EXHIBIT 4.1
Falmouth Bancorp, Inc.
Stock Option Agreement for Xxxxx X. Xxxxxxxxxxx
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Xxxxx X. Xxxxxxxxxxx
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Name of Award Recipient Social Security Number
000 Xxxxxxxxx Xxxx
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Xxxxxx Xxxxxxx
Xxxx Xxxxxxxx XX 00000
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City State ZIP Code
This Option Agreement is intended to set forth the terms and conditions on
which a Stock Option has been granted. Set forth below are the specific
terms and conditions applicable to this Stock Option. Attached as Exhibit A
are its general terms and conditions.
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Option Grant (A) (B) (C) (D) (E)
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Grant Date: 3/19/02 3/19/02 3/19/02 3/19/02 11/18/99
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Class of Optioned Shares* Common Common Common Common Common
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No. of Optioned Shares* 946 944 944 944 20,000
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Exercise Price Per Share* $22.00 $22.00 $22.00 $22.00 $15.00
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Option Type (ISO or NQSO) NQSO NQSO NQSO NQSO NQSO
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Vesting
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Earliest Exercise Date* 2/1/03 2/1/04 2/1/05 2/1/06 11/18/99
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Option Expiration Date* 3/19/12 3/19/12 3/19/12 3/19/12 11/17/09
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* Subject to adjustment as provided in the 1997 Stock Option Plan for
Outside Directors, Officers and Employees of Falmouth Bancorp, Inc. and
the General Terms and Conditions.
By signing where indicated below, Falmouth Bancorp, Inc. (the "Company")
grants this Stock Option upon the specified terms and conditions, and the
Optionee acknowledges receipt of this Stock Option Agreement, including
Exhibit A, and agrees to observe and be bound by the terms and conditions
set forth herein.
Falmouth Bancorp, Inc. Award Recipient
By __ ____________________________
Name: Xxxx X. Xxxxx, Xx.
Title: Compensation Committee
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Instructions: This page should be completed by or on behalf of the Company.
Any blank space intentionally left blank should be crossed out. An option
grant consists of a number of optioned shares with uniform terms and
conditions. Where options are granted on the same date with varying terms
and conditions (for example, varying exercise prices or earliest exercise
dates), the options should be recorded as a series of grants each with its
own uniform terms and conditions.
EXHIBIT A
FALMOUTH BANCORP, INC..
STOCK OPTION AGREEMENT FOR XXXXX X. XXXXXXXXXXX
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General Terms and Conditions
Section 1. Option Size and Type. The number of shares of Common
Stock that have been optioned to you (the "Option") is specified in this
Stock Option Agreement. The Option shall be treated as a non-qualified
stock option under the Internal Revenue Code of 1986 ("Code").
Section 2. Option Period. (a) You shall have the right to purchase
all or any portion of the optioned Common Stock at any time during the
period ("Option Period") commencing on the Earliest Exercise Date and ending
on the earliest to occur of the following dates:
(i) the close of business on the last day of the 3-month
period commencing on the date of the termination of all employment
with the Company, other than on account of death, disability,
Retirement or a Termination of Cause;
(ii) the close of business on the last day of the one-year
period commencing on the date of your termination of employment with
the Company due to death, Disability or Retirement;
(iii) the date and time when you cease to be an employee of the
Company due to a termination for Cause; and
(iv) the last day of the ten-year period commencing on the date
on which the Option was granted.
(b) Upon termination of your service to the Company, any Options
granted hereunder whose Earliest Exercise Date has not occurred is deemed
forfeited. In the event your service terminates on account of a Change in
Control or your Retirement, Disability or death, the date of your
termination of service shall be the Earliest Exercise Date for any Option
that is not already exercisable.
Section 3. Exercise Price. During the Option Period, and after the
applicable Earliest Exercise Date, the Optionee shall have the right to
purchase all or any portion of the optioned Common Stock at the Exercise
Price per Share.
Section 4. Method of Exercise. You may, at any time during the
Option Period provided by section 2, exercise your right to purchase all or
any part of the optioned Common Stock then available for purchase; provided,
however, that the minimum number of shares of optioned Common Stock which
may be purchased shall be one hundred (100) or, if less, the total number of
shares of optioned Common Stock then available for purchase. The Optionee
shall exercise such right by:
(a) giving written notice to the Company, in the form attached
hereto as Appendix A; and
(b) delivering to the Company full payment of the Exercise
Price for the optioned Common Stock to be purchased.
The date of exercise shall be the earliest date practicable following the
date the requirements of this section 4 have been satisfied, but in no event
more than three (3) days after such date. Payment shall be made (i) in
United States dollars by certified check, money order or bank draft made
payable to the order of Falmouth Bancorp, Inc., (ii) in shares of Common
Stock, already owned by you, duly endorsed for transfer and with all
necessary stock transfer tax stamps attached, having a fair market value
equal to the Exercise Price, such fair market value to be determined in such
manner as may be provided by the Company or as may be required in order to
comply with or conform to the requirements of any applicable laws or
regulations, (iii)if permitted by the Committee, by requesting the Company
to cancel, without payment, shares of optioned Common Stock having a fair
market value (determined by the Committee in accordance with provisions of
the immediately preceding subsection (ii)) equal to the Exercise Price of
the Options being exercised, or (iv) in a combination of the foregoing
methods. You shall not, without the prior written approval of the Company,
dispose of shares of Common Stock acquired pursuant to the exercise of this
Option until after the first anniversary of the date on which the Shares
were acquired.
Section 5. Delivery and Registration of Optioned Shares. As soon as
practicable following the date on which you have satisfied the requirements
of section 4, the Company shall take such action necessary to cause the
Company to issue a stock certificate evidencing your ownership of the
optioned Common Stock that has been purchased. You shall have no right to
vote or to receive dividends, nor have any other rights with respect to
optioned Common Stock, prior to the date as of which such optioned Common
Stock is transferred to you on the stock transfer records of the Company,
and no adjustments shall be made for any dividends or other rights for which
the record date is prior to the date as of which such transfer is effected.
The obligation of the Company to deliver Common Stock under this Agreement
shall, if the Committee so requests, be conditioned upon the receipt of a
representation as to the investment intention of the person to whom such
Common Stock is to be delivered, in such form as the Company shall determine
to be necessary or advisable to comply with the provisions of applicable
federal, state or local law. It may be provided that any such
representation shall become inoperative upon a registration of the Common
Stock or upon the occurrence of any other event eliminating the necessity of
such representation. The Company shall not be required to deliver any
Common Stock under this Agreement prior to (a) the admission of such Common
Stock to listing on any stock exchange on which Common Stock may then be
listed, or (b) the completion of such registration or other qualification
under any state or federal law, rule or regulations as the Committee shall
determine to be necessary or advisable.
Section 6. Adjustments in the Event of Reorganization. In the event
of any merger, consolidation, or other business reorganization in which the
Company is the surviving entity, and in the event of any stock split, stock
dividend or other event generally affecting the number of shares of Common
Stock held by each person who is then a shareholder of record, the number of
shares of Common Stock subject to the Option granted hereunder and the
Exercise Price per share of such Option shall be adjusted in accordance with
section 8.3 of the 1997 Stock Option Plan for Outside Directors, Officers
and Employees of Falmouth Bancorp, Inc. (the "Plan") to account for such
event. In the event of any merger, consolidation, or other business
reorganization in which the Company is not the surviving entity, any
exercisable Option granted hereunder shall be canceled or adjusted in
accordance with the Plan. In the event that the Company shall declare and
pay any dividend with respect to shares of Common Stock (other than a
dividend payable in shares of Common Stock) which results in a nontaxable
return of capital to the holders of shares of Common Stock for federal
income tax purposes, or otherwise than by dividend makes distribution of
property to the holders of its shares of Common Stock, at the election of
the Company, the Company shall either (i) make an equivalent payment to each
Person holding an outstanding Option as of the record date for such dividend
or distribution in accordance with section 8.3 of the Plan, (ii) adjust the
Exercise Price per share of outstanding Options in such a manner as the
Company may determine to be necessary to reflect the effect of the dividend
or distribution, or (iii) take any other action described in section 8.3(c)
of the Plan.
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Section 7. No Right to Continued Service. Nothing in this Agreement
nor any action of the Board or Company with respect to this Agreement shall
be held or construed to confer upon you any right to a continuation of
service by the Company. You may be dismissed or otherwise dealt with as
though this Agreement had not been entered into.
Section 8. Taxes. Where any person is entitled to receive shares
pursuant to the exercise of the Option granted hereunder, the Company shall
have the right to require such person to pay to the Company the amount of
any tax which the Company is required to withhold with respect to such
shares, or, in lieu thereof, to retain, or to sell without notice, a
sufficient number of shares to cover the amount required to be withheld.
Section 9. Notices. Any communication required or permitted to be
given under the Plan, including any notice, direction, designation, comment,
instruction, objection or waiver, shall be in writing and shall be deemed to
have been given at such time as it is delivered personally or five (5) days
after mailing if mailed, postage prepaid, by registered or certified mail,
return receipt requested, addressed to such party at the address listed
below, or at such other address as one such party may by written notice
specify to the other party:
(a) If to the Company:
Falmouth Bancorp, Inc.
00 Xxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Corporate Secretary
With a copy to:
Xxxxxxx Xxxxxxxx & Wood
0000 Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
(b) If to you, to your address as shown in the personnel
records of the Company or Falmouth Co-operative Bank, as applicable.
Section 10. Restrictions on Transfer. The Option granted hereunder
shall not be subject in any manner to anticipation, alienation or
assignment, nor shall such Option be liable for or subject to debts,
contracts, liabilities, engagements or torts, nor shall it be transferable
by you other than by will or by the laws of descent and distribution or as
otherwise permitted by the Plan. To name a Beneficiary who may exercise
your Options following your death, complete the attached Appendix B and file
it with the Corporate Secretary of Falmouth Bancorp, Inc.
Section 11. Successors and Assigns. This Agreement shall inure to
the benefit of and shall be binding upon the Company and you and your
respective heirs, successors and assigns.
Section 12. Construction of Language. Whenever appropriate in the
Agreement, words used in the singular may be read in the plural, words used
in the plural may be read in the singular, and words importing the masculine
gender may be read as referring equally to the feminine or the neuter. Any
reference
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to a section shall be a reference to a section of this Agreement, unless the
context clearly indicates otherwise. Capitalized terms not specifically
defined herein shall have the meanings assigned to them under the Plan.
Section 13. Governing Law. This Agreement shall be construed,
administered and enforced according to the laws of the Commonwealth of
Massachusetts without giving effect to the conflict of laws principles
thereof, except to the extent that such laws are preempted by the federal
law.
Section 14. Amendment. This Agreement may be amended, in whole or in
part and in any manner not inconsistent with the provisions of the Plan, at
any time and from time to time, by written agreement between the Company and
you.
Section 15. Restatement. This Agreement is intended to properly
document the options granted to you on November 18, 1999 and March 19, 2002
without modifying the substantive terms thereof and this Agreement shall be
construed in accordance with this intent.
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APPENDIX A TO STOCK OPTION AGREEMENT
FALMOUTH BANCORP, INC. XXXXX X. XXXXXXXXXXX STOCK OPTION PLAN
Notice of Exercise of Stock Option
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Use this Notice to inform Falmouth Bancorp, Inc. that you are exercising
your right to purchase shares of common stock ("Shares") of Falmouth
Bancorp, Inc. (the "Company") pursuant to an option ("Option") granted under
the Stock Option Agreement between Falmouth Bancorp, Inc. and Xxxxx X.
Xxxxxxxxxxx dated ____ ("Option Agreement"). If you are not the person
to whom the Option was granted ("Option Recipient"), you must attach to this
Notice proof of your right to exercise the Option granted under the Option
Agreement. This Notice should be personally delivered or mailed by
certified mail, return receipt requested to: Falmouth Bancorp, Inc., 00
Xxxxx Xxxxxxx, Xxxxxxxx, Xxxxxxxxxxxxx 00000 Attention: Corporate
Secretary. The effective date of the exercise of the Option shall be the
earliest date practicable following the date this Notice is received by the
Company, but in no event more than three days after such date ("Effective
Date"). Except as specifically provided to the contrary herein, capitalized
terms shall have the meanings assigned to them under the 1997 Stock Option
Plan for Outside Directors, Officers and Employees of Falmouth Bancorp, Inc.
OPTION INFORMATION Identify below the Option that you are exercising by
providing the following information from the Stock Option Agreement.
Name of Option Recipient: _______________________________________________
Option Grant Date: _____________, ____ Exercise Price per share: $______
(Month and Day)(Year)
EXERCISE PRICE Compute the Exercise Price below and select a method of
payment.
Total Exercise Price _____________ x $______________ = $______________
(No. of Shares) (Exercise Price) Total Exercise
Price
Method of Payment
[ ] I enclose a certified check, money order, or bank
draft payable to the order of Falmouth Bancorp, Inc.
in the amount of $____________
[ ] I enclose Shares duly endorsed for transfer to the
Company with all stamps attached and having a fair
market value of $____________
[ ] I hereby request that the Committee cancel the number
of Shares covered by my Stock Option Agreement with
the Company having a fair market value of $____________
Total Exercise Price $____________
ISSUANCE OF CERTIFICATES
I hereby direct that the stock certificates representing the Shares
purchased above be issued to the following person(s) in the amount specified
below:
Name and Address Social Security No. No of Shares
___________________________________ _____-____-_______ ______________
___________________________________
___________________________________ _____-____-_______ ______________
___________________________________
WITHHOLDING ELECTIONS Beneficiaries should not complete.
I understand that I am responsible for the amount of federal, state
and local taxes required to be withheld with respect to the Shares to be
issued to me pursuant to this Notice, but that I may request the Company to
retain or sell a sufficient number of such Shares to cover the amount to be
withheld. I hereby request that any taxes required to be withheld be paid
in the following manner [check one]:
[ ] With a certified or bank check that I will deliver to the Company on
the day after the Effective Date of my Option exercise.
[ ] With the proceeds from a sale of Shares that would otherwise be
distributed to me.
[ ] Retain shares that would otherwise be distributed to me.
I understand that the withholding elections I have made on this form are not
binding on the Company, and that the Company will decide the amount to be
withheld and the method of withholding and advise me of its decision prior
to the Effective Date. I further understand that the Company may request
additional information or assurances regarding the manner and time at which
I will report the income attributable to the distribution to be made to me.
I further understand that if I have elected to have Shares sold to satisfy
tax withholding, I may be asked to pay a minimal amount of such taxes in
cash in order to avoid the sale of more Shares than are necessary.
COMPLIANCE WITH TAX AND SECURITIES LAWS
S H I understand that I must rely on, and consult with, my own tax
and legal counsel (and not the Company) regarding the application
I E of all laws -- particularly tax and securities laws -- to the
transactions to be effected pursuant to my Option and this
G R Notice. I understand that I will be responsible for paying any
federal, state and local taxes that may become due upon the sale
N E (including a sale pursuant to a "cashless exercise") or other
disposition of Shares issued pursuant to this Notice and that I
must consult with my own tax advisor regarding how and when such
income will be reportable.
_______________________________________ ______________________________
Signature Date
___________________________________________________________________________
Address
Internal Use Only
Corporate Secretary
Received [check one]: [ ] By Hand [ ] By Mail Post Marked ___________
Date of Post Xxxx
By ____________________________________ ______________________________
Authorized Signature Date of Receipt
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APPENDIX B TO STOCK OPTION AGREEMENT
FOR XXXXX X. XXXXXXXXXXX
Beneficiary Designation Form
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GENERAL
INFORMATION Use this form to designate the Beneficiary(ies) who may
exercise Options outstanding to you at the time of your
death.
Name of Person Social Security Number
Making Designation ____________________________ ______-_____-_________
BENEFICIARY
DESIGNATION Complete sections A and B. If no percentage shares are
specified, each Beneficiary in the same class (primary or
contingent) shall have an equal share. If any designated
Beneficiary predeceases you, the shares of each remaining
Beneficiary in the same class (primary or contingent) shall
be increased proportionately.
A PRIMARY BENEFICIARY(IES). I hereby designate the following person as my
primary Beneficiary under the Plan, reserving the right to change or revoke
this designation at any time prior to my death:
Name Address Relationship Birthdate Share
_________________ __________________ ________ ________ _______%
__________________
_________________ __________________ ________ ________ _______%
__________________
_________________ __________________ ________ ________ _______%
__________________
Total = 100%
B CONTINGENT BENEFICIARY(IES). I hereby designate the following person(s)
as my contingent Beneficiary(ies) under the Plan to receive benefits only if
all of my primary Beneficiaries should predecease me, reserving the right to
change or revoke this designation at any time prior to my death as to all
outstanding Options:
Name Address Relationship Birthdate Share
_________________ __________________ ________ ________ _______%
__________________
_________________ __________________ ________ ________ _______%
__________________
_________________ __________________ ________ ________ _______%
__________________
Total = 100%
S H I understand that this Beneficiary Designation shall be effective
only if properly completed and received by the Corporate Secretary
I E of Falmouth Bancorp, Inc. prior to my death, and that it is
subject to all of the terms and conditions of the Plan. I also
G R understand that an effective Beneficiary designation revokes my
prior designation(s) with respect to all outstanding Options.
N E
_______________________________________ ______________________________
Signature Date
Internal Use Only
This Beneficiary Designation was received by Comments
the Corporate Secretary of Falmouth Bancorp,
Inc. on the date indicated.
By ____________________________________ ______________________________
Authorized Signature Date of Receipt
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