Exhibit 10.2
PACIFIC FINANCIAL
CORPORATION
2000 STOCK INCENTIVE COMPENSATION
PLAN
INCENTIVE STOCK OPTION
AGREEMENT
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(F)
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Vesting
Commencement Date:
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THIS INCENTIVE STOCK OPTION
AGREEMENT (the "Agreement”) is made and entered into as of
the date set forth in Item (B) above (the "Grant Date") between
Pacific Financial Corporation, a Washington corporation (the
"Company") and the person named in Item A above
("Holder").
THE PARTIES AGREE AS
FOLLOWS:
1.
Grant of Option; Grant
Date. The Company hereby
grants to Holder pursuant to the Company's 2000 Stock Incentive
Compensation Plan, as amended from time to time (the "Plan"), a
copy of which is available from the Company on request, the right
(the "Option”) to purchase up to the number of shares of the
Company's Common Stock listed in Item (C) above (the "Option
Shares") at the price per share set forth in Item (D) above (the
"Exercise Price"), on the terms and conditions set forth in this
Agreement and in the Plan, the terms and conditions of the Plan
being incorporated into this Agreement by reference. This Option is
intended to qualify as an incentive stock option for purposes of
Section 422 of the Internal Revenue Code of 1986, as amended. The
number and kind of Option Shares and the Exercise Price may be
adjusted in certain circumstances in accordance with the provisions
of Section 13 of the Plan.
2.
Termination of Option.
A vested Option shall terminate, to
the extent not previously exercised, upon the occurrence of the
first of the following events:
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(a)
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ten years from the
date of grant;
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(b)
the expiration of three months from
the date of Holder's termination of employment by or services to
the Company for any reason other than death or disability (as
defined in the Plan);
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(c)
the expiration of one year from (i)
the date of Holder's death; or (ii) Holder's termination of
employment by or service to the Company coincident with disability
(as defined in the Plan); or
(d)
immediately upon Holder's
termination of employment by or service to the Company for Cause
(as defined in the Plan).
3.1
Exercise Schedule.
This Option shall vest and be
exercisable according to the following schedule: (a) 20% on the
date one year after the Vesting Commencement Date; and (b) an
additional 20% each successive year thereafter, so that 100% of the
Option shall be fully vested and exercisable on and after the date
which is five (5) years after the Vesting Commencement Date.
The unvested portion of the Option, if any, shall terminate
immediately upon the Holder's termination of employment by or
service to the Company for any reason whatsoever. The vesting
schedule for the Option is subject to acceleration in accordance
with the provisions of Section 13.2 of the Plan.
3.2
Manner of Exercise.
Holder may exercise this Option by:
(i) the surrender of this Option Agreement to the Secretary of
the Company at the principal office of the Company, accompanied by
an executed notice of exercise in the form attached hereto as
Exhibit 3.2 (or at the option of the Company such other form
of stock purchase agreement as shall then be acceptable to the
Company), (ii) paying in full the Exercise Price in the manner
provided in Section 3.3 below and (iii) paying his or her
share of any applicable withholding or employment taxes. This
Option may only be exercised to purchase that number of Shares
having an aggregate Fair Market Value (as defined in the Plan) on
the date of exercise greater than or equal to $2,500 (or the lesser
number of remaining shares covered by this Option). The date the
Company receives each of the above items will be considered the
date this Option was exercised.
3.3
Payment. Payment is required to be made for Option Shares
purchased at the time written notice of exercise of the Option is
given to the Company as provided in Section 7.5 of the Plan.
The proceeds of any payment shall constitute general funds of the
Company.
4.
Nonassignability of
Option. This Option is
not assignable or transferable by Holder except in accordance with
Section 12 of the Plan. Any attempt to assign, pledge,
transfer, hypothecate or otherwise dispose of this Option in a
manner not herein permitted, and any levy of execution, attachment,
or similar process on this Option, shall be null and
void.
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5.
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Restriction on
Issuance of Shares .
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5.1
Legality of Issuance.
The Company shall not be obligated
to sell or issue any Option Shares pursuant to this Agreement if
such sale or issuance, in the judgment of the Company and the
Company's counsel, might constitute a violation by the Company of
any provision of law, including without limitation the provisions
of the Securities Act of 1933, as amended (the "Securities
Act”).
5.2
Registration or Qualification of
Securities. The Company
may, but shall not be required to, register or qualify the sale of
any Option Shares under the Securities Act or any other applicable
law. The Company shall not be obligated to take any affirmative
action in order to cause the grant or exercise of this Option or
the issuance or sale of any Option Shares pursuant thereto to
comply with any law.
6.
Restriction on
Transfer. Regardless of
whether a sale of the Option Shares has been registered under the
Securities Act or has been registered or qualified under the
securities laws of any state, the Company may impose restrictions
upon the sale, pledge, or other transfer of Option Shares
(including the placement of appropriate legends on stock
certificates) if, in the judgment of the Company and the Company's
counsel, such restrictions are necessary or desirable in order to
achieve compliance with the provisions of the Securities Act, the
securities laws of any state, or any other law, or if the Company
does not desire to have a trading market develop for its
securities.
7.
Professional Advice
. The acceptance and exercise of
the Option and the sale of Option Shares has consequences under
federal and state tax and securities laws, which may vary depending
upon the individual circumstances of the Holder. Accordingly,
Holder acknowledges that he has been advised to consult his
personal legal and tax advisor in connection with this Agreement
and his dealings with respect to the Option and the Option Shares.
Holder further acknowledges that the Company has made no warranties
or representations to Holder with respect to the income tax
consequences of the grant and exercise of this Option or the sale
of the Option Shares and Holder is in no manner relying on the
Company or its representatives for an assessment of such
consequences.
8.
Assignment; Binding
Effect . Subject to the
limitations set forth in this Agreement, this Agreement shall be
binding upon and inure to the benefit of the executors,
administrators, heirs, legal representatives, and successors of the
parties hereto; provided, however, that Holder may not assign any
of Holder's rights under this Agreement.
9.
Damage
