EXHIBIT 99.3
STOCK OPTION AGREEMENT
FOR INCENTIVE STOCK OPTIONS UNDER SECTION 422
OF THE INTERNAL REVENUE CODE
PURSUANT TO THE
PATAPSCO BANCORP, INC.
1996 STOCK OPTION AND INCENTIVE PLAN
STOCK OPTION for a total of _________ shares of Common Stock, par value
$.01 per share, of Patapsco 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 Patapsco
Bancorp, Inc. 1996 Stock Option and Incentive 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%
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*/ 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
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with provisions of the Plan as follows:
(i) Schedule of rights to exercise.
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Percentage of Total Shares
Years of Continuous Employment Subject to Option Which May
After Date of Grant of Option Be Exercised
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Upon Grant 0%
1 year but less than 2 years 20%
2 years but less than 3 years 40%
3 years but less than 4 years 60%
4 years but less than 5 years 80%
5 years or More 100%
__________________________
*/ 110% 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 9
(ii) Method of Exercise. This Option shall be exercisable by a written
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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. 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
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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
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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.
4. Non-transferability of Option. This Option may not be transferred in
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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.
ISO Agreement
Page 10
5. Term of Option. This Option may not be exercisable for more than
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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.
PATAPSCO BANCORP, INC.
1996 STOCK OPTION AND INCENTIVE 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 common stock of the Company on the date of
grant of this Option.
INCENTIVE STOCK OPTION EXERCISE FORM
PURSUANT TO THE
PATAPSCO BANCORP, INC.
1996 STOCK OPTION AND INCENTIVE PLAN
__________________________
Date
Treasurer
Patapsco Bancorp, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Patapsco Bancorp, Inc.
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1996 Stock Option and Incentive Plan
Dear Sir:
The undersigned elects to exercise the Incentive Stock Option to purchase
________ shares, par value $.01 per share, of Common Stock of Patapsco 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
______ ____ shares of Common Stock, valued at $____ per share
$ Total
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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,
_______________________________