STOCK OPTION AGREEMENT
FOR INCENTIVE STOCK OPTIONS UNDER SECTION 422
OF THE INTERNAL REVENUE CODE
PURSUANT TO THE
NEWSOUTH BANCORP, INC.
1997 STOCK OPTION PLAN
STOCK OPTION for a total of _____ shares of Common Stock,
par value $.01 per share, of NewSouth Bancorp, 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 (the "Code"), 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
NewSouth Bancorp, Inc. 1997 Stock Option Plan (the "Plan") which
was adopted by the Company and which is incorporated by
reference herein, receipt of which is hereby acknowledged.
1. Option Price. The option price is $_____ for each
share, being 100% of the fair market value, as determined by the
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.
------------------------------
Percentage of Total Shares
Years of Continuous Employment Subject to Option Which May
After Date of Grant of Option Be Exercised
------------------------------ ---------------------------
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 __%
5 years or more __%
__________
*/ 100% 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.
ISO Agreement
Page 2
(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 combination of cash and Common Stock as the
Optionee elects. In addition, the Optionee may elect to pay for
all or part of the exercise price of the shares by having the
Company withhold a number of shares having a fair market value
equal to the exercise price. 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. 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 person exercising this Option to make any representation and
warranty to the Company as may be required by any applicable law
or regulation.
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.
ISO Agreement
Page 3
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. 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 ten 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.
NEWSOUTH BANCORP, INC.
1997 STOCK OPTION PLAN COMMITTEE
By _____________________________
_____________________
Date of Grant Attest: ___________________ (Seal)
__________
**/ Five years in the case of an Optionee who owns shares
representing more than 10% of the outstanding stock of the
Company on the date of grant of this Option.
INCENTIVE STOCK OPTION EXERCISE FORM
PURSUANT TO THE
NEWSOUTH BANCORP, INC.
1997 STOCK OPTION PLAN
____________
Date
Treasurer
NewSouth Bancorp, Inc.
0000 Xxxxxxxx Xxxxxx, X.X. Box 2047
Washington, North Carolina 27889
Re: NewSouth Bancorp, Inc. 1997 Stock Option Plan
---------------------------------------------
Dear Sir:
The undersigned elects to exercise the Incentive Stock
Option to purchase _____ shares, par value $.01, of Common Stock
of NewSouth Bancorp, Inc. under and pursuant to a Stock Option
Agreement dated __________, 199__.
Delivered herewith is a certified or bank cashier's or
teller's check and/or shares of Common Stock, valued at the fair
market value of the stock on the date of exercise, as set forth
below.
$_____ of cash or check
$_____ in the form of _____ shares of Common Stock,
valued at $_____ per share
$_____ in the form of the Company's withholding of
_____ shares of Common Stock, valued at $_____
per share, that are subject to this Option
$ Total
=====
The name or names to be on the stock certificate or
certificates and the address and Social Security Number of such
person(s) is as follows:
Name __________________________________________________________
Address _______________________________________________________
Social Security Number ________________________________________
Very truly yours,
________________________
