Common use of Long-Term Incentive Clause in Contracts

Long-Term Incentive. Stock Option Plan: Each year, the EMPLOYEE will receive stock options with a "value" equal to 50% of his salary; provided, however, that no stock options will be awarded to the EMPLOYEE which would result in the EMPLOYEE holding unexercised stock options which exceed ____ of the issued and outstanding shares of Merchants Bancshares, Inc. The stock value is determined by calculating the "Black-Scholes" value. The exercise price will be determined annually by the CORPORATION'S Board of Directors' Compensation Committee. It is intended that the Committee will set the exercise price slightly above the then current market price for the stock of Merchants Bancshares, Inc. Options are exercisable at any time after two (2) years from their original issue date. The term of the options will expire on the earlier of (a) ten years from the issue date, while EMPLOYEE remains employed by the CORPORATION, or (b) if EMPLOYEE's employment is terminated, then twelve months after termination of employment. If the EMPLOYEE is terminated without just cause or due to his disability, or in the event that any transaction occurs which results in a change of control of the CORPORATION from that existing on the date of this Agreement, the EMPLOYEE may exercise these options immediately upon the occurrence of any such event or at any other time permitted in the preceding sub-paragraph. In the event that there is a split of the stock of Merchants Bancshares, Inc., EMPLOYEE's stock options and option price shall be adjusted accordingly, so as to leave EMPLOYEE in the same relative position as at the time of commencement of this Agreement with regard to the issued and outstanding shares of Merchants Bancshares, Inc., on the date such action is taken. In the event there is a public offering of the stock of Merchants Bancshares, Inc. other than pursuant to a stock option or an employee stock ownership plan, at any time before the options granted hereby have been fully exercised, then the number of shares subject to the options granted herein shall be increased so that the total number of shares purchased and purchasable under these options as increased will bear the same relationship to the fully-diluted capitalization of Merchants Bancshares, Inc. immediately after giving effect to completion of the public offering as the original number of shares purchasable under these option does to the fully-diluted capitalization of Merchants Bancshares, Inc. at the effective date hereof. The purchase price for additional shares covered by these options as provided in the preceding sentence shall be the greater of the purchase price provided for herein or the purchase price paid by third parties purchasing stock in the public offering. If the CORPORATION is unable to deliver the shares upon which the EMPLOYEE seeks to exercise his options, for any reason, then the CORPORATION shall pay to the EMPLOYEE, on the date of exercise, the difference between the exercise price and the trading price of Merchants Bancshares, Inc. shares on that day, as traded on the exchange on which said shares are listed. In the event that the EMPLOYEE shall become deceased during the period in which the EMPLOYEE may exercise his stock options, as provided above, then his Estate may exercise said options in the manner provided above; provided, however, that said options are exercised within six (6) months after EMPLOYEE'S demise.

Long-Term Incentive. Stock Option option Plan: Each year, the EMPLOYEE will receive stock options with a "value" equal to 50% of his salary; provided, however, that no stock options will be awarded to the EMPLOYEE which would result in the EMPLOYEE holding unexercised stock options which exceed ____ of the issued and outstanding shares of Merchants Bancshares, Inc. . The stock value is determined by calculating the "Black-Scholes" value. The exercise price will be determined annually by the CORPORATION'S 's Board of Directors' Compensation Committee. It is intended that the Committee will set the exercise price slightly above the then current market price for the stock of Merchants Bancshares, Inc. Options are exercisable at any time after two (2) years from their original issue date. The term of the options will expire on the earlier of (a) ten years from the issue date, date while EMPLOYEE remains employed by the CORPORATION, or (b) if EMPLOYEE's employment is terminated, then twelve months after termination of employment. If the EMPLOYEE is terminated without just cause or due to his disability, or in the event that any transaction occurs which results in a change of control of either the CORPORATION or Merchants Bancshares, Inc. from that existing on the date of this Agreement, the EMPLOYEE may exercise these options this option immediately upon the occurrence of any such event or at any other time permitted in the preceding sub-paragraph. In the event that there is a split of the stock of Merchants Bancshares, Inc.Inc. stock, EMPLOYEE's stock options and option price shall be adjusted accordingly, so as to leave EMPLOYEE in the same relative position as at the time of commencement of this Agreement with regard to the issued and outstanding shares of Merchants Bancshares, Inc., Inc. on the date such action is taken. In the event there is a public offering of the stock of Merchants Bancshares, Inc. other than pursuant to a stock option or an employee stock ownership plan, at any time before the options granted hereby have been fully exercised, then the number of shares subject to the options granted herein shall be increased so that the total number of shares purchased and purchasable under these options as increased will bear the same relationship to the fully-diluted capitalization of Merchants Bancshares, Inc. the Corporation immediately after giving effect to completion of the public offering as the original number of shares purchasable under these option options does to the fully-diluted capitalization of Merchants Bancshares, Inc. the Corporation at the effective date hereof. The purchase price for additional shares covered by these options as provided in the preceding sentence shall be the greater of the purchase price provided for herein or the purchase price paid by third parties purchasing stock in the public offering. If the CORPORATION is unable to deliver cause to be delivered the shares upon which the EMPLOYEE seeks to exercise his options, for any reason, then the CORPORATION shall pay to the EMPLOYEE, on the date of exercise, the difference between the exercise price and the trading price of Merchants Bancshares, Inc. shares on that day, as traded on the exchange on which said shares are listed. In the event that the EMPLOYEE shall become deceased during the period in which the EMPLOYEE may exercise his stock options, as provided above, then his Estate may exercise said options in the manner provided above; provided, however, that said options are exercised within six (6) months after EMPLOYEE'S demise.

Long-Term Incentive. Stock Option Plan: Each year, the EMPLOYEE will receive stock options with a "value" equal to 50% of his her salary; provided, however, that no stock options will be awarded to the EMPLOYEE which would result in the EMPLOYEE holding unexercised stock options which exceed ____ of the issued and outstanding shares of Merchants Bancshares, Inc. . The stock value is determined by calculating the "Black-Black- Scholes" value. The exercise price will be determined annually by the CORPORATION'S 's Board of Directors' Compensation Committee. It is intended that the Committee will set the exercise price slightly above the then current market price for the stock of Merchants Bancshares, Inc. Options are exercisable at any time after two (2) years from their original issue date. The term of the options will expire on the earlier of (a) ten years from the issue date, date while EMPLOYEE remains employed by the CORPORATION, or (b) if EMPLOYEE's employment is terminated, then twelve months after termination of employment. If the EMPLOYEE is terminated without just cause or due to his her disability, or in the event that any transaction occurs which results in a change of control of either the CORPORATION or Merchants Bancshares, Inc. from that existing on the date of this Agreement, the EMPLOYEE may exercise these options this option immediately upon the occurrence of any such event or at any other time permitted in the preceding sub-sub- paragraph. In the event that there is a split of the stock of Merchants Bancshares, Inc.Inc. stock, EMPLOYEE's stock options and option price shall be adjusted accordingly, so as to leave EMPLOYEE in the same relative position as at the time of commencement of this Agreement with regard to the issued and outstanding shares of Merchants Bancshares, Inc., Inc. on the date such action is taken. In the event there is a public offering of the stock of Merchants Bancshares, Inc. other than pursuant to a stock option or an employee stock ownership plan, at any time before the options granted hereby have been fully exercised, then the number of shares subject to the options granted herein shall be increased so that the total number of shares purchased and purchasable under these options as increased will bear the same relationship to the fully-diluted capitalization of Merchants Bancshares, Inc. the Corporation immediately after giving effect to completion of the public offering as the original number of shares purchasable under these option options does to the fully-diluted capitalization of Merchants Bancshares, Inc. the Corporation at the effective date hereof. The purchase price for additional shares covered by these options as provided in the preceding sentence shall be the greater of the purchase price provided for herein or the purchase price paid by third parties purchasing stock in the public offering. If the CORPORATION is unable to deliver cause to be delivered the shares upon which the EMPLOYEE seeks to exercise his her options, for any reason, then the CORPORATION shall pay to the EMPLOYEE, on the date of exercise, the difference between the exercise price and the trading price of Merchants Bancshares, Inc. shares on that day, as traded on the exchange on which said shares are listed. In the event that the EMPLOYEE shall become deceased during the period in which the EMPLOYEE may exercise his her stock options, as provided above, then his her Estate may exercise said options in the manner provided above; provided, however, that said options are exercised within six (6) months after EMPLOYEE'S demise.

Long-Term Incentive. Stock Option option Plan: Each year, the EMPLOYEE will receive stock options with a "value" equal to 50% of his salary; provided, however, that no stock options will be awarded to the EMPLOYEE which would result in the EMPLOYEE holding unexercised stock options which exceed ____ of the issued and outstanding shares of Merchants Bancshares, Inc. . The stock value is determined by calculating the "Black-Scholes" value. The exercise price will be determined annually by the CORPORATION'S CORPORATIONS' Board of Directors' Compensation Committee. It is intended that the Committee will set the exercise price slightly above the then current market price for the stock of Merchants Bancshares, Inc. Options are exercisable at any time after two (2) years from their original issue date. The term of the options will expire on the earlier of (a) ten years from the issue date, while EMPLOYEE remains employed by the CORPORATIONCORPORATIONS, or (b) if EMPLOYEE's employment is terminated, then twelve months after termination of employment. If the EMPLOYEE is terminated without just cause or due to his disability, or in the event that any transaction occurs which results in a change of control of either of the CORPORATION CORPORATIONS from that existing on the date of this Agreement, the EMPLOYEE may exercise these options immediately upon the occurrence of any such event or at any other time permitted in the preceding sub-paragraph. In the event that there is a split of the stock of Merchants Bancshares, Inc., EMPLOYEE's stock options and option price shall be adjusted accordingly, so as to leave EMPLOYEE in the same relative position as at the time of commencement of this Agreement with regard to the issued and outstanding shares of Merchants Bancshares, Inc., on the date such action is taken. In the event there is a public offering of the stock of Merchants Bancshares, Inc. other than pursuant to a stock option or an employee stock ownership plan, at any time before the options granted hereby have been fully exercised, then the number of shares subject to the options granted herein shall be increased so that the total number of shares purchased and purchasable under these options as increased will bear the same relationship to the fully-diluted capitalization of Merchants Bancshares, Inc. immediately after giving effect to completion of the public offering as the original number of shares purchasable under these option does to the fully-diluted capitalization of Merchants Bancshares, Inc. at the effective date hereof. The purchase price for additional shares covered by these options as provided in the preceding sentence shall be the greater of the purchase price provided for herein or the purchase price paid by third parties purchasing stock in the public offering. If the CORPORATION is CORPORATIONS are unable to deliver the shares upon which the EMPLOYEE seeks to exercise his options, for any reason, then the CORPORATION CORPORATIONS shall pay to the EMPLOYEE, on the date of exercise, the difference between the exercise price and the trading price of Merchants Bancshares, Inc. shares on that day, as traded on the exchange on which said shares are listed. In the event that the EMPLOYEE shall become deceased during the period in which the EMPLOYEE may exercise his stock options, as provided above, then his Estate may exercise said options in the manner provided above; provided, however, that said options are exercised within six (6) months after EMPLOYEE'S demise.

Long-Term Incentive. Stock Option option Plan: Each year, the EMPLOYEE will receive stock options with a "value" equal to 50% of his salary; provided, however, that no stock options will be awarded to the EMPLOYEE which would result in the EMPLOYEE holding unexercised stock options which exceed ____ of the issued and outstanding shares of Merchants Bancshares, Inc. . The stock value is determined by calculating the "Black-Scholes" value. The exercise price will be determined annually by the CORPORATION'S Board of Directors' Director's Compensation Committee. It is intended that the Committee will set the exercise price slightly above the then current market price for the stock of Merchants Bancshares, Inc. Options are exercisable at any time after two (2) years from their original issue date. The term of the options will expire on the earlier of (a) ten 10 years from the issue date, date while EMPLOYEE remains remained employed by the CORPORATION, or (b) if EMPLOYEE's employment is terminated, then twelve months after termination of employment. If the EMPLOYEE is terminated without just cause or due to his disability, or in the event that any transaction occurs which results in a change of control of either the CORPORATION or Merchants Bancshares, Inc. from that existing on the date of this Agreement, the EMPLOYEE may exercise these options this option immediately upon the occurrence of any such event or at any other time permitted in the preceding sub-paragraph. In the event that there is a split of the stock of Merchants Bancshares, Inc.Inc. stock, EMPLOYEE's stock options and option price shall be adjusted accordingly, so as to leave EMPLOYEE in the same relative position as at the time of commencement of this Agreement with regard to the issued and outstanding shares of Merchants Bancshares, Inc., Inc. on the date such action is taken. In the event there is a public offering of the stock of Merchants Bancshares, Inc. other than pursuant to a stock option or an employee stock ownership plan, at any time before the options granted hereby have been fully exercised, then the number of shares subject to the options granted herein shall be increased so that the total number of shares purchased and purchasable under these options as increased will bear the same relationship to the fully-diluted capitalization of Merchants Bancshares, Inc. the Corporation immediately after giving effect to completion of the public offering as the original number of shares purchasable under these option options does to the fully-diluted capitalization of Merchants Bancshares, Inc. the Corporation at the effective date hereof. The purchase price for additional shares covered by these options as provided in the preceding sentence shall be the greater of the purchase price provided for herein or the purchase price paid by third parties purchasing stock in the public offering. If the CORPORATION is unable to deliver cause to be delivered the shares upon which the EMPLOYEE seeks to exercise his options, for any reason, then the CORPORATION shall pay to the EMPLOYEE, on the date of exercise, the difference between the exercise exercised price and the trading price of Merchants Bancshares, Inc. shares on that day, as traded on the exchange on which said shares are listed. In the event that the EMPLOYEE shall become deceased during the period in which the EMPLOYEE may exercise his stock options, as provided above, then his Estate may exercise said options in the manner provided above; provided, however, that said options are exercised within six (6) months after EMPLOYEE'S demise.

Long-Term Incentive. Stock Option Plan: Each yearIf and when the Company becomes a reporting company under Section 12 of the Securities Exchange Act of 1934 with respect to its equity securities (a “Reporting Company”), the EMPLOYEE will receive Company shall recommend to the Board that the Compensation Committee award to Executive within 10 days of becoming a Reporting Company the following equity grants: 1. a stock options option award under the Reporting Company’s equity plan with an economic value of $1,600,000 determined by dividing such value by the per share Black Scholes value of Discovery Holding Company’s (“DHC”) common stock (as generally used and calculated by the Company for purposes of compensatory targets (and not necessarily as used for financial reporting purposes)) on Executive’s Employment Commencement Date. Such award shall vest and become exercisable at no less than the rate of 25% per year beginning on July 15, 2009 and shall include such other terms and conditions as the Compensation Committee establishes in good faith under the applicable equity plan. Executive shall be considered for a "value" equal to 50stock option award in 2009 which award, if any, shall be in the discretion of the Compensation Committee. 2. A sign-on make up stock option award under the Reporting Company’s equity plan with an economic value of $3,000,000 determined by dividing such value by the per share Black Scholes value of DHC’s common stock (as generally used and calculated by the Company for purposes of compensatory targets (and not necessarily as used for financial reporting purposes)) on Executive’s Employment Commencement Date. Such award shall vest and become exercisable at no less than the rate of 25% of his salary; providedper year beginning on July 15, 2009, and shall include such other terms and conditions as the Compensation Committee establishes in good faith under the applicable equity plan, provided however, that no stock options will be awarded if Company terminates Executive’s employment not for Cause (as defined below), if Executive terminates his employment for Good Reason (as defined below), or if Executive’s employment terminates as a result of the Company not renewing the Original Term prior to the EMPLOYEE options awarded hereunder becoming fully vested, such options shall, subject to Executive providing the Company with an effective release required by Section IV.D.3 hereof, become 100% vested and shall become and remain fully exercisable (to the extent not previously exercised) for a period of one hundred fifty (150) days following the date on which would result in the EMPLOYEE holding unexercised stock options which exceed ____ termination of Executive’s employment from the Company occurs, or if earlier, the expiration of the issued and outstanding shares of Merchants Bancshares, Inc. The stock value is determined by calculating the "Black-Scholes" valueoption’s term. 3. The exercise price will be determined annually by the CORPORATION'S Board of Directors' Compensation Committee. It is intended that the Committee will set the exercise price slightly above the then current market price for the stock options granted under this section shall be the higher of Merchants Bancsharesthe fair market value of DHC common stock on the Employment Commencement Date or the fair market value of the Reporting Company’s common stock on the grant date, Inc. Options are exercisable at any time after two (2) years from their original issue datefair market value in each case to be determined in the manner provided under the applicable equity plan. 4. The term number of shares pursuant to the options will expire on option granted pursuant to Section III.D.1 and Section III.D.2 assume a conversion ratio of 1 for 1 from DHC common stock to the earlier of (a) ten years from Reporting Company’s common stock with no price adjustment upon conversion. To the issue date, while EMPLOYEE remains employed by the CORPORATION, or (b) if EMPLOYEE's employment is terminated, then twelve months after termination of employment. If the EMPLOYEE is terminated without just cause or due to his disability, or in the event that any transaction occurs which results in a change of control of the CORPORATION from that existing on the date of this Agreement, the EMPLOYEE may exercise these options immediately upon the occurrence of any such event or at any other time permitted in the preceding sub-paragraph. In the event that extent there is a split of different conversion ratio or price adjustment, the stock of Merchants Bancshares, Inc., EMPLOYEE's stock options and option price shall be adjusted accordingly, so calculation as to leave EMPLOYEE in the same relative position as at the time of commencement of this Agreement with regard to the issued and outstanding shares of Merchants Bancshares, Inc., on the date such action is taken. In the event there is a public offering of the stock of Merchants Bancshares, Inc. other than pursuant to a stock option or an employee stock ownership plan, at any time before the options granted hereby have been fully exercised, then the number of shares subject to the options granted herein pursuant to this subsection will be adjusted accordingly. 5. Should the fair market value of the Reporting Company’s common stock at the date of grant of the options provided for in Section III.D.1 and Section III.D.2 be greater than the fair market value of DHC’s common stock at the Employment Commencement Date, Executive shall be increased so that the total number of shares purchased entitled to receive a cash payment payable and purchasable under these options determined as increased will bear the same relationship described in, and subject to the fully-diluted capitalization of Merchants Bancshares, Inc. immediately after giving effect to completion terms and conditions of the public offering Loss Value Payment Addendum attached hereto as the original number of shares purchasable under these option does to the fully-diluted capitalization of Merchants Bancshares, Inc. at the effective date hereof. The purchase price for additional shares covered by these options as provided in the preceding sentence shall be the greater of the purchase price provided for herein or the purchase price paid by third parties purchasing stock in the public offeringAttachment 1. 6. If the CORPORATION Company does not become a Reporting Company under the Securities Exchange Act of 1934 within eighteen (18) months of the Employment Commencement Date, Sections III.D.1 to (4) shall be null and void, and if Executive is unable then employed by the Company, the Company shall provide Executive with an equity interest in the Company with a value of $4,600,000 (adjusted to deliver reflect changes in value from he Employment Commencement Date) in a form determined in good faith by the shares upon Board and which shall be reasonably acceptable to the Executive. For any such equity interest, Executive shall be credited with his prior service and otherwise reflect terms to which the EMPLOYEE seeks parties agreed with respect to the original grants. 7. The Company shall permit you to exercise his options, for any reason, then the CORPORATION shall pay stock options awarded to you under this section through a broker-facilitated cashless exercise program to the EMPLOYEEextent allowed by law and in accordance with Company policies relating to the exercise of stock options (such as, on the date by way of exerciseexample, the difference between Company’s xxxxxxx xxxxxxx policies). Upon the exercise price Company becoming a Reporting Company and provided that it may do so under applicable law, it shall proceed, in a timely manner, to register the trading price of Merchants Bancshares, Inc. shares on that day, as traded on the exchange on which said shares are listed. In the event that the EMPLOYEE shall become deceased during the period in stock option plans (or other long-term incentive plans pursuant to which the EMPLOYEE may exercise his stock options, as provided above, then his Estate may exercise said options awarded to Executive have been granted) with the Securities and Exchange Commission in the manner provided above; provided, however, that said options are exercised within six (6) months after EMPLOYEE'S demisea Form S-8 filing or other appropriate registration statement.

Long-Term Incentive. Stock Option Plan: Each year, the EMPLOYEE will receive stock options with a "value" equal to 50% of his salary; provided, however, that no stock options will be awarded to the EMPLOYEE which would result in the EMPLOYEE holding unexercised stock options which exceed ____ % of the issued and outstanding shares of Merchants Bancshares, Inc. The stock value is determined by calculating the "Black-Scholes" value. The exercise price will be determined annually by the CORPORATION'S CORPORATIONS' Board of Directors' Compensation Committee. It is intended that the Committee will set the exercise price slightly above the then current market price for the stock of Merchants Bancshares, Inc. Options are exercisable at any time after two (2) years from their original issue date. The term of the options will expire on the earlier of (a) ten years from the issue date, while EMPLOYEE remains employed by the CORPORATIONCORPORATIONS, or (b) if EMPLOYEE's employment is terminated, then twelve months after termination of employment. If the EMPLOYEE is terminated without just cause or due to his disability, or in the event that any transaction occurs which results in a change of control of either of the CORPORATION CORPORATIONS from that existing on the date of this Agreement, the EMPLOYEE may exercise these options immediately upon the occurrence of any such event or at any other time permitted in the preceding sub-paragraph. In the event that there is a split of the stock of Merchants Bancshares, Inc., EMPLOYEE's stock options and option price shall be adjusted accordingly, so as to leave EMPLOYEE in the same relative position as at the time of commencement of this Agreement with regard to the issued and outstanding shares of Merchants Bancshares, Inc., on the date such action is taken. In the event there is a public offering of the stock of Merchants Bancshares, Inc. other than pursuant to a stock option or an employee stock ownership plan, at any time before the options granted hereby have been fully exercised, then the number of shares subject to the options granted herein shall be increased so that the total number of shares purchased and purchasable under these options as increased will bear the same relationship to the fully-diluted capitalization of Merchants Bancshares, Inc. immediately after giving effect to completion of the public offering as the original number of shares purchasable under these option does to the fully-diluted capitalization of Merchants Bancshares, Inc. at the effective date hereof. The purchase price for additional shares covered by these options as provided in the preceding sentence shall be the greater of the purchase price provided for herein or the purchase price paid by third parties purchasing stock in the public offering. If the CORPORATION is CORPORATIONS are unable to deliver the shares upon which the EMPLOYEE seeks to exercise his options, for any reason, then the CORPORATION CORPORATIONS shall pay to the EMPLOYEE, on the date of exercise, the difference between the exercise price and the trading price of Merchants Bancshares, Inc. shares on that day, as traded on the exchange on which said shares are listed. In the event that the EMPLOYEE shall become deceased during the period in which the EMPLOYEE may exercise his stock options, as provided above, then his Estate may exercise said options in the manner provided above; provided, however, that said options are exercised within six (6) months after EMPLOYEE'S demise.