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EXHIBIT 10.3: FORM OF INCENTIVE STOCK OPTION AWARD AGREEMENT
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FORM OF
INCENTIVE STOCK OPTION AWARD AGREEMENT
FOR THE NEWPORT BANCORP, INC. 2007 EQUITY INCENTIVE PLAN
This Award Agreement is provided to ________________ (the
"Participant") by Newport Bancorp, Inc. (the "Company") as of
_________ (the
"Grant Date"), the date the Board of Directors of the Company
serving as the
committee of the 2007 Plan (the "Committee") granted the
Participant the right
and option to purchase Shares pursuant to the Newport Bancorp,
Inc., Inc. 2007
Equity Incentive Plan (the "2007 Plan"), subject to the terms
and conditions of
the 2007 Plan and this Award Agreement:
1. OPTION GRANT: You have been granted an INCENTIVE
STOCK OPTION (referred to in this
Agreement as your "Option").
2. NUMBER OF SHARES
SUBJECT TO YOUR OPTION: ___________ shares of Common Stock
("Shares"), subject to adjustment
as may be necessary pursuant to
Article 10 of the 2007 Plan.
3. GRANT DATE: ___________
4. EXERCISE PRICE: You may purchase Shares covered by
your Option at a price of $_______
per share.
Unless sooner vested in accordance with Section 2 of the Terms
and
Conditions (attached hereto) or otherwise in the discretion of
the Committee,
the Options shall vest (become exercisable) in accordance with
the following
schedule:
<TABLE>
<CAPTION>
Continuous Status Percentage of Number of Shares
as a Participant Option Vested/ Available for
after Grant Date Number of Shares Exercise Vesting Date
----------------- ---------------- -----------------
-------------
<S> <C> <C> <C>
Less than 1 year 0% _____ ______
1 year 20% _____ ______
2 years 40% _____ ______
3 years 60% _____ ______
4 years 80% _____ ______
5 years 100% _____ ______
</TABLE>
IN WITNESS WHEREOF, Newport Bancorp, Inc., acting by and through
the
Board of Directors, has caused this Award Agreement to be
executed as of the
Grant Date set forth above.
NEWPORT BANCORP, INC.
ACCEPTED BY PARTICIPANT: By:
-----------------------------------
On behalf of the Board of Directors
--------------------------
[Name]
--------------------------
Date
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TERMS AND CONDITIONS
1. GRANT OF OPTION. The Grant Date, Exercise Price and number of
Shares
subject to your Option are stated on page 1 of this Award
Agreement.
Capitalized terms used herein and not otherwise defined shall
have the
meanings assigned to such terms in the 2007 Plan. The Company
intends
this grant to qualify as an Incentive Stock Option under Section
422 of
the Internal Revenue Code of 1986, as amended.
2. VESTING OF OPTIONS. The Option shall vest (become
exercisable) in
accordance with the vesting schedule shown on page 1 of this
Award
Agreement. Notwithstanding the vesting schedule on page 1, the
Option
will also vest and become exercisable:
(a) Upon your death or Disability during your Continuous Status
as
a Participant; or
(b) Upon a Change in Control (as defined in the 2007 Plan).
3. TERM OF OPTIONS AND LIMITATIONS ON RIGHT TO EXERCISE. The
term of the
Option will be for a period of ten (10) years, expiring at 5:00
p.m.,
Eastern Time, on the tenth anniversary of the Grant Date
(the
"Expiration Date"). To the extent not previously exercised, the
vested
portion of your Option will lapse prior to the Expiration Date
upon the
earliest to occur of the following circumstances:
(a) Three (3) months after the termination of your
Continuous
Status as a Participant for any reason other than your death
or Disability.
(b) Twelve (12) months after termination of your Continuous
Status
as a Participant by reason of Disability.
(c) Twelve (12) months after the date of your death, if you
die
while employed, or during the three-month period described
in
subsection (a) above or during the twelve-month period
described in subsection (b) above and before the Option
would
otherwise lapse. Upon your death, your beneficiary
(designated
pursuant to the terms of the 2007 Plan) may exercise your
Option.
(d) At the end of the remaining original term of the Option,
if
your employment is involuntarily or constructively
terminated
within twelve (12) months of a Change in Control. Options
exercised more than
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