Exhibit 10.3
ENTERPRISE BANCORP, INC.
Nonqualified Stock Option
Agreement
This Agreement is entered into as of
this Xth day of XXXXX, 20XX by and between Enterprise
Bancorp, Inc., a Massachusetts corporation (the
“Company”), and
(the “Optionee”).
WITNESSETH THAT:
WHEREAS, the Company has instituted
a program entitled “Enterprise Bancorp, Inc. 2009 Stock
Incentive Plan” (the “Plan”); and
WHEREAS, the Compensation Committee
of the Board of Directors, or the full Board of Directors, as the
case may be, of the Company has authorized the grant of stock
options upon the terms and conditions set forth below;
and
WHEREAS, the Compensation Committee
or the full Board of Directors, as the case may be, has authorized
the grant of this stock option pursuant and subject to the terms of
the Plan, a copy of which is attached hereto and incorporated
herein; and
WHEREAS, the Compensation Committee
or the full Board of Directors, as the case may be, has designated
this stock option a nonqualified stock option in accordance with
Section 5 of the Plan;
NOW, THEREFORE, in consideration of
the premises and the mutual covenants and agreements herein
contained, the Company and the Optionee agree as
follows.
1.
Grant . Subject to the terms of the Plan and
this Agreement, the Company hereby grants to the Optionee a stock
option (the “Option”) to purchase from the Company XXX
shares of its common stock, $0.01 par value per share
(“Stock”). This Option is not intended to be an
incentive stock option or to qualify for special federal income tax
treatment under Section 422 of the Code.
2.
Exercise Price
. This Option may be exercised
at the exercise price of $XX.XX per share of Stock, subject to
adjustment as provided herein and in the Plan.
3.
Term and Exercisability of
Option . This
Option shall expire on the earlier of XXXX XX, 20XX or the last day
of the exercise period determined pursuant to subsection
(c) of this Section 3. At any time before its expiration,
this Option may be exercised to the extent set forth in the
schedule attached to this Agreement as Exhibit 1, which is
incorporated herein and made a part hereof by this reference,
provided that:
(a)
at the time of exercise the Optionee
is not in violation of any employee confidentiality, noncompetition
or other agreement with the Company or a Subsidiary;
(b)
the Optionee must maintain the
employment, contractual or other service relationship with the
Company or a Subsidiary that was in effect at the time of the
initial grant of this Option (the “Relationship”)
without change on the relevant date set forth in Exhibit 1 in
order for any scheduled increment in the exercisable portion of the
Option to become effective;
(c)
this Option may not be exercised if
three months or more have elapsed following the date of
termination, or any change in the nature, of the Relationship
between the Optionee and the Company or a Subsidiary; provided,
however, that if the Relationship terminates as a result of the
Optionee’s retirement at age 62 or older, “thirty-six
months” shall be substituted for “three months”
in this sentence; and provided, further, that if the Relationship
terminates by reason of the Optionee’s permanent and total
disability (as determined by the Compensation Committee or the full
Board of Directors, as the case may be, on the basis of medical
advice satisfactory to it) or death, the Option must be exercised
within twelve months of the Optionee’s death or disability;
and
(d)
For purposes of subsections
(b) and (c) of this Section 3, the nature of the
Relationship between the Optionee and the Company shall not be
deemed to have changed if the fundamental nature of the
Relationship, meaning the Optionee serving as an employee or as a
non-employee director or as a third-party consultant, advisor or
other vendor, as the case may be, does not change, regardless of
any changes in the Optionee’s title, compensation or other
terms of employment or service, as the case may be, which do not
change the fundamental nature of the Relationship. A
fundamental change in the nature of the Relationship would include,
for example, a change from the Optionee serving as an employee of
the Company to serving as a third-party consultant to the Company
or a change from the Optionee serving as an employee director of
the Company to serving as a non-employee director of the
Company.
4.
Method of Exercise
. Prior to its expiration and
to the extent that the right to purchase shares of Stock has vested
hereunder, this Option may be exercised from time to time by
written notice to the Company, substantially in the form attached
hereto as Exhibit 2, stating the number of shares with respect
to which this Option is being exercised and accompanied by either
(a) payment in full of the exercise price for the number of
shares to be delivered, by means of payment acceptable to the
Company in accordance with Section 5(c) of the Plan, or
(b) a description of a “cashless exercise”
procedure and such other documents and undertakings as are
necessary to satisfy that procedure. As soon as practicable after
its receipt of such notice, the Company shall, without transfer or
issue tax to the Optionee (or other person entitled to exercise
this Option), deliver, or cause to be delivered, to the Optionee
(or other person entitled to exercise this Option), at the
principal executive offices of the Company or such other place as
shall be mutually acceptable, a stock certificate or certificates
for such shares out of theretofore authorized but unissued shares
or reacquired shares of its Stock as the Company may elect;
provided, however, that the time of such delivery may be postponed
by the Company for such period as may be required for it with
reasonable diligence to comply with any applicable requirements of
law. If and to the extent that the Company also provides to
its shareholders generally a means to hold title to shares on a
noncertificated basis, then any shares to be issued to the Optionee
upon the exercise of this Option may be issued on such a
noncertificated basis if
2
mutually agreed upon by the Company and the
Optionee and otherwise permissible under applicable law and the
rules of any applicable stock exchange. Payment of the
exercise price may be made in cash or cash equivalents or, in
accordance with the terms and conditions of
Section 5(c) of the Plan, in whole or in part in shares
of Common Stock of the Company; provided, however, that the
Compensation Committee or the full Board of Directors, as the case
may be, reserves the right upon receipt of any written notice of
exercise from the Optionee to require payment in cash with respect
to the shares contemplated in such notice; and provided, further,
that the Optionee may not make payment in shares of Stock that he
acquired upon the earlier exercise of any incentive stock option,
unless he has held the shares until at least two years after the
date the incentive stock option was granted and at le
