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Exhibit 10.1
2008 INCENTIVE STOCK OPTION PLAN
OF UNION BANKSHARES, INC. AND SUBSIDIARY
SECTION ONE
DEFINITIONS
As used
herein:
(a)
"Corporation" means Union Bankshares, Inc.
(b) "Code"
means the Internal Revenue Code, as amended.
(c)
"Committee" means the stock option committee, as described in
Section
Three.
(d)
"Effective Date" means the effective date of this Plan, as
determined
under Article Eighteen.
(e)
"Eligible Employees" means those officers and other key
employees,
including division managers and department heads, employed by the
Corporation
or any parent or Subsidiary, who are selected by the Committee from
time to
time to receive stock options, as provided in Section Three.
(f)
"Extended Option Period" means the extended period for exercise
of
options following termination of the Optionee's employment, as
provided in
Section 8, paragraphs (a), (b), (c) or (d) and as applicable in
the
circumstances.
(g) "Fair
Market Value" means, as of any given date, with respect to a
share of the Corporation's Common Stock, the price per share
determined by the
Committee, consistent with Code Section 422 and Treasury
Regulations
thereunder. To the extent not inconsistent with Code Section 422
and applicable
regulations, for so long as the Corporation's Common Stock is
listed for
trading on a national securities exchange, the per share market
value of such
stock on any given date shall be deemed to be the price at which
the
Corporation's Common Stock was last sold on such exchange on such
date, or, if
there shall be no sale on such date, the next preceding date on
which a sale
shall have occurred.
(h)
"Optionee" means an Eligible Employee to whom a stock option has
been
awarded under the Plan.
(i) "Plan"
means this 2008 Incentive Stock Option Plan of Union
Bankshares, Inc. and Subsidiary.
(j)
"Retirement" means the Optionee's retirement from employment by
the
Corporation or any parent or Subsidiary on or after the Optionee's
normal
retirement date or early retirement date, as provided in the
Corporation's
defined benefit pension plan, or any successor broad-based
retirement plan
designated by the Committee.
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(k)
"Subsidiary" means Union Bank, and any successor corporation or
entity, and shall also mean and include any other corporation or
entity, at
least 50% of the combined voting stock of which is hereafter owned
or
controlled by the Corporation, and any successor to such other
corporation or
entity.
(l) "Ten
Percent Shareholder" means a person who at the time of a stock
option grant owns in excess of ten percent (10%) of the total
combined voting
power of all classes of stock of the Corporation or any parent or
Subsidiary of
the Corporation.
(m)
"Termination Date" means the date of the termination of this Plan,
as
determined under Article Eighteen.
SECTION TWO
PURPOSES
The
purposes of the Plan are:
(a) To
encourage a sense of proprietorship on the part of designated
officers and other key employees who will have key roles in
fostering the
continued growth and success of the Corporation and its
Subsidiary;
(b) To
recognize past valuable services of such key employees;
(c) To
furnish such key employees with further incentive to develop
and
promote the business and financial success of the Corporation and
its
Subsidiary, and thereby to enhance shareholder value; and
(d) To
induce such key employees to continue in the service of the
Corporation and its Subsidiary, by providing a means whereby such
key employees
may be given an opportunity to purchase stock in the
Corporation.
SECTION THREE
ADMINISTRATION
(a) The
Plan shall be administered by a stock option committee
consisting
of all the members of the Board of Directors of the Corporation who
are not
eligible to receive options under the Plan and who qualify as
"Non-Employee
Directors" under Securities and Exchange Commission Rule 16b-3
promulgated
under the Securities Exchange Act of 1934, as amended. A majority
of the
Committee shall constitute a quorum. All determinations of the
Committee shall
be made by a majority of its members.
(b)
Subject to the express provisions of the Plan, the Committee
shall
have full power and authority, in its discretion, to determine
initially and
from time to time those Eligible Employees to whom options are to
be granted
and to establish the terms on which options are granted and may be
exercised,
not inconsistent with this Plan, including the times when such
options shall be
granted or may be exercised and the number of shares to be covered
by each
option. The contributions of individuals in furthering the
interests of the
Corporation and its Subsidiary shall be the primary guide for the
Committee in
apportioning the number of shares to be optioned to key employees,
but
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the Committee may take into consideration such other factors as it
may deem
relevant in its discretion, including, without limitation, the
position held by
the employee, his or her longevity of service and overall
compensation.
(c)
Options granted under the Plan shall be in writing and in the form
of
an option agreement or other writing intended to be legally binding
and
enforceable on the Corporation, as the Committee may determine in
its
discretion from time to time.
(d)
Subject to the express provisions of the Plan, the Committee
shall
also have the power and authority to construe and interpret the
Plan and any
option agreements entered into hereunder, and to make all other
determinations
necessary or advisable for administering the Plan. The
determination of the
Committee on all matters referred to in this section shall be final
and
conclusive.
SECTION FOUR
ELIGIBILITY
(a)
Options may be granted only to Eligible Employees who are
selected
from time to time by the Committee in accordance with Section
Three, paragraph
(b).
(b) Any
grant of a stock option to an Eligible Employee who is a Ten
Percent Shareholder shall comply with the special provisions set
forth in
Section Six, paragraph (b) and Section Seven, paragraph (b) with
respect to the
option exercise price and duration in addition to other applicable
provisions
of this Plan.
SECTION FIVE
SHARES SUBJECT TO PLAN
(a) The
stock to be issued upon exercise of options granted under this
Plan shall consist of authorized but unissued shares of the
Corporation's $2.00
par value Common Stock and/or shares of such Common Stock held in
treasury.
Subject to adjustment in accordance with Section Fourteen, the
aggregate number
of shares of Common Stock that may be delivered upon exercise of
all options
granted under this Plan shall not exceed fifty thousand (50,000)
shares. The
Corporation will at all times reserve and keep available such
number of shares
of Common Stock as shall be sufficient to satisfy the requirements
of the Plan.
(b) If any
option granted under the Plan expires, terminates or is
canceled without having been exercised in full, the number of
shares of Common
Stock as to which the option has not been exercised shall become
available for
future grants under the Plan.
(c) All
shares issued upon the exercise of an option shall be fully
paid
and nonassessable. For so long as the Corporation's Common Stock is
traded on a
national securities exchange, the Corporation shall take all
appropriate action
for the shares issuable pursuant to this Plan to be approved for
listing upon
issuance. Notwithstanding the foregoing, nothing in this Plan shall
be deemed
to require the Corporation to continue to list its Common Stock for
trading on
any national exchange or other trading facility.
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(d) Unless
otherwise determined by the Committee, no fractional share of
the Corporation's Common Stock shall be issued or transferred upon
exercise of
an option under the Plan.
SECTION SIX
OPTION PRICE
(a) The
purchase price of the shares issuable upon exercise of options
granted under the Plan shall be not less than the Fair Market Value
of the
Corporation's Common Stock at the time such option is granted, as
determined by
the Committee in accordance with the provisions of this Plan.
(b)
Notwithstanding any other provision of this Plan, if an option
is
granted under this Plan to an Eligible Employee who is a Ten
Percent
Shareholder at the time of such option grant, the purchase price of
the shares
under such option shall be not less than one hundred and ten
percent (110%) of
the Fair Market Value of such shares on the date the option is
granted.
SECTION SEVEN
DURATION OF OPTIONS
(a) The
Committee shall have the authority to establish the time or
times
when each option shall become exercisable and the duration of the
exercise
period, in conformity with the provisions hereof.
(b) Unless
sooner terminated under Section Eight, options granted
hereunder shall continue for the period specified by the Committee,
which
period shall not exceed ten (10) years from the date of grant, or
five (5)
years in the case of a grant to an Optionee who is a Ten Percent
Shareholder.
SECTION EIGHT
TERMINATION OF OPTIONS
(a) Unless
otherwise provided under the terms of an option grant, in the
event of termination of the Optionee's employment with the
Corporation or any
parent or Subsidiary of the Corporation for any cause (other than
the death,
Retirement or disability of the Optionee, or termination for just
cause),
including by reason of voluntary resignation or involuntary lay
off, (i) each
vested, unexpired, unexercised option held by such Optionee
hereunder shall
continue to be exercisable during the period ending on the earlier
of the
option's specified expiration date or three (3) months after the
date on which
the Optionee's employment terminated; and (ii) each unvested option
shall
terminate upon termination of employment. Any options remaining
unexercised
upon expiration of the E
