INCENTIVE STOCK OPTION AGREEMENT
EXHIBIT 10.18
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT, made this the 26th day of August, 2002, between VALLEY FINANCIAL CORPORATION, A Virginia corporation, (the “Company”), and J. Xxxxxxx Xxxxxxx an employee of the Company or its subsidiary, Valley Bank, (hereinafter called “Employee”);
THAT, WHEREAS, the Human Resources Committee of the Board of Directors of the Company has determined that the fair market value of the Company’s Common Stock, no par value (“Common Stock”), on this date is $11.88; and
WHEREAS, the Human Resources Committee has authorized the execution and delivery of this Agreement;
NOW, THEREFORE, in consideration of the premises, it is hereby agreed:
Notwithstanding the language in the preceding paragraph, the aggregate fair market value (determined as of the date of this Agreement) of Common Stock exercisable for the first time by the Employee under this INCENTIVE STOCK OPTION during any calendar year is limited to $100,000. Accordingly, the option, subject to the requirements of the preceding paragraph, is first exercisable by the Employee as follows:
2003 - $17,820.00; 2004 - $17,820.00; 2005 - $17,820.00; 2006 - $17,820.00; 2007 - $17,820.00.
The Employee may exercise this INCENTIVE STOCK OPTION by giving written notice of exercise to the Company on a form or forms supplied by the Company, specifying the number of shares with regard to which this INCENTIVE STOCK OPTION is being exercised.
The exercise of this INCENTIVE STOCK OPTION and the issuance of Common Stock hereunder are expressly conditioned upon, and subject to, a registration statement covering such shares being filed with the Securities and Exchange Commission (the “Commission”) pursuant to the Securities Act of 1933 and such registration statement being declared effective by order of the Commission and satisfaction of all state securities law requirements.
The Employee acknowledges receipt of a copy of the Plan dated January 19, 1995, and all amendments thereto, and Company’s Annual Report for the last fiscal year and any current Quarterly Report. The Employee hereby accepts this INCENTIVE STOCK OPTION subject to all terms and provisions of the Plan and agrees to accept as binding, conclusive and final all decisions and interpretations of the Human Resources Committee.
In the event the undersigned Employee is a member of Company’s Control Group, the undersigned shall, at and after the time that the Company’s Common Stock is registered under Section 12 of the Securities Exchange Act of 1934 (the “Exchange Act”), be subject to the reporting requirements of Section 16(a) of the Exchange Act, as well as the short-swing profit limitations of Section 16(b) of the Exchange Act. The Employee acknowledges that the grant of this INCENTIVE STOCK OPTION will constitute a “purchase” or “acquisition” under Section 16(b) of the Exchange Act if (i) less than six months elapses between the date of this option grant and the date of the sale of the option stock, or (ii) upon exercise of this INCENTIVE STOCK OPTION, the exercise price is greater than the market price of the Common Stock acquired.
Notification of the amount due and prior to, or concurrently with, the delivery of the Employee of a certificate representing any shares purchased pursuant to the exercise of this INCENTIVE STOCK OPTION, the Employee shall promptly pay to the Company any amount necessary to satisfy applicable federal, state or local tax requirements. Further, upon disposition of shares of Common Stock acquired pursuant to the exercise of this INCENTIVE STOCK OPTION, the Company shall require the payment of the amount of taxes, if any, which are required by law to be withheld or otherwise paid with regard to such disposition.
(8) OPTION HOLDER NOT STOCKHOLDER. The Employee or his legal representatives, as the case might be, shall not have any of the rights or privileges of a stock holder of the Company in respect of any of the shares issuable upon the exercise of this INCENTIVE STOCK OPTION unless and until certificates representing such shares shall have been issued and delivered.
(9) SURRENDER FOR STOCK APPRECIATION RIGHT. Any part or all of this INCENTIVE STOCK OPTION which has to be surrendered for exercise of a related Stock Appreciation Right shall no longer be exercisable to the extent the related Stock Appreciation Right has been exercised.
(11) GOVERNING LAW. This Agreement shall be governed by Virginia law and shall be binding upon the parties hereto, their heirs, successors and assigns.
VALLEY FINANCIAL CORPORATION | ||
By: | /s/ Xxxxx X. Xxxxxxxx | |
President and CEO |
/s/ J. Xxxxxxx Xxxxxxx |
J. Xxxxxxx Xxxxxxx |
EXHIBIT “A”
VESTING SCHEDULE
The INCENTIVE STOCK OPTION as granted hereunder shall vest in accordance with the following schedule:
Vesting Percentage | Date Upon Which Vesting Percentage Applies | |
20% | First year anniversary of the grant of the Incentive Stock Options hereunder (“Date of Grant”) | |
40% | Second year anniversary of date of grant | |
60% | Third year anniversary of date of grant | |
80% | Fourth year anniversary of date of grant | |
100% | Fifth year anniversary of date of grant |