Exhibit 10.12
FORM OF
COMMONWEALTH BANKSHARES,
INC.
INCENTIVE STOCK OPTION
AGREEMENT
THIS AGREEMENT is between
Commonwealth Bankshares, Inc. (the “Company”) and
(the
“Optionee”), and is dated as of
(the
“Date of Grant”).
The Company hereby grants the
Optionee an option to purchase shares of the common stock of the
Company (the “Company Stock”), subject to the terms and
conditions of this Agreement.
The grant of this option is made
pursuant to the Commonwealth Bankshares, Inc. 2005 Stock Incentive
Plan (the “Plan”), a copy of which is available from
the Company upon request. The terms of the Plan are incorporated
into this Agreement by reference. In the case of any inconsistency
between the Plan and this Agreement, the terms of the Plan shall
control. Any term used in this Agreement that is defined in the
Plan shall have the same meaning given to that term in the
Plan.
1. Grant of Option . The
Company grants the Optionee an Incentive Stock Option (the
“Option”) to purchase from the
Company shares
of Company Stock at
$ per
share (the “Option Price”). The Option Price is not
less than 100% of the Fair Market Value per share of the Company
Stock on the Date of Grant. The Option is intended to be a stock
option that receives special tax treatment under Section 422
of the Internal Revenue Code (the “Code”).
2. Entitlement to Exercise
Option .
(a) The Optionee will become vested
in and entitled to exercise the Option as follows:
This vesting schedule shall
accelerate and the Option shall become fully exercisable upon a
Change in Control, as defined in the Plan.
(b) Except as otherwise stated in
this paragraph, the Option may be exercised only while the Optionee
is employed by the Company.
(i) If the Optionee retires or
ceases to be employed by the Company for any reason other than his
or her death or disability and at a time when all or a portion of
this Option was vested and exercisable pursuant to paragraph
(a) above, the Optionee may exercise any or all of his or her
vested Option within three months after he or she terminates
employment.
(ii) If the Optionee terminates
employment because of a Disability (as defined in the Plan), he or
she may exercise any or all of a portion of the vested Option
(determined as of the Optionee’s termination date) within one
year after the Disability termination date.
(iii) If the Optionee dies while he
or she is employed with the Company or within three months after he
or she terminates employment because of a Disability, the
Optionee’s beneficiary may exercise this Option within the
tenth anniversary of the options date of grant, but only to the
extent the Option was vested and exercisable immediately before the
Optionee’s death.
(iv) If the Optionee is terminated
by the Company for Cause (as defined in the Plan), this Option will
expire immediately with respect to both vested and unvested shares
as of the date of misconduct, unless the Company agrees in writing
to waive this provision.
(c) The aggregate Fair Market Value
(determined by reference to the Option Price on the Date of Grant)
of the Option shares the Optionee may exercise for the first time
in a calendar year may not
