INCENTIVE STOCK OPTION AGREEMENT
UNDER MFB CORP. 2002 STOCK OPTION PLAN
Employee Name:
You are hereby granted the option to purchase a total of 0,000 shares of the
Common Stock, without par value ("Common Stock"), of MFB Corp. ("MFB") over the
next ten years pursuant to MFB's 2002 Stock Option Plan (the "Plan"), on the
following terms and conditions:
1. The purchase price of the shares of Common Stock subject to this option is
$00.00 per share. You must pay this purchase price in cash at the time this
option is exercised; provided, however that, with the approval of MFB's Stock
Compensation Committee (the "Committee"), you may exercise your option by
tendering to MFB whole shares of MFB's Common Stock owned by you, or any
combination of whole shares of MFB's Common Stock owned by you and cash, having
a fair market value equal to the cash exercise price of the shares with respect
to which the option is exercised by you. For this purpose, any shares so
tendered shall be deemed to have a fair market value equal to the mean between
the highest and lowest quoted selling prices for the shares on the date of
exercise of the option (or if there were no sales on such date the weighted
average of the means between the highest and lowest quoted selling prices on the
nearest date before and the nearest date after the date of exercise of the
option), as reported in The Wall Street Journal or a similar publication
selected by the Committee. To exercise this option, you must send written notice
to the MFB's Secretary at the address noted in Section 12 hereof. Such notice
shall state the number of shares in respect of which the option is being
exercised, shall identify the option exercised as an incentive stock option, and
shall be signed by the person or persons so exercising the option. Such notice
shall be accompanied by payment of the full cash option price for such shares
or, if the Committee has authorized the use of the stock swap feature provided
for above, such notice shall be followed as soon as practicable by the delivery
of the option price for such shares. Certificates evidencing shares of Common
Stock will not be delivered to you until payment has been made. Under certain
circumstances, the Plan permits you to deliver a notice to your broker to
deliver the cash to MFB upon the receipt of such cash from the sale of MFB
Common Stock. Contact the Secretary of MFB for further information about this
procedure if you are interested in it.
2. The term of this option (the "Option Term") shall be for a period of ten
years from the date of this letter, subject to earlier termination as provided
in paragraphs 3 and 4 hereof. Except as otherwise provided below, the option may
be exercised at any time, or from time to time, in whole or in part, until the
Option Term expires, but in no case may fewer than 100 such shares be purchased
at any one time, except to purchase a residue of fewer than 100 shares;
provided, however, that except as otherwise provided in paragraphs 3 and 4
below, the exercisability of the option shall vest as to the shares listed below
on the dates listed below:
Date Option for Certain Number Shares As to Which Option
of Shares Becomes Exercisable Becomes Exercisable on Such Date
Notwithstanding the foregoing or any other provision herein, the option may not
be exercised during the first six months of the Option Term.
3. If you cease to be an employee of MFB or any of its subsidiaries for any
reason other than retirement, permanent and total disability, or death, this
option shall forthwith terminate. If your employment by MFB or any of its
subsidiaries is terminated by reason of retirement (which means such termination
of employment as shall entitle you to early or normal retirement benefits under
any then existing pension plan of MFB or one of its subsidiaries), you may
exercise this option in whole or in part within three years after such
retirement, whether or not the option was otherwise exercisable at the date of
such retirement, but not later than the date upon which this option would
otherwise expire; provided, however, that if you are a director or a director
emeritus of MFB at the time of your retirement, you may exercise this option in
whole or in part until the later of (a) three years after your date of
retirement or (b) six months after your service as a director and/or director
emeritus terminates, but not later than the date upon which this option would
otherwise expire. If you cease to be an employee of MFB or any of its
subsidiaries because of your permanent and total disability, you may exercise
this option in whole or in part at any time within one year after such
termination of employment by reason of such disability, but not later than the
date upon which this option would otherwise expire.
4. If you die while employed by MFB or any of its subsidiaries, within three
years after the termination of your employment because of retirement (or, if
later, six months following your termination of service as a director or
director emeritus of MFB), or within one year after the termination of your
employment because of permanent and total disability, this option may be
exercised in whole or in part by your executor, administrator, or estate
beneficiaries at any time within one (1) year after the date of your death but
not later than the date upon which this option would otherwise expire.
5. This option is nontransferable otherwise than by will or the laws of descent
and distribution or pursuant to a qualified domestic relations order. It may be
exercised only by you or your guardian, if any, or, if you die, by your
executor, administrator, or beneficiaries of your estate who are entitled to
your option.
6. All rights to exercise this option will expire, in any event, ten years from
the date of this letter.
7. Certificates evidencing shares issued upon exercise of this option may bear a
legend setting forth among other things such restrictions on the disposition or
transfer of the shares of MFB as MFB may deem consistent with applicable federal
and state laws.
8. Nothing in this option shall restrict the right of MFB or its subsidiaries to
terminate your employment at any time with or without cause.
9. This option is subject to all the terms, provisions and conditions of the
Plan, which is incorporated herein by reference, and to such regulations as may
from time to time be adopted by the Committee. A copy of the Plan has been
furnished to you and an additional copy may be obtained from MFB. In the event
of any conflict between the provisions of the Plan and the provisions of this
letter, the terms, conditions and provisions of the Plan shall control, and this
letter shall be deemed to be modified accordingly.
10. This Stock Option Agreement is intended to grant an option which meets all
of the requirements of incentive stock options as defined in Section 422A of the
Internal Revenue Code. Subject to and upon the terms, conditions and provisions
of the Plan, each and every provision of this Agreement shall be administered,
construed and interpreted so that the option granted herein shall so qualify as
an incentive stock option. Each provision of this Stock Option Agreement which
would prevent this option from qualifying as an incentive stock option, if any,
shall be void.
11. You agree to advise MFB immediately upon any sale or transfer of any shares
of Common Stock received upon exercise of this option to the extent such sale or
transfer takes place prior to the later of (a) two years from the date of grant
or (b) one year from the date of exercise of this option.
12. All notices by you to MFB and your exercise of the option herein granted,
shall be addressed to MFB Corp., 000 Xxxxx Xxxxxx Xxxxxx, Xxxx Xxxxxx Xxx 000,
Xxxxxxxxx, Xxxxxxx 00000, Attention: Secretary, or such other address as MFB
may, from time to time, specify.
13. This option may not be exercised until MFB has been advised by counsel that
all other applicable legal requirements have been met.
Very truly yours,
MFB CORP.
By: ___________________________________
X. Xxxxxxx Xxxxxxxx, Secretary
Accepted on the date above written:
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Employee Name
