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Exhibit 4.2
INCENTIVE STOCK OPTION AGREEMENT
(Employee)
This Incentive Stock Option Agreement ("Option Agreement") is between
Century Bancshares, Inc., a Delaware corporation (the "Company"), and
________________________ (the "Optionee").
W I T N E S S E T H:
WHEREAS, the Company has heretofore adopted the Century Bancshares,
Inc. 1994 Stock Option Plan (the "Plan") for the purpose of providing employees
of the Company or Century National Bank (the "Bank") (as defined in the Plan)
with additional incentive to promote the success of the business, to increase
their proprietary interest in the success of the Company, and to encourage them
to remain in the employ of the Company or the Bank; and
WHEREAS, the Company, acting through the Compensation Committee
designed by the Board of Directors (the "Committee"), has determined that its
interests will be advanced by the issuance to Optionee of incentive stock
options under the Plan:
NOW, THEREFORE, for and in consideration of these premises it is
agreed as follows:
1. Options. Subject to the terms and conditions contained
herein, the Company hereby irrevocably grants to Optionee the right and option
("Options") to purchase from the Company _____ shares of the Company's common
stock, $1.00 par value ("Common Stock"), at a price of $_____ per share, which
is deemed to be not less than the fair market value of the Common Stock at the
date of grant of the Options.
2. Option Period; Vesting. The Options herein granted may be
exercised by Optionee in whole or in part at any time during the period
beginning six (6) months after the date hereof, and ending ten (10) years after
the date hereof ("Option Period"), subject to the limitation that said Options
shall not be exercisable for more than a percentage of the aggregate number of
shares offered by this Option Agreement determined by the number of months
Optionee is employed with the Company or the Bank from the effective date of
this Option Agreement to the date of such exercise, in accordance with the
following schedule:
Number of Full Percentage of
Months of Employment Shares Purchasable
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Less than six months None
Six months or more, but less than 18 months 25%
18 months or more, but less than 30 months 50%
30 months or more, but less than 42 months 75%
42 months or more, but less than 120 months 100%
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Notwithstanding anything in this Agreement to the contrary, the Committee in
its sole discretion may waive the foregoing schedule of vesting and, upon
written notice to Optionee, accelerate the earliest date or dates on which the
Options granted hereunder are exercisable with respect to any of the shares
offered.
3. Procedure for Exercise. The Options herein granted may be
exercised by written notice by Optionee to the Secretary of the Company setting
forth the number of shares of Common Stock with respect to which the Options
are to be exercised accompanied by payment for the shares to be purchased, and
specifying the address to which the certificate for such shares is to be
mailed. Payment shall be in the form of cash or cashier's check, bank draft,
postal or express money order payable to the order of the Company, or at the
option of Optionee, shares of Common Stock theretofore owned by Optionee (or a
combination of cash and Common Stock). As promptly as practicable after
receipt of such written notification and payment, the Company shall deliver to
Optionee certificates for the number of shares of Common Stock with respect to
which such Options have been so exercised.
4. Termination of Employment. If Optionee's employment with the
Company or the Bank is terminated during the Option Period for any reason other
than death or disability, Options granted to him or her hereunder which are not
exercisable on such date thereupon terminate. Any Options which are
exercisable on the date of his or her termination of employment may be
exercised during a three-month period beginning on such date; provided,
however, if Optionee's termination of employment is due to Optionee's
dishonesty, theft, embezzlement from the Company or the Bank, disclosing trade
secrets of the Company or the Bank, willful violation of any rules of the
Company or the Bank pertaining to the conduct of individuals performing
services for the Company or the Bank, or the commission of a willful felonious
act while in the employment of the Company or the Bank, then any option or
unexercised portion thereof granted to Optionee, shall expire upon such
termination.
5. Disability or Death. In the event of the determination of
disability or death of an Optionee under the Plan while he or she is employed
by the Company, all Options hereunder exercisable at the date of such
disability or death shall be thereafter exercisable by Optionee, the guardian
of his or her estate, his or her executor or administrator, or the person or
persons to whom his or her rights under this Option Agreement shall pass by
will or by the laws of descent and distribution, as the case may be, for a
period of one year from the date of Optionee's disability or death, unless this
Option Agreement should earlier terminate in accordance with its other terms.
In no event may any Options be exercised after the end of the Option Period.
Optionee shall be deemed to be disabled if, in the opinion of a physician
selected by the Committee, he or she is incapable of performing services for
the Company or the Bank of the kind he or she was performing at the time the
disability occurred by reason of any medically determinable physical or mental
impairment which can be expected to result in death or to be of long, continued
and indefinite duration. The date
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of determination of disability for purposes hereof shall be the date of such
determination by such physician.
6. Transferability. Neither the Options granted hereunder nor
any rights or benefits of Optionee under this Option Agreement shall be
transferable by Optionee otherwise than by the Optionee's will or by the laws
of descent and distribution. During the lifetime of Optionee, the Options
shall be exercisable only by him or her. Any heir or legatee of Optionee shall
take rights herein granted subject to the terms and conditions hereof. No such
transfer of this Option Agreement to heirs or legatees of Optionee shall be
effective to bind the Company unless the Company shall have been furnished with
written notice thereof and a copy of such evidence as the Committee may deem
necessary to establish the validity of the transfer and the acceptance by the
transferee or transferees of the terms and conditions hereof.
7. No Rights as Stockholder. Optionee shall have no rights as a
stockholder with respect to any shares of Common Stock covered by this Option
Agreement until the date of issuance of a certificate for shares of Common
Stock purchased pursuant to this Option Agreement. Until such time, Optionee
shall not be entitled to dividends or to vote at meetings of the stockholders
of the Company. Except as provided in paragraph 9 hereof, no adjustment shall
be made for dividends (ordinary or extraordinary, whether in cash or securities
or other property) paid or distributions of other rights granted in respect of
any share of Common Stock for which the record date for such payment,
distribution or grant is prior to the date upon which Optionee shall have been
issued share certificates, as provided hereinabove.
8. Extraordinary Corporate Transactions. If the Company
recapitalizes or otherwise changes its capital structure, or merges,
consolidates, sells all of its assets or dissolves (each of the foregoing a
"Fundamental Change"), then thereafter upon any exercise of Options granted
hereunder, Optionee shall be entitled to purchase under such Options, in lieu
of the number of shares of Common Stock as to which such Options shall then be
exercisable, the number and class of shares of stock and securities to which
Optionee would have been entitled pursuant to the terms of the Fundamental
Change if, immediately prior to such Fundamental Change, Optionee had been the
holder of record of the number of shares of Common Stock as to which such
Options are then exercisable. If the Company shall not be the surviving entity
upon the occurrence of a Fundamental Change, the Options granted hereunder
shall be governed by subparagraph 6(i) of the Plan.
9. Changes in Capital Structure. The existence of outstanding
Options shall not affect in any way the right or power of the Company or its
shareholder to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issuance of
Common Stock or subscription rights thereof, or any issuance of bonds,
debentures, preferred or prior preference stock ahead of or affecting the
Common Stock or the rights thereof, or the dissolution or liquidation
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of the Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceedings, whether of a similar
character or otherwise. If the outstanding shares of Common Stock of the
Company shall at any time be changed or exchanged by declaration of a stock
dividend, stock split, combination of shares, or recapitalization, the number
and kind of shares subject to the Plan or subject to any Options theretofore
granted, and the Option prices, shall be appropriately and equitable adjusted
so as to maintain the proportionate number of shares without changing the
aggregate Option price.
10. Compliance With Securities Laws. Upon the acquisition of any
shares pursuant to the exercise of the Options herein granted, Optionee (or
any person acting under paragraph 6) will enter into such written
representations, warranties and agreements as the Company may reasonably
request in order to comply with applicable securities laws or with this Option
Agreement.
11. Compliance With Laws. Notwithstanding any of the other
provisions hereof, Optionee agrees that he or she will not exercise the Options
granted hereby, and that the Company will not be obligated to issue any shares
pursuant to this Option Agreement, if the exercise of the Options or the
issuance of such shares of Common Stock would constitute a violation by
Optionee or by the Company of any provision of any law or regulation of any
governmental authority.
12. Resolution of Disputes. As a condition of the granting of the
Options hereby, Optionee and his or her heirs and successors agree that any
dispute or disagreement which may arise hereunder shall be determined by the
Committee in its sole discretion and judgment, and that any such determination
and any interpretation by the Committee of the terms of this Option Agreement
shall be final and shall be binding and conclusive, for all purposes, upon the
Company, Optionee, his or her heirs and personal representatives.
13. Legends on Certificate. The certificates representing the
shares of Common Stock purchased by exercise of any Options will be stamped or
otherwise imprinted with legends in such form as the Company or its counsel may
require with respect to any applicable restrictions on sale or transfer and the
stock transfer records of the Company will reflect stop-transfer instructions
with respect to such shares.
14. Notices. Every notice hereunder shall be in writing and shall
be given by registered or certified mail. All notices of the exercise of any
Options hereunder shall be directed to Century Bancshares, Inc., 0000
Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, Attention: Corporate
Secretary. Any notice given by the Company to Optionee directed to him or her
at his or her address on file with the Company shall be effective to bind him
or her and any other person who shall acquire rights hereunder. The Company
shall be under no obligation whatsoever to advise Optionee of the existence,
maturity or termination of any of Optionee's rights hereunder and Optionee
shall
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be deemed to have familiarized himself or herself with all matters contained
herein and in the Plan which may affect any of Optionee's rights or privilege
hereunder.
15. Construction and Interpretation. Whenever the term "Optionee"
is used herein under circumstances applicable to any other person or persons to
whom this award, in accordance with the provisions of paragraph 6 hereof, may
be transferred, the word "Optionee" shall be deemed to include such person or
persons.
16. Notice of Disposition. If Optionee disposes of any shares of
Common Stock acquired pursuant to the exercise of any Options granted hereunder
prior to the earlier of (i) two years from the date of this Option Agreement or
(ii) one year from the date the shares of Common Stock were acquired, Optionee
shall notify the Company of such disposition within ten days of its occurrence
and deliver to the Company any amount of federal or state income tax
withholding required by law. Payment of the withholding shall be made in
accordance with Section 10 of the Plan. If Optionee fails to pay the
withholding tax, the Company is authorized to withhold from any cash
remuneration then or thereafter payable to Optionee any tax required to be
withheld by reason of any disposition named herein.
17. Agreement Subject to Plan. This Option Agreement is subject
to the Plan. The terms and provisions of the Plan (including any subsequent
amendments thereto) are hereby incorporated herein by reference thereto. In
the event of a conflict between any term or provision contained herein and a
term or provision of the Plan, the applicable terms and provisions of the Plan
will govern and prevail. All definitions of words and terms contained in the
Plan shall be applicable to this Option Agreement.
18. Employment Relationship. Employees shall be considered to be
in the employment of the Company as long as they remain employees of the
Company or the Bank. Any questions as to whether and when there has been a
termination of such employment and the cause of such termination shall be
determined by the Committee, and its determination shall be final. Nothing
contained herein shall be construed as conferring upon Optionee the right to
continue in the employ of the Company, nor shall anything contained herein be
construed or interpreted to limit the "employment at will" relationship between
Optionee and the Company.
19. Binding Effect. This Option Agreement shall be binding upon
and inure to the benefit of any successors to the Company and all persons
lawfully claiming under Optionee.
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IN WITNESS WHEREOF, this Option Agreement has been executed and is
effective as of the ______ day of _________________, ______.
CENTURY BANCSHARES, INC.
ATTEST:
By:
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Name:
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Title:
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Name:
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Title:
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OPTIONEE
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Name:
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