AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 4, 1999
REGISTRATION NO.: 333-___________
FORM S-8
Virginia 54-1375874 -------- ---------- (State of Incorporation (IRS Employer Identification or Organization) No.) 100 South Main Street, P. O. Box 90002 Blacksburg, Virginia 24062 -------------------- ----- (Address of Principal Executive Offices) (Zip Code) |
NATIONAL BANKSHARES, INC. 1999 STOCK OPTION PLAN
(Full name of the Plan)
___________ James G. Rakes Copy to: Chairman, President and -------- Chief Executive Officer Wallace M. Starke and National Bankshares, Inc. J. Scott Perkins 100 South Main Street Mays & Valentine, L.L.P. P.O. Box 90002 1111 East Main Street Blacksburg, Virginia 26062 NationsBank Center Telephone: (540) 951-6236 Richmond, Virginia 23219 --------------------------------- Telephone: (804) 697-1316 |
(Name and Address of Agent for Service Process) -----------------------------
APPROXIMATE DATE OF PROPOSED COMMENCEMENT OF SALES PURSUANT TO THE PLAN:
UPON EFFECTIVENESS OF THIS REGISTRATION STATEMENT.
CALCULATION OF REGISTRATION FEE
Proposed Proposed Maximum Maximum Amount of Title of Securities Amount To Be Offering Price Aggregate Registration To Be Registered Registered Per Share(1) Offering Price(1) Fee ---------------- ---------- ------------ ----------------- ------------ COMMON STOCK $2.50 PAR VALUE 250,000 $24.50 $6,125,000.00 $1,702.75 |
(1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) and (h) under the Securities Act of 1933, as amended (the "Securities Act"), on the basis of $24.50 per share. The proposed maximum offering price per share of $24.50 was calculated based on the average of the bid and asked prices of the shares of the Registrant as reported on the NASDAQ National Market System on June 1, 1999.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
National Bankshares, Inc. (the "Company") will furnish shareholders with annual reports containing audited financial statements and with quarterly reports containing unaudited financial statements for the first three quarters of each fiscal year. Copies of these documents, and any other communications sent to the Company's shareholders generally, also will be furnished to all employees eligible to participate in the Plan.
The Company hereby incorporates herein by reference the following documents filed by the Company with the Commission:
(a) Annual Report on Form 10-K for the fiscal year ended December 31, 1998, filed on pursuant to Section 13 of the Securities Act of 1934 (the "1934 Act");
(b) Quarterly Report on Form 10-Q for the Quarter ended March 31, 1999, filed pursuant to Section 13 of the 1934 Act; and
(c) The description of the Company's Common Stock contained in the "Description of NBI Capital Stock" in the Company's Prospectus/Proxy Statement filed as part of the Registration Statement on Form S-4, Registration No. 33- 64979, with the Securities and Exchange Commission on December 13, 1995, is hereby incorporated by reference.
All documents filed by the Company after the date of this Registration Statement pursuant to Sections 13(a), 13(c), 14 and 15(d) of the 1934 Act, prior to the filing of a post-effective amendment which indicates that all the Company's Common Stock offered hereby has been sold or which deregisters such Company Common Stock then remaining unsold, shall be deemed to be incorporated herein by reference and to be a part hereof from the date of filing such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any other 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 Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Title 13.1, Chapter 9, Article 10 of the Code of Virginia of 1950, as amended, permits a Virginia corporation in general to indemnify any of its officers and directors, and any person serving at its request as an officer or director or another corporation or enterprise if he acted in good faith and in a manner which he believed to be in, or not opposed to, the best interest of the corporation. In the event, however, that such person is adjudged liable to the corporation, he will not be entitled to indemnification. The statute also permits a corporation to provide other or further indemnity in its articles of incorporation, or in a bylaw or resolution approved by its directors or shareholders, except for an indemnity against willful misconduct or a knowing violation of criminal law. Furthermore, unless limited by its articles of incorporation, a corporation shall indemnify a director who entirely prevails in the defense of any proceeding to which he was a party because he is or was a director of the corporation. Finally, the statute authorizes a corporation to purchase and maintain insurance on behalf of any such person against any liability asserted against him and incurred by him in any such capacity or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability.
The Articles of Incorporation of the Company provide that the Company shall indemnify any person who was or is a party or is threatened to be made a party to any proceeding by reason of the fact that he is or was a director or officer of the Company against all liabilities and expenses incurred in connection therewith, including amounts paid in settlement, imposed upon, threatened or asserted against him or her because he or she is or was an officer or director of the Company, except for an indemnity against willful misconduct or a knowing violation of criminal law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
An index of Exhibits appears at page II-6 hereof.
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 of 1933;
(ii) To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represents a fundamental change in the information set forth in the 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;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) shall not apply to information contained in periodic reports filed by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, 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 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 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered herein, 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 of 1933 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 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 policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned 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 Town of Blacksburg, Commonwealth of Virginia, on the 3rd day of June, 1999.
NATIONAL BANKSHARES, INC.
Blacksburg, Virginia
By: /s/ James G. Rakes ------------------ James G. Rakes Chairman, President and Chief Executive Officer |
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:
NAME TITLE DATE ---- ----- ---- Chairman, President and Chief Executive Officer (Principal Executive Officer) /s/ James G. Rakes and Director June 3, 1999 ----------------------- James G. Rakes Treasurer (Principal Financial /s/ J. Robert Buchanan and Accounting Officer) June 3, 1999 ----------------------- J. Robert Buchanan |
Director and
/s/ C. L. Boatwright Vice Chairman of the Board June 3, 1999 ----------------------- C. L. Boatwright /s/ L. A. Bowman Director June 3, 1999 ----------------------- L. A. Bowman /s/ A. A. Crouse Director June 3, 1999 ----------------------- A. A. Crouse |
/s/ J. A. Deskins, Sr. Director June 3, 1999 ----------------------- J. A. Deskins, Sr. /s/ P. A. Duncan Director June 3, 1999 ----------------------- P. A. Duncan /s/ C. L. Forrester Director June 3, 1999 ----------------------- C. L. Forrester /s/ W. T. Peery Director June 3, 1999 ----------------------- W. T. Peery /s/ J. R. Stewart Director June 3, 1999 ----------------------- J. R. Stewart |
EXHIBIT INDEX
Exhibit Description Exhibit Number ------------------- -------------- Articles of Incorporation, as 4.1 (Incorporated by amended reference from Exhibit 3(a) of the Company's Annual Report on Form 10-K for fiscal year ended December 31, 1993, filed March 30, 1994). Bylaws 4.2 (Incorporated by reference from from Exhibit 3(b) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1993, filed March 30, 1994). National Bankshares, Inc. 4.3 1999 Stock Option Plan, filed herewith Opinion of Marilyn B. Buhyoff, 5 Esq., Counsel, National Bankshares, Inc., with respect to the validity of the Common Stock, filed herewith Consent of KPMG LLP, 23.1 Independent Public Accountants, dated June 3, 1999, filed herewith. Consent of Marilyn B. Buhyoff, 23.2 Esq., Counsel, National Bankshares, Inc., contained in her opinion filed as Exhibit 5 hereto |
NATIONAL BANKSHARES, INC. Exhibit 4.3
1999 STOCK OPTION PLAN
ARTICLE I
ESTABLISHMENT, PURPOSE, AND DURATION
1.1 ESTABLISHMENT OF THE PLAN. National Bankshares, Inc., a Virginia corporation (the "Company"), hereby establishes an incentive compensation plan for the Company and its subsidiaries to be known as the "National Bankshares, Inc. 1999 Stock Option Plan", as set forth in this document. Unless otherwise defined herein, all capitalized terms shall have the meanings set forth in Section 2.1 herein. The Plan permits the grant of Incentive Stock Options and Non-qualified Stock Options.
The Plan was adopted by the Board of Directors of the Company on March 10, 1999, and shall become effective on the date thereof (the "Effective Date"), subject to the approval by vote of shareholders of the Company in accordance with applicable laws.
1.2 PURPOSE OF THE PLAN. The purpose of the Plan is to promote the success of the Company and its subsidiaries by providing incentives to Key Employees that will promote the identification of their personal interest with the long-term financial success of the Company and with growth in shareholder value. The Plan is designed to provide flexibility to the Company, including its subsidiaries, in its ability to motivate, attract, and retain the services of Key Employees upon whose judgment, interest, and special effort the successful conduct of its operation is largely dependent.
1.3 DURATION OF THE PLAN. The Plan shall commence on the Effective Date, as described in Section 1.1 herein, and shall remain in effect, subject to the right of the Board of Directors of the Company to terminate the Plan at any time pursuant to Article IX herein, until March 9, 2009, at which time it shall terminate except with respect to Awards made prior to, and outstanding on, that date which shall remain valid in accordance with their terms.
ARTICLE II
DEFINITIONS
2.1 DEFINITIONS. Except as otherwise defined in the Plan, the following terms shall have the meanings set forth below:
(a) "Agreement" means a written agreement implementing the grant of each Award signed by an authorized officer of the Company and by the Participant.
(b) "Award" means, individually or collectively, a grant under this Plan of Incentive Stock Options or Non-qualified Stock Options.
(c) "Award Date" or "Grant Date" means the date on which an Award is made by the Committee under this Plan.
(d) "Board" or "Board of Directors" means the Board of Directors of the Company, unless otherwise indicated.
(e) "Change in Control" means the occurrence, after the Effective Date, of either an "Acquisition of Controlling Ownership" (as defined in clause (i) below), a "Change in the Incumbent Board" (as defined in clause (ii) below), a "Business Combination" (as defined in clause (iii) below), or a "Liquidation or Dissolution" (as defined in clause (iv) below).
(i) "Acquisition of Controlling Ownership" means the
acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 20% or more of either (x) the then
outstanding shares of common stock of the Company (the "Outstanding
Common Stock") or (y) the combined voting power of the then
outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Voting
Securities"). Notwithstanding the foregoing, for purposes of this
clause (i), the following acquisitions shall not constitute a Change
in Control:
(A) any acquisition directly from the Company;
(B) any acquisition by the Company;
(C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; or
(D) any acquisition by any corporation pursuant to a
transaction which complies with paragraphs (A), (B) and (C) of clause
(iii) of this Section 2.1(e).
(ii) "Change in the Incumbent Board" means that individuals who, as of the Effective Date, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board. For this purpose, any individual who becomes a director subsequent to the Effective Date whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be thereupon considered a member of the Incumbent Board (with his predecessor thereafter ceasing to be a member), but excluding, for
this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board.
(iii) "Business Combination" means the consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination") unless all of the following occur:
(A) all or substantially all of the individuals and entities who were the beneficial owners respectively, of the Outstanding Common Stock and Outstanding Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries, in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Common Stock and Outstanding Voting Securities, as the case may be,
(B) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination, or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination, and
(C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board or were elected by such majority at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination.
(iv) "Liquidation or Dissolution" means the approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.
(f) "Code" means the Internal Revenue Code of 1986, as amended from time to time.
(g) "Committee" means the committee of the Board appointed by the Board to administer the Plan pursuant to Article III herein, all of the members of which shall be "non-employee directors" as defined in Rule 16b-3, as amended, under the Exchange Act or any similar or successor rule and "outside directors" within the meaning of Section 162(m)(4)(C)(i) of the Code. Unless otherwise determined by the Board, the Committee shall consist of all non-employee director members of the Board meeting the above requirements.
(h) "Company" means National Bankshares, Inc., or any successor thereto as provided in Article XI herein.
(i) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(j) "Fair Market Value" of a Share means the mean between the high and low sales price of the Stock on the relevant date if it is a trading date, or if not, on the most recent date on which the Stock was traded prior to such date, as reported by NASDAQ National Market System, or if, in the opinion of the Committee, this method is inapplicable or inappropriate for any reason, the fair market value as determined pursuant to a reasonable method adopted by the Committee in good faith for such purpose.
(k) "Incentive Stock Option" or "ISO" means an option to purchase Stock, granted under Article VI herein, which is designated as an incentive stock option and is intended to meet the requirements of Section 422 of the Code.
(l) "Key Employee" means an officer or other key employee of the Company or its Subsidiaries, who, in the opinion of the Committee, can contribute significantly to the growth and profitability of, or perform services of major importance to, the Company and its Subsidiaries. Key Employee does not include non-employee officers or directors, but may include officers or directors who are employees.
(m) "Non-qualified Stock Option" or "NQSO" means an option to purchase Stock, granted under Article VI herein, which is not intended to be an Incentive Stock Option.
(n) "Option" means an Incentive Stock Option or a Non-qualified Stock Option.
(o) "Participant" means a Key Employee who is granted an Award under the Plan.
(p) "Person" shall have the meaning ascribed to such term in
Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and
14(d) thereof, including a "group" as defined in Section 13(d).
(q) "Plan" means the National Bankshares, Inc. 1999 Stock Option Plan, as described and as hereafter from time to time amended.
(r) "Stock" or "Shares" means the common stock of the Company.
(s) "Subsidiary" shall mean a corporation at least 50% of the total combined voting power of all classes of stock of which is owned by the Company, either directly or through one or more of its Subsidiaries.
ARTICLE III
ADMINISTRATION
3.1 THE COMMITTEE. The Plan shall be administered by the Committee
which shall have all powers necessary or desirable for such administration.
The express grant in this Plan of any specific power to the Committee shall
not be construed as limiting any power or authority of the Committee. In
addition to any other powers and, subject to the provisions of the Plan,
the Committee shall have the following specific powers: (i) to determine
the terms and conditions upon which the Awards may be made and exercised;
(ii) to determine all terms and provisions of each Agreement, which need
not be identical; (iii) to construe and interpret the Agreements and the
Plan; (iv) to establish, amend or waive rules or regulations for the Plan's
administration; (v) to accelerate the exercisability of any Award; and (vi)
to make all other determinations and take all other actions necessary or
advisable for the administration of the Plan.
3.2 DELEGATION OF CERTAIN DUTIES. The Committee may in its sole discretion delegate all or part of its duties and obligations to designated officer(s) to administer the Plan with respect to Awards to Key Employees who are not subject to Section 16 of Exchange Act.
3.3 SELECTION OF PARTICIPANTS. The Committee shall have the authority to grant Awards under the Plan, from time to time, to such Key Employees as may be selected by it. Each Award shall be evidenced by an Agreement.
3.4 DECISIONS BINDING. All determinations and decisions made by the Board or the Committee pursuant to the provisions of the Plan shall be final, conclusive and binding.
3.5 RULE 16B-3 REQUIREMENTS AND CODE SECTION 162(M). Notwithstanding any other provision of the Plan, the Board or the Committee may impose such conditions on any Award, and amend the Plan in any such respects, as may be required to satisfy the requirements of Rule 16b-3, as amended (or any successor or similar rule), under the Exchange Act. Any provision of the Plan to the contrary notwithstanding, and except to the extent that the Committee determines otherwise: (i) transactions by and with respect to officers and directors of the Company who are subject to Section 16(b) of
the Exchange Act (hereafter, "Section 16 Persons") shall comply with any applicable conditions of SEC Rule 16b-3; (ii) transactions with respect to persons whose remuneration is subject to the provisions of Section 162(m) of the Code shall conform to the requirements of Section 162(m)(4)(C) of the Code; and (iii) every provision of the Plan shall be administered, interpreted and construed to carry out the foregoing provisions of this sentence. Notwithstanding any provision of the Plan to the contrary, the Plan is intended to give the Committee the authority to grant Awards that qualify as performance-based compensation under Code Section 162(m)(4)(C) as well as Awards that do not so qualify. Every provision of the Plan shall be administered, interpreted and construed to carry out such intention and any provision that cannot be so administered, interpreted and construed shall to that extent be disregarded; and any provision of the Plan that would prevent an Award that the Committee intends to qualify as performance-based compensation under Code Section 162(m)(4)(C) from so qualifying shall be administered, interpreted and construed to carry out such intention and any provision that cannot be so administered, interpreted and construed shall to that extent be disregarded.
3.6 INDEMNIFICATION OF COMMITTEE. In addition to such other rights of indemnification as they may have as directors or as members of the Committee, the members of the Committee shall be indemnified by the Company against reasonable expenses, including attorneys' fees, actually and reasonably incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan or any Award granted or made hereunder, and against all amounts reasonably paid by them in settlement thereof or paid by them in satisfaction of a judgment in any such action, suit or proceeding, if such members acted in good faith and in a manner which they believed to be in, and not opposed to, the best interests of the Company and its Subsidiaries.
ARTICLE IV
STOCK SUBJECT TO THE PLAN
4.1 NUMBER OF SHARES. Subject to adjustment as provided in Section 4.3 herein, the maximum aggregate number of Shares that may be issued pursuant to Awards made under the Plan shall not exceed 250,000. Except as provided in Sections 4.2 and 4.3 herein, the issuance of Shares in connection with the exercise of, or as other payment for Awards, under the Plan shall reduce the number of Shares available for future Awards under the Plan.
4.2 LAPSED AWARDS OR FORFEITED SHARES. If any Award granted under this Plan (for which no material benefits of ownership have been received) terminates, expires, or lapses for any reason other than by virtue of exercise of the Award, any Stock subject to such Award again shall be available for the grant of an Award under the Plan.
4.3 DELIVERY OF SHARES AS PAYMENT. In the event a Participant pays the Option Price for Shares pursuant to the exercise of an Option with previously acquired Shares, the number of Shares available for future Awards under the Plan shall be reduced only by the net number of new Shares issued upon the exercise of the Option.
4.4 CAPITAL ADJUSTMENTS. The number and class of Shares subject to each outstanding Award, the Option Price (as hereinafter defined) and the aggregate number and class of Shares for which Awards thereafter may be made shall be subject to such adjustment, if any, as the Committee in its sole discretion deems appropriate to reflect such events as stock dividends, stock splits, recapitalizations, mergers, consolidations or reorganizations of or by the Company.
ARTICLE V
ELIGIBILITY
Persons eligible to participate in the Plan include all employees of the Company and its Subsidiaries who, in the opinion of the Committee, are Key Employees.
ARTICLE VI
STOCK OPTIONS
6.1 GRANT OF OPTIONS. Subject to the terms and provisions of the
Plan, Options may be granted to Key Employees at any time and from time to
time as shall be determined by the Committee. The Committee shall have
complete discretion in determining the number of Shares subject to Options
granted to each Participant, provided, however, that (i) no Key Employee
may be granted Options in any calendar year for more than 25,000 Shares and
(ii) that the aggregate Fair Market Value (determined at the time the Award
is made) of Shares with respect to which any Participant may first exercise
ISOs granted under the Plan during any calendar year may not exceed
$100,000 or such amount as shall be specified in Section 422 of the Code
and rules and regulation thereunder.
6.2 OPTION AGREEMENT. Each Option grant shall be evidenced by an Agreement that shall specify the type of Option granted, the Option Price, the duration of the Option, the number of Shares to which the Option pertains, any conditions imposed upon the exercisability of Options in the event of retirement, death, disability or other termination of employment, and such other provisions as the Committee shall determine. The Agreement shall specify whether the Option is intended to be in Incentive Stock Option within the meaning of Section 422 of the Code, or Nonqualified Stock Option not intended to be within the provisions of Section 422 of the Code.
6.3 OPTION PRICE. The exercise price per share of Stock covered by an Option ("Option Price") shall be determined by the Committee subject to the following limitations. The Option Price shall not be less than 100% of the Fair Market Value of such Stock on the Grant Date. In addition, an ISO granted to an employee who, at the time of grant, owns (within the meaning of Section 425(d) of the Code) Stock possessing more than 10% of the total combined voting power of all classes of Stock of the Company, shall have an Option Price which is at least equal to 110% of the Fair Market Value of the Stock.
6.4 DURATION OF OPTIONS. Each Option shall expire at such time as
the Committee shall determine at the time of grant provided, however, that
no Option shall be exercisable later than the tenth (10th) anniversary date
of its Award Date. In addition, no ISO granted to an employee who, at the
time of grant, owns (within the meaning of Section 425(d) of the Code)
Stock possessing more than 10% of the total combined voting power of all
classes of Stock of the Company, shall be exercisable later than the fifth
(5th) anniversary date of its Award Date.
6.5 EXERCISABILITY. Options granted under the Plan shall be exercisable at such times and be subject to such restrictions and conditions as the Committee shall determine, which need not be the same for all Participants.
6.6 METHOD OF EXERCISE. Options shall be exercised by the delivery of a written notice to the Company in the form prescribed by the Committee setting forth the number of Shares with respect to which the Option is to be exercised, accompanied by full payment for the Shares which shall be deemed to include any arrangements approved by the Committee for the delivery to the Company of the proceeds of a sale or margin loan in the case of a "cashless" exercise. The Option Price shall be payable to the Company in full either in cash (including, where approved by the Committee, the proceeds of a cashless exercise in the Committee's discretion), by delivery of Shares of Stock valued at Fair Market Value at the time of exercise (in the Committee's discretion), delivery of a promissory note (in the Committee's discretion) or by a combination of the foregoing. As soon as practicable after receipt of written notice and payment, the Company shall deliver to the Participant, stock certificates in an appropriate amount based upon the number of Options exercised, issued in the Participant's name. No Participant who is awarded Options shall have rights as a shareholder until the date of exercise of the Options.
6.7 RESTRICTIONS ON STOCK TRANSFERABILITY. The Committee may impose such restrictions on any Shares acquired pursuant to the exercise of an Option under the Plan as it may deem advisable, including, without limitation, restrictions under the applicable Federal securities law, under the requirements of the National Association of Securities Dealers, Inc. or any stock exchange upon which such Shares are then listed and under any blue sky or state securities laws applicable to such Shares.
6.8 NONTRANSFERABILITY OF OPTIONS. Except as specifically provided in an Agreement pursuant to 6.9 below, no Option granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, otherwise than by will or by the laws of descent and distribution, and all Options granted to a Participant under the Plan shall be exercisable during his lifetime only by such Participant or his guardian or legal representative.
6.9 TRANSFERABILITY OF CERTAIN OPTIONS. In addition to nontransferable Options, the Committee may grant Nonqualified Stock Options that are transferable during the lifetime of the Key Employee, provided that no consideration is paid for the transfer. The transferee of an Option shall be subject to all restrictions applicable to the Option prior to its transfer. The Agreement granting the Option shall set forth the transfer conditions and restrictions. The Committee may impose on any transferable Option and on Stock issued upon the exercise of any Option such limitations and conditions as the Committee deems appropriate.
ARTICLE VII
CHANGE IN CONTROL
In the event of a Change in Control of the Company, the Committee, as constituted before such Change in Control, in its sole discretion may, as to any outstanding Award, either at the time the Award is made or any time thereafter, take any one or more of the following actions: (i) provide for the acceleration of any time periods relating to the exercise or realization of any such Award so that such Award may be exercised or realized in full on or before a date initially fixed by the Committee (assuming the Agreement with respect to the Award does not already provide for such acceleration); (ii) provide for the purchase or settlement of any such Award by the Company, upon a Participant's request, for an amount of cash equal to the amount which could have been obtained upon the exercise of such Award or realization of such Participant's rights had such Award been currently exercisable or payable; (iii) make such adjustment to any such Award then outstanding as the Committee deems appropriate to reflect such Change in Control; or (iv) cause any such Award then outstanding to be assumed, or new rights substituted therefor, by the acquiring or surviving corporation in such Change in Control.
ARTICLE VIII
MODIFICATION, EXTENSION AND RENEWALS OF AWARDS
Subject to the terms and conditions and within the limitations of the Plan, the Committee may modify, extend or renew outstanding Awards, or, if authorized by the Board, accept the surrender of outstanding Awards (to the extent not yet exercised) granted under the Plan and authorize the granting of new Awards pursuant to the Plan in substitution therefor, and the substituted Awards may specify a lower exercise price than the surrendered
Awards, a longer term than the surrendered Awards or may contain any other provisions that are authorized by the Plan. The Committee may also modify the terms of any outstanding Agreement. Notwithstanding the foregoing, however, no modification of an Award, shall, without the consent of the Participant, adversely affect the rights or obligations of the Participant.
ARTICLE IX
AMENDMENT, MODIFICATION AND TERMINATION OF THE PLAN
9.1 AMENDMENT, MODIFICATION AND TERMINATION. At any time and from time to time, the Board may terminate, amend, or modify the Plan. Such amendment or modification may be without shareholder approval except to the extent that such approval is required by the Code, pursuant to the rules under Section 16 of the Exchange Act, by any national securities exchange or system on which the Stock is then listed or reported, by any regulatory body having jurisdiction with respect thereto or under any other applicable laws, rules or regulations.
9.2 AWARDS PREVIOUSLY GRANTED. No termination, amendment or modification of the Plan other than pursuant to Section 4.4 herein shall in any manner adversely affect any Award theretofore granted under the Plan, without the written consent of the Participant.
ARTICLE X
WITHHOLDING
10.1 TAX WITHHOLDING. The Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy Federal, State and local taxes (including the Participant's FICA obligation) required by law to be withheld with respect to any grant, exercise, or payment made under or as a result of this Plan.
10.2 STOCK WITHHOLDING. With respect to withholding required upon the exercise of Non-qualified Stock Options or upon the occurrence of any other similar taxable event, Participants may elect, subject to the approval of the Committee, to satisfy the withholding requirement, in whole or in part, by having the Company withhold Shares of Stock having a Fair Market Value equal to the amount required to be withheld. The value of the Shares to be withheld shall be based on Fair Market Value of the Shares on the date that the amount of tax to be withheld is to be determined. All elections shall be irrevocable and be made in writing, signed by the Participant on forms approved by the Committee in advance of the day that the transaction becomes taxable.
ARTICLE XI
SUCCESSORS
All obligations of the Company under the Plan, with respect to Awards granted hereunder, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation or otherwise, of all or substantially all of the business and/or assets of the Company.
ARTICLE XII
GENERAL
12.1 REQUIREMENTS OF LAW. The granting of Awards and the issuance of Shares of Stock under this Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies as may be required.
12.2 EFFECT OF PLAN. The establishment of the Plan shall not confer upon any Key Employee any legal or equitable right against the Company, a Subsidiary or the Committee, except as expressly provided in the Plan. The Plan does not constitute an inducement or consideration for the employment of any Key Employee, nor is it a contract between the Company or any of its Subsidiaries and any Key Employee. Participation in the Plan shall not give any Key Employee any right to be retained in the service of the Company or any of its Subsidiaries.
12.3 CREDITORS. The interests of any Participant under the Plan or any Agreement are not subject to the claims of creditors and may not, in any way, be assigned, alienated or encumbered.
12.4 GOVERNING LAW. The Plan, and all Agreements hereunder, shall be governed, construed and administered in accordance with and governed by the laws of the Commonwealth of Virginia and the intention of the Company is that ISOs granted under the Plan qualify as such under Section 422 of the Code.
12.5 SEVERABILITY. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.
Adopted by the Board of Directors:
March 10, 1999
Exhibit 5
June 3, 1999
The Board of Directors
National Bankshares, Inc.
100 South Main Street
Blacksburg, Virginia 24060
Dear Sirs:
I have acted as counsel to National Bankshares, Inc., a Virginia corporation (the "Company"), in connection with the preparation and filing of a registration statement on Form S-8 under the Securities Act of 1933, as amended, with respect to 250,000 shares of the Company s Common Stock, $2.50 par value per share (the "Shares"), to be offered pursuant to the Company s 1999 Stock Option Plan (the "Plan").
In rendering this opinion, I have relied upon, among other things, my examination of the Plan and such records of the Company and certificates of its officers and of public officials as I have deemed necessary.
Based upon the foregoing and the further qualifications stated below, I am of the opinion that:
(1) The Company is duly incorporated, validly existing and in good standing under the laws of the Commonwealth of Virginia; and
(2) The Shares have been duly authorized and, when distributed in accordance with the terms of the Plan, will be legally issued, fully paid and non-assessable.
I hereby consent to the filing of this opinion with the Securities and Exchange Commission as an exhibit to such registration statement and any amendments thereto and to the use of my name under the heading "Legal Opinions" in any Prospectus for the Plan.
Very truly yours,
/s/ MARILYN B. BUHYOFF Marilyn B. Buhyoff Counsel |
National Bankshares, Inc.
Exhibit 23.1
ACCOUNTANTS' CONSENT
The Board of Directors
National Bankshares, Inc.:
We consent to incorporation by reference herein of our report dated February 5, 1999, relating to the consolidated balance sheets of National Bankshares, Inc. and subsidiaries as of December 31, 1998 and 1997, and the related consolidated statements of income and comprehensive income, changes in stockholders' equity, and cash flows for each of the years in the three- year period ended December 31, 1998, which report appears in the December 31, 1998 Annual Report on Form 10-K of National Bankshares, Inc. and subsidiaries incorporated by reference herein. Our report dated February 5, 1999 refers to the adoption of the provisions of Statement of Financial Accounting Standards No. 133, "ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES," as of October 1, 1998.
KPMG LLP
Roanoke, Virginia June 3, 1999