FNCB Bancorp (FNCB) 10-K 2004 FY Annual report

EXHIBIT 10.3

FIRST NATIONAL COMMUNITY BANCORP, INC.

2000 INDEPENDENT DIRECTORS STOCK OPTION PLAN

1.         Purpose. The 2000 Independent Directors Stock Option Plan (the “Plan”) was established to advance the development, growth and financial condition of First National Community Bancorp, Inc. (the “Corporation”) and its subsidiaries, by providing an incentive, through participation in the appreciation of the capital stock of the Corporation, and thereby securing, retaining and motivating members of the Corporation’s Board of Directors who are not officers or employees of the Corporation or any subsidiary thereof (the “non-employee” directors).

2.         Term. The Plan is effective August 30, 2000, the day it was adopted by the Corporation’s Board of Directors (the “Board”), and shall be presented for approval at the next meeting of the Corporation’s shareholders. Any and all options awarded under the Plan before it is approved by the Corporation’s shareholders shall be conditioned upon, and may not be exercised before, receipt of shareholder approval, and shall lapse upon failure to receive such approval. Unless previously terminated by the Board, the Plan shall terminate on, and no options shall be granted after the tenth anniversary of the effective date of the Plan.

3.         Stock Subject to the Plan. The shares of the Corporation’s common stock (the “Common Stock”) issuable under the Plan shall not exceed 100,000 shares. The amount of Common Stock issuable under the Plan may be adjusted pursuant to Section 11 hereof The Common Stock issuable hereunder may be either authorized and unissued shares of Common Stock, or authorized shares of Common Stock issued by the Corporation and subsequently reacquired by it as treasury stock, or shares purchased in open market transactions. Under no circumstances shall fractional shares be issued under the Plan. The Corporation’s failure to obtain any governmental authority deemed necessary by the Corporation’s legal counsel for the proper grant of the stock options under this Plan and/or the issuance of Common Stock under the Plan shall relieve the Corporation of any duty or liability for the failure to grant stock options under the Plan and/or issue Common Stock under the Plan as to which such authority has not been obtained.

4.         Operation and Administration. The ability to control and manage the operation and administration of the Plan shall be vested in the Board or in a committee of two or more members of the Board, selected by the Board (the “Committee”). The Committee shall have the authority and discretion to interpret the Plan, to establish, amend and rescind any rules and regulations relating to the Plan, to determine the terms and provisions of any agreements made pursuant to the Plan, and to make any and all determinations that may be necessary or advisable for the administration of the Plan. Any interpretation of the Plan by the Committee and any decision made by it under the Plan is final and binding.

5.         Stock Options. Stock options shall be granted under the Plan to each non-employee director of the Corporation, annually, at the discretion of a majority of the Board of Directors or of the Committee, as the case may be. Each non-employee director who is a member of the Corporation’s Board on the grant date shall be awarded stock options to purchase shares of Common Stock, as the Board in its discretion determines, (the “Stock Options”) under the following terms and conditions:

(1) The time period during which any Stock Option is exercisable shall be three (3) years after the date of grant.

(2) If a director, who has received an award pursuant to the Plan, ceases to be a member of the Board for any reason and is not designated as “Director Emeritus” by the remaining members of the Board at the time of such cessation, then the director may exercise the Stock Option not before the expiration of seven (7) months after the director ceases to be a member of the Board nor more than twelve (12) months after such cessation. If a director, who has received an award pursuant to the Plan dies, all unexercised awards shall immediately be void.

(3) The purchase price of a share of Common Stock subject to a Stock Option shall be the fair market value of the Common Stock on the date of grant, as determined under Section 7 hereof

(4) The Stock Option shall be made by a written agreement in the form, attached hereto as “Exhibit A”, with such changes therein as may be determined by the Committee (as such term is defined in Section 4 hereof) (the “Stock Option Agreement”).

6. Exercise. Except as otherwise provided in the Plan, a Stock Option may be exercised in whole or in part by giving written notice thereof to the Treasurer of the Corporation, identifying the Stock Option being exercised, the number of shares of Common Stock with respect thereto, and other information pertinent to the exercise of the Stock Option. The purchase price of the shares of Common Stock with respect to which a Stock Option is exercised shall be paid with the written notice of exercise, either in cash or in Common Stock, including Common Stock issuable hereunder, at its then current fair market value, or any combination of cash or Common Stock. Funds received by the Corporation from the exercise of any Stock Option shall be used for its general corporate purposes. The number of shares of Common Stock subject to a Stock Option shall be reduced by the number of shares of Common Stock with respect to which the director has exercised rights under the related Stock Option Agreement.

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If the Corporation or its shareholders execute an agreement to dispose of all or substantially all of the Corporation’s assets or capital stock by means of sale, merger, consolidation, reorganization, liquidation or otherwise, as a result of which the Corporation’s shareholders as of immediately before such transaction will not own at least fifty percent (50%) of the total combined voting power of all classes of voting capital stock of the surviving entity (be it the Corporation or otherwise) immediately after the consummation of such transaction, thereupon any and all outstanding Stock Options shall immediately become exercisable until the consummation of such transaction, or if not consummated, until the agreement therefore expires or is terminated, in which case thereafter all Stock Options shall be treated as if the agreement never had been executed. If during any period of two (2) consecutive years, the individuals, who at the beginning of such period, constituted the Board, cease for any reason to constitute at least a majority of the Board (unless the election of each director of the Board, who was not a director of the Board at the beginning of such period, was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period) thereupon any and all outstanding Stock Options shall immediately become exercisable. If there is an actual, attempted or threatened change in the ownership of at least twenty-five percent (25%) of any class of voting stock of the Corporation through the acquisition of, or an offer to acquire, such percentage of the Corporation’s voting stock by any person or entity, or persons or entities acting in concert or as a group, and such acquisition or offer has not been duly approved by the Board, thereupon any and all outstanding Stock Options shall immediately become exercisable.

7.         Value. Where used in the Plan, the “fair market value” of Stock or any options or rights with respect thereto, including Awards, shall mean and be determined by (a) the weighted average of all reported sales thereof on the principal established domestic securities exchange on which listed during the thirty (30) days prior to the grant date, and if not listed, then (b) the average of the dealer “bid” and “ask” prices thereof on the over-the-counter market on the grant date, as reported by the National Association of Securities Dealers Automated Quotation System (“NASDAQ”), in accordance with pertinent provisions of and principles under the Code and the regulations promulgated thereunder.

8.         Continued Relationship. Nothing in the Plan or in any Stock Option shall confer upon any director any right to continue his relationship with the Corporation as a director, or limit or affect any rights, powers or privileges that the Corporation or its affiliates may have to supervise, discipline and terminate such director, and the relationships thereof

9.         General Restrictions. The Board may require, in its discretion, (a) the listing, registration or qualification of the Common Stock issuable pursuant to the Plan on any securities exchange or under any federal or state securities or other laws, (b) the approval of any governmental authority, or (c) an execution of an agreement by any director with respect to

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disposition of any Common Stock (including, without limitation, that at the time of the director’s exercise of the Stock Option, any Common Stock thereby acquired is being and will be acquired solely for investment purposes and without any intention to sell or distribute the Common Stock). If the Board so requires, then Stock Options shall not be exercised, in whole or in part, unless such listing, registration, qualification, approval or agreement has been appropriately effected or obtained to the satisfaction of the Board and legal counsel for the Corporation. Notwithstanding anything to the contrary herein, a director shall not sell, transfer or otherwise dispose of any shares of Common Stock acquired pursuant to a Stock Option unless at least six (6) months have elapsed from the date the Stock Option was granted and, in any event, the transfer or disposition is made in accordance with Section 16 of the Securities Exchange Act of 1934, as amended, and as the same may be amended from time to time.

10.       Rights. Except as otherwise provided in the Plan, a director shall have no rights as a holder of the Common Stock subject to a Stock Option unless and until one or more certificates for the shares of Common Stock are issued and delivered to the director. No Stock Option, or the grant thereof, shall limit or affect the right or power of the Corporation or its affiliates to adjust, reclassify, recapitalize, reorganize or otherwise change its or their capital or business structure, or to merge, consolidate, dissolve, liquidate or sell any or all of its or their business, property or assets.

11.       Adjustments. In the event that the shares of Common Stock of the Corporation, as presently constituted, shall be changed into or exchanged for a different number or kind of shares of Common Stock or other securities of the Corporation or of other securities of the Corporation or of another corporation (whether by reason of merger, consolidation, recapitalization, reclassification, split-up, combination of shares or otherwise) or if the number of such shares of Common Stock shall be increased through the payment of a stock dividend, stock split or similar transaction, then, there shall be substituted for or added to each share of Common Stock of the Corporation that was theretofore appropriated, or that thereafter may become subject to a Stock Option under the Plan, the number and kind of shares of Common Stock or other securities into which each outstanding share of the Common Stock of the Corporation shall be so changed or for which each such share shall be exchanged or to which each share shall be entitled, as the case may be. Each outstanding Stock Option shall be appropriately amended as to price and other terms, as may be necessary to reflect the foregoing events.

If there shall be any other change in the number or kind of the outstanding shares of Common Stock of the Corporation, or of any Common Stock or other securities into which such Common Stock shall have been changed, or for which it shall have been exchanged, and if a majority of the members of the Board shall, in their sole discretion, determine that the change equitably requires an adjustment in any Stock Option that was theretofore granted or that may thereafter be granted under the Plan, then such adjustment shall be made in accordance with the determination.

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The grant of a Stock Option pursuant to the Plan shall not affect, in any way, the right or power of the Corporation to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge, to consolidate, to dissolve, to liquidate or to sell or transfer all or any part of its business or assets.

Fractional shares resulting from any adjustment in a Stock Option pursuant to this Section 11 may be settled as a majority of the members of the Board or of the Committee, as the case may be, shall determine.

To the extent that the foregoing adjustments relate to Common Stock or securities of the Corporation, such adjustments shall be made by a majority of the members of the Board or of the Committee, as the case may be, whose determination in that respect shall be final, binding and conclusive. Notice of any adjustment shall be given by the Corporation to each holder of a Stock Option that is so adjusted.

12.       Forfeiture. Notwithstanding anything to the contrary in this Plan, if an option holder is engaged in fraud, embezzlement, theft, commission of a felony, or dishonesty in the course of his relationship with the Corporation or its affiliates, or has disclosed trade secrets of the Corporation or its affiliates, the option holder shall forfeit all rights under and to all unexercised Stock Options, and all exercised Stock Options for which the Corporation has not yet delivered certificates for shares of Common Stock, and all rights to receive Stock Options shall be automatically canceled.

13.       Miscellaneous. Any reference contained in this Plan to a particular section or provision of law, rule or regulation shall include any subsequently enacted or promulgated section or provision of law, rule or regulation, as the case may be. With respect to persons subject to Section 16 of the Securities Exchange Act of 1934, as amended, transactions under this Plan are intended to comply with all applicable conditions of the Rule and the regulations promulgated thereunder or any successor rule that may be promulgated by the Securities and Exchange Commission. To the extent any provision of this Plan fails to so comply, it shall be deemed null and void, to the extent permitted by applicable law, subject to the provisions of Section 15, below. Where used in this Plan, the plural shall include the singular, and, unless the context otherwise clearly requires, the singular shall include the plural and the masculine shall include the feminine. The captions of the numbered Sections contained in this Plan are for convenience only, and shall not limit or affect the meaning, interpretation or construction of any of the provisions of the Plan.

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14. Transferability. Stock Option awards granted under the Plan are not transferable.

15.       Amendment. The Plan may be amended, suspended or terminated, without notice, by a majority vote of the Board of the Corporation.

16.       Taxes. The issuance of shares of Common Stock under the Plan shall be subject to any applicable taxes or other laws or regulations of the United States of America and any state or local authority having jurisdiction thereover.

END

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EXHIBITA

FIRST NATIONAL COMMUNITY BANCORP, INC.

2000 INDEPENDENT DIRECTORS STOCK OPTION PLAN

STOCK OPTION AGREEMENT

A STOCK OPTION (the” Stock Option”) for________ ( __________ )shares of common stock, (the “Common Stock”), of First National Community Bancorp, Inc., a Pennsylvania business corporation (the “Corporation”) is hereby granted to ______________________________ ____________ (the “Director”), subject in all respects to the terms and provisions of the First National Community Bancorp, Inc. 2000 Independent Directors Stock Option Plan (the “Plan”). The option price as determined under Section 6 of the Plan is $_________________per share.

This Stock Option shall vest and become exercisable six (6) months from the date of this Agreement ~ upon receipt of shareholder approval of the 2000 Independent Directors Stock Option Plan, whichever comes later. This Option may not be exercised more than three (3) years from the date of grant, and may be exercised during such term only in accordance with the terms of the Plan and this Agreement.

ATTEST: First National Community Bancorp, Inc.

By: _________________________

Secretary	J. David Lombardi, President and Chief
	Executive Officer

Dated:

The Director acknowledges receipt of a copy of the Plan, and represents that he or she is familiar with the terms and provisions thereof. The Director hereby accepts this Stock Option subject to all the terms and provisions of the Plan.

Dated: _________________	________________________________________
		Director

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