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HEARTLAND BANCSHARES, INC.
EXHIBIT 10.5
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HEARTLAND BANCSHARES, INC.
INCENTIVE STOCK OPTION AGREEMENT
THIS INCENTIVE STOCK OPTION AGREEMENT (this "Option Agreement") is made
and entered into as of the __________ day of ___________________, _______ by and
between HEARTLAND BANCSHARES, INC. (the "Company") and
_______________________________ ("Participant");
WITNESSETH:
The Board of Directors of the Company has adopted that certain 1999
Stock Option Plan, as amended (the "Plan"), a copy of which is attached hereto
as Exhibit "A" and incorporated herein by reference. Pursuant to the terms of
the Plan and that certain employment agreement dated February 25, 1999, by and
among the Company, Heartland National Bank (the "Bank") and Participant (the
"Employment Agreement"), the Board of Directors has selected Participant to
participate in the Plan and desires to grant to Participant certain incentive
stock options to purchase shares of the Company's authorized $.10 par value
common stock ("Stock"), subject to the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the mutual promises, agreements and
covenants contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. INCORPORATION OF PLAN PROVISIONS
This Option Agreement is subject to and is to be construed in all
respects in a manner which is consistent with the terms of the Plan, the
provisions of which are hereby incorporated by reference into this Option
Agreement. Unless specifically provided otherwise, all terms used in this Option
Agreement shall have the same meaning as in the Plan.
2. GRANT OF OPTION
Subject to the further terms and conditions of this Option Agreement,
Participant is hereby granted an option to purchase __________________
(___________) shares of Stock, effective as of the date first written above.
This stock option is intended to be an Incentive Stock Option as provided in ss.
422 of the Internal Revenue Code. In the event that there is a conflict between
the terms of the Employment Agreement and the terms of this Option Agreement,
the terms of this Option Agreement shall control.
3. FAIR MARKET VALUE OF STOCK
The Board of Directors has determined, in good faith and in its best
judgment, that the fair market value per share of Stock as of the date this
stock option is granted is $10.00.
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4. OPTION PRICE
The Board of Directors has determined that the price for each share of
Stock purchased under this Option Agreement shall be $10.00.
5. EXPIRATION OF OPTION
The option to acquire Stock pursuant to this Option Agreement shall
expire (to the extent not previously exercised) upon the first to occur of the
following:
(i) _________________________ (the tenth anniversary of
the date of grant of the option);
(ii) The date which is sixty days following the date which
Participant ceases his employment with the Company or any subsidiary of the
Company, otherwise than as a result of Participant's death or total disability;
(iii) The date which is the first anniversary of the date
upon which Participant ceases to be employed by the Company, or any subsidiary
of the Company, by reason of Participant's death or total disability; or
(iv) The date upon which Participant ceases his employment
with the Company or any subsidiary of the Company, for any reason (including
death or total disability) other than termination of the Employment Agreement by
the Company or the Bank without cause (as defined in the Employment Agreement),
with respect to any portion of this option that is not exercisable on such date.
6. EXERCISE OF OPTION
(a) Subject to subsection (b) of this Article 6, unless this
option earlier lapses or expires pursuant to Article 5 hereof, this option shall
be exercisable with respect to the full number of shares subject to this Option
Agreement as follows:
_____________________________________________
_____________________________________________
_____________________________________________
(b) Notwithstanding subsection (a) of this Article 6, in the event
the Employment Agreement is terminated by the Company or the Bank without cause
(as defined in the Employment Agreement), this option shall become fully
exercisable (to the extent not previously exercised).
(c) To the extent this option becomes exercisable in accordance
with the foregoing, Participant may exercise this stock option, in whole or in
part, from time to time. The option exercise price may be paid by Participant
either (i) in cash, (ii) by surrender of shares of Stock owned by Participant
for more than six months on the date of surrender and which have a fair market
value on the date of surrender equal to the aggregate exercise price of the
shares as to which such option shall be exercised, or (iii) shares of Stock
issued or issuable in connection with the exercise of this option.
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Notwithstanding the foregoing, Participant shall be permitted to pay
the exercise price of this option in shares of Stock pursuant to clauses (ii)
and (iii) above only if an organized trading market in the Stock exists on the
date of exercise of this option. In addition, any payment of the option exercise
price pursuant to the aforementioned clause (iii) shall be made only with the
prior consent of the Board of Directors of the Company.
For the purposes of this Article 6, an "organized trading market" shall
be deemed to exist on the date of exercise of the option if: (a) the Stock is
listed on a national securities exchange, or (b) the Stock has been quoted on
the National Association of Securities Dealers Automated Quotation System
("Nasdaq") for the 15 trading days preceding the date of exercise of the option,
or (c) bid and asked quotations for the Stock have been published by the
National Quotation Bureau or other recognized inter-dealer quotation publication
(other than Nasdaq) during 20 of the 30 trading days preceding the date of
exercise of the option. In the event that an organized trading market for the
Stock exists on the date of exercise of the option, Participant shall be given
credit against the option exercise price hereunder for such shares surrendered
equal to (i) if the Stock is listed on a national securities exchange or is
quoted on the Nasdaq National Market, the last actual sales transaction price
reported on the day preceding exercise of the option, or, if there were no
actual sales transactions reported for such date, on the date next preceding
such date on which actual sales transactions were reported, or (ii) if the Stock
is quoted on Nasdaq (other than the Nasdaq National Market) or by the National
Quotation Bureau or other recognized inter-dealer quotation publication, the
average of the high and low price quotations on the day preceding exercise of
the option, or, if there were no price quotations for such date, on the date
next preceding such date on which there were high and low price quotations for
the Stock.
7. MANNER OF EXERCISE
This stock option may be exercised by written notice to the Secretary
of the Company specifying the number of shares to be purchased and signed by
Participant or such other person who may be entitled to acquire Stock under this
Option Agreement. If any such notice is signed by a person other than
Participant, such person shall also provide such other information and
documentation as the Secretary of the Company may reasonably require to assume
that such person is entitled to acquire Stock under the terms of the Plan and
this Option Agreement. After receipt of the notice and any other assurances
requested by the Company under this Article 7, and upon receipt of the full
option price, the Company shall issue to the person giving notice of exercise
under this Option Agreement the number of shares specified in such notice.
8. RESTRICTIONS ON TRANSFERABILITY
The stock option granted hereunder shall not be transferable by
Participant otherwise than by will or by the laws of descent and distribution,
and such stock option shall be exercisable during Participant's lifetime only by
Participant.
9. FURTHER RESTRICTIONS ON EXERCISE AND SALE OF STOCK
The Board of Directors may, in its sole discretion, prohibit this
Option from being exercised
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by the holder hereof in the event that (i) there is not on file with the
Securities and Exchange Commission an effective Registration Statement covering
the option shares on Form S-8, or similar form promulgated by the Securities and
Exchange Commission, and (ii) the Board is not reasonably satisfied that the
offer and sale of such option shares to the option holder will be exempt in fact
from the registration requirements of the Securities Act of 1933, as amended,
and such state securities laws as shall be applicable. The Board of Directors
may condition the exercise of this Option upon its receipt of such
representations, factual assurances and legal opinions as it shall deem
necessary to determine and document the availability of any such exemption and
may further condition such exercise upon such undertakings by the holder hereof
or such restriction upon the transferability of the shares to be acquired
hereunder as it shall determine to be necessary to effectuate and protect the
claim to any such exemption.
Nothing contained in this section shall be construed to obligate the
Company to, or to grant any right to the holder of this Option to, cause the
Company to file any Registration Statement; or, if any such Registration
Statement is filed, to prepare any additional prospectus, to file any amendments
to the Registration Statement, or to continue said Registration Statement in
effect.
10. REORGANIZATION AND RECAPITALIZATION
In the event that dividends are payable in Common Stock of the Company
or in the event there are splits, subdivisions or combinations of shares of
Common Stock of the Company, the number of Shares available under the Plan shall
be increased or decreased proportionately, as the case may be, and the number of
Shares deliverable upon the exercise thereafter of any Option theretofore
granted shall be increased or decreased proportionately, as the case may be,
without change in the aggregate purchase price.
In case the Company is merged or consolidated with another corporation
and the Company is not the surviving corporation, or in case the property or
stock of the Company is acquired by another corporation, or in case of a
separation, reorganization, recapitalization or liquidation of the Company, the
Board of Directors of the Company, or the Board of Directors of any corporation
assuming the obligations of the Company hereunder, shall either (i) make
appropriate provision for the protection of any outstanding Options by the
substitution on an equitable basis of appropriate stock of the Company, or of
the merged, consolidated or otherwise reorganized corporation which will be
issuable in respect to the shares of Common Stock of the Company, provided only
that the excess of the aggregate fair market value of the shares subject to
option immediately after such substitution over the purchase price thereof is
not more than the excess of the aggregate fair market value of the shares
subject to option immediately before such substitution over the purchase price
thereof, or (ii) upon written notice to the Participant provide that the Option
(including the shares not then exercisable) must be exercised within sixty days
of the date of such notice or it will be terminated.
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IN WITNESS WHEREOF, the Company has caused this Option Agreement to be
executed by a member of the Board of Directors or a duly authorized officer of
the Company, and Participant has executed this Option Agreement as of the date
first written above.
HEARTLAND BANCSHARES, INC.
By:
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Name:
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Title:
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"PARTICIPANT"
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NAME:
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