VAIL BANKS, INC. AMENDED AND RESTATED STOCK INCENTIVE PLAN STOCK OPTION AGREEMENT (Incentive Stock Option)
Exhibit
10.1
VAIL
BANKS, INC.
AMENDED
AND RESTATED STOCK INCENTIVE PLAN
(Incentive
Stock Option)
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Employee/Optionee:
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▇▇▇▇▇
▇▇▇▇
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Number
of Shares:
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10,000
Shares
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Option
Exercise Price:
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$14.74
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Grant
Date:
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August
22, 2005
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Vesting
Schedule:
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No.
Shares
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Date
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2,500
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August
22, 2006
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2,500
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August
22, 2007
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2,500
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August
22, 2008
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2,500
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August
22, 2009
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THIS
OPTION AGREEMENT
(the
“Agreement”)
is
entered into effective as of the 22nd
day of
August, 2005 by and between
VAIL BANKS, INC.,
a
Colorado bank holding company (the “Company”),
and
the employee designated above (the “Optionee”).
W I T N E S S E T H:
WHEREAS,
the Vail
Banks, Inc. Amended and Restated Stock Incentive Plan (the “Plan”)
was
adopted by the Company, effective April 20, 1998; and
WHEREAS,
as of
the date hereof, the Committee responsible for administration of the Plan
granted the Option as provided herein;
NOW,
THEREFORE,
the
parties agree as follows:
1.
Grant
of Option.
1.1
Option.
An
option to purchase shares of the Company’s Common Stock, par value $.01 per
share, (the “Shares”)
is
hereby granted to the Optionee (the “Option”).
1.2
Number
of Shares.
The
number
of Shares that the Optionee can purchase upon exercise of the Option and
the
dates upon which the Option can first be exercised are set forth
above.
1.3
Option
Exercise Price.
The
price the Optionee must pay to exercise the Option (the “Option
Exercise Price”)
is set
forth above.
1.4
Date
of Grant.
The
date the Option is granted (the “Grant
Date”)
is set
forth above.
1.5
Type
of Option.
The
Option is intended to qualify as an Incentive Stock Option within the meaning
of
Section 422 of the Internal Revenue Code of 1986, as amended from time to
time,
or any successor provision thereto, and
shall
be so construed; provided, however, that nothing in this Agreement shall
be
interpreted as a representation, guarantee or other undertaking on the part
of
the Company that the Option is or will be determined to be an Incentive Stock
Option within the meaning of Section 422 of the Code. To the extent this
Option
is not treated as an Incentive Stock Option, it will be treated as a
Nonqualified Stock Option.
1.6
Construction.
This
Agreement shall be construed in accordance and consistent with, and subject
to,
the provisions of the Plan (the provisions of which are incorporated herein
by
reference) and, except as otherwise expressly set forth herein, the capitalized
terms used in this Agreement shall have the same definitions as set forth
in the
Plan.
1.7
Condition.
The
Option is conditioned on the Optionee’s execution of this Agreement. If this
Agreement is not executed by the Optionee it may be canceled by the
Committee.
2.
Duration.
The
Option shall be exercisable to the extent and in the manner provided herein
for
a period of ten (10) years from the Grant Date (the “Exercise
Term”);
provided, however, that the Option may be earlier terminated as provided
in
Section 1.7 and Section 5 hereof.
3.
Vesting.
Subject
to earlier termination of the Option as provided in Section 1.7 and Section
5
hereof or in the Plan, if the Optionee remains employed by the Company, the
Optionee shall become vested in the Option, and the Option may be exercised
with
respect to the Shares, based upon the Company’s achievement of the performance
targets and other performance goals set forth on Schedule A attached hereto
and
made a part hereof (as such Schedule A may be supplemented or amended from
time
to time), as follows: 25% of the Option shall vest on each anniversary of
the
Grant Date (each such date shall be a “Vesting Date” and August 22, 2009 shall
be the “Final Vesting Date”) if the performance targets or other goals with
respect to such Vesting Date have been satisfied on or before the Vesting
Date.
On each Vesting Date (if the performance targets and other performance goals
have been met), Optionee shall have the right to purchase the Shares that
have
become vested. If the performance targets and other performance goals for
a
Vesting Date are not met, unless the Company otherwise, determines the portion
of the Option that would vest on such Vesting Date shall be forfeited and
cancelled as of such Vesting Date. The right to purchase the Shares as they
become vested shall be cumulative and shall continue during the Exercise
Term
unless sooner terminated as provided herein.
4.
Manner
of Exercise and Payment.
4.1
To
exercise the Option, the Optionee must deliver a completed copy of the
Option
Exercise Form,
attached hereto as Exhibit
A,
to the
address indicated on such Form or such other
address
designated by the Company from time to time. The Option may be exercised
in
whole or in part with respect to the vested Shares; provided, however, the
Committee may establish a minimum number of Shares (e.g., 100) for which
an
Option may be exercised at a particular time. Within thirty (30) days of
delivery of the Option Exercise Form, the Company shall deliver certificates
evidencing the Shares to the Optionee, duly endorsed for transfer to the
Optionee, free and clear of all liens, security interests, pledges or other
claims or charges. Contemporaneously
with the delivery of the Option Exercise Form, Optionee shall tender the
Option
Exercise Price to the Company, by cash, check, wire transfer or such other
method of payment (e.g., by delivery, or attestation to ownership, of Shares
already owned) as may be acceptable to the Committee pursuant to the
Plan.
4.2
The
Optionee shall not be deemed to be the holder of, or to have any of the rights
of a holder with respect to any Shares subject to the Option until (i) the
Option shall have been exercised pursuant to the terms of this Agreement
and the
Optionee shall have paid the full purchase price for the number of Shares
in
respect of which the Option was exercised, (ii) the Company shall have issued
and delivered the Shares to the Optionee, and (iii) the Optionee’s name shall
have been entered as a stockholder of record on the books of the Company,
whereupon the Optionee shall have full voting and other ownership rights
with
respect to such Shares.
5.
Termination
of Employment.
5.1
Termination
by Death.
In the
event the Optionee dies while actively employed, all outstanding unvested
Options granted to the Optionee shall immediately vest, and thereafter all
vested Options shall remain exercisable at any time prior to the end of the
Exercise Term, or for one (1) year after the date of death, whichever period
is
shorter, (i) by such person(s) who have acquired Optionee’s rights by will or
the laws of descent and distribution, or (ii) if no such person in (i) exists,
by the executor or representative of the Optionee’s estate.
5.2
Termination
by Disability.
In the
event the employment of the Optionee is terminated by reason of Disability,
all
outstanding unvested Options granted to the Optionee shall immediately vest
as
of the date the Committee determines the definition of Disability to have
been
satisfied by the Optionee, and thereafter all vested Options shall remain
exercisable at any time prior to the end of the Exercise Term, or for one
(1)
year after the date that the Committee determines the definition of Disability
to have been satisfied, whichever period is shorter.
5.3
Termination
for Cause.
If
the
Optionee’s employment is terminated by the Company for Cause, all outstanding
unvested Options granted to the Optionee shall expire, and Optionee’s right to
exercise any then outstanding Options (whether or not vested) shall terminate
immediately upon the date that the Committee determines is the Optionee’s date
of termination of employment.
5.4
Termination
of Employment for Other Reasons.
If the
Optionee’s employment is terminated by the Company without Cause, or the
Optionee voluntarily terminates his employment (including upon Retirement),
all
outstanding unvested Options shall expire, and any Options vested as of his
date
of termination shall remain exercisable at any time prior to the
end
of the Exercise Term
or for
three (3) months after his date of termination of employment, whichever period
is shorter.
5.5
Employment
by Subsidiary.
For
purposes of this Section and Section 8, employment with the Company includes
employment with any Subsidiary of the Company and service as a Director of
the
Company or any Subsidiary shall be considered employment with the Company.
A
change of employment between the Company and any Subsidiary or between
Subsidiaries is not a termination of employment under this
Agreement.
5.6
Change
In Control.
In the
event a Change in Control occurs while the Optionee is employed by the Company,
all outstanding unvested Options granted to the Optionee shall immediately
vest
and become immediately exercisable. The Company, in its discretion, may
terminate the Option upon a Change in Control; provided, however, that at
least
30 days prior to the Change in Control, the Company notifies the Optionee
that
the Option will be terminated and provides the Optionee, either, at the election
of the Company, (i) a cash payment equal to the difference between the Fair
Market Value of the vested Options (including Options that would become vested
upon the Change in Control as provided above) and the Exercise Price for
such
Options, computed as of the date of the Change in Control and to be paid
no
later than 3 business days after the Change in Control, or (ii) the right
to
exercise all vested Options (including Options that would become vested upon
the
Change in Control as provided above) immediately prior to the Change in Control.
If the Options remain outstanding after the Change in Control (including
any
substituted Options), the Options shall remain exercisable in accordance
with
the other provisions of this Section 5, provided that, notwithstanding the
other
provisions of this Agreement, the Options shall remain exercisable for a
period
of at least one year after the date of the Change in Control.
6.
Nontransferability.
The
Option shall not be transferable other than by will or by the laws of descent
and distribution. During the lifetime of the Optionee, the Option shall be
exercisable only by the Optionee.
7.
Securities
Laws Restrictions.
The
Option may not be exercised at any time unless, in the opinion of counsel
for
the Company, the issuance and sale of the Shares issued upon such exercise
is
exempt from registration under the Securities Act of 1933, as amended, or
any
other applicable federal or state securities law, rule or regulation, or
the
Shares have been duly registered under such laws. The Company shall not be
required to register the Shares issuable upon the exercise of the Option
under
any such laws. Unless the Shares have been registered under all applicable
laws,
the Optionee shall represent, warrant and agree, as a condition to the exercise
of the Option, that the Shares are being purchased for investment only and
without a view to any sale or distribution of such Shares and that such Shares
shall not be transferred or disposed of in any manner without registration
under
such laws, unless it is the opinion of counsel for the Company that such
a
disposition is exempt from such registration. The Optionee acknowledges that
an
appropriate legend giving notice of the foregoing restrictions may appear
conspicuously on all certificates evidencing the Shares issued upon the exercise
of the Option.
8.
No
Right to Continued Employment.
Nothing
in this Agreement or the Plan shall be interpreted or construed to confer
upon
the Optionee any right with respect to continuance of employment by the Company
or any Subsidiary, nor shall this Agreement or the Plan interfere in any
way
with the right of the Company or a Subsidiary to terminate the Optionee’s
employment at any time.
9.
Adjustments.
In
the
event of a change in capitalization or corporate transaction, the Committee
shall make appropriate adjustments to the number and class of Shares or other
stock or securities subject to the Option and the purchase price for such
Shares
or other stock or securities. The Committee’s adjustment shall be made in
accordance with the provisions of Section 4.3 of the Plan and shall be effective
and final, binding and conclusive for all purposes of the Plan and this
Agreement.
10.
Withholding
of Taxes.
10.1
The
Company shall have the right to deduct from any distribution of cash to the
Optionee an amount equal to the federal, state and local income taxes, any
employment taxes payable by Optionee as an employee, and other amounts as
may be
required by law to be withheld (the “Withholding Taxes”) with respect to the
Option. If the Optionee is entitled to receive Shares upon exercise of the
Option, the Optionee shall pay the Withholding Taxes (if any) to the Company
in
cash prior to the issuance of such Shares. In satisfaction of the Withholding
Taxes, the Optionee may make a written election (the “Tax Election”), to have
withheld a portion of the Shares issuable to him or her upon exercise of
the
Option, having an aggregate Fair Market Value equal to the required Withholding
Taxes (but not in excess of such amount), provided that, if the Optionee
may be
subject to liability under Section 16(b) of the Exchange Act, the election
must
comply with the requirements applicable to Share transactions by such
Optionees.
10.2
If
the
Optionee makes a disposition, within the meaning of Section 424(c) of the
Code
and regulations promulgated thereunder, of any Share or Shares issued to
him
pursuant to his exercise of the Option within the two-year period commencing
on
the day after the Grant Date or within the one-year period commencing on
the day
after the date of transfer of such Share or Shares to the Optionee pursuant
to
such exercise, the Optionee shall, within ten (10) days of such disposition,
notify the Company thereof, by delivery of written notice to the Company
at its
principal executive office, and immediately deliver to the Company the amount
of
Withholding Taxes.
11.
Modification
of Agreement.
This
Agreement may be modified, amended, suspended or terminated, and any terms
or
conditions may be waived, only by a written instrument executed by the parties
hereto.
12.
Severability.
Should
any provision of this Agreement be held by a court of competent jurisdiction
to
be unenforceable or invalid for any reason, the remaining provisions of this
Agreement shall not be affected by such holding and shall continue in full
force
in accordance with their terms.
13.
Governing
Law.
The
validity, interpretation, construction and performance of this Agreement
shall
be governed by the laws of the State of Colorado without giving effect to
the
conflicts of laws principles thereof.
14.
Successors
in Interest.
This
Agreement shall be binding upon, and inure to the benefit of, the Company
and
its successors and assigns, and upon any person acquiring, whether by merger,
consolidation, reorganization, purchase of stock or assets, or otherwise,
all or
substantially all of the Company’s assets and business. This Agreement shall
inure to the benefit of the Optionee’s heirs and legal representatives. All
obligations imposed upon the Optionee and all rights granted to the Company
under this Agreement shall be final, binding and conclusive upon the Optionee’s
heirs, executors, administrators and successors.
15.
Resolution
of Disputes.
Any
dispute or disagreement which may arise under, or as a result of, or in any
way
relate to, the interpretation, construction or application of this Agreement
shall be determined by the Committee. Any determination made hereunder shall
be
final, binding and conclusive on the Optionee and the Company for all
purposes.
IN
WITNESS WHEREOF, the parties have executed this Agreement effective as of
the
date first above written.
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VAIL
BANKS, INC.
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By:______________________________
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Name:____________________________
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Title:_____________________________
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By
signing below, Optionee hereby accepts the Option subject to all its terms
and
provisions and agrees to be bound by the terms and provisions of the Plan.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Board of Directors of the Company, or the Compensation
Committee, upon any questions arising under the Plan. Optionee authorizes
the
Company to withhold, in accordance with applicable law, from any
compensation
payable to him or her, any taxes required to be withheld by federal, state
or
local law as a result of the grant, existence or exercise of the
Option.
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OPTIONEE
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Signature:
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/s/ ▇▇▇▇▇ ▇▇▇▇ | |
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Name:
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▇▇▇▇▇ ▇▇▇▇ |
[EXHIBIT
FOLLOWS]
EXHIBIT
A
OPTION
EXERCISE FORM
I,
_____________________________, do hereby exercise the Option with a Date
of
Grant of ___________________, ______ granted to me pursuant to the Option
Agreement. The
Shares being purchased and the Total Option Exercise Price are set forth
below:
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Number
of Shares:
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________________
Shares
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Option
Exercise Price Per Share
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x
$
____________ per Share
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Total
Option Exercise Price:
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=
$
____________.
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The
Total
Option Exercise Price is included with this Form.
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____________________________________
Signature
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Date:
___________________
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Send
or
deliver this Form with an original signature to
Vail
Banks, Inc.
Attn:
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇,
▇▇
▇▇▇▇▇
SCHEDULE
A
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Vesting
Date
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Performance
Targets and Goals
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August
22, 2006
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1.
The Finance and Accounting cost centers of the Company achieving
a net
contribution of $2.1 million for 2005 (excluding intercompany
charges)
2.
CAMELS rating of “2” or better for Vail Banks, Inc. and WestStar Bank on
the then most recent regulatory safety and soundness examination
report
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August
22, 2007 and later years
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Performance
Targets and other goals will be established at the beginning of
the
Company’s fiscal year.
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The
determination of whether a Performance Target has been met will be based
upon
the Company’s financial statements, adjusted by the Company as it deems
appropriate to take into account changes to the business or its operations,
acquisitions or dispositions, tax law changes, accounting changes or similar
unusual events or items.