in the Plan are incorporated into and
made a part of this Option Agreement and this Option Agreement shall be
governed by and construed in accordance with the Plan.
4. Nontransferability. The Option granted hereby is not assignable
or transferable by the Grantee other than by will or the laws of descent and
distribution and is subject to the provisions of Section 8 hereof. The Option
may be exercised during the lifetime of the Grantee only by the Grantee.
5. Limitation of Rights. The Option granted hereby does not confer
to the Grantee or the Grantee's personal representative any rights of a
stockholder of the Company unless and until shares of Stock are in fact issued
to such person in connection with the exercise of the Option. Nothing in this
Option Agreement shall interfere with or limit in any way the right of the
Company or any Subsidiary to terminate the Grantee's directorship at any time,
nor confer upon the Grantee any right to continue in as a director of the
Company or any Subsidiary.
6. Stock Reserve. The Company shall at all times during the term of
this Option Agreement reserve and keep available such number of shares of
Stock as will be sufficient to satisfy the requirements of this Option
Agreement.
7. Grantee's Covenant. The Grantee hereby agrees to his or her best
efforts to serve as a director of the Company in a diligent and loyal manner
and to promote the Company's interests.
8. Restrictions on Transfer and Pledge. No right or interest of the
Grantee in the Option granted hereby may be pledged, encumbered, or
hypothecated to or in favor of any party other than the Company or a
subsidiary, or shall be subject to any lien, obligation, or liability of the
Grantee to any other party other than the Company or a Subsidiary.
9. Restrictions on Issuance of Shares. If any time the Board shall
determine in its discretion, that listing, registration or qualification of
the shares of Stock covered by the Option upon any securities exchange or
under any state or federal law, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition to the exercise of
the Option, the Option may not be exercised in whole or in part unless and
until such listing, registration, qualification, consent or approval shall
have been affected or obtained free of any conditions not acceptable to the<PAGE>
Board.
10. Plan Controls. In the event of any actual or alleged conflict
between the provision of the Plan and the provisions of this Option Agreement,
the provisions of the Plan shall be controlling and determinative.
11. Successors. This Option Agreement shall be binding upon any
successor of the Company, in accordance with the terms of this Option
Agreement and the Plan.
IN WITNESS WHEREOF, Community Bancshares, Inc., acting by and through
its duly authorized officers, has caused this Option Agreement to be executed,
and the Grantee has executed this Option Agreement, all as of the day and year
first above written.
COMMUNITY BANCSHARES, INC.
By:________________________________
Title:_____________________________
___________________________________
GRANTEE<PAGE>
