EXHIBIT 10.12
XXXXXXX MERCHANTS BANCSHARES, INC.
INCENTIVE STOCK OPTION AGREEMENT
UNDER STOCK OPTION PLAN OF THE COMPANY
This agreement made on _______________, between Xxxxxxx Merchants
Bancshares, Inc., a Maine corporation having its principal office in Bangor,
Maine, (hereinafter called the "Company") and ____________ , (the "Optionee").
WITNESSETH
WHEREAS, the Company at its Annual Meeting on May 27, 1993, adopted a 1993
Stock Option plan (hereinafter called the "Plan"); and
WHEREAS, the Plan was amended at the Annual Meetings of the Company on
April 25, 1995 and April 24, 1997; and
WHEREAS, the Optionee is now employed by the Company or by a subsidiary
corporation thereof; and
WHEREAS, the Company has sufficient authorized but unissued shares of
Common Stock, par value $1 per share, to satisfy all options which may be
granted pursuant to the Plan, and
WHEREAS, Optionee represents that after the grant of the option herein
evidenced, he/she will not own stock (including the stock subject to such
option) possessing more than ten percent (10%) of the total combined voting
power of the Company (ownership being determined as set forth in Section 424(d)
of the Internal Revenue Code of 1986, as amended, (hereafter the "Code"), and
WHEREAS, the Compensation Committee of the Company has determined that on
the date as of which the option was granted, ________________________, the fair
market value of the Common Stock was $_____ per share.
NOW THEREFORE, pursuant to the Plan (the terms and conditions of which are
expressly made a part hereof by reference thereto) and as an incentive and to
encourage stock ownership by the Optionee, and in consideration for the Optionee
continuing in the service of the Company or a subsidiary corporation of the
Company through __________________, and for other valuable consideration,
receipt of which is hereby acknowledged:
1. The Company hereby evidences its grant to the Optionee as a matter of
separate agreement and not in lieu of salary or any other compensation for
services, of the right and option (hereinafter called the "Option") to purchase
all or any part of an aggregate of shares of Common Stock on the terms and
conditions herein set forth.
2. The purchase price of the shares of Common Stock subject to the Option
shall be $_____ per share, which is not less than one hundred percent (100%) of
the fair market value of such Stock on the date of this Agreement. The effective
date of granting of the Option is ______________.
3. Subject to the provisions of Paragraphs 4, 5, 6, 9 and 11 hereof, the
Option shall be exercisable as to all or any part of the shares to which it
relates at any time after _________________, and prior to May 26, 2003;
provided, however, that each exercise must be for at least fifty (50) shares and
the aggregate fair market value (determined at the time of grant of this Option)
of stock exercisable by the Optionee shall not in any calendar year exceed One
Hundred Thousand Dollars ($100,000).
4. The Option is not exercisable until ______________, and may not be
exercised after May 26, 2003.
5. The Option is not transferable by the Optionee otherwise than by will or
the laws of descent and distribution, and is exercisable during his/her lifetime
only by him/her.
6. Notwithstanding the provisions of Paragraphs 3 and 4 above, the Option
may not be exercised by the Optionee unless at all times during a period
beginning with the effective date of granting the option, and ending on the day
three (3) months before the date of any proposed exercise, the
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Optionee was an employee of either the Company, a parent or subsidiary
corporation of the Company, or of a corporation (or a parent or a subsidiary
corporation thereof) issuing or assuming the Option in a transaction to which
Section 424(a) of the Code applies.
7. Any exercise of this Option by the Optionee shall be effected by
delivering to the office of the Company, Bangor, Maine, written notice stating
the number of shares (not fewer than fifty (50) shares nor totaling more than a
value of One Hundred Thousand Dollars ($100,000) in any calendar year) with
respect to which the Option is being exercised, and by paying or causing to be
paid to the Company the full purchase price of such shares by certified or
cashier's check. The Company shall issue certificates for such shares in such
denominations as the Optionee may direct, and shall deliver such certificates in
accordance with any reasonable instructions contained in the notice.
8. Optionee agrees that each and any exercise by him/her of the Option
hereby granted shall constitute a representation that the shares acquired upon
such exercise are being purchased for investment and not with a view to or for
their sale or in connection with their distribution. Optionee agrees that
certificates representing shares so purchased may bear a legend restricting
transfer thereof.
9. If the Optionee's employment is terminated for reason of disability,
such rights may be exercised within one (1) year from the date of termination.
If Optionee dies while employed or while serving on the Board of Directors of
the Company or Xxxxxxx Merchants Bank, or within three (3) months after ceasing
to be an employee or Board member, the Option shall expire one (1) year after
the date of death unless by its terms it expires sooner. During such period
after such death, the Option may be exercised, to the extent it could have been
exercised on the date of death, by the person or persons to whom the Optionee's
rights under the Option shall pass by will or by the laws of descent and
distribution.
Xxxxxxx Merchants Bancshares, Inc.
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10. The Company shall at all times during the term of the Option reserve
and keep available for issue such number of shares of its authorized and
unissued Common Stock as will be sufficient to satisfy the requirements of this
Option Agreement, shall pay all issue taxes (if any) with respect to the issue
of shares pursuant hereto and all other fees and expenses necessarily incurred
by the Company in connection therewith and will from time to time use its best
efforts to comply with all laws and regulations which, in the opinion of counsel
for the Company, shall be applicable thereto. The Optionee shall pay any and all
state and federal income taxes imposed on Optionee by virtue of the exercise of
this Option.
11. A. Subject to any provisions in the Articles of Incorporation of the
Company to the contrary, if the outstanding shares of the Company's Common Stock
are increased, decreased or exchanged for a different number or kind of shares
or securities of the Company as a result of a stock dividend, stock split,
reserve stock split, reclassification or other recapitalization, an appropriate
and proportionate adjustment shall be made in the number and kind of shares for
which options may be granted under this Option. A corresponding adjustment
changing the number or kind of shares allocated to unexercised portions of this
Option granted prior to any such change, shall likewise be made. Any such
adjustment in the outstanding Options shall be made without change in the
aggregate purchase price applicable to the unexercised portion of the Option but
with a corresponding adjustment in the price for each share or other unit of any
security covered by this Option.
Adjustments under this Section 11A or under Section 11B hereof shall be
made by the Compensation Committee, whose determinations as to what adjustments
shall be made, and the extent thereof, shall be final, binding and conclusive.
No fractional shares of stock shall be sold or issued under this Option or
pursuant to any such adjustment.
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B. Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving corporation,
or upon the sale of substantially all of the property or more than eighty
percent (80%) of the then outstanding stock of the Company to another
corporation, this Option shall terminate unless provision be made in writing in
connection with such transaction for assumption of this Option, or the
substitution for this Option of new Options covering the stock of a successor
employer corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to number and kind of shares and prices, in which event this
Option shall continue in the manner and under the terms so provided. If this
Option is terminated in accordance with the preceding sentence as a result of a
reorganization, merger or consolidation of the Company or the sale of
substantially all of the property or more than eighty percent (80%) of the then
outstanding stock of the Company, the Company shall, subject to any restrictions
contained in its Articles of Incorporation or in any financing agreement,
indenture or other agreement to which the Company is now or may then be a party
or by which the Company is or may be bound, pay to the Optionee an amount equal
to (i) the number of shares as to which this Option had not yet become
exercisable on the date of termination, times (ii) the difference between the
exercise price per share under such Option and fair market value of each share
of the Company's Common Stock on the date of termination.
12. The Optionee agrees that he/she will remain in the employ of the
Company or, at the election of the Company from time to time, of one of its
subsidiaries, for a period of at least one (1) year from the date hereof and
that he/she will, during such employment, serve the Company or such subsidiary
in good faith and use his/her best efforts to promote its interests, subject to
vacations, sick leave and other excused absences in accordance with the
Company's regular policies. Such employment,
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unless otherwise agreed in specific cases, shall be at the pleasure of the
Company or such subsidiary and shall be at such rate of base compensation as the
Company or such subsidiary shall reasonably determine from time to time. If,
during such one-year period, the Employee shall terminate his/her employment
without the consent or approval of the Company or such subsidiary, or shall
otherwise violate the provisions of this Paragraph 12, the Option shall, to the
extent not theretofore exercised, forthwith terminate. This Option Agreement
does not confer on the Optionee any right to continue in the employ of the
Company or of any such subsidiary corporation, nor does it interfere in any way
with (a) any right which the Company or any such subsidiary corporation may have
to terminate the employment or alter the duties of the Optionee at any time, or
(b) any right which the Optionee may have to terminate his/her employment at any
time.
13. As used herein the term "subsidiary corporation" shall mean any present
or future subsidiary corporation of the Company coming within the definition of
subsidiary corporation contained in Section 424(f) of the Code.
14. It shall be a condition to the Optionee's right to purchase shares
hereunder that the Company may, in its discretion, require that in the opinion
of counsel for the Company the proposed purchase shall be exempt from
registration under the Securities Act of 1933, as amended, and the Optionee
shall have made such undertakings and agreements with the Company as the Company
may reasonably require, and that such other steps, if any, as counsel for the
Company shall deem necessary to comply with any law, rule or regulation
applicable to the issue of such shares by the Company shall have been taken by
the Company or the Optionee, or both. The certificates representing the shares
purchased under this Option may contain such legends as counsel for the Company
shall deem necessary to comply with the applicable law, rule or regulation.
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15. This Option is issued pursuant to the terms of the Plan. This Option
does not set forth all of the terms and conditions of the Plan, which are
incorporated herein by reference. Copies of the Plan may be obtained upon
written request without charge from the Company.
16. This Option is [not] intended to be treated as an Incentive Stock
Option under Section 422 of the Code. The Optionee agrees to notify the Company
in writing within thirty (30) days of the disposition of one (1) or more shares
of Stock which were transferred to him/her pursuant to his/her exercise of this
Option if such disposition occurs within two (2) years from the date of this
Option or within one (1) year after the transfer of such shares to him/her.
17. This Option is effective as of the date granted.
18. This Option Agreement shall be governed by the laws of the State of
Maine.
IN WITNESS WHEREOF, the Company has caused this Option Agreement to be duly
executed by its President or by the Chairman of its Board of Directors, each
thereunto duly authorized by the Board of Directors of the Company.
Xxxxxxx Merchants Bancshares, Inc.
By
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[President] [Chairman]
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Optionee
