INCENTIVE STOCK OPTION AWARD AGREEMENT PURSUANT TO GRAND RIVER COMMERCE, INC.
EXHIBIT
10.2
PURSUANT
TO
GRAND
RIVER COMMERCE, INC.
2009
STOCK INCENTIVE PLAN
Participant: _______________
Grant
Date: ____________, 20___ (“Grant Date”)
Plan
under which Options are Granted: Grand River Commerce, Inc. 2009
Stock Incentive Plan (“Plan”)
Type of
Options: Incentive Stock Options
Number of
Shares to which Options are Granted: _______________
Exercise
Price per Share: $_______
Vesting
Schedule: The Options shall become vested in accordance with Schedule
1 hereto.
CERTAIN
EARLY DISPOSITIONS OF SHARES PURCHASED UPON EXERCISE OF THIS OPTION (GENERALLY,
SALE OF THE SHARES WITHIN TWO YEARS OF THE GRANT DATE OR WITHIN ONE YEAR OF
EXERCISE OF THE OPTION) MAY RESULT IN LOSS OF “INCENTIVE STOCK OPTION”
TREATMENT. GRAND RIVER COMMERCE, INC. RECOMMENDS THAT THE PARTICIPANT
CONSULT WITH HIS OR HER PERSONAL TAX ADVISOR PRIOR TO EXERCISING ANY
OPTIONS.
IN
WITNESS WHEREOF, the parties have executed and made effective this Option as of
the Grant Date.
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PARTICIPANT
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TERMS
AND CONDITIONS
TO
THE INCENTIVE STOCK OPTION AWARD
PURSUANT
TO
GRAND
RIVER COMMERCE, INC.
2009
STOCK INCENTIVE PLAN
1. Grant of the
Option. The Company hereby grants to the Participant the right
and option (“Option”) to purchase the aggregate number of shares of common
stock, $0.01 par value per share, of the Company (“Stock”) as set forth on page
1 (such number being subject to adjustment as provided herein) on the terms and
conditions set forth in this Agreement and the Plan. Once vested, the
Option awarded under this Agreement may be exercised in whole at any time or in
part from time to time, subject to the terms and conditions of this Agreement
and the Plan. The Option granted under this Agreement is intended to
qualify as an “incentive stock option” under section 422 of the Internal
Revenue Code of 1986, as amended (“Code”), and shall be so
construed. The Participant shall have no obligation to exercise any
Option granted by this Agreement.
2. Exercise
Price. The price per share at which the Participant shall be
entitled to purchase shares of Stock upon the exercise of this Option shall be
the Exercise Price per Share set forth on page 1, subject to adjustment as
provided in Paragraph 11 (“Exercise
Price”), which Exercise Price shall be not less than the Fair Market Value of a
share of Stock on the date that the Option is granted and, with respect to a
Controlling Participant (as defined in the Plan), not less than one hundred ten
percent (110%) of the Fair Market Value of a share of Stock on the date that the
Option is granted.
3. Vesting and Term of the
Option.
(a) General. The
right to exercise the Option shall vest in the hands of the Participant as
provided for on Schedule 1 of this Agreement. Shares for which
Options have vested shall be referred to as “Vested Shares.” Shares
for which Options have not vested shall be referred to as “Nonvested
Shares.” The respective numbers of Vested Shares and Nonvested Shares
shall adjust proportionately in accordance with any adjustments made pursuant to
Paragraph 11 of this
Agreement. In addition, shares may become Vested Shares in accordance
with Paragraphs 8, 14 and 16.
(b) Exercisable for Whole Vested
Shares Only. Subject to the relevant provisions and
limitations contained herein, the Participant may exercise the Option to
purchase all or part of whole Vested Shares. In no event shall the
Participant be entitled to exercise the Option with respect to Nonvested Shares
or a fraction of a Vested Share.
(c) Expiration. Notwithstanding
any other provision contained herein to the contrary, the unexercised portion of
the Option(s), if any, will automatically and without notice expire upon the
earliest of: (i) ten (10) years following the Grant Date and, in the case
of a Controlling Participant, not more than five (5) years from the Grant Date;
(ii) the date determined pursuant to Paragraph 8 of this Agreement; and (iii) the date
determined pursuant to Paragraph 16 of
this Agreement (“Expiration Date”). An Option will cease to be
exercisable with respect to a share of Stock when the Participant purchases the
share.
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4. Method of Exercising
Option.
(a) Subject
to the provisions provided herein or incorporated by reference, the Participant
may exercise the Option at any time on or prior to the Expiration Date with
respect to all or any part of the Vested Shares by delivering to the Company, at
its principal place of business, a written notice of exercise in substantially
the form attached hereto as Exhibit A,
accompanied by payment to the Company of the Exercise Price multiplied by the
number of Vested Shares then being purchased.
(b) The
notice of exercise must be signed by the Participant; provided however, that if
the Option is being exercised by a person or persons other than the Participant
pursuant to Paragraph 8, the notice
of exercise must be signed by such other person or persons and must be
accompanied by proof acceptable to the Company of the legal right of such person
or persons to exercise the Option.
(c) Upon
acceptance of such notice and receipt of payment in full of the purchase price
for the shares of Stock for which the Option is being exercised, the Company
shall issue (or cause to be issued) a certificate evidencing the shares of Stock
acquired as a result of the exercise of the Option. In the event that
the exercise of the Option is treated in part as the exercise of an ISO and in
part as the exercise of a NQSO in accordance with Paragraph 15, the Company shall issue a certificate
evidencing the shares of Stock treated as acquired upon the exercise of an ISO
and a separate certificate evidencing the shares of Stock treated as acquired
upon the exercise of a NQSO, and shall identify each such certificate
accordingly in its stock transfer records.
(d) No
purported exercise of an Option shall be effective and no shares of Stock shall
be issued to the Participant upon exercise of the Option until: (i) the
Exercise Price for the shares of Stock being purchased is paid in full in the
manner provided in this Agreement; (ii) all applicable taxes required to be
withheld have been paid in full; and (iii) the approvals, if any, of all
governmental authorities required in connection with the Option, or the issuance
of Shares pursuant to this Agreement, have been received by the
Company.
5. Method of Payment for
Options. The Exercise Price shall be payable in accordance
with the provisions of Section 6(A) of the Plan, as it may be amended from time
to time.
6. Tax
Withholding. As a condition to the exercise of this Option,
the Company shall have the right to require that the Participant (or the
recipient of any shares of Stock) remit to the Company an amount calculated by
the Company to be sufficient to satisfy applicable federal, state, foreign or
local withholding tax requirements (or make other arrangements satisfactory to
the Company with regard to such taxes) prior to the delivery of any certificate
evidencing shares of Stock. If permitted by the Company and by the
terms of the Plan at the time of exercise, either at the time of the grant of
the Option or in connection with its exercise, the Participant may satisfy
applicable withholding tax requirements by delivering a number of whole shares
of Stock owned by the Participant for at least six (6) months prior to the date
of exercise and having a Fair Market Value (determined on the date that the
amount of tax to be withheld is to be fixed) at least equal to the aggregate
amount required to be withheld.
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7. Notice of
Disposition. As a condition to the exercise of this Option,
the Participant agrees to inform the Company promptly of any disposition (within
the meaning of section 424(c) of the Code and the regulations thereunder) of
Stock received upon exercise of the Option.
8. Termination of
Employment.
(a) Death. Upon
the death of the Participant, any and all Options granted to the Participant
pursuant to this Agreement that are Nonvested Shares as of the date of the
Participant’s death shall expire as of the date of the Participant’s death, and
all Options held by the Participant that are Vested Shares as of the date of the
Participant’s death may be exercised only by the Participant’s legal
representatives, heirs, legatees, or distributees and only within a period of
twelve (12) months following the date of the Participant’s death, after which
time the Options shall expire.
(b) Disability. If
the Participant ceases to be an employee of the Company, its Subsidiaries or
Affiliates during the term of this Option by reason of the Participant’s
disability (as defined in section 22(e)(3) of the Code), any and all Options
granted to the Participant pursuant to this Agreement that are Nonvested Shares
as of the date that the Participant ceases to be an employee shall expire as of
such termination date; provided, however, that the Options held by the
Participant that are exercisable as of the date that the Participant ceases to
be an employee may be exercised only by the Participant or his guardian or legal
representative and must be exercised within a period of twelve (12) months
following the date that the Participant ceases to be an employee, after which
time the Options shall expire unless the Participant dies during such period, in
which event the provisions of Paragraph 8(a) shall govern.
(c) Resignation. Upon
the resignation by the Participant as an employee of the Company, its
Subsidiaries and Affiliates during the term of this Option, any and all Options
evidenced by this Agreement that are Nonvested Shares as of the date that the
Participant’s resignation becomes effective shall expire immediately upon the
effectiveness thereof; and any and all Options evidenced by this Agreement that
are Vested Shares as of the date that the Participant’s resignation becomes
effective shall be exercisable for the period of time not to extend beyond the
remainder of the term of the Option or three months from the date that the
Participant’s resignation becomes effective, whichever is
earlier. Any Option or portion thereof not exercised prior to such
date shall expire at such time unless the Participant dies during such period,
in which case the provisions of Paragraph 8(a) shall govern.
(d) Termination by the
Company. If the Participant’s employment with the Company is
terminated by the Company, its Subsidiaries or Affiliates during the term of
this Option (other than as a result of Participant’s death, disability or
resignation), all Nonvested Shares shall expire immediately upon the
effectiveness thereof; and any and all Options evidenced by this Agreement that
are Vested Shares as of the date that such termination becomes effective shall
be exercisable for the period of time not to extend beyond the remainder of the
term of the Option or three months from the date that such termination becomes
effective, whichever is earlier. Any Option or portion thereof not
exercised prior to such date shall expire at such time unless the Participant
dies during such period, in which case the provisions of Paragraph 8(a) shall govern.
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9. Nontransferability. The
Option evidenced by this Agreement is nontransferable other than by will or the
laws of descent and distribution and shall be exercisable during the lifetime of
the Participant only by the Participant (or in the event of his disability (as
defined in section 22(e)(3) of the Code), by his guardian or legal
representative) and after his death, only by the Participant’s legal
representatives, heirs, legatees, or distributees.
10. Special Limitation on
Exercise. Notwithstanding anything herein to the contrary, no
purported exercise of this Option shall be effective without the approval of the
Committee, which shall be a condition to the exercise of this Option and may be
withheld to the extent that the exercise, either individually or in
the aggregate together with the exercise of other previously exercised stock
options and/or offers and sales pursuant to any prior or contemplated offering
of securities, would, in the sole and absolute judgment of the Committee,
require the filing of a registration statement with the United States Securities
and Exchange Commission or with the securities commission of any
state. If a registration statement is not in effect under the
Securities Act of 1933 or any applicable state securities law
with respect to the shares of Stock purchasable or otherwise
deliverable under the Option, the Participant (i) shall deliver to the
Company, prior to the exercise of the Option or as a condition to the delivery
of Stock pursuant to the exercise of the Option, such information,
representations and warranties as the Company may reasonably request in order
for the Company to be able to satisfy itself that the shares of Stock are being
acquired in accordance with the terms of an applicable exemption from the
securities registration requirements of applicable federal and state securities
laws and (ii) shall agree that the shares of Stock so acquired will not be
disposed of except pursuant to an effective registration statement, unless the
Company shall have received an opinion of counsel that such disposition is
exempt from such requirement under the Securities Act of 1933 and any applicable
state securities law.
11. Adjustments on Changes in
Shares. In the event of any change in the outstanding shares
of Stock by reason of any merger, reorganization, consolidation,
recapitalization, stock dividend, stock split, reverse stock split, spinoff,
combination or exchange of shares or other corporate change, the Committee, in
its sole discretion, may make such substitution or adjustment, if any, as it
deems to be equitable or appropriate, as to (i) the number or kind of shares
subject to the Option; (ii) subject to the limitation contained in Paragraph 17, the Exercise Price applicable to the
Option; (iii) any measure of performance that relates to the Option in order to
reflect such change in the Stock and/or (iv) any other affected terms of the
Option.
12. Amendment and
Termination. Subject to the terms and provisions of the Plan,
this Agreement may be amended or terminated only by a written agreement executed
by the Company and the Participant. The amendment or termination of
the Plan shall not operate to modify the terms and conditions of this Agreement
or any Option evidenced by this Agreement without the Participant’s consent,
and, notwithstanding the termination of the Plan, such Agreement and Option
shall be construed in accordance with the substantive provisions of the Plan as
necessary to give effect to this Agreement or any Option still in existence.
13. Legend on Stock
Certificates. Certificates evidencing the shares of Stock
issued upon exercise of an Option, to the extent appropriate at the time, shall
have noted conspicuously on the certificates a legend intended to give all
persons full notice of the existence of the conditions, restrictions, rights and
obligations set forth herein and in the Plan.
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14. Change of
Control. Notwithstanding any provision of this Agreement to
the contrary, in the event of a Change of Control or an agreement to effect a
Change of Control, all Nonvested Shares shall become fully exercisable Vested
Shares to the full extent of the unexercised portion of the original
grant.
15. Qualified Status of
Option. To the extent that the aggregate Fair Market Value
(determined as of the time of grant) of the shares of Stock with respect to
which Options designated as Options are exercisable for the first time by any
employee during any calendar year (under all plans of the Company) exceeds
$100,000, that portion shall be treated as a NQSO. For purposes of
this section, Options shall be taken into account in the order in which they
were granted. In addition, if any approval of the Company’s
shareholders required for the Option to be deemed an ISO is not obtained within
the required time period, the full amount of this Option will be treated as a
NQSO.
16. Minimum Capital
Requirements. Notwithstanding any provision of this Agreement
to the contrary, during the first three years following the date that Grand
River Bank (“Bank”) opens for business, the Option granted under the Agreement
shall expire, to the extent not exercised, within 45 days following the receipt
of notice from the Bank’s primary federal regulator (“Regulator”) that
(i) the Bank has not maintained its minimum capital requirements (as
determined by the Regulator) and (ii) the Regulator is requiring termination or
forfeiture of Options. Upon receipt of such notice from the
Regulator, the Company shall promptly notify each Participant that the Option
issued under this Agreement has become fully exercisable Vested Shares to the
full extent of the grant and that the Participant must exercise the Option
granted to him prior to the end of the 45-day period or such earlier period as
may be specified by the Regulator or forfeit the Option. In case of
forfeiture, the Participant shall have no cause of action, of any kind or
nature, with respect to the forfeiture against the Company or any
Affiliate. Neither the Company nor any Affiliate shall be liable to
the Participant due to the failure or inability of the Company or any Affiliate
to provide adequate notice to the Participant.
17. Repricing. The
Committee shall not, without the further approval of the Board of Directors, (i)
authorize the amendment of this Option to reduce the Exercise Price of this
Option or (ii) grant a replacement Option upon the surrender and
cancellation of this Option for the purpose of reducing the Exercise Price of
this Option. Nothing contained in this section shall affect the right
of the Committee to make any adjustment permitted under Paragraph 11.
18. No Rights as a
Shareholder. Notwithstanding the exercise of an Option, a
Participant shall have no rights as a shareholder with respect to shares covered
by an Option until the date the certificates evidencing the shares of Stock are
issued (as evidenced by the appropriate entry on the books of the Company or of
a duly authorized transfer agent of the Company). No adjustment will
be made for dividends or other rights the record date for which is prior to the
date of issuance. Upon issuance of the certificates evidencing the
shares of Stock acquired upon exercise of an Option, such shares of Stock shall
be deemed to be transferred for purposes of section 421 of the Code and the
regulations promulgated thereunder.
19. Interpretation. When
a reference is made in this Agreement to a Paragraph, Exhibit or Schedule, such
reference will be to a Paragraph of, or Exhibit or Schedule to, this Agreement
unless otherwise indicated. The headings contained in this Agreement
are for convenience of reference only and will not affect in any way the meaning
or interpretation of this Agreement or any Option. Whenever the words
“include,” “includes” or “including” are used in this Agreement, they will be
deemed to be followed by the words “without limitation.” The words
“hereof,” “herein” and “hereunder” and words of similar import when used in this
Agreement will refer to this Agreement as a whole and not to any particular
provision in this Agreement. Each use herein of the masculine, neuter
or feminine gender will be deemed to include the other genders. Each
use herein of the plural will include the singular and vice versa, in each case
as the context requires or as is otherwise appropriate. The word “or”
is used in the inclusive sense. Any agreement, instrument or statute
defined or referred to herein or in any agreement or instrument that is referred
to herein means such agreement, instrument or statute as from time to time
amended, modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by succession of
comparable successor statutes and references to all attachments thereto and
instruments incorporated therein. References to a person are also to
its permitted successors or assigns. No provision of this Agreement is to be
construed to require, directly or indirectly, any person to take any action, or
omit to take any action, which action or omission would violate applicable law
(whether statutory or common law), rule or regulation.
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20. Governing
Law. The validity, construction and effect of this Agreement
and any Option granted hereunder shall be determined in accordance with the laws
of the State of Michigan, without reference to the laws that might otherwise
govern under applicable principles of conflicts of law.
21. Notices. Any
notice or other communication required or permitted to be made hereunder or by
reason of the provisions of this Agreement shall be in writing, duly signed by
the party giving such notice or communication and shall be deemed to have been
properly delivered if delivered personally or by a recognized overnight courier
service, or sent by first-class certified or registered mail, postage prepaid,
as follows (or at such other address for a party as shall be specified by like
notice): (i) if given to the Company, at its principal place of business, and
(ii) if to the Participant, at the address set forth on page 1. Any
notice properly given hereunder shall be effective on the date on which it is
actually received by the party to whom it was addressed; provided, however, that
for a notice of exercise to be effective, such notice must be in conformity with
the Plan and this Agreement, as reasonably determined by the Committee, in its
discretion.
22. Entire
Agreement. Subject to the terms and conditions of the Plan,
this Agreement sets forth the entire agreement and understanding of the parties
with regard to the Options granted hereby and supersedes all prior agreements,
arrangements and understandings relating to the subject matter
hereof.
23. Incorporation By Reference;
Relationship to Plan. This Agreement is being executed and
delivered pursuant to the Plan, all of the terms of which are incorporated by
reference into, and made a part of, this Agreement. To the extent not
specifically provided in this Agreement or otherwise required by context, all
capitalized terms used in this Agreement but not defined herein shall have the
same meanings ascribed to them in the Plan. In the event of an
irreconcilable conflict between the terms of the Plan and this Agreement, the
terms of the Plan shall prevail. The Company shall provide a copy of
the Plan to the Participant upon written request to the Company at its principal
place of business. By the execution of this Agreement, the
Participant acknowledges this Agreement and the Options are subject to the terms
and conditions of the Plan.
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EXHIBIT
A
NOTICE
OF EXERCISE OF
STOCK
OPTION TO PURCHASE
COMMON
STOCK OF
GRAND
RIVER COMMERCE, INC.
Participant
Name:__________________
Address_________________________
________________________________
Date_____________________
Grand
River Commerce, Inc.
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
Grandville,
Michigan 49418
Attn: President
Re: Exercise of Incentive Stock Option
Gentlemen:
Pursuant
to the provisions of the Grand River Commerce, Inc. 2009 Stock Incentive Plan
(“Plan”), I hereby give notice to Grand River Commerce, Inc., a Michigan
corporation (the “Company”) of my election to exercise options granted to me to
purchase _________ shares of common stock (the “Stock”) of the Company under the
Incentive Stock Option Award Agreement (“Agreement”) dated as of
____________. The purchase shall take place as
of _____________, _____ (“Exercise Date”). All capitalized
terms used, but not otherwise defined, herein shall have the meanings given them
in the Agreement.
On or
before the Exercise Date, I will pay the applicable purchase price as
follows:
o by
delivery of cash or check, Company draft, money order or wire transfer of good
funds payable to the Company in the amount of $___________, which amount
represents the full purchase price of the shares of Stock to be issued upon
exercise hereof.
o if
permitted by the Company and by the terms of the Plan, and upon any such
conditions imposed by the Committee, by delivery of _________ whole shares of
Stock owned by me prior to the Exercise Date.
o by
delivery of cash or check, Company draft, money order or wire transfer of good
funds payable to the Company in the amount of $___________, which amount
represents a portion of the purchase price of the shares of Stock to be issued
upon exercise hereof and, if permitted by the Committee and the terms of the
Plan, and upon any such conditions imposed by the Company, by delivery of
_________ shares of Stock owned by me prior to the Exercise Date.
The
required federal, state, foreign and local income tax withholding obligations,
if any, on the exercise of the Option shall be satisfied on or before the
Exercise Date in the manner provided in the Agreement. As soon as the
stock certificate is registered in my name, please deliver it to me at address
set forth above.
Unless
the shares to be issued upon the exercise of the Option evidenced by this notice
are registered for issuance to and resale by me pursuant to an effective
registration statement on Form S-8 (or successor form) filed under
the Securities Act of 1933, as amended (“Securities Act”), I hereby
represent, warrant, covenant, and agree with the Company as
follows:
1. The
shares of Stock being acquired by me will be acquired for my own account without
the participation of any other person, with the intent of holding the Stock for
investment and without the intent of participating, directly or indirectly, in a
distribution of the Stock and not with a view to, or for resale in connection
with, any distribution of the Stock, nor am I aware of the existence of
any distribution of the Stock.
2. I
am not acquiring the Stock based upon any representation, oral or written, by
any person with respect to the future value of, or income from, the Stock but
rather upon an independent examination and judgment as to the prospects of the
Company.
3. The
Stock was not offered to me by means of publicly disseminated advertisements or
sales literature, nor am I aware of any offers made to other persons by such
means.
4. I
am able to bear the economic risks of the investment in the Stock, including the
risk of a complete loss of my investment therein.
5. I
understand and agree that the Stock will be issued and sold to me without
registration under any federal or state law relating to the
registration of securities for sale, and will be issued and sold in reliance on
the exemptions from registration under federal and applicable state securities
laws.
6. The
Stock cannot be offered for sale, sold or transferred by me other than pursuant
to an effective registration under the Securities Act or in a transaction
otherwise in compliance with the Securities Act and evidence satisfactory to the
Company of compliance with the applicable securities laws of other
jurisdictions. The Company shall be entitled to rely upon an opinion
of counsel satisfactory to it with respect to compliance with the above
laws.
7. The
Company will be under no obligation to register the Stock or to comply with any
exemption available for sale of the Stock without registration or filing, and
the information or conditions necessary to permit routine sales of securities of
the Company under Rule 144 under the Securities Act are not now available and no
assurance has been given that it or they will become available. The Company is
under no obligation to act in any manner so as to make Rule 144 available with
respect to the Stock.
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8. I
have had complete access to and the opportunity to review and make copies of all
material documents related to the business of the Company, including, but not
limited to, contracts, financial statements, tax returns, leases, deeds and
other books and records. I have examined such of these documents as I
wished and am familiar with the business and affairs of the
Company. I realize that the purchase of the Stock is a speculative
investment.
9. I
have had the opportunity to ask questions of and receive answers from the
Company and any person acting on its behalf and to obtain all material
information reasonably available with respect to the Company and its
affairs. I have received all information and data with respect to the
Company which I have requested and which I have deemed relevant in connection
with the evaluation of the merits and risks of my investment in the
Company.
10. I
have such knowledge and experience in financial and business matters that I am
capable of evaluating the merits and risks of the purchase of the Stock
hereunder and I am able to bear the economic risk of such purchase.
11. The agreements,
representations, warranties and covenants made by me herein extend to and apply
to all of the Stock issued to me pursuant to the Agreement, and the Company is
entitled to rely on these agreements, representations, warranties and covenants
in issuing the shares of Stock upon the exercise of the Option evidenced by this
notice. Acceptance by me of the certificate representing such Stock
shall constitute a confirmation by me that all such agreements, representations,
warranties and covenants made herein shall be true and correct at that
time.
Very truly yours,
__________________________
AGREED TO AND ACCEPTED:
GRAND
RIVER COMMERCE, INC.
By:
Name:
Title:
Date:__________________
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SCHEDULE
1
VESTING
SCHEDULE
INCENTIVE
STOCK OPTION AWARD ISSUED PURSUANT TO THE
GRAND
RIVER COMMERCE, INC.
2009
STOCK INCENTIVE PLAN
Except as
otherwise expressly provided in the Agreement, the Options shall become Vested
Shares in accordance with the following schedule:
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Date
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Number
or Percentage of Vested Shares
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