April 17, 1997
INCENTIVE STOCK OPTION AGREEMENT
UNDER PEOPLES BANK CORPORATION OF INDIANAPOLIS
STOCK OPTION PLAN
Xxxxxx X. Xxxxxxx
You are hereby granted the option to purchase a total of 33,000
Nonvoting Common Shares, without par value ("Nonvoting Common Shares"), of
Peoples Bank Corporation of Indianapolis ("Peoples") over the next ten (10)
years pursuant to the Peoples Bank Corporation of Indianapolis Stock Option Plan
(the "Plan"), on the following terms and conditions:
1. This option shall become exercisable in three installments. This
option may be exercised for up to 10,000 shares at any time after the closing
price of each Nonvoting Common Share on the Nasdaq National Market (or other
exchange on which such shares are then traded) (the "Closing Market Price") is
equal to or greater than $60 per share for a period of at least 20 consecutive
trading days ("Option Installment I"). This option award may be exercised for an
additional 11,000 shares at any time after the Closing Market Price is equal to
or greater than $70 per share for a period of at least 20 consecutive trading
days ("Option Installment II"). This option award may be exercised for the
remaining 12,000 shares at any time after the Closing Market Price is equal to
or greater than $80 per share for a period of at least 20 consecutive trading
days ("Option Installment III").
If a Change of Control (as defined in the Plan) occurs at any time, this option
award shall become immediately exercisable in its entirety. If your employment
by Peoples Bank and Trust Company is terminated without cause or by you with
Good Reason pursuant to Section 7(B) of your Employment Agreement with Peoples
Bank & Trust Company dated as of April 17, 1997, Option Installment I shall
become immediately exercisable in its entirety. The purchase price of the
Nonvoting Common Shares subject to this option is $45.25 per share. You must pay
this purchase price in cash at the time this option (or any vested portion
thereof) is exercised; provided, however that, with the approval of the Board
Related Affairs Committee (the "Committee"), you may exercise your option by
tendering to Peoples Nonvoting Common Shares owned by you, or any combination of
whole Nonvoting Common Shares 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 (or any vested portion thereof), you must send written notice to Peoples'
Secretary at the address noted in Section 13 hereof. Such notice shall state the
number of shares in
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respect of which the option is being exercised, shall state what portion of the
option exercised is an incentive stock option or a non-qualified stock option
(in accordance with Section 11 hereof) 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 Nonvoting Common Shares will not be delivered to
you until payment has been made. Under certain circumstances, subject at all
times to compliance with applicable securities laws, the Plan permits you to
deliver a notice to your broker to deliver the cash to Peoples upon the receipt
of such cash from the sale of Nonvoting Common Shares.
2. In addition to any adjustments required by Section 7 of the Plan, in
the event issuance of a share split or other share dividend consisting of shares
of Voting or Nonvoting Common Shares, the number of Nonvoting Common Shares to
be purchased pursuant to this Agreement, the purchase price of each share, and
the Closing Market Prices per share triggering exerciseability of the options
under paragraph 1, above, will be adjusted as follows: (a) the total number of
shares to be purchased pursuant to the option will be equal to the product of
(i) the total number of shares subject to the option before such issuance; (ii)
a fraction, the numerator of which is the total number of common shares
outstanding immediately after such issuance and the denominator of which is the
total number of common shares outstanding immediately prior to such issuance;
and (b) the purchase price of the shares subject to the option and Closing
Market Prices triggering exerciseability will be equal to the (i) price
immediately before such issuance; times (ii) a fraction, the numerator of which
is the total number of common shares outstanding immediately prior to such
issuance and the denominator of which is the total number of common shares
outstanding immediately after such issue.
3. The term of this option (the "Option Term") shall be for a period
of ten (10) years from the date of this letter, subject to earlier termination
as provided in paragraphs 4 and 5 hereof. Except as otherwise provided below,
the option may be exercised 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.
4. Thirty (30) days after you cease to be an employee of Peoples 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 Peoples 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 Peoples or
one of its subsidiaries), Option Installment II and Option Installment III (if
such installments have not yet become exercisable) shall each terminate and
expire immediately prior to such termination. You may, however, exercise Option
Installment I (and, if they have not expired pursuant to the foregoing sentence,
Option Installment II and Option Installment III) in whole or in part within the
three (3) month period following your retirement (but not later than the date
upon which this option would otherwise expire), whether or not Option
Installment I was otherwise exercisable on the date of retirement. If you cease
to be an
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employee of Peoples or any of its subsidiaries because of your permanent and
total disability, Option Installment II and Option Installment III (if such
installments have not yet become exercisable) shall each terminate and expire
immediately prior to such termination. You may, however, exercise Option
Installment I (and, if they have not expired pursuant to the foregoing sentence,
Option Installment II and Option Installment III) in whole or in part at any
time within one (1) year after such termination of employment by reason of such
disability (but not later than the date upon which this option would otherwise
expire), whether or not Option Installment I was otherwise exercisable at the
time of termination.
5. If you die while employed by Peoples or any of its subsidiaries,
Option Installment II and Option Installment III (if such installments have not
yet become exercisable) shall each terminate and expire immediately at the time
of your death. However, if you die while employed by Peoples or any of its
subsidiaries, within three (3) months after the termination of your employment
because of retirement, or within one (1) year after the termination of your
employment because of permanent and total disability, Option Installment I (and,
if they have not expired pursuant to the foregoing sentence, Option Installment
II and Option Installment III) 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), whether or not Option Installment I was otherwise
exercisable at the time of termination.
6. 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.
7. All rights to exercise this option will expire, in any event, ten
(10) years from the date of this letter.
8. 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 Peoples as Peoples may deem consistent
with applicable federal and state laws.
9. Nothing in this option shall restrict the right of Peoples or its
shareholders to terminate your employment or service at any time with or without
cause.
10. 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 may be
obtained from the Secretary of Peoples. 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.
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11. To the extent possible, this Stock Option Agreement is intended to
grant an option which meets all of the requirements of incentive stock options
as defined in Section 422 of the Internal Revenue Code. To the extent possible,
and 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. To the extent the option cannot meet the requirements of incentive
stock options, the stock option shall be treated as a non-qualified stock
option. Without limiting the foregoing, if options for shares having an exercise
price in excess of $100,000 (taking into account options held by you under your
agreement dated January 24, 1996) become exercisable in any calendar year, then
options first becoming exercisable for the number of whole shares with an
aggregate exercise price of not more than $100,000 shall be deemed incentive
stock options and the remainder of such options shall be non-qualified options.
To the extent the option is deemed a non-qualified stock option, you are hereby
granted the right to receive, upon exercise of such non-qualified option, a cash
amount (cash award) in the amount necessary to reimburse you for federal, state
and local income taxes imposed on you as a consequence of the exercise of the
non-qualified stock option and the receipt of this cash award.
12. You agree to advise Peoples immediately upon any sale or transfer
of any Nonvoting Common Shares received upon exercise of this option (or any
vested portion thereof) to the extent such sale or transfer takes place prior to
one year from the date of any exercise of this option or within two years from
the date hereof.
13. All notices by you to Peoples and your exercise of the option
herein granted, shall be addressed to Peoples Bank Corporation of Indianapolis,
000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000, Attention: Secretary, or
such other address as Peoples may, from time to time, specify.
Very truly yours,
PEOPLES BANK CORPORATION OF
INDIANAPOLIS
By: /s/ Xxxxxxx X. XxXxxxxxx
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Xxxxxxx X. XxXxxxxxx, President
and Chief Executive Officer
Accepted on the date above written:
/s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
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