STOCK OPTION AGREEMENT
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FOR NON-STATUTORY STOCK OPTIONS PURSUANT TO THE
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NORWOOD FINANCIAL CORP.
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2006 STOCK OPTION PLAN
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STOCK OPTIONS for a
total of _____ shares of Common Stock, par value
$.10 per share, of Norwood Financial Corp. (the "Company") is
hereby granted to
_____________________
(the "Optionee") at
the price determined as provided in,
and in all respects subject to the terms, definitions and provisions of
Norwood
Financial Corp 2006
Stock Option Plan ("the Plan") adopted by the Company which
is incorporated by reference herein, receipt of which is hereby
acknowledged.
Such Stock Options do
not comply with Options granted under Section 422 of
the
Internal Revenue Code of 1986, as amended.
1. Option Price. The
Option price is $_________ for each Share, being
100% of the fair market value, as determined by the Committee, of the Common
Stock on the
date of grant of this
option (____________________)
("Date of
Grant").
2. Exercise of Option.
(a) Exercisability.
Such Options will be first exercisable as
of the one-year anniversary of the Date of Grant. Such Options
shall continue to
be exercisable for a period of ten years and one day following the
date of grant
without regard to the
continued services of such Director as a Director or
Director Emeritus.
In the event of the
Optionee's death,
such Options may
be
exercised by the personal representative of his estate or person or persons
to
whom his rights under
such Option
shall have passed by
will or by the laws of
descent and distribution. Notwithstanding any provisions in this Section 2,
in
no event shall this Option be exercisable prior to six months
following the date
of grant, except upon death or disability.
(b) Method of Exercise. This Option shall be exercisable
by a
written notice which shall:
(i) State the election
to exercise the
Option, the
number of Shares with
respect to which it is being exercised, the person in
whose name the stock certificate or certificates for such Shares of
Common Stock
is to be registered,
his address and Social
Security Number (or if more than
one, the names, addresses and Social Security Numbers of such
persons);
(ii) Contain such
representations and
agreements as
to the holder's investment intent with respect to such shares of
Common Stock as
may be satisfactory to the Company's counsel;
(iii) Be signed by the person or persons entitled to
exercise the
Option and, if the Option is being
exercised by any person or
persons other than the
Optionee, be accompanied by proof, satisfactory to
counsel for the Company, of the
<PAGE>
right of such person or persons to exercise the Option; and
(iv) Be in writing
and delivered in person or by
certified mail to the Treasurer of the Company.
Payment of the
purchase price of any
Shares with respect to which the
Option is being
exercised shall be by
certified or bank
cashier's or teller's
check. The certificate
or certificates
for shares of Common
Stock as to which
the Option shall be exercised shall be registered in the name of the
person or
persons exercising the Option.
(c) Restrictions on Exercise. This Option may not be exercised
if the issuance of the Shares upon such exercise would constitute a
violation of
any applicable federal or state securities or other law or valid
regulation. As
a condition to the Optionee's exercise of this Option,
the Company may
require
the person exercising this Option to make any representation and
warranty to the
Company as may be required by any applicable law or regulation.
3. Non-transferability of Option. This Option may not be
transferred in
any manner otherwise than by will or the laws of descent or
distribution and may
be exercised during the lifetime of the Optionee only by the
Optionee. The terms
of this Option
shall be binding
upon the executors, administrators, heirs,
successors and assigns of the Optionee.
4. Term of Option.
This Option may not be exercised more than ten (10)
years and one day from the date of grant of this Option, as set
forth below, and
may be exercised during such term only in accordance with the Plan
and the terms
of this Option.
5. Related Matters.
Notwithstanding
anything herein to the
contrary,
additional conditions
or restrictions
related to such Options may be contained
in the Plan or the resolutions of the Plan Committee authorizing such grant of
Options.
Norwood Financial Corp.
Date of Grant
By: _____________________________________
President and Chief Executive Officer
Attest:
____________________________
________________________________________
(SEAL)
Director
<PAGE>
NORWOOD FINANCIAL CORP. 2006 STOCK OPTION PLAN
NOTICE OF EXERCISE OF GRANTED OPTIONS
Pursuant to the Stock Option Agreement (the "Agreement") entered into
on the ___________________, __________, between Norwood Financial Corp.
(Norwood) and
___________________
(Director),
notice is hereby given of my
election to purchase _____ shares at $_________ per share as
granted to me under
the Agreement
(copy attached). Accompanying this notice is payment of
$____________ which
represents the full purchase price of the shares covered by
this election.
______ In accordance
with Paragraph 2b of the Agreement, I request that the
shares be registered in my name.
______ In accordance
with Paragraph 2b of the Agreement, I request that the
shares be registered in joint name, with right of survivorship,
with my spouse,
________________________.
___________________________
Director
___________________________
Date
Check one of the following:
______ This exercise
represents the total
shares granted to me under the above
Agreement.
__
