Document:

exv10w4w2

EXHIBIT 10.4.2

FORM

Fauquier Bankshares, Inc.

Nonstatutory Stock Option Agreement

     THIS AGREEMENT is between Fauquier Bankshares, Inc. (the “Company”) and                     
(the “Optionee”), and is dated as of                      , 2009 (the “Date of Grant”).

     The Company hereby grants the Optionee an option to purchase shares of the common stock of the
Company, subject to the terms and conditions of this Agreement.

     The grant of this option is made pursuant to the Fauquier Bankshares, Inc. 2009 Stock
Incentive Plan (the “Plan”), a copy of which has been provided to the Optionee, receipt of which is
hereby acknowledged. The terms of the Plan are incorporated into this Agreement by reference. In
the case of any inconsistency between the Plan and this Agreement, the terms of the Plan shall
control. Any term used in this Agreement that is defined in the Plan shall have the same meaning
given to that term in the Plan.

     1. Grant of Option. The Company grants the Optionee a Nonstatutory Stock Option (the
“Option”) to purchase from the Company                      shares of Company Stock at $                     per
share (the “Option Price”). The Option Price is not less than 100% of the Fair Market Value per
share of the Company Stock on the Date of Grant. The Option is not intended to be an “incentive
stock option” that receives special tax treatment under Section 422 of the Internal Revenue Code
(the “Code”).

     2. Entitlement to Exercise Option.

          (a) The Optionee will become vested in and entitled to exercise the Option as
follows:

	 	 	 	 	 
	 	 	 	 	Total Number or
	 	 	Number or	 	Percentage Vested
	Vesting Date	 	Percentage of Shares	 	Shares
	 

	 	 
	 	 

     This vesting schedule shall accelerate and the Option shall become fully exercisable upon a
Change in Control, death, Disability or Retirement.

 

 

          (b) Except as otherwise stated in this paragraph, the Option may be exercised to the extent it
is vested only while the Optionee is employed by the Company.

     (i) If the Optionee retires or ceases to be employed by the Company for any
reason other than his or her death or Disability and at a time when all or a portion
of this Option was vested and exercisable pursuant to paragraph (a) above, the
Optionee may exercise any or all of his vested Option within three months after he
or she terminates employment.

     (ii) If the Optionee terminates employment because of a Disability (as defined
in the Plan), he or she may exercise any or all of a portion of the vested Option
(determined as of the Optionee’s termination date) within one year after the
Disability termination date.

     (iii) If the Optionee dies while he or she is employed by the Company or within
three months after he or she terminates employment because of a Disability, the
Optionee’s beneficiary may exercise this Option within one year after the Optionee’s
death, but only to the extent the Option was vested and exercisable immediately
before the Optionee’s death.

     (iv) If the Optionee’s employment is terminated by the Company for Cause (as
defined in the Plan), this Option will expire immediately (with respect to both
vested and unvested shares) as of the date of the misconduct, as determined by the
Committee.

          (c) In no event may this Option be exercised after                     , 2019.  

[10 years from date
of grant]

     3. Method of Exercise and Payment.

          (a) The Optionee may exercise his Option by delivering a written notice to the
Company in the form attached as Exhibit A. The exercise date will be (i) in the case of notice by
mail, the date of postmark; or (ii) if delivered in person, the date of delivery. The notice must
be signed and state the number of shares the Optionee has elected to purchase. The Optionee may
exercise the Option in whole or in part, but only with respect to whole shares of Company Stock.

          (b) The exercise notice must be accompanied by payment of the Option Price in full by cash
(which shall include payment by check, bank draft or money order payable to the Company) or by
delivery of irrevocable instructions to a creditworthy broker to deliver promptly to the Company,
from the sale or loan proceeds with respect to the sale of Company Stock or a loan secured by
Company Stock, the amount necessary to pay the exercise price and any applicable withholding taxes.
Instead of paying cash, the Optionee may substitute shares of the Company’s common stock that he
or she previously acquired (and has
owned for at least 6 months) for all or part of the cash payment. Shares of Company Stock
used as payment will be valued at their Fair Market Value on the date of exercise.

2

 

     4. Tax Obligations Upon Exercise. The difference between the Fair Market Value of the
shares purchased when this Option is exercised and the Option price is compensation taxable to the
Optionee as ordinary income and is subject to applicable federal and state taxes. By signing the
Agreement, the Optionee agrees to authorize payroll withholding or to make arrangements
satisfactory to the Company to comply with applicable tax withholding requirements.

     5. Nontransferability. In general, this Option shall not be transferable by the
Optionee other than by will or by the laws of descent and distribution. Notwithstanding the
preceding sentence and subject to federal and state securities laws, the Optionee may transfer this
all or a portion of this Option to one or more immediate family members, to a trust for the benefit
of immediate family members, or to a partnership, limited liability company, or other entity the
only partners, members, or interest-holders of which are among the Optionee’s immediate family
members. Consideration may not be paid for the transfer of this Option. The transferee of the
Option shall be subject to all conditions applicable to the Option prior to its transfer, as set
forth in this Agreement.

     6. Adjustments. If the number of outstanding shares of Company Stock is increased or
decreased as a result of a subdivision or consolidation of shares, the payment of a stock dividend,
stock split, or any other change in the capitalization effective without receipt of consideration
by the Company, the number of unexercised Option shares and the Option price shall be appropriately
adjusted by the Company, whose determination shall be binding, however, to the extent required to
avoid a charge to earnings for financial accounting purposes, adjustments made by the Company
pursuant to this Section 6 to an outstanding Option shall be made so that both: (i) the aggregate
intrinsic value of an Option immediately after the adjustment is not greater than or less than the
Option’s aggregate intrinsic value before the adjustment, and (ii) the ratio of the exercise price
per share to the market value per share is not reduced.

     7. Employment Rights. Neither the Plan nor this Agreement confers upon the Optionee
any right to continue as an employee of the Company or limits in any respect the right of the
Company to terminate the Optionee’s employment.

     8. Governing Law. This Agreement shall be governed by the laws of the Commonwealth of
Virginia.

     9. Acceptance of Option. This Agreement deals only with the Option the Optionee has
been granted and not its exercise. The Optionee’s acceptance of the Option places no obligation or
commitment on the Optionee to exercise the Option. By signing below, the Optionee indicates
acceptance of the Option and his or her agreement to the terms and conditions set forth in this
Agreement, which, together with the terms of the Plan, shall become the Company’s Stock Option
Agreement with the Optionee. The Optionee also
acknowledges receipt of a copy of the Plan and agrees to all of the terms and conditions of
the Plan. This Agreement will not be effective until it is signed and returned.

3

 

     10. Entire Agreement, Amendment. This Agreement constitutes the entire agreement
between the Optionee and the Company with respect to the Option shares and shall be binding upon
the Optionee’s legatees, distributees, and personal representatives and the successors of the
Company. This Agreement may only be amended by a writing signed by both the Optionee and the
Company.

	 	 	 	 	 	 	 
	 	 	Fauquier Bankshares, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 

	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 

	 	 
	 

	 	Date:	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	[OPTIONEE NAME]	 	 
	 
	 	 	 	 	 	 
	 

	 	Signature:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Date:	 	 	 	 
	 

	 	 

	 	 

4

 

Exhibit A

Notice Of Exercise Of Stock Option

To Purchase Common Stock Of Fauquier Bankshares, Inc.

	 	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Date:	 	 	 	 
	 

	 	 

	 	 

Fauquier Bankshares, Inc.

Attention: Chairman

     Re: Exercise of Nonstatutory Stock Option

Gentlemen:

     Subject to acceptance by Fauquier Bankshares, Inc. (the “Company”) pursuant to the provisions
of the Fauquier Bankshares, Inc. 2009 Stock Incentive Plan, I hereby elect to exercise options
granted to me to purchase                      shares of Company Stock (the “Stock”) under the Nonstatutory
Stock Option Agreement dated                     . 200___(the “Agreement”), at a price of $                    
per share, for a total of $                     (the “Exercise Price”).

     I shall pay for the Stock as follows:

	 	o	 	By cash, certified check, or bank cashier’s check, enclosed, for $                    
for the full Exercise Price, payable to Fauquier Bankshares, Inc.
	 
	 	o	 	By delivery of irrevocable instructions to a creditworthy broker to deliver promptly
to the Company, from the sale or loan proceeds with respect to the sale of Company
Stock or a loan secured by Company Stock, the amount necessary to pay the exercise
price and any applicable withholding taxes.
	 
	 	o	 	By the enclosed certificate representing ___shares of Company Stock with a Fair
Market Value equal to the Exercise Price ($                     ) that I have held for at least
six months (if I acquired them from the Company) and that are not subject to any
restrictions.

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

 

 

     I represent and warrant to the Company that:

          (a) I am acquiring the Stock for my own account as principal for investment and not with a
view to resale or distribution.

          (b) I am not acquiring the Stock based upon any representation, oral or written, by any person
with respect to the future value of, or income from, the Stock but rather upon an independent
examination and judgment as to the prospects of the Company. The 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
Stock, including the risk of a complete loss of my investment therein.

          (c) I recognize that purchase of the Stock involves a high degree of risk and have taken full
cognizance of and understand such risk.

          (d) 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 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
to date with respect to the Company which I have requested and have deemed relevant in connection
with the evaluation of the merits and risks of my investment in the Company. 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 shares hereunder. I understand that the Company has relied on my
representations as set forth in this Notice of Exercise in determining materiality for purposes of
the disclosure obligations of the Company under federal and state securities laws.

          (e) I understand and agree that the Company shall withhold from payments made to me, or I
shall remit to the Company, all amounts required to be withheld by the Company to satisfy federal
and state tax withholding obligations with respect to the exercise of the Option.

          (f) I agree that my certificate(s) for the Stock will bear legends to reflect any restrictions
set forth herein and in the Agreement. The agreements, representations, warranties and covenants
made by me herein extend to and apply to all of the Stock of the Company issued to me pursuant to
the Option. Acceptance by me of the certificate
representing such Stock shall constitute a confirmation that all such agreements, representations,
warranties and covenants made herein shall be true and correct at such time.

2

 

     I would like the Stock to be registered in the name(s) of                                                           
               
             
             
             
        
as              
             
             
             
             
              
            
          (specify individual, joint
tenants, tenants by the entireties with right of survivorship as at common law, for the benefit of,
or other legal designation).

	 	 	 	 	 
	 

	 	Very truly yours,
	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

AGREED TO AND ACCEPTED:

Fauquier Bankshares, Inc.

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Its:
	 	 	 	 
	 

	 	 	 	 

	 	 	 	 	 
	Number of Shares	 	 
	Exercised:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Number of Shares	 	 
	Remaining:
	 	 	 	 
	 

	 	 

	 	 

3exv10w4w3

EXHIBIT 10.4.3

FORM

Fauquier Bankshares, Inc.

Restricted Stock Agreement

     THIS AGREEMENT is between Fauquier Bankshares, Inc. (the “Company”) and                     
(the “Employee”), and is dated as of                     , 2009 (the “Date of Award”).

     The Company hereby grants the Employee a Restricted Stock Award under the Fauquier Bankshares,
Inc. Long-Term Incentive Program (the “Program”), subject to the terms and conditions of this
Agreement. Program Awards are allocated from the Fauquier Bankshares, Inc. 2009 Stock Incentive
Plan (the “Plan”).

     The terms of the Program and the Plan are incorporated into this Agreement by reference, and
such terms shall control over any inconsistent provisions in this Agreement. Any term used in this
Agreement that is defined in the Program or Plan shall have the same meaning provided in the
Program or Plan.

     1. Restricted Stock Award. The Company shall transfer ___shares of Restricted
Stock to the Employee on ___(the “Grant Date”). The Fair Market Value of the
Restricted Stock as of the Grant Date, as determined by the Company, is $  per share. The
Employee has the right to elect to include the value of the Restricted Stock in gross income in the
year of transfer pursuant to Internal Revenue Code section 83(b) by completing the “Election to
Include Value of Restricted Property in Gross Income in Year of Transfer Under Code Section 83(b)”
form (the “83(b) Election Form”), attached as Exhibit A to this Agreement.

     2. Restrictions. Except as provided in this Agreement, the Restricted Stock is
nontransferable and subject to a substantial risk of forfeiture. The Employee’s interest in the
Restricted Stock shall become transferable and non-forfeitable (“Vested”) as of the date provided
in Section 3 of this Agreement (the “Vesting Date”).

     3. Vesting.

      (a) Vesting Date. The Restricted Stock awarded pursuant to Section 1
shall become Vested on                     , 2011, provided the Employee is an employee of the
Company as of the Vesting Date and has been so employed throughout the period beginning on
the date of this Agreement and ending on the Vesting Date.

 

 

     (b) Retirement. In the event of the Employee’s Retirement, as defined in the
Plan, before the Vesting Date, all of the Restricted Stock shall be transferable and
non-forfeitable as of the date of the Employee’s Retirement.

     (c) Death or Disability. If the Employee dies or becomes Disabled (as defined
below) before the Vesting Date, all of the Restricted Stock shall be transferable and
non-forfeitable as of the date of the Employee’s death or Disability. For purposes of this
Agreement, “Disability” means the Employee, as determined by the Committee, is (a) is unable
to engage in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than twelve months, or (b) by reason of any
medically determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than twelve months,
receiving income replacement benefits for a period of not less than three months under an
accident and health plan covering employees of the Company.

     (d) Change in Control. If there is a Change in Control of the Company before
the Vesting Date, all of the Restricted Stock shall be transferable and non-forfeitable as
of the date of the Change in Control.

     4. Custody of Certificates. The Company will deliver to the Employee the certificates
evidencing the Restricted Stock awarded. The stock certificates shall bear a legend describing the
terms and conditions of the applicable restrictions on transfer. [or: Custody of certificates
evidencing unvested Restricted Stock shall be retained by the Company. The Company shall deliver
certificates to the Employee of Restricted Stock that become Vested within 30 days after the
Vesting Date].

     5. Dividends and Voting Rights. The Employee will have the right to receive
cash dividends and will have the right to vote Restricted Stock, both unvested and Vested.

     6. Effect of Termination of Employment. All Restricted Stock that is not then Vested
shall be forfeited if the Employee’s employment with the Company terminates for any reason other
than Retirement, death or Disability. [If applicable: the Employee shall return to the Company all
stock certificates evidencing such unvested Restricted Stock.] The Employee shall not be entitled
to any compensation with respect to such unvested Restricted Stock.

     7. Tax Liability and Income Tax Withholding. The Employee agrees as a condition of
this Restricted Stock award to pay to the Company, or make arrangements satisfactory to the Company
regarding the payment to the Company of, the aggregate mount of any federal, state or local income
taxes of any kind required by law to be withheld with respect to the Restricted Stock when the fair
market value of the Restricted Stock become taxable. Until such amount has been paid or
arrangements satisfactory to the Company have been made, no stock certificate shall be delivered to
the Employee. The Employee hereby authorizes the Company to sell all or any part of the Restricted
Stock if necessary to protect the Company form incurring a withholding tax
liability.

2

 

     8. Adjustments. If the number of outstanding shares of Company Stock is increased or
decreased as a result of a stock dividend, redemption, stock split, reverse stock split,
recapitalization, merger, consolidation, spinoff, reorganization, combination or exchange of
shares, or any similar corporate change, the number of shares of Restricted Stock subject to the
Award shall be appropriately adjusted by the Committee, whose determination shall be binding.

     9. Employment Rights. Neither the Plan nor this Agreement confers upon the Employee
any right to continue as an employee of the Company or limits in any respect the right of the
Company to terminate the Employee’s employment.

     10. Governing Law. This Agreement shall be governed by the laws of the Commonwealth
of Virginia.

     11. Severability. In the event any provision (or any part of any provision) contained
in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any
respect, such invalidity, illegality, or unenforceability shall not affect any other provision (or
remaining part of the affected provision) of this Agreement, but this Agreement shall be construed
as if such invalid, illegal, or unenforceable provision (or part thereof) were modified to the
minimum extent necessary to make it legal and enforceable and to achieve the same objective. If no
such modification is possible, then this Agreement shall be construed as if such provision had
never been contained herein but only to the extent such provision (or part there of) is invalid,
illegal, or unenforceable.

     12. Acceptance of Restricted Stock Agreement. This Agreement deals only with the
Restricted Stock Agreement the Employee has been granted. By signing below, the Employee indicates
acceptance of the Restricted Stock Agreement and his or her agreement to the terms and conditions
set forth in this Agreement, which, together with the terms of the Program and the Plan, shall
become the Company’s Restricted Stock Agreement with the Employee. The Employee also acknowledges
receipt of a copy of the Program and the Plan and agrees to all of the terms and conditions of both
documents. This Agreement will not be effective until it is signed and returned.

     13. Code Section 409A. To the extent applicable, this Agreement is intended to comply
with Code Section 409A, and the Committee shall interpret and administer the Agreement in
accordance therewith. In addition, any provision, including, without limitation, any definition,
in this Agreement that is determined to violate the requirements of Code Section 409A shall be void
and without effect and any provision, including, without limitation, any definition, that is
required to appear in this Agreement under Code Section 409A that is not expressly set forth shall
be deemed to be set forth herein, and the Agreement shall be administered in all respects as if
such provisions were expressly set forth. In addition, the timing of payment of the benefits
provided for under this Agreement shall be revised as necessary for compliance with Code Section
409A.

     14. Entire Agreement, Amendment. This Agreement constitutes the entire agreement
between the Employee and the Company with respect to the Restricted Stock Agreement and shall be
binding upon the Employee’s legatees, distributes, and personal representatives and the

3

 

successors
of the Company. This Agreement may only be amended by a writing signed by both the Employee and
the Company.

	 	 	 	 	 
	 	Fauquier Bankshares, Inc.

 	 
	 	 	 	 	 
	 	By:  	 	 
	 

	 

	 
	 	 	 	 	 
	 	Its: 	 	 
	 

	 

	 
	 	 	 	 	 
	 	Date: 	 	 
	 

	 

	 
	 
	 	[Employee Name]

 	 
	 	Signature: 	 	 	 
	 

	 

	 
	 	 	 
	 	Date: 	 	 	 
	 

	 

	 
	 

4

 

Exhibit A

Fauquier Bankshares, Inc.

Restricted Stock Award

Election to Include Value of Restricted Property in Gross Income

in Year of Transfer Under Code Section 83(b)

     The undersigned hereby elects to have the provisions of Section 83(b) of the Internal Revenue
Code of 1986, as amended (the “Code”), apply to purchases and grants of the property described
below. The undersigned provides the following information in accordance with Treasury Regulation
Section 1.83-2:

     1. The name, address and taxpayer identification number of the undersigned are:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Name	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Address	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Social Security No.	 	-	 	-	 	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
 	 	 

	 	 
 	 	 

     2. Description of property with respect to which the election is being made:

                          restricted shares of common stock of Fauquier Bankshares, Inc. (the
“Company”) awarded to the taxpayer pursuant to an Agreement between the taxpayer and the
Company dated as of                     , 2009.

     3. The date on which property is transferred and the taxable year for which the election is
made:

     The restricted stock was awarded and transferred to the taxpayer as of                     , 2009. The taxable year to which this election relates is calendar year
2009.

     4. The nature of the restriction(s) to which the property is subject:

     The restricted stock is forfeitable and not transferable until the Vesting date.

 

     5. Fair market value:

     The aggregate fair market value of the restricted stock subject to this election, as
described in Section 2 above (determined with regard to nonlapse restrictions only), is
$                    .

     6. Amount paid for property:

     Except for services to be rendered, no consideration was paid for the restricted stock.

     7. Furnishing statement to employer:

     A copy of this statement has been furnished to Fauquier Bankshares, Inc.

Dated:                      ___, 2009

	 	 	 	 	 
	 	
Signature

 	 
	 	 	 
	 	 	 
	 	 	 
	 

2

 

Restricted Units Award

83(b) Election Form

General Instructions

     This form must be filed with the Internal Revenue Service Center where you file your
Federal Income Tax Return on or before 30 days from                     , 2009, with a copy furnished to
the Company. A copy of this form as filed must also be attached to your [2009] Federal Income Tax
Return Form 1040.

     A copy of this form should also be furnished to Fauquier Bankshares, Inc. contemporaneously
with your Internal Revenue Service filing.

Special Instructions

Paragraph 2 Insert the number of restricted units of membership interest to be
covered by the election. The number may be all or any portion of the number of units
awarded to you.

Paragraph 5 Multiply the number of units entered in paragraph 2 by the fair market
value of each unit on the date of grant (as stated in paragraph 1 of the Agreement) and
enter the product in the space provided. This is the amount of additional compensation
income which must be reported by you to the IRS and on which you will pay federal and state
income taxes for 2009.

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