Exhibit 10(2)
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_____________________________
FORM OF
NON-QUALIFIED STOCK OPTION AGREEMENT
UNDER THE CITY SAVINGS FINANCIAL CORPORATION STOCK OPTION PLAN
_____________________________:
You are hereby granted the option to purchase a total of _________ shares
of the Common Stock, without par value ("Common Stock"), of City Savings
Financial Corporation (the "Holding Company") over the next ten years and one
day pursuant to the Holding Company's Stock Option Plan (the "Plan"), on the
following terms and conditions:
1. The purchase price of the shares of Common Stock subject to this option
is $_________ per share. You must pay this purchase price in cash at the time
this option is exercised; provided, however that, with the approval of the
Holding Company's Stock Option Plan Committee (the "Committee"), beginning on
and after ______________________, you may exercise your option by tendering to
the Holding Company whole shares of the Holding Company's Common Stock owned by
you, or any combination of whole shares of Holding Company Common Stock owned by
you and cash, having a fair market value equal to the cash exercise price of the
shares with respect to which the option is exercised by you. For this purpose,
any shares so tendered shall be deemed to have a fair market value equal to the
mean between the highest and lowest quoted selling prices for the shares on the
date of exercise of the option (or if there were no sales on such date the
weighted average of the means between the highest and lowest quoted selling
prices on the nearest date before and the nearest date after the date of
exercise of the option), as reported in The Wall Street Journal or a similar
publication selected by the Committee. To exercise this option, you must send
written notice to the Holding Company's Secretary at the address noted in
Section 10 hereof. Such notice shall state the number of shares in respect of
which the option is being exercised, shall identify the option exercised as a
non-qualified stock option, and shall be signed by the person or persons so
exercising the option. Such notice shall be accompanied by payment of the full
cash option price for such shares or, if the Committee has authorized the use of
the stock swap feature provided for above, such notice shall be followed as soon
as practicable by the delivery of the option price for such shares. Certificates
evidencing shares of Common Stock will not be delivered to you until payment has
been made. Under certain circumstances, the Plan permits you to deliver a notice
to your broker to deliver the cash to the Holding Company upon the receipt of
such cash from the sale of the Holding Company Common Stock. Contact the
Secretary of the Holding Company for further information about this procedure if
you are interested in it.
2. The term of this option (the "Option Term") shall be for a period of ten
years and one day from the date of this letter, subject to earlier termination
as provided in paragraphs 3 and 4 hereof. Except as otherwise provided below,
the option shall become exercisable with respect to the first 20% of the total
number of shares covered hereby on the first anniversary of the date of this
letter, and the option shall become exercisable with respect to the second,
third, fourth and fifth 20% of such shares on the second, third, fourth and
fifth anniversaries, respectively, of the date of this letter. When the option
becomes exercisable with respect to any shares of Common
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Stock, those shares may be purchased at any time, or from time to time, in whole
or in part, until the Option Term expires, but in no case may fewer than 100
such shares be purchased at any one time, except to purchase a residue of fewer
than 100 shares. Notwithstanding the foregoing or any other provision herein,
the option may not be exercised during the first six months of the Option Term.
3. If you are no longer a director or director emeritus of the Holding
Company or its subsidiaries because of any reason other than death or
disability, you may exercise this option, to the extent it was exercisable at
the date you ceased to be a director, in whole or in part at any time within six
(6) months after such date, but not later than the date upon which this option
would otherwise expire. If you cease to be a director or director emeritus of
the Holding Company or its subsidiaries because of your disability, you may
exercise this option in whole or in part at any time within one (1) year after
the date you ceased to be a director or director emeritus by reason of such
disability, but not later than the date upon which this option would otherwise
terminate.
4. If you die while serving as a director or director emeritus of the
Holding Company or its subsidiaries, within six months after you are no longer a
director or director emeritus of the Holding Company or its subsidiaries for
reasons other than disability, or within one (1) year after the date you ceased
to be a director or director emeritus by reason of your disability, this option
may be exercised in whole or in part by your executor, administrator, or estate
beneficiaries at any time within one (1) year after the date of your death but
not later than the date upon which this option would otherwise expire.
5. This option is non-transferable otherwise than by will or the laws of
descent and distribution or pursuant to a qualified domestic relations order. It
may be exercised only by you or your guardian, if any, or, if you die, by your
executor, administrator, or beneficiaries of your estate who are entitled to
your option.
6. All rights to exercise this option will expire, in any event, ten years
and one day from the date of this letter.
7. Certificates evidencing shares issued upon exercise of this option may
bear a legend setting forth among other things such restrictions on the
disposition or transfer of the shares of the Holding Company as the Holding
Company may deem consistent with applicable federal and state laws.
8. Nothing in this option shall restrict the right of the Holding Company
or its shareholders to terminate your service as a director at any time with or
without cause.
9. This option is subject to all the terms, provisions and conditions of
the Plan, which is incorporated herein by reference, and to such regulations as
may from time to time be adopted by the Committee. A copy of the Plan has been
furnished to you and an additional copy may be obtained from the Holding
Company. In the event of any conflict between the provisions of the Plan and the
provisions of this letter, the terms, conditions and provisions of the Plan
shall control, and this letter shall be deemed to be modified accordingly.
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10. All notices by you to the Holding Company and your exercise of the
option herein granted, shall be addressed to City Savings Financial Corporation,
0000 Xxxxxxxx Xxxxxx, Xxxxxxxx Xxxx, Xxxxxxx 00000-0000, Attention: Secretary,
or such other address as the Holding Company may, from time to time, specify.
11. This option may not be exercised until the Holding Company has been
advised by counsel that all other applicable legal requirements have been met.
Very truly yours,
CITY SAVINGS FINANCIAL CORPORATION
By: ______________________________________
______________________________________
Accepted on the date above written:
______________________________________
______________________________________
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