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Exhibit 10.3
 
NONQUALIFIED STOCK OPTION AWARD
PURSUANT TO THE HABERSHAM BANCORP
OUTSIDE DIRECTORS STOCK OPTION PLAN

THIS AWARD is made as of the Grant Date by HABERSHAM BANCORP (the “Company”) to
______________________ (the “Optionee”).

Upon and subject to the Terms and Conditions attached hereto and incorporated
herein by reference, the Company awards as of the Grant Date to Optionee a
nonqualified stock option (the “Option”), as described below, to purchase the
Option Shares.

 
A.
Grant Date: ______________, 200__.

 
B.
Type of Option: Nonqualified Stock Option.

 
C.
Plan under which granted: Habersham Bancorp Outside Directors Stock Option Plan.

 
D.
Option Shares: All or any part of   shares of the Company’s $1.00 par value
common stock (the “Common Stock”), subject to adjustment as provided in the
attached Terms and Conditions.

 
E.
Exercise Price: $_______ per share, subject to adjustment as provided in the
attached Terms and Conditions.

 
F.
Option Period: The Option may be exercised only during the Option Period which
commences on the Grant Date and ends, generally, on the earliest of (a) the
fifth (5th) anniversary of the Grant Date; (b) the date the Optionee ceases to
be a member of either the Board of Directors or any Bank Board, except in the
event of the Optionee’s death; or (c) the first anniversary of the Optionee’s
death. Note that other limitations to exercising the Option, as described in the
attached Terms and Conditions, may apply.

 

 
G.
Vesting: The Option Shares shall be fully vested as of the Grant Date, but may
not be exercised until six (6) months following the Grant Date.

IN WITNESS WHEREOF, the Company has executed and sealed this Award as of the
Grant Date set forth above.

  HABERSHAM BANCORP        
By:
 
       
Title:
 

By signing below, the Optionee hereby accepts the Award and agrees to the Terms
and Conditions attached hereto.

     
Optionee

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TERMS AND CONDITIONS
TO THE
NONQUALIFIED STOCK OPTION AWARD
PURSUANT TO THE HABERSHAM BANCORP
OUTSIDE DIRECTORS STOCK OPTION PLAN

1.  Exercise of Option. Subject to the provisions provided herein or in the
Award made pursuant to the Habersham Bancorp Outside Directors Stock Option
Plan:

  (a)  the Option may be exercised with respect to all or any portion of the
vested Option Shares at any time during the Option Period by the delivery to the
Company, at its principal place of business, of (i) a written notice of exercise
in substantially the form attached hereto as Exhibit 1, which shall be actually
delivered to the Company no earlier than thirty (30) days and no later than ten
(10) days prior to the date upon which Optionee desires to exercise all or any
portion of the Option and (ii) payment to the Company of the Exercise Price
multiplied by the number of Option Shares being purchased (the “Purchase Price”)
in the manner provided in subsection (b).

Upon acceptance of such notice and receipt of payment in full of the Purchase
Price, the Company shall cause to be issued a certificate representing the
Option Shares purchased.

  (b)        The Purchase Price shall be paid in full upon the exercise of an
Option and no Option Shares shall be issued or delivered until full payment
therefor has been made. Payment of the Purchase Price for all Option Shares
purchased pursuant to the exercise of an Option shall be made in cash or by
certified check.

2.  Vested Option Shares. The Option Shares shall be immediately vested as of
the Grant Date; provided, however, the Option may not be exercised until six (6)
months following the Grant Date.

3.  Rights as Shareholder. Except as otherwise expressly permitted by the
Committee in writing, until the stock certificates reflecting the Option Shares
accruing to the Optionee upon exercise of the Option are issued to the Optionee,
the Optionee shall have no rights as a shareholder with respect to such Option
Shares. The Company shall make no adjustment for any dividends or distribu-tions
or other rights on or with respect to Option Shares for which the record date is
prior to the issuance of that stock certificate, except as the Plan or the
attached Award otherwise provides.

4.  Restriction on Transfer of Option and of Option Shares. The Option evidenced
hereby is nontransferable other than by will or the laws of descent and
distribution and shall be exercisable during the lifetime of the Optionee only
by the Optionee (or in the event of his Disability, by his personal
representative) and after his death, only by his legatee or the executor of his
estate.

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5.  Changes in Capitalization.

                 (a)  If the number of shares of Common Stock shall be increased
or decreased by reason of a subdivision or combination of shares of Common
Stock, the payment of a stock dividend in shares of Common Stock or any other
increase or decrease in the number of shares of Common Stock outstanding
effected without receipt of consideration by the Company, an appropriate
adjustment shall be made by the Committee, in a manner determined in its sole
discretion, in the number and kind of Option Shares and in the Exercise Price.
 
                 (b)    If the Company shall be the surviving corporation in any
merger consolidation, reorganization, extraordinary dividend, spin-off or other
change in the capital structure of the Company, the Optionee shall be entitled
to purchase the number and class of securities to which a holder of the number
of shares of Common Stock subject to the Option at the time of the transaction
would have been entitled to receive as a result of such transaction, and a
corresponding adjustment, where appropriate, shall be made in the Exercise
Price. In the event of a Change in Control or other corporate transaction
pursuant to which the Company is not the surviving entity, the Committee may
provide for the assumption of the Option by the surviving entity or the
substitution of a new option, adjusted in a manner similar to that contemplated
by the immediately preceding sentence; however, if the surviving entity does not
agree to the assumption or substitution of the Option, the Committee may elect
to terminate the Option Period as of the effective date of the Change in Control
in consideration of the payment to the Optionee of the sum of the difference
between the then aggregate Fair Market Value of the Common Stock and the
aggregate Exercise Price for each vested Option Share which has not been
exercised as of the effective date of the Change in Control. A dissolution or
liquidation of the Company shall cause the Option to terminate as to any portion
thereof not exercised as of the effective date of the dissolution or
liquidation.

                  (c)    The existence of the Plan and the Option granted
pursuant to this Agreement shall not affect in any way the right or power of the
Company to make or authorize any adjustment, reclassification, reorganization or
other change in its capital or business structure, any merger or consolidation
of the Company, any issue of debt or equity securities having preferences or
priorities as to the Common Stock or the rights thereof, the dissolution or
liquidation of the Company, any sale or transfer of all or any part of its
business or assets, or any other corporate act or proceeding. Any adjustment
pursuant to this Section may provide, in the Committee’s discretion, for the
elimination without payment therefor of any fractional shares that might
otherwise become subject to any Option.

6.  Special Limitation on Exercise. No purported exercise of the Option shall be
effective without the approval of the Committee, which may be withheld to the
extent that the exercise, either individually or in the aggregate together with
the exercise of other previously exercised stock options and/or offers and sales
pursuant to any prior or contemplated offering of securities, would, in the sole
and absolute judgment of the Committee, require the filing of a registration
statement with the United States Securities and Exchange Commission or with the
securities commission of any state. If a registration statement is not in effect
under the Securities Act of 1933 or any applicable state securities law with
respect to shares of Common Stock purchasable or otherwise deliverable under the
Option, the Optionee (a) shall deliver to the Company, prior to the exercise of
the Option or as a condition to the delivery of Common Stock pursuant to the
exercise of an Option exercise, such information, representations and warranties
as the Company may reasonably request in order for the Company to be able to
satisfy itself that the Option Shares are being acquired in accordance with the
terms of an applicable exemption from the securities registration requirements
of applicable federal and state securities laws and (b) shall agree that the
shares of Common Stock so acquired will not be disposed of except pursuant to an
effective registration statement, unless the Company shall have received an
opinion of counsel that such disposition is exempt from such requirement under
the Securities Act of 1933 and any applicable state securities law.

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7.  Legend on Stock Certificates.  Certificates evidencing the Option Shares, to
the extent appropriate at the time, shall have noted conspicuously on the
certificates a legend intended to give all persons full notice of the existence
of the conditions, restrictions, rights and obligations set forth herein and in
the Plan.

8.  Governing Laws. This Award and the Terms and Conditions shall be construed,
administered and enforced according to the laws of the State of Georgia;
provided, however, the Option may not be exercised except in compliance with
exemptions available under applicable state securities laws of the state in
which the Optionee resides and/or any other applicable securities laws.

9.  Successors. This Award and the Terms and Conditions shall be binding upon
and inure to the benefit of the heirs, legal representatives, successors and
permitted assigns of the Optionee and the Company.

10.    Notice. Except as otherwise specified herein, all notices and other
communications under this Award shall be in writing and shall be deemed to have
been given if personally delivered or if sent by registered or certified United
States mail, return receipt requested, postage prepaid, addressed to the
proposed recipient at the last known address of the recipient. Any party may
designate any other address to which notices shall be sent by giving notice of
the address to the other parties in the same manner as provided herein.

11.    Severability. In the event that any one or more of the provisions or
portion thereof contained in the Award and these Terms and Conditions shall for
any reason be held to be invalid, illegal or unenforceable in any respect, the
same shall not invalidate or otherwise affect any other provisions of the Award
and these Terms and Conditions, and the Award and these Terms and Conditions
shall be construed as if the invalid, illegal or unenforceable provision or
portion thereof had never been contained herein.

12.    Entire Agreement. Subject to the terms and conditions of the Plan, the
Award and the Terms and Conditions express the entire understanding of the
parties with respect to the Option.

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13.  Violation. Any transfer, pledge, sale, assignment, or hypothecation of the
Option or any portion thereof shall be a violation of the terms of the Award or
these Terms and Conditions and shall be void and without effect.

14.  Headings and Capitalized Terms. Section headings used herein are for
convenience of reference only and shall not be considered in construing the
Award or these Terms and Conditions. Capitalized terms used, but not defined, in
either the Award or the Terms and Conditions shall be given the meaning ascribed
to them in the Plan.

15.  Specific Performance. In the event of any actual or threatened default in,
or breach of, any of the terms, conditions and provisions of the Award and these
Terms and Conditions, the party or parties who are thereby aggrieved shall have
the right to specific performance and injunction in addition to any and all
other rights and remedies at law or in equity, and all such rights and remedies
shall be cumulative.

16.  No Right to Continued Service. Neither the establishment of the Plan nor
the award of Option Shares hereunder shall be construed as giving the Optionee
the right to continued service with the Company or any affiliate.
 
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EXHIBIT 1

NOTICE OF EXERCISE OF
STOCK OPTION TO PURCHASE
COMMON STOCK OF
HABERSHAM BANCORP

  Name
 
    Address
 
           
Date
 
 

Habersham Bancorp
Highway 441 North
P.O. Box 1980
Cornelia, Georgia 20531
Attn: ____________________

Re: Exercise of Nonqualified Stock Option

Ladies and Gentlemen:

Subject to acceptance hereof by Habersham Bancorp (the “Company”) and pursuant
to the provisions of the Habersham Bancorp Outside Directors Stock Option Plan
(the “Plan”), I hereby give notice of my election to exercise options granted to
me to purchase ______________ shares of Common Stock of the Company under the
Nonqualified Stock Option Award for Directors (the “Award”) dated as of
____________. The purchase shall take place as of __________, 200__ (the
“Exercise Date”).

On or before the Exercise Date, I will pay the applicable purchase price by
delivery of cash or a certified check for $___________ for the full purchase
price payable to the order of Habersham Bancorp.

As soon as the stock certificate is registered in my name, please deliver it to
me at the above address.

If the Common Stock being acquired is not registered for issuance to and resale
by the Optionee pursuant to an effective registration statement on Form S-8 (or
successor form) filed under the Securities Act of 1933, as amended (the “1933
Act”), I hereby represent, warrant, covenant, and agree with the Company as
follows:

The shares of the Common Stock being acquired by me will be acquired for my own
account without the participation of any other person, with the intent of
holding the Common Stock for investment and without the intent of participating,
directly or indirectly, in a distribution of the Common Stock and not with a
view to, or for resale in connection with, any distribution of the Common Stock,
nor am I aware of the existence of any distribution of the Common Stock;

Exhibit 1 - Page 1 of 3

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I am not acquiring the Common Stock based upon any representation, oral or
written, by any person with respect to the future value of, or income from, the
Common Stock but rather upon an independent examination and judgment as to the
prospects of the Company;

The Common Stock was not offered to me by means of publicly disseminated
advertisements or sales literature, nor am I aware of any offers made to other
persons by such means;

I am able to bear the economic risks of the investment in the Common Stock,
including the risk of a complete loss of my investment therein;

I understand and agree that the Common Stock will be issued and sold to me
without registration under any state law relating to the registration of
securities for sale, and will be issued and sold in reliance on the exemptions
from registration under the 1933 Act, provided by Sections 3(b) and/or 4(2)
thereof and the rules and regulations promulgated thereunder;

The Common Stock cannot be offered for sale, sold or transferred by me other
than pursuant to: (A) an effective registration under the 1933 Act or in a
transaction otherwise in compliance with the 1933 Act; and (B) evidence
satisfactory to the Company of compliance with the applicable securities laws of
other jurisdictions. The Company shall be entitled to rely upon an opinion of
counsel satisfactory to it with respect to compliance with the above laws;

The Company will be under no obligation to register the Common Stock or to
comply with any exemption available for sale of the Common Stock without
registration or filing, and the information or conditions necessary to permit
routine sales of securities of the Company under Rule 144 under the 1933 Act are
not now available and no assurance has been given that it or they will become
available. The Company is under no obligation to act in any manner so as to make
Rule 144 available with respect to the Common Stock;

I have and have had complete access to and the opportunity to review and make
copies of all material documents related to the business of the Company,
including, but not limited to, contracts, financial statements, tax returns,
leases, deeds and other books and records. I have examined such of these
documents as I wished and am familiar with the business and affairs of the
Company. I realize that the purchase of the Common Stock is a speculative
investment and that any possible profit therefrom is uncertain;

I have had the opportunity to ask questions of and receive answers from the
Company and any person acting on its behalf and to obtain all material
information reasonably available with respect to the Company and its affairs. I
have received all information and data with respect to the Company which I have
requested and which I have deemed relevant in connection with the evaluation of
the merits and risks of my investment in the Company;

Exhibit 1 - Page 2 of 3

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I have such knowledge and experience in financial and business matters that I am
capable of evaluating the merits and risks of the purchase of the Common Stock
hereunder and I am able to bear the economic risk of such purchase; and

The agreements, representations, warranties and covenants made by me herein
extend to and apply to all of the Common Stock of the Company issued to me
pursuant to this Award. Acceptance by me of the certificate representing such
Common Stock shall constitute a confirmation by me that all such agreements,
representa-tions, warranties and covenants made herein shall be true and correct
at that time.

I understand that the certificates representing the shares being purchased by me
in accordance with this notice shall bear a legend referring to the foregoing
covenants, representations and warranties and restrictions on transfer, and I
agree that a legend to that effect may be placed on any certificate which may be
issued to me as a substitute for the certificates being acquired by me in
accordance with this notice. I further understand that capitalized terms used in
this Notice of Exercise without definition shall have the meanings given to them
in the Plan.

Very truly yours,
 
_____________________

       
AGREED TO AND ACCEPTED:
             
HABERSHAM BANCORP
             
By: ___________________________
             
Title: __________________________
             
Number of Shares
     
Exercised: ______________________
             
Number of Shares
     
Remaining: _____________________
 
Date: ______________________
 

 
 
Exhibit 1 - Page 3 of 3

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