Exhibit 10.3
COLUMBIA BANCORP
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____________, 2000
Incentive Stock Option Agreement
Option Number: _________
STOCK OPTION (the "Option") for a total of _________ shares of common
stock, par value $0.01 per share (the "Common Stock"), of Columbia Bancorp (the
Company"), is hereby granted to ____________ (the "Optionee") at the price set
forth in Section 2, effective as of the "Effective Date," as defined in the Plan
and Agreement to Merge, by and between Company and Suburban Bancshares, Inc.
("Suburban Bancshares"), dated September 28, 1999, as amended (the "Merger
Agreement"). The Option is granted pursuant to the Suburban Bancshares, Inc.
1997 Stock Option Plan, as assumed and amended by the Company (the "Plan"), and
is subject to the terms and provisions of this Agreement and the Plan, the terms
of which are incorporated in this Agreement by reference. The Option is intended
to qualify as an incentive stock option under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code").
1. Option Price. The price at which shares of Common Stock may be
purchased under this Agreement is ___________ for each share.
This Option is granted, pursuant to the Merger Agreement, in
substitution for the outstanding incentive stock option (the "Former Option")
granted to the Optionee by the Suburban Bancshares on ______________ (the
"Former Option's Grant Date") under the terms of the Plan as in effect prior to
the Effective Date. The Optionee acknowledges that, pursuant to the provisions
of Section 10(b) of the Plan as in effect immediately prior to the Effective
Date, the Former Option was surrendered and cancelled immediately prior to the
Effective Date to obtain the grant of this Option by the Company in substitution
for such Former Option. The Former Option has no further force or effect after
such surrender and cancellation. The Optionee agrees that the Optionee shall
have no further right of any kind under the Former Option, including the right
to purchase any securities, and further agrees that this Agreement will FOREVER
AND IRREVOCABLY RELEASE AND DISCHARGE Suburban Bancshares and the Company, the
directors and officers thereof, and any and all other persons who may have any
liability with respect to the Former Option, from any and all claims, rights and
liabilities whatsoever relating to the Former Option.
2. Exercise of Option. This Option shall be exercisable as follows:
(i) One hundred percent (100%) of the Option is exercisable as of the
date of this Agreement.
(ii) Method of Exercise. This Option shall be exercisable by a
written 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 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 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
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
any manner otherwise than by will or the laws of descent or distribution, or
pursuant to a "qualified domestic relations order" (within the meaning of
Section 414(p) of the Code and the regulations and rulings thereunder). The
terms of this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.
5. Term of Option. This Option may not be exercisable for more than ten
years from the Former Option's Grant Date, and may be exercised during such term
only in accordance with the Plan and the terms of this Option.
SUBURBAN BANCSHARES, INC.
1997 STOCK OPTION PLAN COMMITTEE
By: ___________________________________
Print Name: ____________________________
Title: __________________________________
Accepted and Approved:
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Print Name: __________________________
Dated: _________________________, 2000