Exhibit 10.7
MID-WISCONSIN FINANCIAL SERVICES, INC.
1999 STOCK OPTION PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
Option Agreement made as of ______________, 20__ (the "Date of Grant")
between Mid-Wisconsin Financial Services, Inc. and _______________________
for the purpose of granting the Option described below under the terms of
the Mid-Wisconsin Financial Services, Inc. 1999 Stock Option Plan. The
definition and construction of all terms used in this Option Agreement is
governed by paragraph 12.
1. GRANT OF OPTION. The Company hereby awards the Optionee an
Option to purchase ___________ shares of the Common Stock (the "Shares")
upon the terms and conditions of the Plan, and the terms hereinafter
stated.
2. PURCHASE PRICE. The Option Price shall be $______ for each
Share.
3. TIME OF EXERCISE.
(A) EXTENT TO WHICH OPTION IS EXERCISABLE. This Option shall first
become exercisable:
(i) As to 25% of the Shares on the first anniversary of the Date
of Grant if Optionee has not then incurred a Termination of
Employment;
(ii) As to an additional 25% of the Shares on the second
anniversary of the Date of Grant if Optionee has not then incurred a
Termination of Employment;
(iii) As to an additional 25% of the Shares on the third anniversary
of the Date of Grant if Optionee has not then incurred a Termination
of Employment; and
(iv) As to a final 25% of the Shares on the fourth anniversary of
the Date of Grant if Optionee has not then incurred a Termination of
Employment;
provided, however, that this Option shall become exercisable in whole upon
the Optionee's death or Disability or achieving Optionee's Retirement Date.
This Option shall not become exercisable in any event unless Optionee has
executed that certain Non-solicitation Agreement dated ________, 20__
between Optionee and the Company ( the "Non-solicitation Agreement") which
is incorporated herein by reference.
(B) EXERCISE DURING OPTIONEE'S LIFETIME. This Option is exercisable
during the Optionee's lifetime only by him and only if it is exercised
prior to its Expiration Date. For purposes of this Option Agreement, the
term "Expiration Date" means the first to occur of:
(i) the tenth anniversary of the Date of Xxxxx;
(ii) if the Optionee's Termination of Employment occurs because
of the death of the Optionee, the first anniversary of the Optionee's
death;
(iii) if the Optionee's Termination of Employment occurs because
of the Disability of the Optionee, the first anniversary of the
Optionee's Termination of Employment;
(iv) if the Optionee's Termination of Employment occurs because
of the Retirement of the Optionee, the second anniversary of the
Optionee's Termination of Employment;
(v) if the Optionee's Termination of Employment occurs because of
a reason other than Disability, Retirement, Cause, or death, the date
which is three months subsequent to the date on which the Optionee's
Termination of Employment occurs;
(vi) if the Optionee has engaged in any act or omitted to take
any action, and such action or omission constitutes Cause, the date of
such action or failure to act; and
(vii) if the Optionee violates the provisions of paragraph 6, the
date of such violation;
provided, however, that notwithstanding the foregoing, in the event the
Optionee incurs a Termination of Employment for a reason other than for
Cause during the 24-month period following a Change in Control of the
Company, this Option shall be exercisable in accordance with the terms of
Section 6.3(e)(v) of the Plan.
(C) EXERCISE AFTER OPTIONEE'S DEATH. In the event of Termination of
Employment by reason of the Optionee's death, this Option may be exercised
in whole or in part prior to the Expiration Date specified in subparagraph
3(b)(ii) by his estate or his designee by will to the extent this Option
was exercisable by the Optionee immediately prior to his death, but only
prior to the first anniversary of the Optionee's death. In the event of
the Optionee's death after he had incurred a Termination of Employment by
reason of Disability or Retirement, this Option may be exercised in whole
or in part by the Optionee's estate or his designee by will prior to the
first to occur of (i) the Expiration Date specified in subparagraph
3(b)(iii) or (iv), as the case may be, and (ii) the first anniversary of
the Optionee's death, but only to the extent this Option was exercisable by
the Optionee immediately prior to his death.
4. METHOD OF EXERCISE.
(A) NOTICE OF EXERCISE. This Option shall be exercisable by written
notice to the Secretary of the Company at its principal place of business
at Medford, Wisconsin. Such notice shall be in substantially the form set
forth as Form 2 attached to this Option Agreement and shall state the exact
number of Shares as to which this Option is being exercised and shall be
signed by the person or persons exercising this Option. The date of
exercise shall be the date such written notice and payment have been
delivered to the Secretary of the Company either in person or by depositing
said notice and payment of the purchase price in the United States mail,
postage prepaid and addressed to the Secretary of the Company at the
Company's home business office.
(B) MINIMUM NUMBER OF SHARES. This Option cannot be exercised with
respect to any fractional Shares.
(C) PAYMENT FOR SHARES. A notice of exercise shall be accompanied by
payment of the full Option Price of such Shares (plus minimum required tax
withholding, if any) by:
(i) tendering cash (in the form of a check or otherwise) in such
amount;
(ii) except as otherwise provided by the Committee prior to
exercise of this Option, tendering Shares (by attestation or actual
delivery) with a Fair Market Value on the date of exercise equal to
such amount; or
(iii) delivering irrevocable instructions to a broker to promptly
deliver to the Company the sale or loan proceeds equal to such amount,
along with documentation from such broker guaranteeing such payment.
(D) DELIVERY OF SHARES. The Company shall deliver a certificate or
certificates representing Shares attributable to an exercise of this Option
as soon as practicable after the notice of exercise and payment shall have
been received. The certificate or certificates for the Shares as to which
this Option shall have been exercised shall be registered in the name of
the person or persons exercising this Option. The Company shall not be
obligated to deliver any certificates prior to the fulfillment by it of any
listing obligations with respect to the Shares on any exchange or over-the-
counter market or the registration or qualification of the Shares under any
federal or state securities laws which the Company deems advisable.
5. RELOAD OPTION. To the extent the Optionee (a) exercises the
Option or any portion thereof by (i) delivery or attesting to the ownership
of Common Stock pursuant to subparagraph 4(c)(ii) or (ii) delivering
irrevocable instructions with respect to the sale of Common Stock pursuant
to subparagraph 4(c)(iii) or (b) pays tax withholding attributable to the
exercise of this Option by delivering Shares or having Shares withheld from
exercise pursuant to Section 7.3 of the Plan, then, if the Optionee's
Termination of Employment has not then occurred, the Optionee shall
automatically be awarded, on the date of such exercise (or on the first
date of exercise in the event of a partial exercise), a new Option (a
"Reload Option") to purchase additional Shares equal in number to the
Shares delivered, attested, or withheld in connection with such exercise.
The Reload Option shall be subject to the same terms and conditions as this
Option and shall be exercisable, if at all, only to the extent this Option
would have then been exercisable if still outstanding, except (a) the
Reload Option have an Option Price equal to the Fair Market Value per Share
on the date the Reload Option is deemed to have been awarded, (b) the
Reload Option shall not be exercisable after the Optionee's Termination of
Employment, and (c) the Reload Option can be exercised only by the
Optionee.
6. FORFEITURE PROVISIONS. The Option evidenced by this Option
Agreement and the Reload Option described in paragraph 5 shall not be
exercisable and shall expire if Optionee violates any provision of the Non-
solicitation Agreement. In addition, if Optionee (a) exercises this
Option, in whole or in part, (i) during a period which begins six months
prior to Optionee's Termination of Employment and ends during the one year
period or periods described in the Non-solicitation Agreement, and (ii)
Optionee violates any provision of the Non-solicitation Agreement, or (b)
exercises this Option within the six-month period immediately preceding
Optionee's Termination of Employment for Cause, Optionee hereby agrees to
pay to the Company, with respect to each Share acquired upon exercise, the
excess of (x) the Fair Market Value of each Share on the date of exercise
over (y) the Option Price. This requirement may be waived by the Committee
only if it determines, in its sole judgment, that such waiver is in the
best interests of the Company. The Committee shall, in its sole good faith
and reasonable judgment, determine whether any violation of the Non-
solicitation Agreement has occurred and its judgment shall be final and
binding on all parties.
7. ENFORCEMENT AND RIGHT OF SET-OFF. Optionee consents to a
deduction from any amounts owed by the Company to Optionee from time to
time and at any time (including amounts owed as wages or other compensation
and welfare benefits of any kind, including vacation pay) to the extent of
the amount owed to the Company under paragraph 6. Whether or not the
Company elects to exercise its right to set-off under this paragraph in
whole or in part, Optionee agrees to pay the unpaid balance of any amount
owed the Company pursuant to this Option Agreement within three days of the
Company's written demand for such payment (determined as of the date such
demand is sent by certified mail or overnight courier to the last address
provided to the Company by Optionee).
8. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. If the Common Stock
is changed into a greater or lesser number of shares as a result of a stock
dividend, stock split-up, or combination of Shares, then the number of
Shares subject to this Option and the Option Price shall be proportionately
increased or decreased to give effect to the change as provided for in the
Plan. In the event of any other change in the Common Stock or change in
the capitalization of the Company, the Committee may make such changes in
the terms of this Option as provided for in Section 3.5 of the Plan.
9. NON-TRANSFERABILITY OF OPTION. This Option may be exercised only
by the Optionee or, if the Optionee dies, by the personal representative or
designee under the Optionee's will or by the Optionee's estate, as the case
may be. Except as otherwise provided in the preceding sentence, this
Option may not be assigned, transferred, pledged, or hypothecated in any
way, shall not be assignable by operation of law and shall not be subject
to execution, attachment, or similar process. Any attempted assignment,
transfer, pledge, hypothecation, or other disposition of this Option
contrary to the provisions hereof, and the levy of any execution,
attachment, or similar process upon this Option, shall be null and void and
without effect.
10. SHARES AS INVESTMENT. If not registered by the Company under the
Securities Act of 1933 (the "Act"), the Shares acquired pursuant to the
exercise of this Option, will be "restricted" stock which will not be
freely transferable by the holder after exercise of this Option. The
Optionee and any successor in interest of the Optionee accordingly
represents and acknowledges, as a condition of the granting of this Option,
that (a) Shares which are unregistered under the Act will be acquired for
the Optionee's (or his successor's) own account for investment only and not
with a view to offer for sale or for sale in connection with the
distribution or transfer thereof and (b) that the certificates representing
Shares purchased pursuant to this Option which have not been registered
pursuant to the Act will bear a legend as to such restrictions on transfer.
11. EMPLOYMENT. This Option Agreement does not constitute a contract
of employment between the Company or any Subsidiary and the Optionee and it
shall not affect the right of the Company or any present or future
Subsidiary to terminate the employment of the Optionee, with or without
cause, at any time.
12. CONSTRUCTION AND DEFINITIONS. This Option Agreement is subject
to and shall be construed in accordance with the terms of the Plan which
are explicitly made applicable to this Option Agreement and incorporated by
this reference. Unless otherwise defined, all terms used in this Option
Agreement, when capitalized, have the same meaning as such terms are
defined in the Plan and each such definition is hereby incorporated by this
reference. In the event of any conflict between the provisions of this
Option Agreement and the Plan, the provisions of the Plan shall govern.
13. GOVERNING LAW. This Option Agreement shall be governed by the
laws of the State of Wisconsin without reference to or the application of
the principles of conflicts of laws. The Company and Optionee agree that
the Circuit Court for Xxxxxx County, Wisconsin shall have jurisdiction over
any action or proceeding involving the enforcement of its terms and agrees
TO THE PERSONAL JURISDICTION OF SUCH COURT IN ANY SUCH ACTION OR
PROCEEDING.
14. BINDING EFFECT. The Option evidenced by this Option Agreement is
expressly conditioned on the execution of this Option Agreement by the
Optionee. This Option Agreement shall be binding upon and inure to the
benefit of the Company and the Optionee and their successors in interest.
15. RECEIPT OF INFORMATION. The Optionee hereby acknowledges receipt
of a copy of the Plan and of the Company's most recent annual report to its
shareholders.
IN WITNESS WHEREOF, the Company has caused this Option Agreement to be
signed by its officer, thereunto duly authorized, and the Optionee has
acknowledged his acceptance of this Option in accordance with the terms of
this Option Agreement and the Plan, all as of the Date of Grant.
OPTIONEE: MID-WISCONSIN FINANCIAL
SERVICES, INC.
_________________________ By:___________________________
_________________________ Xxxxx X. Warsaw
Optionee As its President and
Chief Executive Officer
FORM 2
MID-WISCONSIN FINANCIAL SERVICES, INC.
1999 STOCK OPTION PLAN
NOTICE OF INTENT TO EXERCISE STOCK OPTION
The undersigned Optionee hereby exercises the Option to purchase shares of
common stock of Mid-Wisconsin Financial Services, Inc. under the Mid-Wisconsin
Financial Services, Inc. 1999 Stock Option Plan as follows:
Date of Grant: __________________, _____
Type of Option: [ ] Incentive Stock Option
[ ] Non-qualified Stock Option
Number of Shares: ____________ (whole shares only)
Option Price: $___________ per Share
Income Tax Due*: $___________
*The Company is required to withhold taxes when a non-qualified Option is
being exercised. Under current tax law, the Company is not required to
withhold taxes when an Optionee exercises an Incentive Stock Option.
Total Amount Due: $___________
Method of Payment: Indicate the method or methods by which payment will be
made:
[ ] Check
[ ] Surrender of Company Shares
No. of Shares surrendered: _____________
[ ] by delivery [ ] by attestation
(Shares must have been held for at least 6 months)
[ ] Cashless exercise and sale or loan by broker (attach copy of
broker sale or loan agreement). By checking this box, the
Optionee certifies that no shares to be sold will violate any
Company policies on xxxxxxx xxxxxxx.
Date: _______________, 200__
Optionee Name: ______________________________
Signature: ______________________________
Social Security No. _____________________________
Address: Street: __________________________________________________________
City: _____________________________ State: ____ Zip: _________
