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<PAGE> 1
EXHIBIT 10.4: FORM OF NON-STATUTORY STOCK OPTION AWARD
AGREEMENT
<PAGE> 2
FORM OF
NON-STATUTORY 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 for the 2007
Plan (the "Committee") granted the Participant the right and
option to purchase
Shares pursuant to the Newport Bancorp, 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 a
NON-STATUTORY
STOCK OPTION (referred to
in this Agreement as your
"Option"). Your Option is
NOT intended to qualify as
an "incentive stock option"
under Section 422 of the
Internal Revenue Code of
1986, as amended.
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
as a Participant Percentage of Number of Shares
after Grant Date Option Vested Available for 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.
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 befo
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