Exhibit
99.2
SKAGIT STATE BANCORP,
INC.
RESTRICTED STOCK AGREEMENT
RESTRICTED STOCK AGREEMENT
(“Agreement”) entered into by and between Skagit State
Bancorp, Inc. , a Washington corporation
(“Bancorp”), and the Grantee named below, on
______________, _______.
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Grantee:
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Number of Shares
of Restricted Stock :
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Date of
Grant:
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Fair Market Value
of
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Restricted Stock on
Date of Grant:
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Vesting
Schedule
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Date of Vesting
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Percentage of Number of Shares of Restricted
Stock
That Vests on Such Date (rounded up to next highest
whole number of shares)
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1.
Bancorp hereby grants to Grantee the number of shares of restricted
stock (“Restricted Stock”) identified above, under the
terms and conditions provided in this Agreement.
2.
The shares of Restricted Stock are granted under the 2005 Incentive
Stock Plan of Skagit State Bancorp, Inc. (the “Plan”)
and are subject to the terms and conditions of the Plan and this
Agreement. The terms and conditions of the Plan are
incorporated herein by this reference. In the event of a
conflict between the terms and conditions of the Plan and the terms
and conditions of this Agreement, the former shall govern.
Capitalized terms used herein that are not otherwise defined shall
have the meaning given those terms in the Plan.
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3.
Grantee is not required to pay any amounts for shares of Restricted
Stock received hereunder.
4.
Shares of Restricted Stock shall Vest in accordance with the
Vesting Schedule set forth above. Shares of Restricted Stock
that have not Vested as of the time Grantee first ceases to
maintain Continuous Status as a Service Provider shall be forfeited
to Bancorp for no consideration.
5.
Shares of Restricted Stock are not transferable and may not be
sold, pledged, assigned, hypothecated, transferred or disposed of
in any manner, other than by will or by the laws of descent or
distribution, prior to the time such shares Vest.
6.
Notwithstanding any contrary provisions of this Agreement, Grantee
may not sell shares of common stock of Bancorp acquired hereunder
(whether or not Vested) unless those shares are registered under
applicable securities laws and regulations or an exemption from
such registration is available. Prior to such sale, Bancorp
may require Grantee to provide it with a letter, at Grantee’s
expense, from counsel acceptable to Bancorp stating that the sale
of the shares will not violate any such securities laws or
regulations.
7.
Certain Tax Matters. Grantee acknowledges that
following:
a.
Grantee understands that under Section 83(a) of the U.S. Internal
Revenue Code of 1986, as amended (the “Code”), the
excess of the fair market value on the date of Vesting of the
shares of Restricted Stock over the fair market value on the Date
of Grant of such shares will be taxed at the time of Vesting as
ordinary income and subject to payroll and other withholding taxes
and to tax reporting, as applicable. Grantee further
understands that he/she may elect under Section 83(b) of the Code
to be taxed at ordinary income rates based on the fair market value
of the shares of Restricted Stock at the time such shares are
acquired, rather than at the time and as the shares of Restricted
Stock Vest. Such election (an “83(b) Election”) must be
filed with the Internal Revenue Service within thirty (30) days
from the Date of Grant.
b.
Grantee understands that (i) he/she will not be
entitled to a deduction for any ordinary income previously
recognized as a result of the 83(b) Election if shares of
Restricted Stock are subsequently forfeited to Bancorp, and
(ii) the 83(b) Election may cause him/her to recognize
more compensation income than you would have otherwise recognized
if the value of the shares of Restricted Stock subsequently
decline.
c.
THE FORM FOR MAKING AN 83(b) ELECTION IS ATTACHED TO THIS AGREEMENT
AS EXHIBIT B. GRANTEE UNDERSTANDS THAT FAILURE TO FILE SUCH AN
ELECTION WITHIN THE 30-DAY PERIOD MAY RESULT IN THE RECOGNITION OF
ORDINARY INCOME BY HIM/HER AS THE SHARES OF RESTRICTED STOCK VEST.
Grantee further understands that an additional copy of such
election form should be filed with
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his/her federal income tax return for the
calendar year in which the date of the date of Grant falls. Grantee
acknowledges that the foregoing is only a summary of the federal
income tax laws that apply to the shares of R estricted
Stock and does not purport to be complete. GRANTEE FURTHER
ACKNOWLEDGES THAT BANCORP HAS DIRECTED HIM/HER TO SEEK INDEPENDENT
ADVICE REGARDING THE APPLICABLE PROVISIONS OF THE CODE, THE INCOME
TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH
HE/SHE MAY RESIDE, AND THE TAX CONSEQUENCES OF HIS/HER DEATH.
d.
Grantee agrees to execute and deliver to Bancorp a copy of
(i) the Acknowledgment and Statement of Decision
Regarding Section 83(b) Election, attached hereto as Exhibit A, and
(ii) if he/she makes the Section 83(b) Election, the
83(b) Election attached hereto as Exhibit B.
e.
Grantee acknowledges that determining the actual tax consequences
to him/her of receiving or disposing of shares of Restricted Stock
may be complicated. These tax consequences will depend, in part, on
Grantee’s specific situation and may also depend on the
resolution of currently uncertain tax law and other variables not
within the control of Bancorp. Grantee is aware that he/she should
consult a competent and independent tax advisor for a full
understanding of the specific tax consequences to him/her of
receiving or disposing of shares of Restricted Stock. Prior to
executing this Agreement, Grantee either has consulted with a
competent tax advisor independent of Bancorp to obtain tax advice
concerning such shares in light of his/her specific situation or
has had the opportunity to consult with such a tax advisor but has
chosen not to do so.
8.
As security for the faithful performance of this Agreement, Grantee
agrees, upon execution hereof, to deliver a stock power in the form
attached as Exhibit C (with the transferee, certificate number,
date and number of shares left blank), executed by Grantee and
his/her spouse, if any, along with any certificate(s) evidencing
shares of Restricted Stock issued to him/her, to the Secretary of
Bancorp or its designee (“Escrow Holder”).
Grantee hereby appoints the Escrow Holder to hold such stock power
and any such certificate(s) in escrow and to take all such actions,
and to effectuate all such transfers and/or releases of such
Shares, as are in accordance with the terms of this Agreement and
the Plan. The foregoing appointment is a power coupled with an
interest and may not be revoked by Grantee. Grantee and
Bancorp agree that Escrow Holder will not be liable to any party to
this Agreement (or to another party) for any actions or omissions,
unless Escrow Holder is grossly negligent relative thereto. Escrow
Holder may rely on any letter, notice or other document executed by
any signature purported to be genuine and may rely on advice of
counsel and obey any orde
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