Exhibit 10.2

 

NEW PEOPLES BANKSHARES, INC.

FORM OF NON-EMPLOYEE DIRECTOR

NON-QUALIFIED STOCK OPTION AGREEMENT

 

THIS AGREEMENT dated as of                     , between New Peoples Bankshares,
Inc., a Virginia corporation (the “Company”), and                      (the
“Optionee”), is made pursuant and subject to the provisions of the Company’s
2001 Incentive Plan, as amended from time to time (the “Plan”). All terms used
herein that are defined in the Plan shall have the same meanings given them in
the Plan.

 

1. Grant of Option. Pursuant to the terms of the Plan, the Company, on
                                , granted to the Optionee, subject to the terms
and conditions of the Plan and subject further to the terms and conditions
herein set forth, the right and option to purchase from the Company all or any
part of an aggregate of                      (        ) shares of the Common
Stock of the Company (the “Common Stock”) at an option price per share of
                     (the “Option”). The Option shall be a Non-Qualified Stock
Option exercisable as hereinafter provided.

 

2. Terms and Conditions. This Option is subject to the following terms and
conditions:

 

  (a) Expiration Date. The Expiration Date of this Option is
                    .

 

  (b) Exercise of Option. This Option shall be exercisable with respect to the
total number of shares covered by this Option [ at any time after
                     and] until the earlier of the Expiration Date or the
termination of the Optionee’s rights hereunder pursuant to paragraph 3, 4 or 5.
A partial exercise of this Option shall not affect the Optionee’s right to
exercise subsequently this Option with respect to the remaining shares that are
exercisable, subject to the conditions of the Plan and this Agreement.

 

  (c) Method of Exercising and Payment for Shares. This Option may be exercised
only by written notice delivered to the attention of the Company’s Secretary at
the Company’s principal office in Honaker, Virginia. The written notice shall
specify the number of shares being acquired pursuant to the exercise of the
Option when such Option is being exercised in part in accordance with
subparagraph 2(b) hereof. The exercise date shall be the date upon which such
notice is received by the Company. Such notice shall be accompanied by payment
of the Option price in full for each share either in cash in United States
Dollars, or by the surrender of shares of Common Stock, or by cash equivalent
acceptable to the Company or any combination thereof having an aggregate fair
market value equal to the total Option price for all the shares being purchased.

 

--------------------------------------------------------------------------------

  (d) Cashless Exercise. To the extent permitted by applicable laws and
regulations, at the request of the Optionee, the Company will cooperate in a
“cashless exercise” in accordance with the Plan.

 

  (e) Nontransferability. This Option is nontransferable except, in the event of
the Optionee’s death, by will or by the laws of descent and distribution,
subject to the terms hereof. During the Optionee’s lifetime, this Option may be
exercised only by the Optionee.

 

3. Exercise in the Event of Death. This Option shall remain exercisable with
respect to any shares yet unexercised in the event in the event that the
Optionee dies prior to exercising this Option in full and prior to the
Expiration Date of this Option. In that event, this Option may be exercised by
the Optionee’s estate, or the person or persons to whom his rights under this
Option shall pass by will or the laws of descent and distribution. The
Optionee’s estate or such persons must exercise this Option with respect to the
remaining shares subject to the Option, if at all, within one year of the date
of the Optionee’s death or during the remainder of the period preceding the
Expiration Date, whichever is shorter.

 

4. Exercise in the Event of Permanent and Total Disability. This Option shall
remain exercisable with respect to any shares yet unexercised if the Optionee
becomes permanently and totally disabled (as determined by the Board) while
serving on the Board prior to exercising this Option in full and prior to the
Expiration Date of this Option. In such event, the Optionee must exercise this
Option with respect to the remaining share subject to the Option, if at all,
within one year of the date on which he ceases serving on the Board due to
permanent and total disability or during the remainder of the period preceding
the Expiration Date, whichever is shorter.

 

5. Exercise After Resignation, Non-Election or Other Approved Circumstance. In
the event that the Optionee resigns from or is not re-elected or does not stand
for re-election to the Board or in any other circumstance approved by the Board
in its sole discretion, this Option shall remain exercisable with respect to any
shares yet unexercised but must be exercised by the Optionee, if at all, within
one year following the date of his resignation or cessation of service on the
Board, or within the period prescribed by the Board in an approved circumstance,
or during the remainder of the period preceding the Expiration Date, whichever
is shorter.

 

6. Fractional Shares. Fractional shares shall not be issuable hereunder, and
when any provision hereof may entitle the Optionee to a fractional share such
fraction shall be disregarded.

 

7. Investment Representation. The Optionee agrees that, unless such shares shall
previously have been registered under the Securities Act of 1933 (a) any shares
purchased by him hereunder will be purchased for investment and not with a view
to distribution or resale, and (b) until such registration, certificates
representing such shares may bear an appropriate legend to assure compliance
with such Act.

 

8. Change in Capital Structure. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
this Option, and the price per share thereof, shall be proportionately adjusted
and its terms shall be adjusted as the Committee shall determine to be equitably

 

-2-

--------------------------------------------------------------------------------

required for any increase or decrease in the number of issued and outstanding
shares of Common Stock of the Company resulting from any stock dividend (but
only on the Common Stock), stock split, subdivision, combination,
reclassification, recapitalization or general issuance to holders of Common
Stock of rights to purchase Common Stock at substantially below its then fair
market value or any change in the number of such shares outstanding effected
without receipt of cash or property or labor or services by the Company or for
any spin-off, spin-out, split-up, split-off or other distribution of assets to
shareholders.

 

In the event of a change in the Common Stock of the Company as presently
constituted, which is limited to a change of all of its authorized shares with
par value or without par value, the shares resulting from any such change shall
be deemed to be the Common Stock within the meaning of the Plan.

 

The grant of this Option pursuant to the Plan shall not affect in any way the
right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge or
to consolidate or to dissolve, liquidate or sell, or transfer all or any part of
its business or assets.

 

9. Governing Law. This Agreement shall be governed by and construed and enforced
in accordance with the laws of the Commonwealth of Virginia, except to the
extent that federal law shall be deemed to apply.

 

10. Conflicts. In the event of any conflict between the provisions of the Plan
as in effect on the date hereof and the provisions of this Agreement, the
provisions of the Plan shall govern.

 

11. Optionee Bound by Plan. The Optionee hereby acknowledges receipt of a copy
of the Plan and agrees to be bound by all the terms and provisions thereof.

 

12. Binding Effect. Subject to the limitations stated above and in the Plan,
this Agreement shall be binding upon and insure to the benefit of the legatees,
distributees, and personal representatives of the Optionee and the successors of
the Company.

 

13. Counterparts. This Agreement may be executed in one or more counterparts,
each one of which when so executed shall be deemed to be an original, and all of
which taken together shall constitute one and the same agreement.

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by a duly
authorized officer, and the Optionee has affixed his signature hereto.

 

OPTIONEE:

 

NEW PEOPLES BANKSHARES, INC.

 

--------------------------------------------------------------------------------

 

 

--------------------------------------------------------------------------------

 

-3-