EXHIBIT 99.3
MAGIC VALLEY BANK
EMPLOYEE STOCK OPTION AGREEMENT
(AS ADOPTED BY SNAKE RIVER BANCORP, INC.)
TERMS AND CONDITIONS
1. EXERCISE OF OPTION.
Subject to the limitations stated in Section 2, Optionee may exercise
the Option with respect to all, or from time to time with respect to any part of
the Vested Option Shares during the Option Period applicable to such Vested
Option Shares by delivery to the Bank of:
A. a written notice in a form acceptable to the Bank specifying
the number of whole Option Shares being purchased; and
B. cash or collected thuds; or a written statement of the Optionee
requesting or acknowledging cancellation of Vested Option Shares upon issuance
of the Option Shares exercised; or a combination thereof with an aggregate Fair
Market Value equal to the sum of (i) the Exercise Price for the Option Shares
exercised and (ii) the Withholding Taxes, if any, payable by the Bank incident
to the exercise.
2. LIMITATIONS ON EXERCISE.
Notwithstanding any provision of this Section or any other Section of
this Agreement to the contrary, following the end of each Option Period the
Option shall expire and no longer be exercisable with respect to the Option
Shares to which such Option Period applied. Subject to the previous sentence,
the exercisability of the Option during each Option Period shall be subject to
the following limitations:
(A) NUMBER OF SHARES. Not less than twenty (20) Option Shares may be
purchased at any one time upon exercise of the Option unless the number of
shares purchased is the total number which remain to be purchased under this
Option.
(B) TERMINATION FOR CAUSE. If the Optionee's employment or affiliation
with the Bank is terminated for cause, the Option shall automatically terminate
in its entirety upon such termination; provided, however, that the Committee
may, in its sole discretion, within thirty (30) days of such termination,
reinstate the Option by giving written notice of such reinstatement to the
Optionee.
In the event of such reinstatement, the Optionee may exercise the Option
only to such extent, for such time, and upon such terms and conditions as if the
Optionee had ceased to be employed by or affiliated with the Bank upon the date
of such termination for a reason other than cause, disability or death. In the
case of an employee, termination for cause shall include, but shall not be
limited to, termination for malfeasance or gross malfeasance in the performance
of duties or conviction of illegal activity in connection therewith and, in any
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event, the determination of the Committee with respect thereto shall be final
and conclusive. If Optionee is a Director, termination for cause shall include
removal pursuant to the exercise of regulatory authority by the office of the
Comptroller of the Currency, Federal Reserve Board or other bank supervisory
agency.
(C) DEATH OF OPTIONEE. If an Optionee dies while employed by or
affiliated with the Bank or during the thirty (30) day period referred to in
Section 2(c) hereof or the one (1) year period referred to in Section 2(d)
hereof; the Option shall expire on the expiration date specified for the Option
at the time of its grant, or one (1) year after the date of such death,
whichever is earlier. After such death, but before such expiration, subject to
the terms and provisions of the Plan and this Agreement, the person of persons
to whom such Optionee's rights under the Option shall have passed by will or by
the applicable laws of descent and distribution, or the executor or
administrator of the Optionee's estate, shall have the right to exercise the
Option to the extent that increments, if any, had become exercisable as of the
date on which the Optionee died.
(D) DISABILITY OF OPTIONEE. If an Optionee is disabled while employed by
or affiliated with the Bank or during the thirty (30) day period referred to in
Section 2(e) hereof, the Option shall expire on the expiration date specified
for the Stock Option at the time of its grant, or one (1) year after the date
such disability occurred, whichever is earlier. After such disability occurs,
but before such expiration, the Optionee or the guardian or conservator of the
Optionee's estate, as duly appointed by a court of competent jurisdiction, shall
have the right to exercise the Option to the extent that increments, if any, had
become exercisable as of the date on which the Optionee became disabled or
ceased to be employed by or affiliated with the Bank as a result of the
disability. The Optionee shall be deemed to be "disabled" if it shall appear to
the Board of Directors, upon written certification delivered to the Bank of a
qualified licensed physician, that the Optionee had become disabled within the
meaning of Section 422(c)(6) of the Internal Revenue Code.
(E) CESSATION OF AFFILIATION. Except as provided in Section (2)(b)
hereof; if for any reason other than disability or death, the Optionee ceased to
be employed by or affiliated with the Bank, the Option shall expire not later
than thirty (30) days thereafter. During such period after cessation of
affiliation, the Option shall be exercisable only as to those increments, in
any, which had become exercisable as of the date on which such Optionee ceased
to be affiliated with the Bank, and the Option or increments which had not
become exercisable as of such date shall expire and terminate automatically on
such date. Except as provided in Section 2(b) hereof, if the Optionee ceases to
be employed by or affiliated with the Bank by ▇▇▇▇▇ of disability, such
Optionee's Stock Options shall expire not later than one (1) year thereafter.
During such period after cessation of affiliation, such Stock Options shall be
exercisable only as to those increments, if any, which had become exercisable as
of the date on which such Optionee ceased to be affiliated with the Bank, and
the Stock Option or increment which had not become exercisable as of such date
shall expire and terminate automatically on such date.
(F) TERMINATING EVENTS. For purposes of this Section 2(f), a Terminating
Event is defined as dissolution and liquidation of the Bank, consummation of a
plan of reorganization, merger or consolidation of the Bank with one or more
banks or corporations, as a result of which the Bank is not the surviving
entity, or any other transaction involving the Bank where there is a change in
ownership of at least twenty-five percent (25%), except as may result from a
transfer of shares
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to another corporation in exchange for at least eighty percent (80%) control of
that corporation. The Committee shall notify each Optionee of the pendency of
the Terminating Event at least thirty (30) days prior to the occurrence of the
event.
Upon delivery to the Optionee of notice of a Terminating Event, an
Option granted prior to the Terminating Event shall be exercisable in full
notwithstanding the provisions of Section 3, subject to earlier expiration or
termination of such Option.
Upon the date thirty (30) days after delivery of such notice, any Option
or portion thereof not exercised shall terminate, unless provision is made in
connection with the Terminating Event for assumption of Options covering stock
of a successor employer bank or corporation, or a parent or subsidiary
corporation thereof, with appropriate adjustments as to number and kind of
shares and prices.
3. VESTING AND EXERCISE.
With respect to each increment of Option Shares, the Option shall vest
and be exercisable by the Optionee for a period of five (5) years (the "Option
Period") from the Vesting Date applicable to each such increment of Option
Shares.
4. BANK'S RIGHTS.
This Agreement is not an employment contract. Nothing in this Agreement
shall affect in any manner whatsoever the right or power of the Bank to
terminate Optionee's employment, if Optionee is then an employee, for any
reason.
5. CHANGES TO OUTSTANDING SECURITIES.
(a) If the outstanding shares of Common Stock of the Dank are increased
or decreased, or changed into or exchanged for a different number or kind of
shares or securities of the Bank, through a reorganization, merger,
recapitalization, reclassification, stock split, stock dividend, stock
consolidation, or otherwise, an appropriate and proportionate adjustment shall
be made in the number and kind of shares as to which the Option may be granted.
Such adjustments shall be made without change in the total price applicable to
the unexercised portion of the Option, but with a corresponding adjustment in
the price for each Option Share subject to the Option. Adjustments under this
Section shall be made by the Committee, whose determination as to what
adjustments shall be made, and the extent thereof; shall be final and
conclusive.
(b) No right to purchase fractional shares shall result from any
adjustment in Options pursuant to this Section 5, In case of any such
adjustment, the shares subject to the Option shall be rounded down to the
nearest whole share.
(c) Notice of any adjustment shall be given by the Bank to the Optionee
and such adjustment (whether or not notice is given) shall be effective and
binding for all purposes.
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6. SHAREHOLDER'S RIGHTS.
Neither Optionee nor any person entitled to exercise Optionee's rights
in the event of Optionee's death shall have any of the rights of a shareholder
with respect to the Option Shares except to the extent that certificates for
such shares shall have been issued upon the exercise of the Option.
7. DEFINITIONS.
(a) Capitalized terms not otherwise defined herein shall have the
definitions given such terms by the Plan as in effect on the date of execution
of the Stock Option Agreement.
(b) The term "Fair Market Value" shall mean, with respect to shares of
Bank Common Stock the Fair Market Value per Share (as defined in the Plan as in
effect on the Grant Date), as of the date of exercise of the Option; and, with
respect to canceled Vested Option Shuns, the excess of the Fair Market Value per
Share over the Exercise Price of each shares.
(c) The term "Withholding Taxes" shall mean all income taxes, FICA,
FUTA or similar employment taxes, and any other taxes or assessments payable by
the Bank as the result of an exercise of this Option.
8. PARENTS AND SUBSIDIARIES.
For purposes of this Agreement employment with the Bank shall include
employment with any parent and any subsidiary of the Bank.
9. FURTHER INSTRUMENTS.
The parties agree to execute such further instruments and to take such
further actions as reasonably may be required to carry out the intent of this
Agreement.
10. NOTICES.
Any notice required or permitted under this Agreement shall be in
writing and shall be sent by receipted mail, postage prepaid, addressed to the
Bank at its principal place of business and to Optionee at the address shown in
this Agreement or at any other address Optionee indicates by notice to the Bank.
11. NONTRANSFERABILITY OF OPTION.
The Option may not be sold, transferred, pledged, assisted, or otherwise
alienated or hypothecated, other than by will or by the laws of descent and
distribution or pursuant to a qualified domestic relations order (us defined in
the Code or ERISA). The Option shall be exercisable during the Optionee's
lifetime only by the Optionee.
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12. ASSIGNABILITY.
This Agreement shall be binding upon and inure to the benefit of the
successors and assigns of the Bank and, subject to the restrictions on transfer
set forth in this Agreement, shall be binding upon and inure to the benefit of
Optionee and Optionee's heirs, executors, administrators, successors and
assigns. The Bank may assign its rights and delegate its duties.
13. ENTIRE AGREEMENT.
This Agreement, including the Plan and any exhibits hereto, constitutes
the entire agreement of the parties with respect to the subject matter hereof.
In the event of a conflict between the Plan and this Agreement the Plan shall
prevail.
14. AMENDMENTS.
No representation or promise relating to this Agreement, and no
amendment of this Agreement, shall be binding unless in writing and signed by
all of the parties.
15. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the
laws (excluding the conflict of laws provisions) of the State of Idaho as
applied to agreements to which an Idaho corporation is a party.
16. TAXES.
Any Withholding Taxes payable by the Bank as a result of an exercise of
this Option shall be the liability of the Optionee, and Optionee shall pay such
Withholding Taxes in accordance with Sections 1 and 2 of this Agreement.
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