Exhibit 10(12)
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EMPLOYEE INCENTIVE STOCK OPTION AGREEMENT
UNDER THE RIVER VALLEY BANCORP STOCK OPTION PLAN
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You are hereby granted the option to purchase a total of ___ shares of the
Common Stock, without par value ("Common Stock"), of River Valley Bancorp
("RVB") over the next ten years pursuant to RVB's Stock Option Plan (the
"Plan"), on the following terms and conditions:
1. The purchase price of the shares of Common Stock subject to this option
is $___ per share. You must pay this purchase price in cash at the time this
option is exercised; provided, however that, with the approval of RVB's Stock
Compensation Committee (the "Committee"), beginning on and after three years
following the date hereof, you may exercise your option by tendering to RVB
whole shares of RVB's Common Stock owned by you, or any combination of whole
shares of RVB's Common Stock owned by you and cash, having a fair market value
equal to the cash exercise price of the shares with respect to which the option
is exercised by you. For this purpose, any shares so tendered shall be deemed to
have a fair market value equal to the mean between the highest and lowest quoted
selling prices for the shares on the date of exercise of the option (or if there
were no sales on such date the weighted average of the means between the highest
and lowest quoted selling prices on the nearest date before and the nearest date
after the date of exercise of the option), as reported in The Wall Street
Journal or a similar publication selected by the Committee. To exercise this
option, you must send written notice to the RVB's Secretary at the address noted
in Section 12 hereof. Such notice shall state the number of shares in respect of
which the option is being exercised, shall identify the option exercised as an
incentive stock option, and shall be signed by the person or persons so
exercising the option. Such notice shall be accompanied by payment of the full
cash option price for such shares or, if the Committee has authorized the use of
the stock swap feature provided for above, such notice shall be followed as soon
as practicable by the delivery of the option price for such shares. Certificates
evidencing shares of Common Stock will not be delivered to you until payment has
been made. Under certain circumstances, the Plan permits you to deliver a notice
to your broker to deliver the cash to RVB upon the receipt of such cash from the
sale of RVB Common Stock. Contact the Secretary of RVB for further information
about this procedure if you are interested in it.
2. The term of this option (the "Option Term") shall be for a period of ten
years from the date of this letter, subject to earlier termination as provided
in paragraphs 3 and 4 hereof. Except as otherwise provided below, the option
shall become exercisable with respect to the first 20% of the total number of
shares covered hereby on the first anniversary of the date of this letter, and
the option shall become exercisable with respect to the second, third, fourth
and fifth 20% of such shares on the second, third, fourth and fifth
anniversaries, respectively, of the date of this letter. When the option becomes
exercisable with respect to any shares of Common
Stock, those shares may be purchased at any time, or from time to time, in whole
or in part, until the Option Term expires, but in no case may fewer than 100
such shares be purchased at any one time, except to purchase a residue of fewer
than 100 shares. Notwithstanding the foregoing or any other provision herein,
the option may not be exercised during the first six months of the Option Term.
3. If you cease to be an employee of RVB or any of its subsidiaries for any
reason other than retirement, permanent and total disability, or death, this
option shall forthwith terminate. If your employment by RVB or any of its
subsidiaries is terminated by reason of retirement (which means such termination
of employment as shall entitle you to early or normal retirement benefits under
any then existing pension plan of RVB or one of its subsidiaries), you may
exercise this option to the extent it was exercisable at the date of your
retirement in whole or in part within three years after such retirement, but not
later than the date upon which this option would otherwise expire; provided,
however, that if you are a director or a director emeritus of RVB at the time of
your retirement, you may exercise this option in whole or in part until the
later of (a) three years after your date of retirement or (b) six months after
you service as a director or director emeritus terminates, but not later than
the date upon which this option would otherwise expire. If you cease to be an
employee of RVB or any of its subsidiaries because of your permanent and total
disability, you may exercise this option in whole or in part at any time within
one year after such termination of employment by reason of such disability, but
not later than the date upon which this option would otherwise expire.
4. If you die while employed by RVB or any of its subsidiaries, within
three years after the termination of your employment because of retirement (of,
if later, six months following your termination of service as a director or
director emeritus of RVB), or within one year after the termination of your
employment because of permanent and total disability, this option may be
exercised in whole or in part by your executor, administrator, or estate
beneficiaries at any time within one (1) year after the date of your death but
not later than the date upon which this option would otherwise expire.
5. This option is non-transferable otherwise than by will or the laws of
descent and distribution or pursuant to a qualified domestic relations order. It
may be exercised only by you or your guardian, if any, or, if you die, by your
executor, administrator, or beneficiaries of your estate who are entitled to
your option.
6. All rights to exercise this option will expire, in any event, ten years
from the date of this letter.
7. Certificates evidencing shares issued upon exercise of this option may
bear a legend setting forth among other things such restrictions on the
disposition or transfer of the shares of RVB as RVB may deem consistent with
applicable federal and state laws.
8. Nothing in this option shall restrict the right of RVB or its
subsidiaries to terminate your employment at any time with or without cause.
9. This option is subject to all the terms, provisions and conditions of
the Plan, which is incorporated herein by reference, and to such regulations as
may from time to time be adopted by the Committee. A copy of the Plan has been
furnished to you and an additional copy may be obtained from RVB. In the event
of any conflict between the provisions of the Plan and the provisions of this
letter, the terms, conditions and provisions of the Plan shall control, and this
letter shall be deemed to be modified accordingly.
10. This Stock Option Agreement is intended to grant an option which meets
all of the requirements of incentive stock options as defined in Section 422A of
the Internal Revenue Code. Subject to and upon the terms, conditions and
provisions of the Plan, each and every provision of this Agreement shall be
administered, construed and interpreted so that the option granted herein shall
so qualify as an incentive stock option. Each provision of this Stock Option
Agreement which would prevent this option from qualifying as an incentive stock
option, if any, shall be void.
11. You agree to advise RVB immediately upon any sale or transfer of any
shares of Common Stock received upon exercise of this option to the extent such
sale or transfer takes place prior to the later of (a) two years from the date
of grant or (b) one year from the date of exercise of this option.
12. All notices by you to RVB and your exercise of the option herein
granted, shall be addressed to River Valley Bancorp, 000 Xxxxxx Xxxxx, Xxxxxxx,
Xxxxxxx 00000, Attention: Secretary, or such other address as RVB may, from time
to time, specify.
13. This option may not be exercised until RVB has been advised by counsel
that all other applicable legal requirements have been met.
Very truly yours,
RIVER VALLEY BANCORP
By:
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Xxxxxxx X. Xxxxxxxxx, President and
Chief Executive Officer
Accepted on the date above written
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