Exhibit 10(1)
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________________________
FORM OF
INCENTIVE 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 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 Compensation 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 the Holding Company's 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 12 hereof. Such notice shall state the number of shares in respect of
which the option is being exercised, shall identify the option exercised as an
incentive 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 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 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
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date of this letter. When the option becomes exercisable with respect to any
shares of Common 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 cease to be an employee of the Holding Company or any of its
subsidiaries for any reason other than retirement, permanent and total
disability, or death, this option shall forthwith terminate. If your employment
by the Holding Company or any of its subsidiaries is terminated by reason of
retirement (which means such termination of employment as shall entitle you to
early or normal retirement benefits under any then existing pension plan of the
Holding Company or one of its subsidiaries), you may exercise this option to the
extent it was exercisable at the date of your retirement in whole or in part
within three years after such retirement, but not later than the date upon which
this option would otherwise expire; provided, however, that if you are a
director or a director emeritus at the time of your retirement, the option shall
continue to vest while you serve as director or director emeritus and you may
exercise this option in whole or in part until the later of (a) three years
after your date of retirement or (b) six months after your service as a director
and/or director emeritus terminates, but not later than the date upon which this
option would otherwise expire. If you cease to be an employee of the Holding
Company or any of its subsidiaries because of your permanent and total
disability, you may exercise this option in whole or in part at any time within
one year after such termination of employment by reason of such disability, but
not later than the date upon which this option would otherwise expire.
4. If you die while employed by the Holding Company or any of its
subsidiaries, within three years after the termination of your employment
because of retirement (or, if later, six months following your termination of
service as a director or director emeritus of the Holding Company), or within
one year after the termination of your employment because of permanent and total
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
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.
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8. Nothing in this option shall restrict the right of the Holding Company
or its subsidiaries to terminate your employment 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.
10. This Stock Option Agreement is intended to grant an option which meets
all of the requirements of incentive stock options as defined in Section 422A of
the Internal Revenue Code. Subject to and upon the terms, conditions and
provisions of the Plan, each and every provision of this Agreement shall be
administered, construed and interpreted so that the option granted herein shall
so qualify as an incentive stock option. Each provision of this Stock Option
Agreement which would prevent this option from qualifying as an incentive stock
option, if any, shall be void.
11. You agree to advise the Holding Company immediately upon any sale or
transfer of any shares of Common Stock received upon exercise of this option to
the extent such sale or transfer takes place prior to the later of (a) two years
from the date of grant or (b) one year from the date of exercise of this option.
12. 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.
13. 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:
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Accepted on the date above written:
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