EXHIBIT 10.2
WAUWATOSA HOLDINGS, INC.
2006 EQUITY INCENTIVE PLAN
FORM OF
NON- QUALIFIED STOCK OPTION AGREEMENT
(OUTSIDE DIRECTOR)
A. Stock options ("Options") for a total of ___________ shares of Common
Stock, par value $0.01 per share, of Wauwatosa Holdings, Inc. (the "Company")
are hereby granted to ________________________ (the "Participant"). Stock
Appreciation Rights with respect to a total of _____________ shares are also
granted to the Participant and relate to the Options granted hereunder. The
grant and terms of the Options and Stock Appreciation Rights shall be subject in
all respects to the Wauwatosa Holdings, Inc. 2006 Equity Incentive Plan (the
"Plan"). The terms of this Non-Qualified Stock Option Agreement are subject to
the terms and conditions of the Plan.
B. The Option exercise price of Common Stock is $__________ per share, the
Fair Market Value (as defined in the Plan) of the Common Stock on __________ __,
2007, the date of grant.
C. The Options granted hereunder shall vest in five (5) approximately equal
annual installments, with the first installment vesting and becoming exercisable
on the first anniversary of the date of grant, or on ______________ __, 2008,
and succeeding installments on each anniversary thereafter through
___________________ __, 2012. To the extent that the Options awarded are not
evenly divisible by "five" (5), then the Options in excess of those evenly
divisible by 5 shall vest at the rate of one per year, commencing with the
initial installment vesting and continuing until each such Option is fully
vested. For example, an award of 103 Options would vest at the rate of 21
Options on the first, second and third anniversaries of the date of grant, and
at the rate of 20 on the fourth and fifth anniversaries of the date of grant.
The Options granted hereunder may be exercised for up to ten (10) years from the
date of grant, subject to sub-paragraph D below.
D. If you terminate service with the Company for any reason other than
death, disability, following a Change in Control (as defined in the Plan) or for
cause, unvested Options will be forfeited and vested Options will be exercisable
for a period of up to one (1) year following such termination. If you terminate
service with the Company due to death, disability or following a Change in
Control, your Options, whether or not exercisable at such time, will become
exercisable by you (or your legal representative or beneficiary) for two (2)
years following your termination of service. In no event will the period of
exercise extend beyond the expiration of the Option term. If you are terminated
for cause, Options will be exercisable only as to those Options in which you are
vested at the time of such termination and must be exercised by the date you
cease to perform services for the Company. All rights under this Agreement shall
expire after the date of your termination of service for cause.
X. Xxxxx Appreciation Rights ("SARs") are hereby granted with respect to
all Options granted hereunder. SARs are granted in tandem with the Options
granted hereunder and the exercise of one will cause the cancellation of the
other. If the Participant exercises SARs, the Participant will not be required
to pay the exercise price of the related Option and will be entitled to receive
Common Stock of the Company equal in value to the difference between the Fair
Market Value of the Common Stock on the date of exercise and the exercise price
of the related Options (which will be cancelled).
Example: Participant receives 1,000 Options and related SARs. The Options
have an exercise price of $12. When the Company Stock is trading at $18,
the Participant exercises 300 SARs. Because the Participant has exercised
SARs, the Participant does not have to pay the exercise price. The
Participant receives 100 shares of the Company stock.
$18 Common Stock
- $12 exercise price
$ 6 SAR value
x 300 SARs exercised
$1,800/18 Common Stock = 100 shares
F. Options may not be exercised if the issuance of shares of Common Stock
of the Company upon such exercise would constitute a violation of any applicable
federal or state securities or other law or regulation. The Participant, as a
condition to exercise of the Options, shall represent to the Company that the
shares of Common Stock of the Company that he acquires pursuant to such exercise
are being acquired by such Participant for investment and not with a present
view to distribution or resale, unless counsel for the Company is then of the
opinion that such a representation is not required under the Securities Act of
1933 or any other applicable law, regulation, or rule of any governmental
agency.
G. Options granted under the Plan are not transferable other than by will
or the laws of descent and are exercisable during the Participant's lifetime
only by the Participant to whom they have been granted or the Participant's duly
appointed guardian or personal representative. Notwithstanding the foregoing,
the Committee may permit a Participant to transfer a Non-Qualified Stock Option
to a family member or a trust or partnership for the benefit of a family member,
in accordance with rules established by the Committee.
H. A copy of the Plan is enclosed and your attention is invited to all the
provisions of the Plan. You will observe that you are not required to exercise
the Options as to any particular number or shares at one time, but the Options
must be exercised, if at all, and to the extent exercised, by no later than ten
years from the date of grant. The Options may be exercised during such term only
in accordance with the terms of the Plan. In the event of any inconsistency
between this Agreement and the Plan, the terms of the Plan will control.
I. All exercises of the Options must be made by executing and returning the
Notice of Exercise of Non-Qualified Stock Options attached hereto as Exhibit A,
and upon receipt of any shares of Common Stock upon the exercise of any Options,
the recipient shall complete and return to the Company the Acknowledgment of
Receipt of Non-Qualified Stock Option Shares attached hereto as Exhibit B. All
exercises of the SARs must be made by executing and returning the Notice of
Exercise of Stock Appreciation Rights attached hereto as Exhibit C, and upon
receipt of any shares of Common Stock upon the exercise of any SARs, the
recipient shall complete and return to the Company the Acknowledgment of Receipt
of Shares of Common Stock attached hereto as Exhibit D.
J. The Participant acknowledges receipt of a copy of the Wauwatosa
Holdings, Inc. 2006 Equity Incentive Plan and represents that he is familiar
with the terms and provisions thereof. The Participant hereby accepts the
Options subject to all the terms and provisions of such Plan. The Participant
hereby agrees to accept as binding, conclusive, and final all decisions and
interpretations of the Committee established to administer such Plan upon any
questions arising under such Plan.
Date: ________________________
ATTEST: WAUWATOSA HOLDINGS, INC.
By: ___________________________ By: _______________________________
WITNESS: PARTICIPANT
Date: __________________________ __________________________________
This Stock Option Agreement must be executed in duplicate originals, with one
original retained by the Company and one original retained by the Participant.
