Exhibit 10.3
CNB BANCORP, INC. STOCK OPTION
PLAN
1. PURPOSE. The purpose of this CNB
Bancorp, Inc. Stock Option Plan ("the Plan") is to provide a method
whereby those key employees of CNB Bancorp, Inc. and its affiliates
(collectively, "the Company"), who are primarily responsible for
the management and growth of the Company's business and who are
presently making and are expected to make substantial contributions
to the Company's future management and growth, may be offered
incentives in addition to those presently available, and may be
stimulated by increased personal involvement in the success of the
Company to continue in its service, thereby advancing the interests
of the Company and its shareholders. The word "affiliate," as used
in the Plan, means any corporation in any unbroken chain of
corporations beginning or ending with the Company, if at the time
of the granting of an option, each corporation other than the last
in that chain owns stock possessing fifty percent (50%)or more of
the total combined voting power of all classes of stock in one of
the other corporations in the chain.
2. ADMINISTRATION. The following
provisions shall govern the administration of the Plan:
(a) Board or Committee Administration. The
Plan shall be administered by the Board of Directors which may
delegate its administrative powers and authority under the Plan to
the Compensation Committee of the Company's Board of Directors (the
"Compensation Committee"). (References in this Plan to the
"Committee" shall be deemed to refer to the Compensation Committee
or the Board of Directors, as the case may be.) The Board of
Directors may from time to time remove members from or add members
to the Compensation Committee. Vacancies on the Compensation
Committee, however caused, shall be filled by the Board of
Directors. The Board of Directors may designate a Chairman and
Vice-Chairman of the Compensation Committee from among the
committee members. Acts of the Compensation Committee (i) at a
meeting, held at a time and place and in accordance with rules
adopted by the committee at which a quorum of the committee is
present and acting, or (ii) reduced to and approved in writing by
all members of the committee, shall be the valid acts of the
committee.
(b) Special Rule for Officers. The grant
of options to employees who are officers of the Company may be made
by and all discretion with respect to the material terms of the
options may be exercised by either (i) the Board of Directors, or
(ii) the Compensation Committee composed solely of two or more
nonemployee directors having full authority to act in the
matter.
(c) Committee Powers. The Committee shall
effect the grant of options under the Plan by execution of
instruments in writing in a form approved by the Committee. Subject
to the express terms and conditions of the Plan, the Committee
shall have full power to construe the Plan and the terms of any
option granted under the Plan, to prescribe, amend and rescind
rules and regulations relating to the Plan or options and to make
all other determinations necessary or advisable for the Plan's
administration, including, without limitation, the power
to:
(i) determine which persons meet the
requirements of Section 3 hereof for selection as participants in
the Plan;
(ii) determine to whom of the eligible
persons, if any, options shall be granted under the
Plan;
(iii) establish the terms and conditions
required or permitted to be included in every option agreement or
any amendments thereto, including whether options to be granted
thereunder shall be "incentive stock options," as defined in
section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), or nonqualified stock options not described in sections
422 or 423 of the Code;
(iv) specify the number of shares to be
covered by each option;
(v) determine the fair market value
of shares of the Company's common stock for any purpose under the
Plan;
(vi) take appropriate action to amend any
option hereunder, provided that no such action may be taken without
the written consent of the affected optionee;
(vii) cancel outstanding options and issue
replacement options therefor with the consent of the affected
optionee; and
(viii) make all other determinations
deemed necessary or advisable for administering the
Plan.
The Committee's determination on the foregoing
matters shall be conclusive.
3. ELIGIBILITY. The persons who shall be
eligible to receive the discretionary grant of options under the
Plan shall be those key employees and officers of the Company
selected for participation by the Committee ("Eligible Persons").
Notwithstanding any other provision of the Plan, no Eligible Person
shall be granted options to purchase more than an aggregate of
100,000 shares of the Company's common stock under the Plan, as
adjusted pursuant to Section 8.
4. THE SHARES. The shares of stock subject
to options authorized to be granted under the Plan shall consist of
160,000 shares of the Company's Common Stock (the "Shares"), or the
number and kind of shares of stock or other securities which shall
be substituted for the Shares or to which the Shares shall be
adjusted as provided in Section 8 hereof. Upon the expiration or
termination for any reason of an outstanding option under the Plan
which has not been exercised in full, all unissued Shares
thereunder shall again become available for the grant of options
under the Plan. Shares of the Company's common stock which are (i)
delivered by an optionee in payment of the exercise price of an
option, or (ii) delivered by an optionee, or withheld by the
Company from the shares otherwise due upon exercise of an option,
in satisfaction of applicable withholding taxes, shall again become
available for the grant of options under the Plan.
5. INCENTIVE STOCK OPTION TERMS AND
CONDITIONS. Options granted to employees under the terms and
conditions of this Section 5 are intended to be incentive stock
options (ISOS) under section 422 of the Code. Each incentive stock
option granted under the Plan shall be authorized by action of the
Committee and shall be evidenced by a written agreement in such
form as the Committee shall from time to time approve, which
agreement shall comply with and be subject to the following terms
and conditions:
(a) Exercise Price. The exercise price of
each incentive stock option shall be one hundred percent (100%) of
the fair market value of a Share of common stock of the Company on
the date the option is granted; provided, however, that the
exercise price of an incentive stock option granted to an
individual who owns stock possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the
Company, as determined under the stock ownership rules specified in
Subsection 5(c), shall be one hundred ten percent (110%) of the
fair market value of a Share of common stock of the Company on the
date the option is granted.
(b) Duration of Options. No incentive
stock option shall be exercisable after the expiration of ten (10)
years from the date on which that option is granted; provided,
however, that no incentive stock option granted to an individual
who owns stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company, as
determined under the stock ownership rules specified in Subsection
5(c), shall be exercisable after the expiration of five (5) years
from the date on which that option is granted.
(c) Determination of Stock Ownership. For
purposes of determining in Subsections 5(a) and 5(b) whether an
employee owns stock possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company,
an employee shall be considered as owning the stock owned, directly
or indirectly, by or for his or her brothers and sisters (whether
by the whole or half blood), spouse, ancestors, and lineal
descendants. Stock owned, directly or indirectly, by or for a
corporation, partnership, estate, or trust shall be considered as
being owned proportionately by or for its shareholders, partners,
or beneficiaries. Stock with respect to which the employee holds an
option shall not be counted.
(d) Right to Exercise. Each incentive
stock option shall become exercisable and vest according to the
terms and conditions established by the Committee and reflected in
the written agreement evidencing the option, provided, however,
that no option shall vest at a rate of less than twenty-five
percent (25%) per year during the four (4) year period following
the date of grant of the option. Notwithstanding the preceding
sentence, all options shall become immediately exercisable in the
event of (1) the employee's attainment of age 65, (2) the closing
of the sale of all or substantially all of the assets of the
Company, (3) the merger or consolidation of the Company into or
with another corporation in a transaction where the Company is not
the surviving corporation, (4) if any person (other than a trustee
or other fiduciary holding securities under an employee benefit
plan of the Company or its affiliate is or becomes the beneficial
owner of 25% or more of the common stock of the Company, or (5) if,
during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the
Company (each an "Incumbent Board Member") cease for any reason to
constitute at least a majority thereof, provided, however, that any
person becoming a director of the Company after the beginning of
such period whose election is approved by a vote of at least
three-quarters of the Incumbent Board Members shall be considered
to be an incumbent Board Member. In addition, the Board of
Directors shall have the authority to accelerate the exercisability
of any options granted to an employee. Each incentive stock option
shall be subject to termination before its date of expiration as
provided in Subsection 5(e).
(e) Terminations of Options. If an
optionee ceases to be an employee of the Company, his or her rights
to exercise an incentive stock option then held shall be only as
follows:
DEATH: If an optionee dies while he or she is
employed by the Company, the optionee's estate shall have the right
for a period of twelve (12) months after the date of death to
exercise the option to the extent the optionee was entitled to
exercise the option on that date, provided the date of exercise is
in no event after the expiration of the term of the option. To the
extent the option is not exercised within this period, the option
will terminate. An optionee's "estate" shall mean the optionee's
legal representative or any person who acquires the right to
exercise an option by reason of the optionee's death.
DISABILITY: If an optionee's employment with the
Company ends because the optionee becomes disabled, the optionee or
his or her qualified representative (in the event of the optionee's
mental disability) shall have the right for a period of twelve (12)
months after the date on which the optionee's employment ends to
exercise the option to the extent the optionee was entitled to
exercise -the option on that date, provided the date of exercise is
in no event after the expiration of the term of the option. To the
extent the option is not exercised within this period, the option
will terminate.
RESIGNATION: If an optionee voluntarily resigns
from the Company, the optionee shall have the right for a period of
three (3) months after the date of resignation to exercise the
option to the extent the optionee was entitled to exercise the
option on that date, provided the date of exercise is in no event
after the expiration of the term of the option. To the extent the
option is not exercised within this period, the option will
terminate.
TERMINATION FOR REASONS OTHER THAN CAUSE: If an
optionee's employment is terminated by the Company for reasons
other than "Cause," the optionee shall have the right for a period
of three (3) months after the date of termination to exercise the
option to the extent the optionee was entitled to exercise the
option on that date, provided the date of exercise is in no event
after the expiration of the term of the option. To the extent the
option is not exercised within this period, the option will
terminate. Notwithstanding the above, an employee shall have five
(5) years from the date of his/her retirement from the Company to
exercise incentive stock options, provided, however, that at the
expiration of the three (3) month period following retirement, such
option shall no longer be treated as incentive stock options, but
shall be treated as non-qualified stock options pursuant to Section
6 below.
For the purpose of this clause, "Cause" shall
mean that: the optionee is determined by the Committee to have
committed an act of embezzlement, fraud, dishonesty, or breach of
fiduciary duty to the Company, or to have deliberately disregarded
the rules of the Company which resulted in loss, damage, or injury
to the Company, or because the optionee has made any unauthorized
disclosure of any of the secrets or confidential information of the
Company, has induced any client or customer of the Company to break
any contract with the Company, has induced any principal for whom
the Company acts as agent to terminate the agency relationship, or
has engaged in any conduct that constitutes unfair competition with
the Company.
OTHER REASONS: If an op
