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EXHIBIT 4.2
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STOCK OPTION AGREEMENT
FOR INCENTIVE STOCK OPTIONS UNDER SECTION 422
OF THE INTERNAL REVENUE CODE
PURSUANT TO THE
PINNACLE BANK
1996 STOCK OPTION AND INCENTIVE PLAN
STOCK OPTION for a total of _____ shares of Common Stock, par value
$.01 per share (the "Common Stock"), of Pinnacle Bancshares, Inc. (the
"Company"), which Option is intended to qualify as an incentive stock option
under Section 422 of the Internal Revenue Code of 1986, as amended, is hereby
granted to _________________________ (the "Optionee") at the price set forth
herein, and in all respects subject to the terms, definitions and provisions of
the Pinnacle Bank 1996 Stock Option and Incentive Plan (the "Plan") adopted by
the Company which is incorporated by reference herein, receipt of which is
hereby acknowledged.
1. Option Price. The option price is $_____ for each share, being
100%(1) of the fair market value, as determined by the Stock Option Committee,
of the Common Stock on the date of grant of this option.
2. Exercises of Option. This Option shall be exercisable in accordance
with provisions of the Plan as follows:
(i) Schedule of rights to exercise.
Years of Service Shares Subject to Option Which May
After Date of Grant of Option Be Exercised
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Upon Grant _______________
1 year but less than 2 years _______________
2 years but less than 3 years _______________
3 years but less than 4 years _______________
4 years but less than 5 years _______________
Over 5 years _______________
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(1) 110% in the case of an Optionee who owns shares representing more than 10%
of the outstanding common stock of the Company on the date of grant of
this Option.
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(ii) Method of Exercise. This Option shall be exercisable by a written
notice by the Optionee which shall:
(a) State the election to exercise the Option, the number of shares with
respect to which it is being exercised, the person in whose name the stock
certificate or certificates for such shares of Common Stock is to be
registered, his address and Social Security Number (or if more than one,
the names, addresses and Social Security Numbers of such persons);
(b) Contain such representations and agreements as to the holder's
investment intent with respect to such shares of Common Stock as may be
satisfactory to the Company's counsel;
(c) Be signed by the person or persons entitled to exercise the Option and,
if the Option is being exercised by any person or persons other than the
Optionee, be accompanied by proof, satisfactory to counsel for the Company,
of the right of such person or persons to exercise the Option; and
(d) Be in writing and delivered in person or by certified mail to the
Treasurer of the Company.
Payment of the purchase price of any shares with respect to which the
Option is being exercised shall be by cash, Common Stock, or such a combination
of cash and Common Stock as the Optionee elects. The certificate or certificates
for shares of Common Stock as to which the Option shall be exercised shall be
registered in the name of the person or persons exercising the Option.
(iii) Restrictions on exercise; Securities registration. This Option may
not be exercised if the issuance of the shares upon such exercise would
constitute a violation of any applicable federal or state securities or other
law or valid regulation. As a condition to the Optionee's exercise of this
Option, the Company may require the Optionee to make any representation and
warranty to the Company as may be required by any applicable law or regulation,
including such representations and warranties as may be necessary to assure the
availability of an exemption from the registration requirements of federal or
state securities laws.
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3. Withholding. The Optionee hereby agrees that the exercise of the Option
or any installment thereof will not be effective, and no shares will become
transferable to the Optionee, until the Optionee makes appropriate arrangements
with the Company for such tax withholding as may be required of the Company
under federal, state or local law on account of such exercise.
4. Non-transferability of Option. This option may not be transferred in any
manner otherwise than by will or the laws of descent or distribution and may be
exercised during the lifetime of the Optionee only by the Optionee. The terms of
this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.
5. Term of Option. This Option may not be exercisable for more than
__________(2) years from the date of grant of this Option, as stated below, and
may be exercised during such term only in accordance with the Plan and the terms
of this Option.
PINNACLE BANCSHARES, INC.
By: _____________________________________
Attest: _________________________________
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Date of Xxxxx
(Seal)
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(2) No more than ten years; five years in the case of an Optionee who owns
shares representing more than 10% of the outstanding Common Stock of the
Company on the date of grant of this Option.
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