EXHIBIT 10.13B
COLUMBIA BANCORP
00000 Xxxxxx Xxxxxxxx Xxxxxxx
Xxxxxxxx Xxxxxxxx 00000
____________, 20__
Incentive Stock Option Agreement
[Name]
[Address]
Dear ____________:
The Administrator of the Columbia Bancorp 1997 Stock Option Plan (the
"Plan") takes pleasure in extending to you an option (the "Option") to purchase
shares of Common Stock of Columbia Bancorp (the "Common Stock") pursuant to the
Plan. The Option shall be subject to the following terms and conditions:
(1) Incentive Stock Option. The Option is intended to qualify as an
incentive stock option within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended or replaced (the "Code"), to the fullest
extent permitted within the limit set forth under Section 422(d) of the
Code. The tax treatment under Code Section 421 for incentive stock options
may not be applicable to a transfer of the Shares (as defined in Paragraph
(2) hereof) to you if the Option or the Shares do not satisfy the
requirements of: (i) Code Section 421(b) (denying Code Section 421 tax
treatment upon a disposition of the Shares within two (2) years from the
Date of Grant or one (1) year after the transfer of Shares to you); (ii)
Code Section 422(a)(2) (denying such tax treatment if you have not been an
employee continuously from the Date of Grant up to at least three (3)
months before the date of exercise, except in the case of disability or
death); or (iii) Code Section 422(b) (other requirements for incentive
stock options).
(2) Number of Shares. The Option covers ________ shares of Common
Stock (the "Shares").
(3) Option Price. The exercise price per share of Common Stock covered
by the Option shall be $_________ ("Exercise Price Per Share"; hereinafter
"Exercise Price" means the exercise price with respect to all Shares
acquired pursuant to each exercise of the Option).
(4) Exercise of Option. [For Options of 200 Shares or Less: Except as
provided in Section 5(c) of the Plan, this Option may not be exercised
during the first year after the Date of Grant, as defined in Paragraph (6)
hereof. Unless
terminated earlier pursuant to other provisions hereof, this Option shall
become exercisable in full after one year after the Date of Grant.] [For
Options of More than 200 Shares: Except as provided in Section 5(c) of the
Plan, this Option (A) may not be exercised during the first year after the
Date of Grant, and (B) unless terminated earlier pursuant to other
provisions hereof, the Option may be exercised to acquire up to: (i)
twenty-five percent (25%) of the Shares after one year after the Date of
Grant; (ii) fifty percent (50%) after two years; (iii) seventy-five percent
(75%) after three years; and (iv) one hundred percent (100%) after four
years.
(5) Termination of Employment. This Option, to the extent it is not
then exercisable, shall terminate when your employment with Columbia
Bancorp (the "Company") and all Subsidiaries terminates. Except as provided
in Paragraphs (5)(A) and (5)(B) hereof, the Option, to the extent it is
exercisable but has not been exercised (the "Unexercised Option"), shall
also terminate when your employment with the Company and its Subsidiaries
terminates.
(A) Retirement or Voluntary Resignation. If you terminate
employment with the Company and its Subsidiaries due to (i) Retirement, as
defined hereinafter, or (ii) voluntary resignation with the consent of the
Board of Directors of the Company or a Subsidiary, the Unexercised Option
may be exercised until the expiration of three (3) months after the date
your employment terminates. "Retirement" means a retirement from employment
with the Company and its Subsidiaries either on or after the first day of
the month coinciding with or next following your sixty-fifth (65th)
birthday.
(B) Death or Disability. If you terminate employment with the
Company and its Subsidiaries due to (i) death or (ii) Disability, as
defined hereinafter, the Unexercised Option may be exercised (in the case
of death, by your executor, personal representative, or the person to whom
the Unexercised Option shall have been transferred by will or the laws of
descent and distribution, as the case may be) until the expiration of one
(1) year after the date of your termination of employment. If you die
during the three (3) month post-termination exercise period provided to you
under Paragraph 5(A) above, the Unexercised Option may be exercised by your
executor, personal representative, or the person to whom the Unexercised
Option shall have been transferred by will or the laws of descent and
distribution, as the case may be, until the expiration of one (1) year
after the date of your death. "Disability" means a permanent mental or
physical disability due to accident or illness that renders you unable to
perform every duty of your occupation with the Company and the Subsidiaries
for a period of at least one hundred eighty (180) days, provided that you
establish such disability to the satisfaction of the Administrator.
Evidence of such Disability shall include the certificate of a competent
licensed physician selected by you and approved by the Administrator which
confirms that you have a Disability as defined herein.
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(6) Term of Option. This Option is effective as of the date the
Administrator approved the Option, _______________, 20___ (the "Date of
Grant"). Notwithstanding anything herein to the contrary, this Option may
not be exercised, in whole or in part, after ten (10) years from the Date
of Grant (i.e., after ________________, 20___).
(7) Manner of Exercise. You or any person exercising the Option may do
so only by delivering written notice thereof to the Administrator. Such
notice shall be in such form as the Administrator may require at its sole
discretion.
(A) Payment of Exercise Price. Full payment for the Exercise
Price shall be made at or prior to the time that the Option, or any part
thereof, is exercised (or, in the discretion of the Administrator, at such
later time as the certificates for such Shares are delivered). Such payment
shall be made: (i) by cash or certified check; (ii) by tender (via delivery
or attestation to the Company of other shares of Common Stock of the
Company which have a Fair Market Value on the date of tender equal to the
Exercise Price, provided that such shares have been owned by you for a
period of at least six months free of any substantial risk of forfeiture or
were purchased on the open market without assistance, direct or indirect,
from the Company; or (iii) by a broker-assisted cashless exercise in
accordance with Regulation T of the Board of Governors of the Federal
Reserve System and other applicable laws through a brokerage firm
pre-approved by the Administrator.
(B) Withholding Taxes. In the event any federal, state or local
income and employment taxes required to be withheld with respect to the
Option (e.g., upon a loss of tax treatment under Code Section 421), you
shall pay to the Company, or make provision satisfactory to the
Administrator for payment of such taxes no later than the date of the event
creating the tax liability. The Company may, to the extent permitted by
law, deduct any such tax obligations from any payment of any kind otherwise
due to you. In the event that payment to the Company of such tax
obligations is made in shares of Common Stock, such shares shall be valued
at Fair Market Value on the applicable date for such purposes.
(8) Right As Stockholder. You will have no rights as a stockholder
solely because of the grant or exercise of the Option before the
certificates for the Shares as to which the Option has been exercised is
issued to you by the Company.
(9) Option Non-Assignable and Non-Transferable. The Option and all
rights granted hereunder, including the right to surrender the Option, is
not assignable or transferable other than by will or the laws of descent
and distribution and, during your lifetime, is exercisable only by you or
your guardian or legal representative.
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(10) Restricted Stock. You will receive Shares restricted in terms of
transferability, as will be indicated in a legend printed on the stock
certificate in the event that there is not an effective registration
statement with respect to such Shares at the time of their issue.
(11) Terms of Plan. The Option is granted under and subject to the
provisions applicable to incentive stock options under the Plan, a copy of
which is attached hereto and made a part hereof. Unless stated otherwise
herein, capitalized terms herein shall have the same meaning as defined in
the Plan.
(12) Notices. Any notice required or permitted to be given to the
Administrator shall be sufficient if in writing and hand delivered, or sent
by registered or certified mail, to:
Personnel, Compensation and Stock Option Committee
Columbia Bancorp
0000 Xxxxxxxxx Xxxxxxxx Xxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the
receipt for registration or certification.
(13) Non-Guarantee of Employment. Nothing in the Plan or in this
Incentive Stock Option Agreement shall confer any right on an individual to
continue in the employ of the Company or any Subsidiary or shall interfere
in any way with the right of the Company or a Subsidiary to terminate such
employment at any time with or without cause or notice and whether or not
such discharge results in the Option becoming unexercisable.
(14) Binding Effect. The covenants and agreements of this Incentive
Stock Option Agreement contained herein shall be binding upon, and inure to
the benefit of, the heirs, legal representatives, successors, and assigns
of the respective parties hereto.
(15) Entire Agreement. Except as provided in Paragraph (11) hereof,
this Incentive Stock Option Agreement contains the entire agreement between
the Company and you with respect to the subject matter contained herein.
Any oral or written agreements, representations, warranties, written
inducements, or other communications made prior to the execution of this
Incentive Stock Option Agreement shall be void and ineffective for all
purposes.
(16) Governing Law. The validity, construction and effect of this
Incentive Stock Option Agreement, and of any rules, regulations,
determinations or decisions made by the Administrator relating thereto, and
the rights of any and all persons having or claiming to have any interest
hereunder, shall be determined
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exclusively in accordance with applicable federal laws and the laws of the
State of Maryland, without regard to its conflict of laws principles.
(17) Amendment. This Incentive Stock Option Agreement may be amended
from time to time by the Administrator in its discretion; provided,
however, that it may not be amended in a manner that would have a
materially adverse effect on the Option as determined in the discretion of
the Administrator, except as provided in the Plan or in a written document
signed by you and the Company.
{Signatures appear on next page}
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The copy of the Option enclosed should be signed by you, dated, and
returned to the Company prior to _______________, 20__ to acknowledge your
receipt of the Option and your approval of each of the terms and conditions
hereof. If the Option has not been accepted and approved by you in writing by
such date, it shall terminate.
Very truly yours,
ADMINISTRATOR, COLUMBIA BANCORP
1997 STOCK OPTION PLAN
By: ____________________________________
Print Name: ____________________________
Title: _________________________________
Accepted and Approved:
______________________________________
Print Name: __________________________
Dated: _________________________, 20__
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