Exhibit 10.10
STOCK OPTION AGREEMENT
FOR
NON-QUALIFIED STOCK OPTION
FOR
OFFICERS AND EMPLOYEES
A NON-QUALIFIED STOCK
OPTION (the " Option ") for a total of 25,000
shares (the " Shares ") of common stock, par value
$0.10 (" Common Stock "), of Guaranty Federal
Bancshares, Inc. (the " Corporation "), which
Option shall not be considered an incentive stock option within the
meaning of Section 422 of the Internal Revenue Code of 1986, as
amended, is hereby granted to Shaun Burke (the "
Optionee ") at the price and upon the terms and
conditions set forth in this Stock Option Agreement (this "
Agreement ").
1.
Option Price . The exercise price is $
19.62 for each Share
under the Option, being 100% of the fair market value of the Common
Stock on the date of grant of the Option as determined by the Stock
Compensation Plan Committee of the Board of Directors of the
Corporation (the "Committee").
2.
Exercises of Option .
(a)
Schedule of Rights to Exercise . The Option shall
become exercisable and vest as follows:
Date
Shares Under
Option Which
Exercisable
Are Exercisable
As of March
9,
2005
5,000
20%
As of March
9,
2006
5,000
40%
As of March
9,
2007
5,000
60%
As of March
9,
2008
5,000
80%
As of March
9,
2009
5,000
100%
Subject to Section
5(a) hereof, the Option shall be exercisable to the extent as of
the dates shown above, provided the Optionee is an employee,
director or director emeritus of the Corporation or Guaranty Bank
(the " Bank ") as of such applicable date.
Notwithstanding any provisions in this Section 2, in no event shall
the Option be exercisable prior to six months following the date of
grant of the Option. Subject to Sections 6 and 7(b) hereof, the
Option shall be 100% vested and exercisable upon the death or
Disability of the Optionee, or upon a Change in Control (defined
hereafter) of the Corporation.
(b)
Method of Exercise . The Option shall be
exercisable by a written notice, a form of which is attached
hereto, 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 is to be registered,
his or her 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 as may be satisfactory to the
Corporation’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
Corporation, of the 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 Chief Financial
Officer of the Corporation.
Payment of the
purchase price of any Shares with respect to which the Option is
being exercised shall be paid to the Corporation in cash (by
certified or bank cashier’s or teller’s check), Common
Stock or a combination of cash and Common Stock. Common Stock
utilized in full or partial payment of the exercise price shall be
valued at the fair market value at the date of exercise of such
Option. Upon receipt by the Corporation of payment in full, the
certificate or certificates for Shares as to which the Option shall
be exercised shall be registered in the name of the person or
persons exercising the Option. Optionee shall not have any of the
rights of a stockholder of the Corporation with respect to the
Shares being acquired pursuant to this Agreement until the Shares
are issued to the Optionee.
Subject to vesting
requirements contained herein, Optionee may engage in the "cashless
exercise" of the Option. Upon a cashless exercise, Optionee shall
give the Corporation written notice of the exercise of the Option
together with an order to a registered broker-dealer or equivalent
third party, to sell part or all of the Shares subject to the
Option (the " Optioned Stock ") and to deliver
enough of the proceeds to the Corporation to pay the Option
exercise price and any applicable withholding taxes. If the
Optionee does not sell the Optioned Stock through a registered
broker-dealer or third party, the Optionee can give the Corporation
written notice of the exercise of the Option and the third party
purchaser of the Optioned Stock shall pay the Option exercise price
plus any applicable withholding taxes to the Corporation.
(c)
Restrictions on Exercise . The Option may not be
exercised if the issuance of Shares upon such exercise would
constitute a violation of any applicable federal or state
securities or other law or valid regulation or the requirements of
any stock exchange or trading market upon which the Common Stock is
then listed. As a condition to the Optionee’s exercise of the
Option, the Corporation may require the person exercising the
Option to make any representation and warranty to the Corporation
as may be required by any applicable law or regulation. Upon the
termination of Optionee’s employment or service by the
Corporation or the Bank for "cause" (as defined in 12 C.F.R.
563.39(b)(1)) as determined by the Board of Directors of the
Corporation, the unexercised portion of the Option at the time of
such termination shall immediately cease to be exercisable as of
the date of such termination of employment or service. Upon the
exercise of the Option (or any portion thereof), the Committee, in
its sole and absolute discretion, may make a cash payment to the
Optionee, in whole or in part, in lieu of the delivery of Shares.
Such cash payment shall be equal to the difference between the fair
market value of the Common Stock on the date the Option (or any
portion thereof) is exercised and the exercise price per Share of
the Option, less applicable withholding. Such cash payment shall be
in exchange for the cancellation of such Option (or portion
thereof). Such cash payment shall not be made in the event that
such transaction would result in liability to the Optionee or the
Corporation under Section 16(b) of the Securities Exchange Act of
1934, as amended, and regulations promulgated thereunder.
3.
Non-transferability of Option . The 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 (or a guardian of
Optionee if Optionee is incapacitated). The terms of the Option
shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.
4.
Term of Option . The Option may not be
exercised more than ten (10) years from the date of grant of the
Option (the " Expiration Date "), as set forth
below, and may be exercised during such term only in accordance
with the terms of this Agreement.
5.
Effect of Termination of Service or Employment,
Disability, Death and Retirement .
(a)
Termination of Service or Employment . Except as
provided in Section 2(c) hereof, in the event that Optionee’s
service or employment with the Corporation or the Bank shall
terminate for any reason, other than Disability, death or
Retirement, all of the Option and all of Optionee’s rights to
purchase or receive Shares pursuant hereto, shall automatically
terminate on (A) the earlier of (i) or (ii): (i) the
Expiration Date, or (ii) the expiration of not more than three
(3) months after the date of such termination of service or
employment; or (B) at such later date as is deter
