<PAGE> 1
As filed with the Securities and Exchange Commission on February 13, 1998
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)
North Carolina 56-1693841
- ----------------------------- -----------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
1600 Curtis Bridge Road
Wilkesboro, North Carolina 28697
------------------------------------------
(Address of principal executive offices)
COMMUNITY BANCSHARES, INC. 1993 STOCK OPTION PLAN
-------------------------------------------------
(Full Title of the Plan)
Ronald S. Shoemaker
1600 Curtis Bridge Road
Wilkesboro, North Carolina 28697
(910) 838-4100
------------------------------
(Name, address and telephone number, including
area code, of agent for service)
------------------------------
Copies Requested to:
Robert T. Molinet, Esq.
Smith, Gambrell & Russell, LLP
Suite 3100, Promenade II
1230 Peachtree Street,
N.E.
Atlanta, Georgia 30309
(404) 815-3500
------------------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=============================================================================================================================
Title of Amount Proposed Proposed Amount of
Securities to be to be Maximum Offering Maximum Aggregate Registration
Registered Registered Price Per Share (1) Offering Price (1) Fee
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Options and 400,000 $7.77 $3,108,000 $916.86
underlying shares of Shares
Common Stock
=============================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(h)(1) based upon the book value of the Common Stock on
December 31, 1997.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The documents listed below are hereby incorporated by reference into
this Registration Statement, and all documents subsequently filed by Community
Bancshares, Inc. (the "Company") pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Securities Exchange Act of 1934, 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 in this Registration Statement and to be a part
hereof from the date of filing such documents:
(a) the Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1996;
(b) the Company's Quarterly Report on Form 10-QSB for the quarter
ended March 31, 1997;
(c) the Company's Quarterly Report on Form 10-QSB for the quarter
ended June 30, 1997;
(d) the Company's Quarterly Report on Form 10-QSB for the quarter
ended September 30, 1997; and
(e) the Company's Registration Statement on Form 8-A, as declared
effective by the Securities and Exchange Commission on June 30,
1997, to register the Company's Common Stock, $3.00 par value,
under Section 12(g) of the Securities and Exchange Act of 1934,
as amended, which Registration Statement contains a description
of the Common Stock.
Item 4. Description of Securities.
No response is required to this item.
Item 5. Interests of Named Experts and Counsel.
No response is required to this item.
Item 6. Indemnification of Officers and Directors.
As provided under North Carolina law, Article XIV of the Company's
Articles of Incorporation provides that a Director shall not be personally
liable to the Company or its shareholders for monetary damages, for breach of
the duty of care or any other fiduciary duty owed to the Company as a Director,
except that such provisions shall not eliminate or limit the liability of a
Director with respect to (a) acts or omissions not made in good faith that the
Director at the time of such breach knew or believed were in conflict with the
best interests of the Company, (b) any liability under Section 55-8-33 of the
North Carolina Business Corporation Act, or (c) any transaction from which the
Director received an improper personal benefit. If applicable law is amended to
authorize corporate action further eliminating or limiting the liability of
Directors, the liability of each Director of the Company shall be eliminated or
limited to the fullest extent permitted by applicable law. These provisions
apply to claims against officers, employees, and agents of the Company as well
as Directors.
<PAGE> 3
Article IX of the Company's Bylaws provides that the Company shall
indemnify a Director to the extent that a Director has been wholly successful in
the defense of any proceeding to which he or she was a party or in defense of
any claim, issue or matter therein because he or she is or was a Director of the
Company, against reasonable expenses incurred by him or her in connection with
the proceeding.
The Company's Bylaws also provide that the Company may indemnify any
Director, officer, employee or agent made a party to a proceeding because he or
she is or was a Director, officer, employee or agent against liability incurred
in the proceeding if (i) he or she conducted himself or herself in good faith;
(ii) he or she reasonably believed, in the case of conduct in his or her
official capacity with the Company, that such conduct was in the best interests
of the Company, and in all other cases, that such conduct was at least not
opposed to the best interests of the Company; and (iii) in the case of any
criminal proceeding, that he or she had no reasonable cause to believe such
conduct was unlawful.
Determination concerning whether or not the applicable standard of
conduct has been met can be made by (a) the Board of Directors by a majority
vote of a quorum consisting of directors not at the time parties to the
proceeding; (b) a majority of a committee duly designated by the Board of
Directors (in which designation directors who are parties may participate),
consisting solely of two or more Directors not at the time parties to the
proceeding; (c) special legal counsel selected either by a majority vote of a
quorum consisting of Directors not at the time parties to the proceeding or, if
a quorum can not be obtained, by a majority vote of the full Board of Directors
(in which directors who are parties may participate); or (d) the shareholders,
but shares owned by or voted under the control of Directors who are at the time
parties to the proceeding, may not be voted on the determination.
No indemnification may be made to or on behalf of a Director, officer,
employee or agent (1) in connection with a proceeding by or in the right of the
Company in which such person was adjudged liable to the Company, except for
reasonable expenses incurred in connection with the proceeding if it is
determined that the Director has met the relevant standard of conduct, or (2)
in connection with any other proceeding charging improper personal benefit to
him or her, whether or not involving action in his or her official capacity, in
which such person was adjudged liable on the basis that personal benefit was
improperly received by such person.
Item 7. Exemption From Registration Claimed.
No response is required to this Item.
Item 8. Exhibits.
The following exhibits are filed with this Registration Statement.
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------- ----------------------
<S> <C>
4.1 - Registrant's 1993 Stock Option Plan as Amended and Restated
4.2 - Form of Non-qualified Stock Option Agreement
4.3 - Form of Incentive Stock Option Agreement
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
5.1 - Opinion of Smith, Gambrell & Russell, LLP
23.1 - Consent of Francis & Co., CPAs
23.2 - Consent of Smith, Gambrell & Russell, LLP (contained in their opinion filed
as Exhibit 5.1)
24.1 - Power of Attorney (contained on the signature page of this Registration
Statement)
</TABLE>
Item 9. Undertakings.
(a) The undersigned Registrant will:
(1) File, during any period in which it offers or sells
securities, a post-effective amendment to this Registration Statement to
include any additional or changed material information on the plan of
distribution;
(2) For determining liability under the Securities Act of 1933,
treat each post-effective amendment as a new registration statement of the
securities offered, and the offering of the securities at that time to be the
initial bona fide offering; and
(3) File a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's Annual Report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 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.
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "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
Securities and Exchange Commission such indemnification is against public
policy as expressed in the 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 of whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
<PAGE> 5
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 of the 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 Wilkesboro, State of North Carolina, on January
29, 1998.
COMMUNITY BANCSHARES, INC.
By: /s/ Ronald S. Shoemaker
---------------------------------------
Ronald S. Shoemaker
President and Chief Executive Officer
(Principal Executive, Financial and
Accounting Officer)
KNOWLEDGE ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Ronald S. Shoemaker and Brent F. Eller
and each of them, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution for him, in his name, place and stead,
in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement on Form S-8, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, including a Registration Statement filed under Rule 462(b) of the
Securities Act of 1933, as amended, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents 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 attorneys-in-fact and agents 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 below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Ronald S. Shoemaker Director, President and
- -------------------------------------- Chief Executive Officer January 29, 1998
Ronald S. Shoemaker
/s/ Brent F. Eller Director, Secretary and Treasurer January 29, 1998
- --------------------------------------
Brent F. Eller
/s/ Jack Ray Ferguson Director January 29, 1998
- --------------------------------------
Jack Ray Ferguson
</TABLE>
[SIGNATURES CONTINUED ON NEXT PAGE]
<PAGE> 6
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Edward F. Greene Director January 29, 1998
- --------------------------------------
Edward F. Greene
/s/ Stephen B. Greene Director January 29, 1998
- --------------------------------------
Stephen B. Greene
Director January __, 1998
- --------------------------------------
Rebecca Lowe
/s/ Gilbert R. Miller Director January 29, 1998
- --------------------------------------
Gilbert R. Miller
/s/ Dwight E. Pardue Director January 29, 1998
- --------------------------------------
Dwight E. Pardue
/s/ Robert F. Ricketts, D.D.S. Director January 29, 1998
- --------------------------------------
Robert F. Ricketts, D.D.S.
/s/ Rebecca Ann Sebastian Director January 29, 1998
- --------------------------------------
Rebecca Ann Sebastian
/s/ Joe D. Severt Director January 29, 1998
- --------------------------------------
Joe D. Severt
/s/ R. Colin Shoemaker Director January 29, 1998
- --------------------------------------
R. Colin Shoemaker
</TABLE>
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------- ----------------------
<S> <C>
4.1 Registrant's 1993 Stock Option Plan as Amended and Restated
4.2 Form of Non-qualified Stock Option Agreement
4.3 Form of Incentive Stock Option Agreement
5.1 Opinion of Smith, Gambrell & Russell, LLP
23.1 Consent of Francis & Co., CPAs
</TABLE>
<PAGE> 1
EXHIBIT 4.1
COMMUNITY BANCSHARES, INC.
1993 STOCK OPTION PLAN
AS AMENDED AND RESTATED
The following plan has been amended to reflect the changes effected by
Amendment No.1, adopted by the Board of Directors on April 21, 1994 and
approved by the shareholders on May 27, 1994, and restated to reflect the
two-for-one split of the Company's Common Stock effected as of November 15,
1995.
1. PURPOSE
The purpose of Community Bancshares, Inc.'s 1993 Stock Option Plan (the
"Plan") is to encourage and enable eligible directors, officers and key
employees of Community Bancshares, Inc. (the "Company") and its subsidiaries to
acquire proprietary interests in the Company through the ownership of Common
Stock of the Company. The Company believes that directors, officers and key
employees who participate in the Plan will have a closer identification with
the Company by virtue of their ability as shareholders to participate in the
Company's growth and earnings. The Plan also is designed to provide motivation
for participating directors, officers and key employees to remain in the employ
of and to give greater effort on behalf of the Company. It is the intention of
the Company to have the Plan qualify as an "incentive stock option plan" under
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") and
the regulations promulgated thereunder. Accordingly, the provisions of the Plan
shall be construed so as to extend and limit participation in a manner
consistent with the requirements of that section of the Code.
2. DEFINITIONS
The following words or terms shall have the following meanings:
(a) "Agreement" shall mean a stock option agreement between the Company
and an Eligible Employee or Non-Employee Director pursuant to the terms of this
Plan.
(b) "Average Market Price" shall mean the mean between the high "bid"
and low "ask" prices as of the close of business for the Company's shares of
Common Stock in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System (or other
national quotation service). If the Company's Common Stock is not regularly
traded in the over-the-counter market but is registered on a national
securities exchange, "Average Market Price" shall mean the closing price of the
Company's Common Stock on such national securities exchange.
(c) "Board of Directors" shall mean the Board of Directors of the
Company or the Executive Committee of such Board.
<PAGE> 2
(d) "Committee" shall mean the committee appointed by the Board of
Directors to administer the Plan.
(e) "Common Stock" shall mean the $3.00 par value common stock of the
Company.
(f) "Company" shall mean Community Bancshares, Inc., a North Carolina
corporation.
(g) "Eligible Employee(s)" shall mean a person or persons regularly
employed by the Company or a Subsidiary.
(h) "Optionee" shall mean an Eligible Employee or Non-Employee Director
having a right to purchase Common Stock under an Agreement.
(i) "Option(s)" shall mean the right or rights granted to Eligible
Employees or Non- Employee Directors to purchase Common Stock under the Plan.
(j) "Plan" shall mean this Community Bancshares, Inc. 1993 Stock Option
Plan.
(k) "Shares," "Stock" or "Common Stock" shall mean shares of the $3.00
par value common stock of the Company.
(l) "Subsidiary" shall mean any corporation, if the Company owns or
controls, directly or indirectly, more than a majority of the voting stock of
such corporation.
(m) "Ten Percent Owner" shall mean an individual who, at the time an
Option is granted, owns directly or indirectly more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company.
(n) "Non-Employee Director" shall mean a director of the Company who is
not a regular salaried employee of the Company or one of its subsidiaries.
3. EFFECTIVE DATE
The effective date of the Plan (the "Effective Date") shall be the date
the Plan is adopted by the Board of Directors or the date the Plan is approved
by the shareholders of the Company, whichever is earlier. The Plan must be
approved by the affirmative vote of not less than a majority of the votes
entitled to be cast thereon, which shareholder vote must be taken within twelve
(12) months after the date the Plan is adopted by the Board of Directors. Such
shareholder vote shall not alter the Effective Date of the Plan. In the event
shareholder approval of the adoption of the Plan is not obtained within the
aforesaid twelve (12) month period, then any options granted in the intervening
period shall be void.
2
<PAGE> 3
4. SHARES RESERVED FOR PLAN
The shares of the Company's Common Stock to be sold Eligible Employees
and Non-employee Directors under the Plan may at the election of the Board of
Directors be either treasury shares or shares originally issued for such
purpose. The maximum number of shares which shall be reserved and made
available for sale under the Plan shall be 400,000. Any shares subject to an
Option which for any reason expires or is terminated unexercised may again be
subject to an Option under the Plan.
5. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Board of Directors of the Company
or the Committee. The Committee shall be comprised of not less than two (2)
members appointed by the Board of Directors of the Company from among its
members. No member of the Board of Directors shall be appointed or serve as a
member of the Committee, and any such appointment or service immediately and
automatically shall terminate, in the event that such person, during the one
year prior to service on the Committee, or during such service, has been
granted or awarded equity securities pursuant to the Plan or any other plan of
the Company or any of its affiliates (as such term is defined in the General
Rules and Regulations of the Securities Exchange Act of 1934, as amended).
Within the limitations described herein, the Board of Directors of the
Company or the Committee shall administer the Plan, select the Eligible
Employees to whom Options will be granted, determine the number of shares to be
optioned to each Eligible Employee and interpret, construe and implement the
provisions of the Plan. Board of Directors and Committee members shall be
reimbursed for out-of-pocket expenses reasonably incurred in the administration
of the Plan.
If the Plan is administered by the Board of Directors, a majority of
the disinterested members of the Board of Directors shall constitute a quorum,
and the act of a majority of the disinterested members of the Board of
Directors present at any meeting at which a quorum is present, or acts approved
in writing by a majority of the disinterested members of the Board of Directors
shall be the acts of the Board of Directors. If the Plan is administered by the
Committee, the Committee shall select one of its members as Chairman and shall
hold its meetings at such times and places, and pursuant to such rules
consistent with the Plan, as it may determine. A majority of the members of the
Committee shall constitute a quorum, and the acts of a majority of the members
present at any meeting at which a quorum is present, or acts approved in
writing by a majority of the members of the Committee shall be the acts of the
Committee.
6. ELIGIBILITY
Options granted pursuant to Section 8 shall be granted only to Eligible
Employees. Options granted pursuant to Section 12 shall be granted only to
Non-employee Directors.
3
<PAGE> 4
7. DURATION OF THE PLAN
The Plan shall remain in effect until all shares subject to or which
may become subject to the Plan shall have been purchased pursuant to Options
granted under the Plan; provided that Options under the Plan must be granted
within ten (10) years from the Effective Date.
8. QUALIFIED INCENTIVE OPTIONS
It is intended that Options granted under the Plan shall be qualified
incentive stock options under the provisions of Section 422 of the Code and the
regulations thereunder or corresponding provisions of subsequent revenue laws
and regulations in effect at the time such Options are granted. Such Options
shall be evidenced by stock option agreements in such form and not inconsistent
with this Plan as the Committee shall approve from time to time, which
agreements shall contain in substance the following terms and conditions:
(a) Price. The purchase price for shares purchased upon exercise will
be the Average Market Price on the day the Option is granted, as determined by
the Board of Directors or the Committee, or, if the Stock is not traded in the
organized markets, then the price shall be the fair market value of the Stock
as determined in good faith by the Board of Directors or the Committee, but in
no case less than the par value of such stock; provided further that the
purchase price of stock deliverable upon the exercise of a qualified incentive
option granted to a Ten Percent Owner shall be not less than one hundred ten
percent (110%) of the Average Market Price or fair market value on the day the
Option is granted, as determined by the Board of Directors or the Committee,
but in no case less than the par value of such stock.
(b) Number of Shares. The Agreement shall specify the number of shares
which the Optionee may purchase under such Option.
(c) Exercise of Options. The shares subject to the Option may be
purchased in whole or in part by the Optionee in accordance with the terms of
the Agreement, from time to time after shareholder approval of the Plan, but in
no event later than ten (10) years from the date of grant of the Option.
Notwithstanding the foregoing, shares subject to an Option granted to a Ten
Percent Owner shall be exercisable no later than five (5) years from the date
of grant of the Option.
(d) Medium and Time of Payment. Stock purchased pursuant to an
Agreement shall be paid for in full at the time of purchase. Payment of the
purchase price shall be in cash or shares of the Common Stock of the Company,
or a combination of cash and shares of the Common Stock of the Company. Upon
receipt of payment, the Company shall, without transfer or issue tax, deliver
to the Optionee (or other person entitled to exercise the Option) a certificate
or certificates for such shares.
(e) Rights as a Shareholder. An Optionee shall have no rights as a
shareholder with respect to any shares covered by an Option until the date of
issuance of the stock certificate to the
4
<PAGE> 5
Optionee for such shares. Except as otherwise expressly provided in the Plan,
no adjustments shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
(f) Nonassignability of Option. No Option shall be assignable or
transferable by the Optionee except by will or by the laws of descent and
distribution. During the lifetime of the Optionee, the Option shall be
exercisable only by him or her.
(g) Effect of Termination of Employment or Death. In the event that an
Optionee during his or her lifetime ceases to be an employee of the Company or
of any subsidiary of the Company for any reason (including retirement) other
than death or permanent and total disability, any Option or unexercised portion
thereof which was otherwise exercisable on the date of termination of
employment shall expire unless exercised within a period of ninety (90) days
from the date on which the Optionee ceased to be an employee, but in no event
after the term provided in the Optionee's Agreement. In the event that an
Optionee ceases to be an employee of the Company or of any subsidiary of the
Company for any reason (including retirement) other than death or permanent and
total disability prior to the time that an Option is exercisable, his or her
Option shall terminate and be null and void.
In the event that an Optionee during his or her lifetime ceases to be
an employee of the Company or any subsidiary of the Company by reason of death
or permanent and total disability, any Option or unexercised portion thereof
which was otherwise exercisable on the date such Optionee ceased employment
shall expire unless exercised within a period of one (1) year from the date on
which the Optionee ceased to be an employee, but in no event after the term
provided in the Optionee's Agreement. In the event that an Optionee during his
or her lifetime ceases to be an employee of the Company or any subsidiary of
the Company by reason of death or permanent and total disability, any Option or
portion thereof which was not exercisable on the date such Optionee ceased
employment shall become immediately exercisable for a period of one (1) year
from the date on which the Optionee ceased to be an employee, but in no event
after the term provided in the Optionee's Agreement. Permanent and total
disability as used herein is as defined in Section 22(e)(3) of the Code.
In the event of the death of an Optionee, the Option shall be
exercisable by his or her personal representatives, heirs or legatees, as
provided herein.
(h) Recapitalization. In the event that dividends are payable in Common
Stock of the Company or in the event there are splits, subdivisions or
combinations of shares of Common Stock of the Company, the number of Shares
available under the Plan shall be increased or decreased proportionately, as
the case may be, and the number of Shares deliverable upon the exercise
thereafter of any Option theretofore granted shall be increased or decreased
proportionately, as the case may be, without change in the aggregate purchase
price.
5
<PAGE> 6
(i) Reorganization. In case the Company is merged or consolidated with
another corporation and the Company is not the surviving corporation, or in
case the property or stock of the Company is acquired by another corporation,
or in case of a separation, reorganization, recapitalization or liquidation of
the Company, the Board of Directors of the Company, or the Board of Directors
of any corporation assuming the obligations of the Company hereunder, shall
either (i) make appropriate provision for the protection of any outstanding
Options by the substitution on an equitable basis of appropriate stock of the
Company, or of the merged, consolidated or otherwise reorganized corporation
which will be issuable in respect to the shares of Common Stock of the Company,
provided only that the excess of the aggregate fair market value of the shares
subject to option immediately after such substitution over the purchase price
thereof is not more than the excess of the aggregate fair market value of the
shares subject to option immediately before such substitution over the purchase
price thereof, or (ii) upon written notice to the Optionee provide that the
Option (including the shares not then exercisable) must be exercised within
sixty (60) days of the date of such notice or it will be terminated.
(j) General Restriction. Each Option shall be subject to the
requirement that if at any time the Board of Directors shall determine, in its
discretion, that the listing, registration or qualification of the Shares
subject to such Option upon any securities exchange or under any state or
federal law, or the consent or approval of any government regulatory body, is
necessary or desirable as a condition of, or in connection with, the granting
of such Option or the issue or purchase of Shares thereunder, such Option may
not be exercised in whole or in part unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Board of Directors.
9. AMENDMENT OF THE PLAN
The Plan may at any time or from time to time be terminated, modified
or amended by the affirmative vote of not less than a majority of the votes
entitled to be cast thereon by the Company's shareholders. The Board of
Directors may at any time and from time to time modify or amend the Plan in any
respect, except that without shareholder approval the Board of Directors may
not (1) increase the maximum number of shares for which Options may be granted
under the Plan either in the aggregate or to any Eligible Employee (other than
increases due to changes in capitalization as referred to in Section 8(h)
hereof), or (2) reduce the option price or waiting period (except as otherwise
expressly provided in the Plan in the case of a reorganization of the Company
as referred to in Section 8(i) hereof), or (3) extend the period during which
Options may be granted or exercised, or (4) change the class of employees
eligible for incentive stock options under Section 6 hereof, or (5) to
otherwise materially modify (within the meaning of Rule 16b-3 of the Securities
Exchange Act of 1934, as amended) the requirements as to eligibility for
participation in the Plan, or (6) to otherwise materially increase (within the
meaning of Rule 16b-3 of the Securities Exchange Act of 1934, as amended) the
benefits accruing to participants under the Plan. The termination or any
modification or amendment of the Plan shall not, without the written consent of
an Optionee, affect his or her rights under an Option or right previously
granted to him or her. With the written consent of the Optionee affected, the
Board of Directors or the Committee may amend outstanding
6
<PAGE> 7
option agreements in a manner not inconsistent with the Plan. Without employee
consent, the Board of Directors may at any time and from time to time modify or
amend outstanding option agreements in such respects as it shall deem necessary
in order that Options granted hereunder shall comply with the appropriate
provisions of the Code and regulations thereunder which are in effect from time
to time respecting "Qualified Incentive Options."
10. LIMITATION ON NUMBER OF SHARES THAT MAY BE PURCHASED
The aggregate fair market value (determined at the time the Option is
granted) of the shares with respect to which incentive stock options are
exercisable for the first time by an Optionee during any calendar year (under
all incentive stock option plans of the Company) shall not exceed $100,000.
11. BINDING EFFECT
All decisions of the Board of Directors or the Committee involving the
implementation, administration or operation of the Plan or any offering under
the Plan shall be binding on the Company, all Eligible Employees participating
in the Plan, and on all persons eligible or who become eligible to participate
in the Plan.
12. NON-EMPLOYEE DIRECTOR PARTICIPATION
The participation and eligibility of Non-Employee Directors of the
Company shall be limited exclusively to the following:
(a) On July 1 in each year during the term of this Plan, each then
Non-Employee Director of the Company shall be granted, without the necessity of
action by the Committee, an Option hereunder to purchase 2,000 shares of Common
Stock at the Average Market Price of such Stock on the date of grant; provided,
however, that no options shall be granted to a Non-Employee Director who has
not served as a director of the Company during the twelve months immediately
preceding the date of grant.
(b) Each Non-Employee Director who is first elected or appointed to
serve as a member of the Board of Directors following the Effective Date shall
be granted, without the necessity of action by the Committee, as of the first
business day following the Non-Employee Director's first day of service as a
member of the Board of Directors, an Option to purchase 2,000 shares of Common
Stock at the Average Market Price of such Stock on the date of grant.
(c) Such options granted under this Plan shall be exercisable
commencing on the date of grant and thereafter until the date which is the
fifth anniversary of the date of grant. In the event the remaining number of
shares of Stock reserved for issuance under the Plan are insufficient to grant
options for the appropriate number of shares of Stock to Non-Employee Directors
as of any grant date, then no options shall be granted as of that grant date.
Options granted to Non-Employee Directors hereunder shall in all other respects
conform to the terms of this Plan.
(d) The provisions of this Section 12 shall not be amended more than
once every six months, other than to comport with changes in the Internal
Revenue Code, the Employee Retirement Income Security Act, or the rules
thereunder."
7
<PAGE> 1
EXHIBIT 4.2
COMMUNITY BANCSHARES, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS NON-QUALIFIED STOCK OPTION AGREEMENT ("Option Agreement") made
and entered into this _______ day of ____________________, 199___ by and
between Community Bancshares, Inc. (the "Company") and
___________________________ ("Director");
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company has adopted that
certain 1993 Stock Option Plan, as amended (the "Plan"), a copy of which is
attached hereto as Exhibit "A" and incorporated herein by reference. Pursuant
to the terms of the Plan, Director is entitled to receive, as of the date
hereof, an automatic grant of an option to purchase 2,000 shares of the
Company's authorized $3.00 par value common stock ("Stock"), subject to the
terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises, agreements
and covenants contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1. INCORPORATION OF PLAN PROVISIONS
This Option Agreement is subject to and is to be construed in all
respects in a manner which is consistent with the terms of the Plan, the
provisions of which are hereby incorporated by reference into this Option
Agreement. Unless specifically provided otherwise, all terms used in this
Option Agreement shall have the same meaning as in the Plan.
2. GRANT OF OPTION
Subject to the further terms and conditions of this Option Agreement,
Director is hereby granted a stock option to purchase 2,000 shares of Stock,
effective as of the date first written above.
3. FAIR MARKET VALUE OF STOCK
The Board of Directors has determined, in good faith and in its best
judgment, that the fair market value per share of Stock as of the date this
stock option is granted is $__________.
4. OPTION PRICE
The Board of Directors has determined that the price for each share of
Stock purchased under this Option Agreement shall be $_________.
<PAGE> 2
5. EXPIRATION OF OPTIONS
The option to acquire Stock pursuant to this Option Agreement shall
expire (to the extent not previously fully exercised) on __________________
(the fifth anniversary of the date of grant of the option).
6. EXERCISE OF OPTION
Director may exercise this stock option, in whole or in part, from
time to time commencing on the date first above written. The option exercise
price may be paid by Director either in cash, or, in the event that an
organized trading market in the Stock exists on the date of exercise of the
option, by surrender of other shares held by Director of the Stock of the
Company.
For the purposes of this Article 6, an "organized trading market"
shall be deemed to exist on the date of exercise of the option if: (a) the
Stock is listed on a national securities exchange, or (b) the Stock has been
quoted on the National Association of Securities Dealers Automated Quotation
System ("NASDAQ") for the 15 trading days preceding the date of exercise of the
option, or (c) bid and asked quotations for the Stock have been published by
the National Quotation Bureau or other recognized inter-dealer quotation
publication (other than NASDAQ) during 20 of the 30 trading days preceding the
date of exercise of the option. In the event that an organized trading market
for the Stock exists on the date of exercise of the option, Director shall be
given credit against the option exercise price hereunder for such shares
surrendered equal to (i) if the Stock is listed on a national securities
exchange or is quoted on the NASDAQ National Market System, the last actual
sales transaction price reported on the day preceding exercise of the option,
or, if there were no actual sales transactions reported for such date, on the
date next preceding such date on which actual sales transactions were reported,
or (ii) if the Stock is quoted on NASDAQ (other than the NASDAQ National Market
System) or by the National Quotation Bureau or other recognized inter-dealer
quotation publication, the average of the high and low price quotations on the
day preceding exercise of the option, or, if there were no price quotations for
such date, on the date next preceding such date on which there were high and
low price quotations for the Stock.
7. MANNER OF EXERCISE
This stock option may be exercised by written notice to the Secretary
of the Company specifying the number of shares to be purchased and signed by
Director or such other person who may be entitled to acquire Stock under this
Option Agreement. If any such notice is signed by a person other than Director,
such person shall also provide such other information and documentation as the
Secretary of the Company may reasonably require to assume that such person is
entitled to acquire Stock under the terms of the Plan and this Option
Agreement. After receipt of the notice and any other assurances requested by
the Company under this Article 7, and upon receipt of the full option price,
the Company shall issue to the person giving notice of exercise under this
Option Agreement the number of shares specified in such notice.
-2-
<PAGE> 3
8. RESTRICTIONS ON TRANSFERABILITY
The stock option granted hereunder shall not be transferable by
Director otherwise than by will or by the laws of descent and distribution, and
such stock option shall be exercisable during Director's lifetime only by
Director.
9. FURTHER RESTRICTIONS ON EXERCISE AND SALE OF STOCK
Director acknowledges and understands that the Stock subject to this
Option Agreement is not registered under the Federal Securities Act of 1933, as
amended ("Federal Act") or under the North Carolina Securities Act, as amended
("State Act"). Each option shall be subject to the requirement that if at any
time the Board of Directors shall determine, in its discretion, that the
listing, registration or qualification of the shares subject to such option
upon any securities exchange or under any state or federal law, or the consent
or approval of any government regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of such option or the issue
or purchase of shares thereunder, such option may not be exercised in whole or
in part unless such listing, registration, qualification, consent or approval
shall have been effected or obtained free of any conditions not acceptable to
the Board of Directors. The costs of any such listing, registration,
qualification, consent or approval shall be paid by the Company. Alternatively,
the Company shall not permit any exercise of this stock option unless it
receives such representations, factual assurances, and legal opinions as it may
deem necessary to determine and document the availability of an exemption from
registration under both the Federal Act and the State Act with respect to any
particular issuance of shares under this Option Agreement. Further, the Board
of Directors shall require that Stock issued in respect of any exercise of this
stock option shall bear such restrictions on further transfer as shall be
necessary to insure the availability of any exemption so claimed.
10. REORGANIZATION
In the event that dividends are payable in Common Stock of the Company
or in the event there are splits, subdivisions or combinations of shares of
Common Stock of the Company, the number of Shares deliverable upon the exercise
thereafter of this Option shall be increased or decreased proportionately, as
the case may be, without change in the aggregate purchase price.
In case the Company is merged or consolidated with another corporation
and the Company is not the surviving corporation, or in case the property or
stock of the Company is acquired by another corporation, or in case of a
separation, reorganization, recapitalization or liquidation of the Company, the
Board of Directors of the Company, or the Board of Directors of any corporation
assuming the obligations of the Company hereunder, shall either (i) make
appropriate provision for the protection of any outstanding Options by the
substitution on an equitable basis of appropriate stock of the Company, or of
the merged, consolidated or otherwise reorganized corporation which will be
issuable in respect to the shares of Common Stock of the Company, provided only
that the excess of the aggregate fair market value of the shares subject to
option immediately after such substitution over the purchase price thereof is
not more than the excess of the aggregate fair market
-3-
<PAGE> 4
value of the shares subject to option immediately before such substitution over
the purchase price thereof, or (ii) upon written notice to the Optionee provide
that the Option (including the shares not then exercisable) must be exercised
within sixty (60) days of the date of such notice or it will be terminated.
IN WITNESS WHEREOF, the Company has caused this Option Agreement to be
executed by a member of the Board of Directors or a duly authorized officer of
the Company, and Director has executed this Option Agreement as of the date
first written above.
COMMUNITY BANCSHARES, INC.
By:
----------------------------------
Ronald S. Shoemaker, President
Attest:
- ---------------------------------
Brent F. Eller, Secretary
"DIRECTOR"
---------------------------------
-4-
<PAGE> 1
EXHIBIT 4.3
COMMUNITY BANCSHARES, INC.
INCENTIVE STOCK OPTION AGREEMENT
THIS INCENTIVE STOCK OPTION AGREEMENT ("Option Agreement") made and
entered into this _______ day of ____________________, 199___ by and between
Community Bancshares, Inc. (the "Company") and ___________________________
("Employee");
W I T N E S S E T H:
The Board of Directors of the Company has adopted that certain 1993
Stock Option Plan (the "Plan"), a copy of which is attached hereto as Exhibit
"A" and incorporated herein by reference. Pursuant to the terms of the Plan,
the Board of Directors has selected Employee to participate in the Plan and
desires to grant to Employee certain incentive stock options to purchase shares
of the Company's authorized $3.00 par value common stock ("Stock"), subject to
the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises, agreements
and covenants contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1. INCORPORATION OF PLAN PROVISIONS
This Option Agreement is subject to and is to be construed in all
respects in a manner which is consistent with the terms of the Plan, the
provisions of which are hereby incorporated by reference into this Option
Agreement. Unless specifically provided otherwise, all terms used in this
Option Agreement shall have the same meaning as in the Plan.
2. GRANT OF OPTION
Subject to the further terms and conditions of this Option Agreement,
Employee is hereby granted a stock option to purchase ______________ shares of
Stock, effective as of the date first written above. This stock option is
intended to be an Incentive Stock Option as provided in ss. 422 of the Internal
Revenue Code.
3. FAIR MARKET VALUE OF STOCK
The Board of Directors has determined, in good faith and in its best
judgment, that the fair market value per share of Stock as of the date this
stock option is granted is $__________.
<PAGE> 2
4. OPTION PRICE
The Board of Directors has determined that the price for each share of
Stock purchased under this Option Agreement shall be $_________.
5. EXPIRATION OF OPTIONS
The option to acquire Stock pursuant to this Option Agreement shall
expire (to the extent not previously fully exercised) upon the first to occur
of the following:
(a) ___________________ (the tenth anniversary of the date of
grant of the option);
(b) The date which is three (3) months following the date
which Employee ceases his employment with the Company or any subsidiary of the
Company, otherwise than as a result of Employee's death or total disability;
(c) The date which is the first anniversary of the date upon
which Employee ceases to be employed by the Company, or any subsidiary of the
Company, by reason of Employee's death or total disability.
(d) The date upon which Employee ceases his employment with
the Company or any subsidiary of the Company, for any reason, including death
or total disability, with respect to any portion of this option that is not
then exercisable on the date Employee ceases his employment with the Company.
6. EXERCISE OF OPTION
Unless options hereunder shall earlier lapse or expire pursuant to
Article 5 hereof, this option may be exercised with respect to the aggregate
number of shares subject to this Option Agreement as follows:
(a) as of _____________, 19__ (first anniversary of date of
grant), _____ shares (33-1/3% of the shares subject to this option);
(b) as of _____________, 19__ (second anniversary of date of
grant), an additional _____ shares (33-1/3% of the shares subject to this
option); and
(c) as of _____________, 19__ (third anniversary of date of
grant), an additional _____ shares (33-1/3% of the shares subject to this
option).
To the extent such options become exercisable in accordance with the
foregoing, Employee may exercise this stock option, in whole or in part, from
time to time. The option exercise price may be paid by Employee either in cash,
or, in the event that an organized trading market in the
-2-
<PAGE> 3
Stock exists on the date of exercise of the option, by surrender of other
shares held by Employee of the Stock of the Company.
For the purposes of this Article 6, an "organized trading market"
shall be deemed to exist on the date of exercise of the option if: (a) the
Stock is listed on a national securities exchange, or (b) the Stock has been
quoted on the National Association of Securities Dealers Automated Quotation
System ("NASDAQ") for the 15 trading days preceding the date of exercise of the
option, or (c) bid and asked quotations for the Stock have been published by
the National Quotation Bureau or other recognized inter-dealer quotation
publication (other than NASDAQ) during 20 of the 30 trading days preceding the
date of exercise of the option. In the event that an organized trading market
for the Stock exists on the date of exercise of the option, Employee shall be
given credit against the option exercise price hereunder for such shares
surrendered equal to (i) if the Stock is listed on a national securities
exchange or is quoted on the NASDAQ National Market System, the last actual
sales transaction price reported on the day preceding exercise of the option,
or, if there were no actual sales transactions reported for such date, on the
date next preceding such date on which actual sales transactions were reported,
or (ii) if the Stock is quoted on NASDAQ (other than the NASDAQ National Market
System) or by the National Quotation Bureau or other recognized inter-dealer
quotation publication, the average of the high and low price quotations on the
day preceding exercise of the option, or, if there were no price quotations for
such date, on the date next preceding such date on which there were high and
low price quotations for the Stock.
7. MANNER OF EXERCISE
This stock option may be exercised by written notice to the Secretary
of the Company specifying the number of shares to be purchased and signed by
Employee or such other person who may be entitled to acquire Stock under this
Option Agreement. If any such notice is signed by a person other than Employee,
such person shall also provide such other information and documentation as the
Secretary of the Company may reasonably require to assume that such person is
entitled to acquire Stock under the terms of the Plan and this Option
Agreement. After receipt of the notice and any other assurances requested by
the Company under this Article 7, and upon receipt of the full option price,
the Company shall issue to the person giving notice of exercise under this
Option Agreement the number of shares specified in such notice.
8. RESTRICTIONS ON TRANSFERABILITY
The stock option granted hereunder shall not be transferable by
Employee otherwise than by will or by the laws of descent and distribution, and
such stock option shall be exercisable during Employee's lifetime only by
Employee.
9. FURTHER RESTRICTIONS ON EXERCISE AND SALE OF STOCK
Employee acknowledges and understands that the Stock subject to this
Option Agreement is not registered under the Federal Securities Act of 1933, as
amended ("Federal Act") or under the North Carolina Securities Act, as amended
("State Act"). Each option shall be subject to the
-3-
<PAGE> 4
requirement that if at any time the Board of Directors shall determine, in its
discretion, that the listing, registration or qualification of the shares
subject to such option upon any securities exchange or under any state or
federal law, or the consent or approval of any government regulatory body, is
necessary or desirable as a condition of, or in connection with, the granting
of such option or the issue or purchase of shares thereunder, such option may
not be exercised in whole or in part unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Board of Directors. The costs of any such
listing, registration, qualification, consent or approval shall be paid by the
Company. Alternatively, the Company shall not permit any exercise of this stock
option unless it receives such representations, factual assurances, and legal
opinions as it may deem necessary to determine and document the availability of
an exemption from registration under both the Federal Act and the State Act
with respect to any particular issuance of shares under this Option Agreement.
Further, the Board of Directors shall require that Stock issued in respect of
any exercise of this stock option shall bear such restrictions on further
transfer as shall be necessary to insure the availability of any exemption so
claimed.
10. REORGANIZATION
In the event that dividends are payable in Common Stock of the Company
or in the event there are splits, subdivisions or combinations of shares of
Common Stock of the Company, the number of Shares available under the Plan
shall be increased or decreased proportionately, as the case may be, and the
number of Shares deliverable upon the exercise thereafter of any Option
theretofore granted shall be increased or decreased proportionately, as the
case may be, without change in the aggregate purchase price.
In case the Company is merged or consolidated with another corporation
and the Company is not the surviving corporation, or in case the property or
stock of the Company is acquired by another corporation, or in case of a
separation, reorganization, recapitalization or liquidation of the Company, the
Board of Directors of the Company, or the Board of Directors of any corporation
assuming the obligations of the Company hereunder, shall either (i) make
appropriate provision for the protection of any outstanding Options by the
substitution on an equitable basis of appropriate stock of the Company, or of
the merged, consolidated or otherwise reorganized corporation which will be
issuable in respect to the shares of Common Stock of the Company, provided only
that the excess of the aggregate fair market value of the shares subject to
option immediately after such substitution over the purchase price thereof is
not more than the excess of the aggregate fair market value of the shares
subject to option immediately before such substitution over the purchase price
thereof, or (ii) upon written notice to the Optionee provide that the Option
(including the shares not then exercisable) must be exercised within sixty (60)
days of the date of such notice or it will be terminated.
-4-
<PAGE> 5
IN WITNESS WHEREOF, the Company has caused this Option Agreement to be
executed by a member of the Board of Directors or a duly authorized officer of
the Company, and Employee has executed this Option Agreement as of the date
first written above.
COMMUNITY BANCSHARES, INC.
By:
-----------------------------------
Ronald S. Shoemaker, President
Attest:
- ----------------------------------
Brent F. Eller, Secretary
"EMPLOYEE"
--------------------------------------
-5-
<PAGE> 1
[SMITH, GAMBRELL & RUSSELL, LLP LETTERHEAD]
EXHIBIT 5.1
Robert T. Molinet
(404) 815-3643
February 11, 1998
Board of Directors
Community Bancshares, Inc.
1600 Curtis Bridge Road
Wilkesboro, North Carolina 28697
RE: Community Bancshares, Inc.
Registration Statement on Form S-8
400,000 Shares of Common Stock with $3.00 par value
Community Bancshares, Inc. 1993 Stock Option Plan
Ladies and Gentlemen:
We have acted as counsel for Community Bancshares, Inc. (the
"Company") in connection with the registration of 400,000 shares of its Common
Stock, $3.00 par value per share (the "Shares"), to be issued under the
Company's 1993 Stock Option Plan, as amended (the "Plan"), pursuant to a
Registration Statement on Form S-8 (the "Registration Statement") to be filed
with the Securities and Exchange Commission pursuant to the Securities Act of
1933, as amended, covering the Shares.
In connection therewith, we have examined the following:
1. The Articles of Incorporation and the Articles of Amendment
of the Company, certified by the Secretary of State of the
State of North Carolina;
2. The By-Laws of the Company, certified as complete and correct
by the Secretary of the Company;
3. The minute book of the Company, certified as correct and
complete by the Secretary of the Company; and
4. The Registration Statement.
Based upon such examination and upon examination of such other
instruments and records as we have deemed necessary, we are of the opinion that
the Shares covered by the Registration
<PAGE> 2
Board of Directors
Community Bancshares, Inc.
February 11, 1998
Page 2
Statement have been legally authorized and when issued in accordance with the
terms described in said Registration Statement, will be validly issued, fully
paid and nonassessable.
We consent to the filing of this opinion as an exhibit to the
aforementioned Registration Statement on Form S-8 and to the reference to this
firm under the caption "Legal Matters" in the Prospectus. In giving this
consent, we do not thereby admit that we come within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, or the
rules and regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
SMITH, GAMBRELL & RUSSELL, LLP
/s/ Robert T. Molinet
--------------------------------
Robert T. Molinet
-2-
<PAGE> 1
EXHIBIT 23.1
[FRANCIS & CO. LETTERHEAD]
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Community Bancshares, Inc. on Form S-8 of our report dated March 7, 1997,
appearing in the Annual Report on Form 10-KSB of Community Bancshares, Inc. for
the year ended December 31, 1996 and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
/s/ Francis & Co., CPAs
Atlanta, Georgia
February 11, 1998
