EXHIBIT 10.5
1996 Employee Incentive Stock Option Plan and Agreement
XXXXXXX XXXXX NATIONAL BANCORP, INC.
1996 EMPLOYEE INCENTIVE STOCK OPTION PLAN
1. Purpose and Administration
(a) Purpose. The purpose of the Employee Incentive Stock Option Plan (the
"Plan") is to give officers and executive personnel ("key employees") of Xxxxxxx
Xxxxx National Bancorp, Inc. (the "Company") and The Xxxxx National Bank (the
"Bank") an opportunity to acquire shares of the common stock of the Company,
$.01 par value (the "Common Stock"), to provide an incentive for key employees
to continue to promote the best interests of the Company and enhance its
long-term performance, and to provide an incentive for key employees to join or
remain with the Company.
(b) Administration. The Plan shall be administered, construed and
interpreted by the Company's Board of Directors, which, to the extent the Board
shall determine, may delegate its powers with respect to the administration of
the Plan (except its powers under Section 10(c)) to a committee of two or more
non-employee directors whose members shall be designated from time to time by
resolution of the Board of Directors. The decision of a majority of the members
of the administrative body shall be sufficient with respect to an action to be
taken or interpretation to be made under the Plan. If administration is
delegated to a committee, all references herein to the Board shall be deemed to
refer to the committee.
(c) Powers. Within the limits of the express provisions of the Plan, the
Board shall determine: (i) the key employees to whom awards hereunder shall be
granted, (ii) the time or times at which such awards shall be granted, (iii) the
form and amount of the awards, and (iv) the limitations, restrictions and
conditions applicable to any such award.
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In making such determinations, the Board may take into account the nature of the
services rendered by such employees, or classes of employees, their present and
potential contributions to the Company's success and such other factors as the
Board in its discretion shall deem relevant.
(d) Interpretations. Subject to the express provisions of the Plan, the
Board may interpret the Plan, prescribe, amend and rescind rules and regulations
relating to it, determine the terms and provisions of the respective awards and
make all other determinations it deems necessary or advisable for the
administration of the Plan.
(e) Determinations. The determinations of the Board on all matters
regarding the Plan shall be conclusive. A member of the Board shall only be
liable for any action taken or determination made in bad faith.
(f) Non-uniform Determinations. The Board's determinations under the Plan,
including without limitation, determinations as to the persons to receive
awards, the terms and provisions of such awards and the agreements evidencing
the same, need not be uniform and may be made by it selectively among persons
who receive or are eligible to receive awards under the Plan, whether or not
such persons are similarly situated.
2. Awards Under the Plan
(a) Form. Awards under the Plan may be granted in either or both the
following forms: (i) incentive stock options ("Incentive Stock Options"), as
described in Section 3, and (ii) Stock Appreciation Rights, as described in
Section 4.
(b) Maximum Limitation. The aggregate number of shares of Common Stock
available for grant under the Plan is 14,193 shares, subject to adjustment
pursuant to Section 6. Shares of Common Stock issued pursuant to the Plan may be
either authorized but unissued shares or shares now or
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hereafter held in the treasury of the Company. In the event that any Incentive
Stock Option granted under the Plan expires unexercised or is terminated,
surrendered or canceled (other than in connection with the exercise of a Stock
Appreciation Right with respect to which Common Stock is delivered to the key
employee under Section 5(b)(ii)), without being exercised, in whole or in part,
for any reason, the number of shares theretofore subject to such Incentive Stock
Option, or the unexercised, terminated, forfeited or unearned portion thereof,
shall be added to the remaining number of shares of Common Stock available for
grant as an Incentive Stock Option under the Plan, including a grant to a former
holder of such Incentive Stock Option, upon such terms and conditions as the
Board shall determine, which terms may be more or less favorable than those
applicable to such former Incentive Stock Option.
3. Incentive Stock Options
It is intended that Incentive Stock Options granted under the Plan shall
constitute incentive stock options within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"). Incentive Stock Options
may be granted in such form and subject to such terms and conditions as the
Board shall from time to time determine, subject to the following:
(a) Exercise Price. The per share exercise price of each Incentive Stock
Option shall be fixed by the Board in the Option Agreement (hereinafter defined)
but shall be at least 100% of the fair market value of the Common Stock subject
to such Incentive Stock Option on the date of grant.
(b) Terms of Options. Each Incentive Stock Option shall become exercisable
at the time, and for the number of shares of Common Stock, fixed by the Option
Agreement. Each Incentive Stock Option shall expire and all rights to purchase
Common Stock thereunder shall cease on the date fixed on the Option Agreement,
which shall not be later than the date ten (10) years from the date such
Incentive Stock Option is granted. With respect to an Incentive Stock Option
granted to an employee who is subject to Section 16 under the Securities
Exchange Act of 1934, as amended, a period of six months must elapse between the
date of grant of an Incentive Stock Option hereunder and the date
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of disposition of the shares of Common Stock purchased upon the exercise of the
Incentive Stock Option.
(c) Limitation on Amounts. The aggregate fair market value (determined with
respect to each Incentive Stock Option as of the time such Incentive Stock
Option is granted) of the capital stock with respect to which Incentive Stock
Options are exercisable for the first time by a key employee during any calendar
year (under this Plan or any other plan of the Company) shall not exceed
$100,000.
(d) Ten Percent Shareholder. Notwithstanding any other provisions herein
contained, no key employee may receive an Incentive Stock Option under the Plan
if such key employee, at the time the award is granted owns (as defined in
Section 424(d) of the Code) stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company, unless the option price for
such Incentive Stock Option is at least 110% of the fair market value of the
Common Stock subject to such Incentive Stock Option on the date of grant and
such Option is not exercisable after the date five years from the date such
Option is granted.
(e) Exercise. Incentive Stock Options shall be subject to such terms and
conditions, shall be exercisable at such time or times, and shall be evidenced
by such form of written option agreement between the optionee and the Company,
as the Board shall determine; provided, that such terms are not inconsistent
with the other provisions of the Plan, and with Section 422 of the Code or
regulations thereunder.
(f) Manner of Exercise and Payment for Common Stock. Any Stock Option
granted under the Plan may be exercised by the grantee, by a legatee or legatees
of such Stock Option under the grantee's last will or by his or her executors,
personal representatives or distributees, (a) by delivering to the Secretary of
the Company written notice of the number of shares of Common Stock with respect
to which the Stock Option is being exercised, or (b) by delivering such notice
to a broker-dealer with a copy to the Secretary of the Company. Except as
otherwise provided in the
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Plan or in any Option Agreement, the purchase price of Common Stock upon
exercise of any Stock Option shall be paid in full (i) in cash or certified
check, (ii) if the grantee may do so in conformity with Regulation T and without
violation of Section 16(b) or (c) under the Securities Exchange Act of 1934, as
amended, pursuant to a broker-dealer's cashless exercise procedure, by a
broker-dealer to whom the grantee has submitted a properly executed exercise
notice consisting of a fully endorsed Stock Option and irrevocable instructions
to deliver to the Company the total exercise price in cash, (iii) in Common
Stock valued at its fair market value on the date of exercise, (iv) by agreeing
to surrender Stock Options then exercisable by him or her valued at the excess
of the aggregate fair market value of the Common Stock subject to such Stock
Options on the date of exercise over the aggregate option exercise price of such
Common Stock, (v) by directing the Company to withhold such number of shares of
Common Stock otherwise issuable upon exercise of such Stock Option having an
aggregate fair market value on the date of exercise equal to the exercise price
of the Stock Option, or (vi) by any combination of (i), (ii), (iii), (iv) and
(v). In the case of payments pursuant to (ii), (iii), (iv) or (v) above, the
grantee's election must be made on or prior to the date of exercise of the Stock
Option and must be irrevocable. The Company shall issue, in the name of the
grantee, Stock Certificates representing the total number of shares of Common
Stock issuable pursuant to the exercise of any Stock Option as soon as
reasonably practicable after such exercise.
(g) Cancellation of Stock Appreciation Rights. The exercise of any
Incentive Stock Option shall cancel that number, if any, of Stock Appreciation
Rights (as defined in Section 4) included in such Incentive Stock Option, which
is equal to the excess of (i) the number of shares of Common Stock subject to
Stock Appreciation Rights included in such Incentive Stock, over (ii) the number
of shares of Common Stock which remain subject to such Incentive Stock Option
after such exercise.
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4. Stock Appreciation Rights
(a) Award. If deemed by the Board to be in the best interests of the
Company, any Incentive Stock Option granted under the Plan may include a stock
appreciation right ("Stock Appreciation Right"), either at the time of grant or
thereafter while the Incentive Stock Option is outstanding.
(b) Terms of Rights. Stock Appreciation Rights shall be subject to such
terms and conditions not inconsistent with the other provisions of the Plan as
the Board shall determine, provided that:
(i) A Stock Appreciation Right shall be exercisable to the extent, and
only to the extent, the Incentive Stock Option in which it is included is
exercisable and shall be exercisable only for such period as the Board may
determine (which period may expire prior to, but not later than, the expiration
date of such Incentive Stock Option). Notwithstanding the preceding sentence, a
Stock Appreciation Right is exercisable only when the fair market value of a
share of Common Stock exceeds the option price specified in such Incentive Stock
Option.
(ii) A Stock Appreciation Right shall entitle the optionee to
surrender to the Company unexercised the Incentive Stock Option, or portion
thereof, to which it is related, or any portion thereof, and to receive from the
Company in exchange therefor that number of shares of Common Stock having an
aggregate fair market value equal to the excess of the fair market value on the
date of exercise of one share of Common Stock over the option price per share
specified in such Incentive Stock Option multiplied by the number of shares of
Common Stock subject to the Incentive Stock Option, or portion thereof, which is
so surrendered. The Board shall be entitled to elect to settle any part or all
of the Company's obligation arising out of the exercise of a Stock Appreciation
Right by the payment of cash or by check equal to the aggregate fair market
value on the date on which the Stock Appreciation Right is exercised of that
part or all of the shares of Common Stock the Company would otherwise be
obligated to deliver.
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(c) Cash Settlement Restriction. (i) Notwithstanding Section 4(b), so long
as the grantee of the Stock Appreciation Right is an officer of the Company, the
Company's right to elect to settle any part or all of its obligation arising out
of the exercise of a Stock Appreciation Right by the payment of cash or by check
shall not apply, unless such exercise occurs no less than six months after the
date of grant of the Stock Appreciation Right and either: (a) the automatic
exercise provisions in paragraph (ii) below have been triggered, or (b) during
the period beginning on the third business day following the date of release by
the Company for publication of its quarterly or annual summary statements of
sales and earnings and ending on the twelfth business day following such date.
(ii) in the event that the Company shall cancel all unexercised
Incentive Stock Options as of the effective date of a merger or other
transaction (as described in Section 7), or in the case of dissolution of the
Company, then each Stock Appreciation Right held by an executive officer or
director of the Company shall be automatically exercised for cash on such date
within 90 days prior to the effective date of such transaction or dissolution as
the Board shall determine and, in the absence of such determinations on the last
business day immediately prior to such effective date.
5. Transferability
No Incentive Stock Option or Stock Appreciation Right may be transferred,
assigned, pledged or hypothecated (whether by operation of law or otherwise),
except as provided by will or the applicable laws of descent or distribution,
and no Incentive Stock Option or Stock Appreciation Right shall be subject to
execution, attachment or similar process. Any attempted assignment, transfer,
pledge, hypothecation or other disposition of an Incentive Stock Option or Stock
Appreciation Right, or levy of attachment or similar process upon the Incentive
Stock Option or Stock Appreciation Right not specifically permitted herein shall
be null and void and without effect. An Incentive Stock Option or Stock
Appreciation Right may be exercised only by a key employee during his or her
lifetime, or pursuant to Section 9(c) by his or her estate or other person who
acquires the right to exercise such Incentive Stock Option or Stock Appreciation
Right upon his or her death by bequest or inheritance.
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6. Adjustment Provisions
The aggregate number of shares of Common Stock with respect to which
Incentive Stock Options and Stock Appreciation Rights may be granted, the
aggregate number of shares of Common Stock subject to each outstanding Incentive
Stock Option and Stock Appreciation Right, and the option price per share of
each such Incentive Stock Option, may all be appropriately adjusted as the Board
may determine for any increase or decrease in the number of shares of issued
Common Stock resulting from a subdivision or consolidation of shares, whether
through reorganization, recapitalization, stock split, stock distribution or
combination of shares, or the payment of a share dividend or other increase or
decrease in the number of such shares outstanding effected without receipt of
consideration by the Company. The Board shall make adjustments under this
Section 6 in its sole discretion, and its decisions shall be binding and
conclusive.
7. Dissolution, Merger and Consolidation, Change of Control
In the event of a dissolution or liquidation of the Company or any merger
or combination in which the Company is not a surviving corporation, each
outstanding Option granted hereunder shall terminate, but the Optionee shall
have the right, immediately prior to such liquidation, dissolution, merger or
combination, to exercise his Option, in whole or in part, to the extent that
such Option is then otherwise exercisable and has not previously been exercised.
In the event that: (i) any person (as such term is used in Section 13 of
the Securities and Exchange Act of 1934, as amended, and the rules and
regulation thereunder and including any affiliate or associate of such person,
as defined in Rule 12b-2 under said Act, and any person acting in concert with
such person) directly or indirectly acquires or otherwise becomes entitled to
vote more than eighty percent (80%) of the voting power entitled to be cast at
an election for directors ("Voting Power") of the Company; or (ii) there occurs
any merger or consolidation of the Company, or any sale, lease or exchange of
all or any substantial part of the consolidated assets of
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the Company and its subsidiary to any other person and (A) in the case of a
merger or consolidation, the holders of outstanding stock of the Company
entitled to vote in elections of directors immediately before such merger or
consolidation (excluding for this purpose any person, including any affiliate or
associate that directly or indirectly owns or is entitled to vote twenty percent
(20%) or more of the Voting Power of the Company) hold less than eighty percent
(80%) of the Voting Power of the survivor of such merger or consolidation or its
parent; or (B) in the case of any such sale, lease or exchange, the Company does
not own at least eighty percent (80%) of the Voting Power of the other person;
or (iii) one or more new directors of the Company are elected and at such time
five or more directors (or, if less, a majority of the directors) then holding
office were not nominated as candidates by majority of the directors in office
immediately before such election, then the Option will be deemed to apply to the
securities to which a holder of the number of shares of Common Stock subject to
the unexercised portion of the Stock Option would be entitled if he or she
actually owned such shares immediately prior to the record date or other times
any such event became effective. Outstanding and unexercised Stock Options
previously granted shall immediately become fully vested and exercisable.
8. Shareholder Approval, Effective Date and Conditions Subsequent to Effective
Date
The Plan shall become effective on the date of the approval of the Plan by
the Board of Directors of the Company; provided, however, that the adoption of
the Plan is subject to shareholder approval within twelve (12) months after the
date of adoption of the Plan by the Board. The Plan shall be null and void and
of no effect if the foregoing condition is not fulfilled, and in such event each
Incentive Stock Option or Stock Appreciation Right granted under the Plan shall
be null and void and of no effect.
No grant or award shall be made under the Plan more than ten years from the
earlier of the date of adoption of the Plan by the Board and shareholder
approval thereof; provided, however, that the Plan and all Incentive Stock
Options and Stock Appreciation Rights granted under the Plan prior to such date
shall remain in effect and subject to adjustment and amendment as described
herein until they have been
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satisfied or terminated in accordance with the terms of the respective grants or
awards and the related agreements.
9. Termination of Employment
(a) Each Incentive Stock Option and Stock Appreciation Right shall, unless
sooner terminated as described in Section 9(b) or (c) below, expire on the first
to occur of the tenth anniversary of the date of grant thereof or the expiration
date set forth in the applicable option agreement.
(b) The nonvested portion (if any) of an Incentive Stock Option and Stock
Appreciation Right shall expire on the first to occur of the applicable dates
set forth in paragraph (a) of this Section 9 and the date that the employment of
the key employee with the Company terminates for any reason other than death or
disability. Notwithstanding the preceding provisions of this paragraph, the
Board, in its sole discretion, may, by written notice given to an ex-employee,
permit the ex-employee to exercise Incentive Stock Options or Stock Appreciation
Rights during a period following his or her termination of employment, which
period shall not exceed three months. In no event, however, may the Board permit
an ex-employee to exercise an Incentive Stock Option or Stock Appreciation Right
after the expiration date contained in the agreement evidencing such Incentive
Stock Option or Stock Appreciation Right. Notwithstanding the preceding
provision of this paragraph, if the Board permits an ex-employee to exercise
Incentive Stock Options or Stock Appreciation Rights during a period following
his or her termination of employment pursuant to such preceding provisions, such
Incentive Stock Options or Stock Appreciation Rights shall, to the extent
unexercised, expire on the date that such ex-employee violates (as determined by
the Board) any covenant not to compete in effect between the Company and the
ex-employee.
(c) If the employment of a key employee with the Company terminates by
reason of disability (as defined in Section 422(c)(9) of the Code as determined
by the Board) or by reason of death, his or her Incentive Stock Options and
Stock Appreciation Rights, if any, shall expire on the first
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to occur of the date set forth in paragraph (a) of this Section 9 and the first
anniversary of such termination of employment.
10. Miscellaneous
(a) Legal and Other Requirements. The obligation of the Company to sell and
deliver Common Stock under the Plan shall be subject to all applicable laws,
regulations, rules and approvals, including, but not by way of limitation, the
effectiveness of a registration statement under the Securities Act of 1933, as
amended, if deemed necessary or appropriate by the Company. Certificates for
shares of Common Stock issued under the Plan may be legended as the Board shall
deem appropriate.
(b) No Obligation to Exercise Options. The granting of an Incentive Stock
Option shall impose no obligation upon an optionee to exercise such Incentive
Stock Option.
(c) Termination and Amendment of Plan. The Board, without further action on
the part of the shareholders of the Company, may from time to time alter, amend
or suspend the Plan or any Incentive Stock Option or Stock Appreciation Right
granted thereunder or may at any time terminate the Plan, except that it may
not, without the approval of the shareholders of the Company (except to the
extent described in Section 6 hereof): (i) materially increase the total number
of shares of Common Stock available for grant under the Plan; (ii) materially
modify the class of eligible employees under the Plan; or (iii) effect a change
relating to Incentive Stock Options granted hereunder which is inconsistent with
Section 422 of the Code or regulations issued thereunder.
No action taken by the Board under this Section, either with or without the
approval of the shareholders of the Company, may materially and adversely affect
any outstanding Incentive Stock Option or Stock Appreciation Right without the
consent of the holder hereof.
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(d) Application of Funds. The proceeds received by the Company from the
sale of Common Stock pursuant to Incentive Stock Options will be used for
general corporate purposes.
(e) Withholding Taxes. Whenever the Company proposes or is required to
issue or transfer shares of Common Stock to an optionee under the Plan, the
Company shall have the right to require the optionee to remit to the Company an
amount sufficient to satisfy all federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for such
shares. If such certificates have been delivered prior to the time a withholding
obligation arises, the Company shall have the right to require the optionee to
remit to the Company an amount sufficient to satisfy all federal, state or local
withholding tax requirements at the time such obligation arises and to withhold
from other amounts payable to the optionee, as compensation or otherwise, as
necessary. In lieu of requiring an optionee to make a payment to the Company in
an amount related to the withholding tax requirement, the Company may, in its
discretion, provide that at the optionee's election, the tax withholding
obligation shall be satisfied by the Company's withholding a portion of the
shares otherwise distributable to the optionee, such shares being valued at
their fair market value at the date of exercise, or by the optionee's delivering
to the Company a portion of the shares previously delivered by the Company, such
shares being valued at their fair market value as of the date of delivery of
such shares by the optionee to the Company.
An election pursuant to the preceding sentence must be made in writing
either (i) during the period beginning on the third business day following the
date of release of a quarterly or annual summary of earnings and ending on the
12th business day following such day, or (ii) at least six months prior to the
date the income is realized.
(f) Right to Terminate Employment. Nothing in the Plan or any agreement
entered into pursuant to the Plan confers upon any key employee or other
optionee the right to continue in the employment of the Company or affect any
right which the Company may have to terminate the employment of such key
employee or other optionee.
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(g) Rights as a Shareholder. No optionee shall have any right as a
shareholder unless and until certificates for shares of Common Stock are issued
to him or her.
(h) Leaves of Absence and Disability. The Board shall be entitled to make
such rules, regulations and determinations as it deems appropriate under the
Plan in respect of any leave of absence taken by or disability of any key
employee. Without limiting the generality of the foregoing, the Board shall be
entitled to determine (i) whether or not any such leave of absence shall
constitute a termination of employment within the meaning of the Plan, and (ii)
the impact, if any of any such leave of absence on awards under the Plan
theretofore made to any key employee who takes such leave of absence.
(i) Fair Market Value. Whenever the fair market value of Common Stock is to
be determined under the Plan as of a given date, such fair market value shall
be: (i) if the Common Stock is actively traded on the over-the-counter market,
the average of the bid and the asked price for the Common Stock at the close of
trading for the ten consecutive trading days immediately preceding such given
date; (ii) if the Common Stock is listed on a national securities exchange, the
average of the closing prices of the Common Stock on the Composite Tape for the
10 consecutive trading days immediately preceding such given date; and (iii) if
the Common Stock is neither actively traded on the over-the-counter market nor
listed on a national securities exchange, such value as the Board, in good
faith, shall determine.
Notwithstanding any provision of the Plan to the contrary, no determination
made with respect to the fair market value of Common Stock subject to an
Incentive Stock Option shall be inconsistent with Section 422 of the Code or
regulations thereunder.
(j) Notices. Every direction, revocation or notice authorized or required
by the Plan shall be deemed delivered to the Company: (i) on the date it is
personally delivered to the Secretary of the Company at its principal executive
offices, or (ii) three business days after it is sent by registered or certified
mail, postage prepaid, addressed to the Secretary at such offices, and shall be
deemed delivered
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to an optionee (x) on the date it is personally delivered to him or her, or (y)
three business days after it is sent by registered or certified mail, postage
prepaid, addressed to him or her at the last address shown for him or her on the
records of the Company.
(k) Applicable Law. All questions pertaining to the validity, construction
and administration of the Plan, and Incentive Stock Options and Stock
Appreciation Rights granted under the Plan shall be determined in conformity
with the laws of Delaware, to the extent not inconsistent with Section 422 of
the Code and regulations thereunder.
(l) Elimination of Fractional Shares. If under any provision of the Plan
which requires a computation of the number of shares of Common Stock subject to
an Incentive Stock Option or Stock Appreciation Right, the number so computed is
not a whole number of shares of Common Stock, such number of shares of Common
Stock shall be rounded down to the next whole number.
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XXXXXXX XXXXX NATIONAL BANCORP, INC.
1996 INCENTIVE STOCK OPTION AGREEMENT
An Incentive Stock Option ("Option") is hereby granted by Xxxxxxx Xxxxx National
Bancorp, Inc. (The "Company"), to the Key Employee named below ("Optionee"), for
and with respect to common stock of the Company, $0.01 par value per share
("Common Stock"), subject to the following terms and conditions:
1. Subject to the provisions set forth herein and the terms and conditions of
The Xxxxx National Bank Employee Incentive Stock Option Plan ("Plan"), the
terms of which are hereby incorporated by reference, and in consideration
of the agreements of Optionee herein provided, the Company hereby grants to
Optionee:
(a) an option intended to be an Incentive Stock Option within the meaning
of Section 422 of the Internal Revenue Code ("Code") as amended and
regulations issued thereunder to purchase from the Company the number
of shares of Common Stock, at the purchase price per share, and on the
schedule, all as set forth below; and
(b) Name of Optionee:
Number of Shares
Subject to Option: shares
Option Price per Share: $ 10.74
Date of Grant: November 19, 1996
Vesting Schedule: 33 1/3% at the end of each year
beginning on December 31, 1997 and ending on
December 31, 1999. However, in the event of a
Change in Control (as defined in the Employee
Incentive Stock Option Plan), all options granted
shall become immediately vested.
Commencement Date: Vested options may be exercised at any time
prior to the expiration date.
Expiration Date: November 18, 2006
2. The exercise of the Option is conditioned upon the acceptance by Optionee
of the terms hereof as evidenced by her/his execution of this agreement in
the space provided therefor at the end hereof and the return of an executed
copy to the Secretary of the Company.
If Optionee's employment with the Company is terminated for any reason,
other than for death or disability, the nonvested portion (if any) of the
Option shall expire on the date of termination of employment. The vested
portion of the Options shall expire three (3) months from the date of
termination of employment. If Optionee's employment with the Company is
terminated due to her/his disability or death, the Option shall expire on
the earlier of the first anniversary of such termination of employment and
the date the Option expires in accordance with its terms. During such
periods the Option may be exercised by Optionee with respect to the same
number of shares of Common Stock, in the same manner, and to the same
extent as if Optionee had continued in employment during such period and
the Option shall be canceled with respect to all remaining shares of Common
Stock; provided that in the event Optionee shall die at a time when the
Option, or a portion thereof, is exercisable by her/him, the Option shall
be exercisable in whole or in part during the applicable period set forth
herein by a legatee or legatees of the Option under Optionee's will, or by
her/his executors personal representatives or distributees, with respect to
the number of shares of Common Stock which Optionee could have purchased
hereunder on the date of her/his death and the Option shall be canceled
with respect to all remaining shares of Common Stock.
Written notice of an election to exercise any portion of the Option,
specifying the portion thereof being exercised and the exercise date, shall
be given by Optionee, or her/his personal representative in the event of
Optionee's death, (I) by delivering such notice at the principal executive
offices of the Company no later than the exercise date, or (ii) by mailing
such notice, postage prepaid, addressed to the Secretary of the Company at
the principal executive offices of the Company at least three business days
prior to the exercise date.
3. The Option may be exercised only by Optionee during her/his lifetime and
may not be transferred other than by will or the applicable laws of descent
or distribution. The Option shall not otherwise be transferred, assigned,
pledged or hypothecated for any purpose whatsoever and is not subject, in
whole or in part, to execution, attachment, or similar process. Any
attempted assignment, transfer, pledge or hypothecation or other
disposition of the Option, other than in accordance with the terms set
forth herein, shall be void and of no effect.
4. Neither Optionee nor any other person entitled to exercise the Option under
the terms hereof shall be, or have any of the rights or privileges of, a
shareholder of the Company in respect of any of the shares of Common Stock
issuable on exercise of the Option, unless and until the purchase price for
such shares shall have been paid in full.
5. In the event the Option shall be exercised in whole, this agreement shall
be surrendered to the Company for cancellation. In the event the Option
shall be exercised in part, or a change in the number or designation of the
Common Stock shall be made, this agreement shall be delivered by Optionee
to the Company for the purpose of making appropriate notation thereon, or
of otherwise reflecting, in such manner as the Company shall determine, the
partial exercise or the change in the number or designation of the Common
Stock.
6. The Option shall be exercised in accordance with such administrative
regulations as the Committee shall from time to time adopt to the extent
not inconsistent with Section 422 of the Code and regulations issued
thereunder.
7. The Option and this agreement shall be construed, administered and governed
in all respects under and by the laws of Delaware to the extent not
inconsistent with Section 422 of the Code and regulations issued
thereunder.
XXXXXXX XXXXX NATIONAL BANCORP,
INC.
By: ___________________________
The undersigned hereby accepts the foregoing Option and the terms and conditions
hereof.
---------------------------
Key Employee
