RURBAN FINANCIAL CORP. INCENTIVE STOCK OPTION AWARD AGREEMENT (For Employees)
Exhibit
10.20
2008
STOCK INCENTIVE PLAN
(For
Employees)
In
recognition of your services to Rurban Financial Corp. (the “Company”) and its
Subsidiaries, the Compensation Committee of the Board of Directors of the
Company (the “Committee”) has granted you an Incentive Stock Option (“Option”)
to purchase common shares, without par value, of the Company (“Stock”), subject
to the terms and conditions described in the Rurban Financial Corp. 2008 Stock
Incentive Plan (the “Plan”) and this Incentive Stock Option Award Agreement
(“Award Agreement”). Your Option is intended to qualify as an
“incentive stock option” under Section 422 of the Code. If for any
reason your Option does not qualify as an incentive stock option, then, to the
extent it does not so qualify, your Option will be treated as a Nonqualified
Stock Option.
To ensure
you fully understand the terms and conditions of your Option, you should read
the Plan and this Award Agreement carefully. Capitalized terms that
are not defined in this Award Agreement have the same meanings as in the
Plan.
You
should return a signed copy of this Award Agreement to:
Xxxxx
Xxxxxxx
Vice
President, Human Resources Manager
000
Xxxxxxx Xxxxxx
Defiance,
Ohio 43512
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1.
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Summary
of Your Restricted Option
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(a)
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Grant
Date: _______________,
2010
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(b)
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Number of Shares of Stock
Subject to Your Option: ___________ shares of
Stock.
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(c)
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Exercise
Price: $______________ per share of
Stock.
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2.
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When
Your Option Will Vest
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Your
Option will vest and become exercisable with respect to one-fifth of the Shares
subject to the Option on each of the first, second, third, fourth and fifth
anniversaries of the Grant Date (each an “Anniversary Date”), subject to your
continued employment with the Company or an Affiliate on the applicable
Anniversary Date. Notwithstanding the foregoing, the Option shall
become fully vested and exercisable upon your death, Disability or
Retirement.
1.
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3.
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When
You May Exercise Your Option and When It Will
Expire
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(a)
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In
General: In general, you may exercise all or any part of
the vested portion of your Option at any time prior to the tenth
anniversary of the Grant Date (the “Expiration Date”), except to the
extent the Committee determines otherwise upon the occurrence of an
Applicable Event or as otherwise provided
below.
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(b)
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Effect of
Termination: If your employment terminates prior to the
Expiration Date, your Option will remain exercisable for the period
specified below:
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(i)
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Retirement. If
you Retire, the vested portion of your Option may be exercised at any time
before the earlier of the Expiration Date or one year following your
Retirement; provided, however, that if you do not exercise your Option
within three months after the date of your Retirement, it will be treated
as a Nonqualified Stock Option.
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(ii)
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Death or
Disability. If your employment terminates due to your
death or Disability, the vested portion of your Option may be exercised at
any time before the earlier of the Expiration Date or the first
anniversary of your termination
date.
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(iii)
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For Any Reason Other Than
Retirement, Death or Disability. If your employment is
terminated for any reason other than your Retirement, death or Disability:
(i) the unvested portion of your Option will be forfeited on your
termination date; and (ii) the vested portion
of your Option may be exercised at any time before the earlier of the
Expiration Date or 30 days after your termination
date.
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(c)
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Applicable
Event: If there is an Applicable Event, Section 11.5 of
the Plan will apply to the outstanding and unexercised portion of your
Option.
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4.
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Exercising Your Option
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You must
follow the procedures described below to exercise your Option. If you
do not follow these procedures, your attempted exercise will be
disregarded.
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(a)
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Exercise. Your
Option may be exercised with respect to whole shares of Stock
only.
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(b)
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Procedure. To exercise
all or any part of the vested portion of your Option, you must (i)
complete and return a copy of the Incentive Stock Option Exercise Form
(attached to this Award Agreement as Exhibit A); and
(ii) pay the applicable exercise price for each share of Stock being
purchased as described in Section
4(c).
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2.
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(c)
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Payment of Exercise
Price. You may pay the exercise price for each share of
Stock being purchased upon the exercise of the Option: (i) in cash equal
to the aggregate exercise price of the number of shares
of Stock being purchased; (ii) in the form of a personal check
or money order made payable to “Rurban Financial Corp.” in the amount of
the aggregate exercise price of the shares of Stock being purchased; (iii)
by tendering whole shares of Stock owned by you for at least six months
before the Option is exercised (or such other period established by
generally accepted accounting principles) with a Fair Market Value equal
to the aggregate exercise price of the shares of Stock being purchased; or
(iv) any combination of the
foregoing.
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(d)
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Issuance of Shares of
Stock. As soon as administratively practicable after the
Company determines that the Option has been validly exercised as to any of
the shares of Stock, the Company will issue or transfer the relevant
number of shares of Stock to you. Any fractional shares of
Stock resulting from the exercise of your Option will be settled in
cash.
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5.
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Mandatory Notice of
Disqualifying Disposition.
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Without
limiting any other provision herein, if you dispose (whether by sale, exchange,
gift or otherwise) of any of the shares of Stock acquired pursuant to the
exercise of your Option within two years after the Grant Date or within one year
after the transfer of such shares of Stock to you upon exercise, you must notify
the Company of such disposition in writing within 30 days from the date of such
disposition. Such written notice shall state the principal terms of
such disposition and the type and amount of the consideration received for such
Shares by you in connection with such disposition.
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6.
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Other Rules Affecting Your
Option
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(a)
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Rights Before Your Option Is
Exercised: You may not vote or receive any dividends
associated with the Stock underlying the unexercised portion of your
Option.
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(b)
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Beneficiary
Designation: You may name a beneficiary or beneficiaries
to receive any shares of Stock or exercise any vested portion of your
Option that is unpaid or unexercised at your death by completing and
filing with the Committee a Beneficiary Designation Form. If
you have not completed a Beneficiary Designation Form or if you wish to
change your beneficiary, you may complete the Beneficiary Designation Form
(attached to this Award Agreement as Exhibit
B). You do not need to designate a beneficiary now, and
no designation is required to be completed as a condition of exercising
your Option. However, if you die without completing a
Beneficiary Designation Form or if you do not complete the form correctly,
your beneficiary will be the executor or administrator of your estate, or
if no such executor or administrator has been appointed to the knowledge
of the Company, your beneficiary shall be your spouse or any one or more
of your dependents as the Company may
designate.
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3.
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(c)
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Tax
Withholding: The Company will have the right and is
hereby authorized to deduct or withhold an amount sufficient to satisfy
federal, state and local taxes required by law to be withheld with respect
to your Option. At the sole discretion of the Committee, you
may be permitted to satisfy the foregoing withholding liability by: (i)
paying to the Company the withholding amount in cash, through the delivery
or attestation of whole shares of Stock you have owned for at least the
previous six months (or such other period acceptable under generally
accepted accounting principles) with a Fair Market Value equal to the
statutory minimum withholding liability; or (ii) by having the Company
withhold shares of Stock that would otherwise be issued to you when your
Option is settled with a Fair Market Value equal to the statutory minimum
withholding liability.
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(d)
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Transferring Your
Option: In general, your Option may not be sold,
transferred, pledged, assigned or otherwise alienated or hypothecated,
except by will or the laws of descent and
distribution. However, as described in Section 5(b), you may
complete a Beneficiary Designation Form to name the person who may
exercise your Option if you die before the Option
expires.
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(e)
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Adjustments to Your
Options: If there is a Stock dividend, Stock split,
recapitalization (including payment of an extraordinary dividend), merger,
consolidation, combination, spin-off, distribution of assets to
shareholders, exchange of shares or other similar corporate change
affecting the Stock, the Committee will appropriately adjust the number of
shares of Stock underlying your Option and any other factors, limits or
terms affecting your Option. Notwithstanding the foregoing, any adjustment
will comply with Section 409A of the Code to the extent
applicable.
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(f)
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Restrictions on Transfer of
Stock: Shares of Stock tendered upon exercise of your
Option under this Award Agreement may be subject to any stock transfer
orders and other restrictions that the Committee believes to be advisable
under the rules, regulations and other requirements of the Securities and
Exchange Commission, any exchange, market or other quotation system on or
through which the Company’s securities are then traded, or any applicable
federal or state securities laws. The Committee may cause a
legend or legends to be placed on any certificates issued under this Award
Agreement to make appropriate reference to any
restrictions.
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(g)
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Tenure: Nothing
in the Plan or this Award Agreement shall confer upon you the right to
continue as an Employee or Director, as applicable, of the Company or any
Subsidiary.
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(h)
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Governing
Law: This Award Agreement will be construed in
accordance with and governed by the laws (other than laws governing
conflicts of laws) of the State of
Ohio.
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(i)
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Amendment of Award
Agreement: This Award Agreement may be amended by a
written agreement signed by both parties to this Award Agreement;
provided, however, that the Company may amend this Award Agreement to the
extent necessary to comply with applicable law without your consent or any
additional consideration, even if those amendments eliminate, restrict or
reduce your rights under this Award
Agreement.
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4.
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(j)
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Other Terms and
Conditions: Your Option is subject to the terms and
conditions described in this Award Agreement and the Plan, which is
incorporated by reference into and made a part of this Award
Agreement. You should read the Plan carefully to ensure you
fully understand all the terms and conditions of your
Option. In the event of a conflict between the terms of the
Plan and the terms of this Award Agreement, the terms of the Plan will
govern. The Committee has the sole responsibility of
interpreting the Plan and this Award Agreement, and its determination of
the meaning of any provision in the Plan or this Award Agreement shall be
binding on you.
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(k)
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Signature in
Counterparts: This Award Agreement may be signed in
counterparts, each of which will be deemed an original, but all of which
will constitute one and the same
instrument.
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* * * * *
Your
Acknowledgement
By
signing below as the “Participant,” you acknowledge and agree that:
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·
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A
copy of the Plan has been made available to you;
and
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You
understand and accept the terms and conditions placed on your
Option.
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PARTICIPANT
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Print Name:
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Print Name:
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Title:
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Date:
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Date:
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5.
EXHIBIT
A
2008
STOCK INCENTIVE PLAN
INCENTIVE
STOCK OPTION EXERCISE NOTICE
(For
Employees)
By
completing this Incentive Stock Option Exercise Notice (“Exercise Notice”) and
returning it to the address given below, I elect to buy the shares of Stock
described below. Capitalized terms not defined in this Exercise
Notice have the same meanings as in the Plan and applicable Award
Agreement.
Note: A separate
Exercise Notice must be completed each time an Option is exercised
(e.g., if the Optionee is simultaneously exercising an Option to purchase
200 shares that was granted on January 1, 2009 and an Option to purchase
100 shares that was granted on January 1, 2010, you must complete two
Exercise Notices, one for each Option being exercised).
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1.
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Affected Option
Shares: This Exercise Notice relates to the following
Option and shares of Stock (fill in the
blanks):
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(a)
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Grant
Date of
Option: __________________________________________________________________
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(b)
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Number
of Shares of Stock Being Purchase with This Exercise
Notice: _________________________
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(c)
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Exercise
Price: The exercise price per share of Stock is
$_______________________________________
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(d)
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Total
Exercise Price: The total exercise (multiply 1(b) by
1(c)) is:
$______________________________
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2.
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Payment of Exercise
Price: The total exercise price will be paid by (check
one):
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¨
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Personal
check, bank draft or money order payable to “Rurban Financial
Corp.”
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¨
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Through
the tender of whole shares of Stock that the Optionee has held for at
least six months (or
such other period established by generally accepted accounting principles)
and which have a Fair Market Value equal to the total exercise
price.
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¨
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A
combination of these two methods (the aggregate amount of cash and value
of shares delivered or attested must be equal to the total exercise
price).
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Notes:
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If:
(a) the cash, bank
or money order method of exercise is selected, full payment must be
included with this Exercise Notice; and (b) you elect the tender form of
paying the exercise price, you may contact the Company at the address
given below for further information as to how the choice of payment will
affect the number of shares of Stock you will
receive.
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3.
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Payment of
Taxes: Subject to Section 5(c) of the Award Agreement
under which the Option was issued, the withholding taxes associated with
this exercise of the Option will be paid (check
one):
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¨
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From
my payroll checking account.
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¨
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By
having the Company withhold shares of Stock that would otherwise be issued
with respect to this exercise.
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6.
4. Acknowledgement of Effect of
Exercise: By signing below, I acknowledge and agree
that:
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(a)
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I
fully understand the effect (including the investment effect) of
exercising the Option and buying the shares of stock and understand that
there is no guarantee that the value of these shares of Stock will
appreciate or will not depreciate;
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(b)
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This
Exercise Notice will have no effect if it is not returned to the Company
at the address given below before the Expiration Date or such other date
as may be specified in the Award Agreement or, to the extent applicable,
if full payment of the exercise price is not included;
and
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(c)
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The
shares of Stock I am buying by completing and returning this Exercise
Notice will be issued to me as soon as administratively
practicable. I will not have any rights as a shareholder of the
Company until the shares of Stock are
issued.
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(Optionee’s
printed name)
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(Optionee’s
signature)
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| Date signed: | |
A signed
copy of this Exercise Notice must be sent to the following address no later than
the Expiration Date or such other date as may be specified in the Award
Agreement to:
Xxxxx
Xxxxxxx
Vice
President, Human Resources Manager
000
Xxxxxxx Xxxxxx
Defiance,
Ohio 43512
*****
Acknowledgement
of Receipt
A signed
copy of the Exercise Notice was received
on: _______________________.
The
Optionee:
¨ Has
effectively exercised the portion of the Option described in the Exercise
Notice; or
¨ Has
not effectively exercised the portion of the Option described in the Exercise
Notice because
(describe deficiency)
_________________________________________________________________
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By:
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Date:
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Note: Keep a copy of this
Exercise Notice as part of the Plan’s permanent records.
7.
EXHIBIT
B
2008
STOCK INCENTIVE PLAN
BENEFICIARY
DESIGNATION FORM
Primary Beneficiary
Designation. I designate the following person(s) as my primary
beneficiary or beneficiaries, in the proportion specified, to receive or to
exercise any vested Awards under the Rurban Financial Corp. 2008 Stock Incentive
Plan (the “Plan”) that are unpaid or unexercised at my death:
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% to
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(Name)
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(Relationship)
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Address:
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% to
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(Name)
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(Relationship)
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Address:
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% to
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(Name)
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(Relationship)
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Address:
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Note: You are not required to
name more than one primary beneficiary but, if you do, the sum of these
percentages may not be greater than 100 percent.
Contingent Beneficiary
Designation. If one or more of my primary beneficiaries dies
before I die, I direct that any vested Awards under the Plan that are unpaid or
unexercised at my death and that might otherwise have been paid to that
beneficiary be:
¨ Allocated
to my other named primary beneficiaries in proportion to the allocation given
above (ignoring the interest allocated to the deceased primary beneficiary);
or
¨ Allocated, in the
proportion specified, among the following contingent beneficiaries:
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% to
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(Name)
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(Relationship)
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Address:
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% to
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(Name)
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(Relationship)
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Address:
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% to
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(Name)
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(Relationship)
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Address:
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Note: You are not required to
name more than one contingent beneficiary but, if you do, the sum of these
percentages may not be greater than 100 percent.
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(Signature)
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(Date)
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(Print
Name)
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Please return an executed copy of this
form to the following: Xxxxx Xxxxxxx, Vice President, Human
Resources Manager, Rurban
Financial Corp., 000 Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxx 00000.
8.
