EXHIBIT 10.2
APPALACHIAN BANCSHARES, INC.
STOCK OPTION AGREEMENT
under the
APPALACHIAN BANCSHARES, INC.
2003 STOCK OPTION PLAN
THIS STOCK OPTION AGREEMENT ("Option Agreement") is made and entered into
as of the ____ day of _________, 2003, by and between Appalachian Bancshares,
Inc. (the "Company") and __________________("Participant"), an employee [a
director] of the Company [of Appalachian Community Bank, an Affiliate].
W I T N E S S E T H:
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WHEREAS, the Board of Directors of the Company has adopted that certain
Appalachian Bancshares, Inc. 2003 Stock Option Plan (the "Plan"), a copy of
which is attached hereto as Exhibit A and incorporated herein by reference.
Pursuant to the terms of the Plan, the Board of Directors has selected
Participant to participate in the Plan and desires to grant to Participant
certain stock options to purchase shares of the Company's authorized common
stock ("Stock"), subject to the terms and conditions set forth herein; and
WHEREAS, Participant desires to participate in the Plan and to receive
stock options thereunder, upon the terms of, and in accordance with, the Plan
and this Option Agreement;
NOW, THEREFORE, in consideration of the mutual promises, agreements and
covenants contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. INCORPORATION OF PROVISIONS
This Option Agreement is subject to, and is to be construed in all respects
in a manner which is consistent with, the terms of the Plan, the provisions of
which hereby are incorporated by reference into this Option Agreement. To the
extent that any terms contained herein are contrary to, or inconsistent with,
the terms of the Plan, the terms of the Plan shall govern. Unless specifically
provided otherwise, all defined terms used in this Option Agreement shall have
the same meaning as in the Plan.
2. GRANT OF OPTION
Subject to the further terms and conditions of this Option Agreement,
Participant hereby is granted [a non-incentive stock option] [an incentive stock
option] to purchase _______ shares
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of Stock, effective as of the ___ day of __________, 2003 (the "Effective
Date"). This stock option is intended to be [a non-ISO] [an ISO.]
3. MARKET VALUE OF STOCK
The Board of Directors has determined, in good faith and in its best
judgment, that the Market Value per share of Stock, as of the date the stock
option is granted pursuant to this Option Agreement, is $______.
4. OPTION PRICE
The Board of Directors has determined that the price of each share of Stock
purchased under this Option Agreement shall be $_____, the Market Value per
share of Stock.
5. EXPIRATION OF OPTIONS
The option to acquire Stock pursuant to this Option Agreement shall expire
(to the extent not previously fully exercised) upon the first to occur of the
following:
(a) _____________, 2013 (the tenth anniversary of the Effective Date),
unless an ISO is granted to a holder of at least 10% of the
outstanding common stock of the Company, in which case, ____________,
2008 (the fifth anniversary of the Effective Date);
(b) The date which is three months following the date upon which
Participant ceases Continuous Service with the Company, or any
Affiliate, other than as a result of a Change in Control of the
Company, or Participant's death, Permanent and Total Disability,
Retirement, or termination for Cause;
(c) The date upon which Participant ceases Continuous Service with the
Company, or any Affiliate, other than as a result of termination for
Cause, with respect to any portion of this option which is not then
exercisable on the date Participant ceases his employment with the
Company;
(d) The date which is 60 days following the date upon which Participant
ceases to be employed by the Company, or any Affiliate, by reason of a
Change in Control of the Company;
(e) The date which is the second anniversary of the date upon which
Participant ceases to be employed by the Company, or any Affiliate, by
reason of Participant's death;
(f) The date which is the first anniversary of the date upon which
Participant ceases to be employed by the Company, or any Affiliate, by
reason of Participant's Permanent and Total Disability;
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(g) The date which is six months following the date upon which Participant
ceases to be employed by the Company, or any Affiliate, by reason of
Participant's Retirement; or
(h) The date upon which Participant ceases to be employed by the Company,
or any Affiliate, by reason of Participant's termination for Cause.
6. EXERCISE OF OPTION
Unless options hereunder shall earlier lapse or expire, pursuant to Section
5 hereof, the option to acquire the aggregate number of _________ shares of
Stock, under this Option Agreement, first may be exercised on the dates, and
with respect to the aggregate number of shares of Stock subject to this Option
Agreement, as follows:
(a) On _______________, _____ shares (20%);
(b) On _______________, _____ shares (20%);
(c) On _______________, _____ shares (20%);
(d) On _______________, _____ shares (20%); and
(e) On _______________, _____ shares (20%).
To the extent such options become exercisable in accordance with the
foregoing, Participant may exercise the stock option granted hereunder, in whole
or in part, from time to time. The option exercise price may be paid by
Participant either in cash or by surrender of other shares of Stock of the
Company held by Participant. Participant shall be given credit against the
option exercise price hereunder, for such shares surrendered, equal to the
Market Value on the day preceding the exercise of the option.
7. MANNER OF EXERCISE
The stock option granted hereunder may be exercised by written notice to
the Company, specifying the number of shares to be purchased and signed by
Participant or such other person who may be entitled to acquire stock under this
Option Agreement. If any such notice is signed by a person other than
Participant, such person shall also provide such other information and
documentation, as the Committee reasonably may require, to assure that such
person is entitled to acquire Stock under the terms of the Plan and this Option
Agreement.
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8. RESTRICTIONS ON TRANSFERABILITY
The stock option granted hereunder shall not be transferable by
Participant, otherwise than by will or by the laws of descent and distribution,
or pursuant to the terms of a "qualified domestic relations order" within the
meaning of Section 414(p) of the Code and the regulations and rulings thereunder
("QDRO"). Unless transferred pursuant to the terms of a QDRO, such stock option
shall be exercisable during Participant's lifetime only by Participant.
9. FURTHER RESTRICTIONS ON EXERCISE AND SALE OF STOCK
No portion of the stock option granted hereunder shall be exercisable at
any time during which there is not on file with the Securities and Exchange
Commission an effective registration statement covering the option shares on
Form S-8, or similar form promulgated by the Securities and Exchange Commission.
Nothing contained in this section shall be construed to obligate the
Company to, or to grant any right to the holder of the stock option granted
hereunder to, cause the Company to file any registration statement; or, if any
such registration statement is filed, to prepare any additional prospectus, to
file any amendments to the registration statement, or to continue said
registration statement in effect.
If, at any time during which the stock option is otherwise exercisable
according to its terms, there is no effective registration statement on file
with the Securities and Exchange Commission covering the shares then acquirable
hereunder, the Committee may, in its sole discretion, permit the stock option to
be exercised by the holder, upon its satisfaction that the offer and sale of
such option shares to the option holder is exempt in fact from the registration
requirements of the Securities Act of 1933, as amended, and such state
securities laws as shall be applicable, and may condition such exercise upon its
receipt of such representations, factual assurances and legal opinions as it
shall deem necessary to determine and document the availability of any such
exemption and may further condition such exercise upon such undertakings by the
holder hereof or such restriction upon the transferability of the shares to be
acquired hereunder as it shall determine to be necessary to effectuate and
protect the claim to any such exemption.
10. REORGANIZATION AND RECAPITALIZATION
In the event that dividends are payable in shares of Stock, or in the event
that there are splits, subdivisions or combinations of shares of Stock, the
number of shares of Stock available under the Plan shall be increased or
decreased proportionately, as the case may be, and the number of shares
deliverable upon the exercise thereafter of any option theretofore granted shall
be increased or decreased proportionately, as the case may be, without change in
the aggregate purchase price.
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In case the Company is merged or consolidated with another corporation and
the Company is not the surviving corporation, or in case the property or stock
of the Company is acquired by another corporation, or in case of a separation,
reorganization, recapitalization or liquidation of the Company, all outstanding
Awards shall be surrendered. With respect to each such surrendered Award, the
Committee shall determine, subject to the vesting requirements of Sections 5 and
6 of this Option Agreement and Section 8(a) of the Plan, whether the holder of
the surrendered Award shall receive:
(i) for each share of Stock then subject to an outstanding award, the
number and kind of Shares into which each outstanding Share (other
than Shares held by dissenting stockholders) is changed or exchanged,
together with an appropriate adjustment to the Exercise Price; or
(ii) a cash payment (from the Company or the successor corporation), in an
amount equal to the Market Value of the shares of Stock subject to the
Award on the date of the Transaction, less the Exercise Price of the
Award.
Any adjustment made hereunder shall be made in such a manner as not to
constitute a modification, within the meaning of Section 424(h) of the Code.
[signatures on the following page]
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IN WITNESS WHEREOF, the Committee has caused this Option Agreement to be
executed by a duly authorized officer of the Company, and Participant has
executed this Option Agreement as of the ____ day of _____________, 2003.
APPALACHIAN BANCSHARES, INC.
By:______________________________
Name: Xxxxx X. Xxxxxx
Title: Chief Executive Officer
ATTEST:
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Secretary or Assistant Secretary
"PARTICIPANT"
By:______________________________
Name:
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EXHIBIT A
APPALACHIAN BANCSHARES, INC. 2003 STOCK OPTION PLAN
