Form of FIRST AMENDMENT TO STOCK OPTION AGREEMENT
Exhibit
10.1
Form
of
FIRST
AMENDMENT TO STOCK OPTION AGREEMENT
THIS
FIRST AMENDMENT TO STOCK OPTION AGREEMENT ("Amendment")
is made as of this ____ day of ______________, 2007 by and between
_________________ ("Executive") and COMMUNITY
BANKS, INC.
("CBI").
WHEREAS,
CBI has granted an option to purchase ___________ shares of CBI Common Stock
to
Executive (the “2006 Option”) pursuant to a certain Stock Option Agreement dated
January 25, 2006 (the "Agreement"), and
WHEREAS,
the Compensation Committee of the Board of Directors of CBI decided on January
22, 2007 to grant an additional option to Executive to purchase __________
shares of CBI common stock, upon the condition that Executive agree to an
extension of the vesting period for the 2006 Option, and
WHEREAS,
the Executive is willing to extend the vesting period of the 2006 Option in
consideration of the grant of options to be made in 2007,
NOW
THEREFORE, in consideration of the foregoing, and intending to be legally bound
hereby, the parties agree as follows:
1.
The
unnumbered section of the Agreement entitled "VESTING
OF ISO's GRANTED January 25, 2006"
is
hereby amended and restated to read in its entirety as follows:
Your
ISO(s) may first be exercised on an after one year from the grant date, but
not
before that time. On and after one year, and prior to two years from the date
of
the grant, your ISO's may be exercised for up to 20% of the total shares the
subject to the ISO's. On and after two years, and prior to three years from
the
date of the grant, your ISO's may be exercised for up to 40% of the total shares
the subject to the ISO's, minus the number of shares previously purchased by
the
exercise of ISO's (adjusted for stock dividends, stock splits, combination
of
shares, recapitalization, and what the Compensation Committee considers in
its
sole discretion to be similar circumstances.) On and after three years, and
prior to four years from the date of the grant, your ISO's may be exercised
for
up to 60% of the total shares the subject to the ISO's, minus the number of
shares previously purchased by the exercise of ISO's (adjusted for stock
dividends, stock splits, combination of shares, recapitalization, and what
the
Compensation Committee considers in its sole discretion to be similar
circumstances.) On and after four years, and prior to five years from the date
of the grant, your ISO's may be exercised for up to 80% of the total shares
the
subject to the ISO's, minus the number of shares previously purchased by the
exercise of ISO's (adjusted for stock dividends, stock splits, combination
of
shares, recapitalization, and what the Compensation Committee considers in
its
sole discretion to be similar circumstances.) On and after five years from
the
date of the grant, your ISO's may be exercised for up to 100% of the total
shares the subject to the ISO's, minus the number of shares previously purchased
by the exercise of ISO's (adjusted for stock dividends, stock splits,
combination of shares, recapitalization, and what the Compensation Committee
considers in its sole discretion to be similar circumstances.) No fractional
shares shall be issued or delivered. The ISO's shall terminate and shall not
be
exercisable after the expiration of seven years from the date of
grant.
2.
The
unnumbered section of the Agreement entitled "VESTING
OF NQSO's"
is
hereby amended and restated to read in its entirety as follows:
Your
NQSO may first be exercised on an after one year from the grant date, but not
before that time. On and after one year, and prior to two years from the date
of
the grant, your NQSO's may be exercised for up to 20% of the total shares the
subject to the NQSO's. On and after two years, and prior to three years from
the
date of the grant, your NQSO's may be exercised for up to 40% of the total
shares the subject to the NQSO's, minus the number of shares previously
purchased by the exercise of NQSO's (adjusted for stock dividends, stock splits,
combination of shares, recapitalization, and what the Compensation Committee
considers in its sole discretion to be similar circumstances.) On and after
three years, and prior to four years from the date of the grant, your NQSO's
may
be exercised for up to 60% of the total shares the subject to the NQSO's, minus
the number of shares previously purchased by the exercise of NQSO's (adjusted
for stock dividends, stock splits, combination of shares, recapitalization,
and
what the Compensation Committee considers in its sole discretion to be similar
circumstances.) On and after four years, and prior to five years from the date
of the grant, your NQSO's may be exercised for up to 80% of the total shares
the
subject to the NQSO's, minus the number of shares previously purchased by the
exercise of NQSO's (adjusted for stock dividends, stock splits, combination
of
shares, recapitalization, and what the Compensation Committee considers in
its
sole discretion to be similar circumstances.) On and after five years from
the
date of the grant, your NQSO's may be exercised for up to 100% of the total
shares the subject to the NQSO's, minus the number of shares previously
purchased by the exercise of NQSO's (adjusted for stock dividends, stock splits,
combination of shares, recapitalization, and what the Compensation Committee
considers in its sole discretion to be similar circumstances.) No fractional
shares shall be issued or delivered. The NQSO's shall terminate and shall not
be
exercisable after the expiration of seven years from the date of
grant.
3.
This
Amendment shall be considered an amendment to and modification of the Agreement,
which may not be further modified except by written agreement executed by the
parties thereto. Except as expressly modified hereby, the Agreement shall remain
in full force and effect.
4.
This
Amendment shall be binding upon and an inure to the benefit of the parties
hereto, their respective successors and assigns.
5.
This
Amendment shall be governed by and construed in accordance to the laws of the
Commonwealth of Pennsylvania.
IN
WITNESS WHEREOF, and intending to be legally bound hereby, the parties have
set
their hands.
ATTEST:
COMMUNITY BANKS, INC.
_____________________
BY: ________________________
________________________
(Name and Title)
WITNESS:
_____________________ ____________________________
Executive