EXHIBIT 10.5
FIRST INTERNATIONAL BANCORP, INC.
1994 INCENTIVE STOCK OPTION PLAN
1. Purpose of the Plan. The purpose of this 1994 Incentive Stock, Option
Plan is to attract and retain the best available personnel for positions of
substantial responsibility, to provide additional incentive to certain key
officers of FIRST INTERNATIONAL BANCORP, INC. and any subsidiaries which FIRST
INTERNATIONAL BANCORP, INC. presently owns or controls or may hereafter organize
or acquire, and to promote the success of the business.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Bank Holding Company" shall mean FIRST INTERNATIONAL BANCORP, INC. or
any subsidiary now owned or hereafter acquired by Bank Holding Company.
(b) "Board" shall mean the Board of Directors of FIRST INTERNATIONAL
BANCORP, INC.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(d) "Common Stock" shall mean the Common Stock of the Bank Holding Company.
(e) "Employee" shall mean a regular, salaried employee (as the term
"employee" is used in Section 422 of the Code) of the Bank Holding Company or
one of its subsidiaries, as the term "subsidiary corporation" is defined in
Section 424 of the code.
(f) "Option" shall mean a stock option granted pursuant to the Plan.
(g) "Option Price" shall mean the price determined by the Board pursuant to
the Plan.
(h) "Optioned Stock" shall mean the stock subject to an option granted
pursuant to the Plan.
(i) "Optionee" shall mean an Employee who received an Option.
(j) "Plan" shall mean this 1994 Incentive Stock Option Plan.
(k) "Share" shall mean a share of Common Stock of the Bank Holding Company
as adjusted in accordance with Section 12 of the Plan.
(l) "10% Shareholder" shall mean an individual who immediately after an
option is granted hereunder owns, within the meaning of Section 422(b)(6) of the
Code, stock possessing more than 10% of the total combined voting power of all
classes of stock of the Bank Holding Company and its subsidiaries.
3. Stock Subject to the Plan. Subject to the provisions of Section 12 of
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is eighty thousand two hundred seventy five (80,275) Shares of
Common Stock of the Bank Holding Company. Such Shares may be authorized but
unissued shares.
If an option should expire or become unexercisable for any reason without
having been exercised in full, the unpurchased Shares which were subject thereto
shall, unless the Plan shall have been terminated, become available for other
Option(s) under the Plan.
4. Administration of the Plan
(a) Procedure. The Plan shall be administered by a committee of two or
more members of the Board who are not employees of the Bank Holding Company and
who are "disinterested" directors. For these purposes, a director shall be
"disinterested" if he or she does not, during one year prior to serving as an
administrator of this Plan, or during such service, receive a grant or award of
equity securities of the Bank Holding Company under this Plan or any other plan
of the Bank Holding Company or its affiliates; provided, however, that grants or
awards of equity securities may be made to directors who are Plan administrators
if such grants or awards would not disqualify such directors from being
"disinterested" under Rule 16b-3(c)(2) of the Securities and Exchange
Commission.
(b) Powers of the Board. Subject to the provisions of the Plan, the Board
shall have the authority: (i) to grant to any officer who is an Employee an
Option to purchase Shares of the Bank Holding Company, which shall be
conditioned on the execution by such officer of a Stock Option Agreement
substantially in the form of Exhibit A hereto (with such modifications as the
Board may desire, within the terms of this Plan and with the requirements of
law); (ii) to determine the option Price for any Shares to be issued pursuant to
an Option granted under the Plan, the officer to whom, and the time or times at
which Options shall be granted, and the number of Shares to be represented by
each Option, the time or times at which Options may be exercised and the term of
each option which in no event shall be more than ten (10) years from
the date of the grant of the Option; (iii) to interpret the Plan; (iv) to
prescribe, amend and rescind rules and regulations relating to the Plan; (v) to
determine the terms and provisions of each Option granted under the Plan (which
need not be identical) and, with the consent of the holder thereof, to modify or
amend each Option; (vi) to authorize any person to execute on behalf of the Bank
Holding Company any instrument required to effectuate the grant of an Option
previously granted by the Board; and (vii) to make all other determinations
deemed necessary or advisable for the administration of the Plan. It is intended
that Options issued hereunder shall qualify as "incentive stock options" under
Section 422 of the Code, and the Board shall administer the Plan in order to
preserve the characterization of options granted pursuant hereto as incentive
stock options.
(c) Effect of Board's Decision. All decisions, determinations and
interpretations or the Board shall be final and binding on all Optionees and any
other holders of any Options granted under the Plan.
5. Eligibility. Options under the Plan may be granted only to key
executive officers who are Employees and who have been appointed as a Vice
President or a higher position with the Bank Holding Company as the Board shall
select. An officer who has been granted an Option may, if he is otherwise
eligible, be granted an additional Option or Options.
6. Term of Plan. The Plan shall become effective upon its adoption by the
Board; subject, however, to approval by (i) holders of at least two-thirds of
the outstanding stock of each class of the Bank Holding Company within twelve
(12) months thereafter. The exercise of any Option granted prior to such
shareholder approval shall be conditioned on such shareholder approval. The
Plan shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 14 of the Plan.
7. Term of Option. Unless otherwise provided in the terms of an Option,
the term or each Option granted under the Plan shall be no greater than ten (10)
years from the date of grant thereof; provided, however, if the Optionee owns
stock possessing more than ten percent (10%) of the total combined voting power
of all classes of stock of the Bank Holding Company at the time the option is
granted, the term of the option shall be no greater than five (5) years from the
date of grant thereof.
8. Option Price. The Option Price for the Shares to be issued pursuant to
any such option granted under the Plan shall be any price determined by the
Board; provided, however, such Option Price shall in no event be less than one
hundred percent (100%) of the fair market value per share of the Bank Holding
Company's Common Stock at the date of the grant of the Option. However, if an
Optionee owns stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Bank Holding Company at the
time the Option is granted, the Option Price shall be at least one hundred and
ten percent (110%) of the fair market value of the Bank Holding Company's Common
Stock at the date of the grant of the Option.
9. Vesting. Except as the Board may otherwise provide in an Optionee's
written Stock Option Agreement, the Option shall be one hundred percent (100%)
vested and may be exercised immediately by the Optionee.
10. Exercise of Option.
(a) Procedure for Exercise. Any Option granted hereunder shall be
exercisable on such terms and conditions as are set forth in the Stock Option
Agreement entered into between the Bank Holding Company and the Optionee on the
grant of such Option. The Option Price of the Shares as to which an Option
shall be exercised shall be paid in full at the time of exercise, at the
election of the Optionee, in cash or currency of the United States of America,
certified check or bank check.
An Option shall be exercised when written notice of such exercise has been
given to the Bank Holding Company in accordance with the terms of the Optionee's
Stock Option Agreement by the person entitled to exercise the Option and payment
as described above for the Shares with respect to which the Option is exercised
has been received by the Bank Holding Company accompanied by any other
representatives or agreements required by the terms of this Plan or the
Optionee's Stock Option Agreement granted hereunder.
(b) Limitation on Option Exercise. If, during any calendar year, the
Optionee has Options hereunder or options under any other plan of the Bank
Holding Company that are exercisable for the first time and the aggregate fair
market value of the stock received pursuant to such Option or options exceeds
$100,000 (as of the date of grant) then Options in excess of $100,000 shall not
be treated as Incentive Stock Options. In the event that an Optionee holds
Options that are exercisable for the first time which are valued in excess of
$100,000, the Bank Holding Company will designate the stock acquired pursuant to
the exercise of an Option (up to the first $100,000) as incentive stock option
stock by issuing separate stock certificates and identifying such certificates
as incentive stock option stock on its stock transfer records.
(c) Termination of Employment. If an Optionee ceases to be an Employee of
the Bank Holding Company for any reason including, but no limited to, death,
permanent disability (as such term is used in Section 22(e)(3) of the Code) or
termination of employment as a result of retirement or otherwise, the Option
will automatically expire as of the date of such Optionee's death, permanent
disability or termination of employment. The Plan shall not confer upon any
Optionee any right with respect to continuation of employment by such bank, nor
shall it interfere in any way with his right or the Bank Holding Company's right
to terminate his employment at any time.
11. Non-Transferability of Options. The Option may not be any manner and
may be exercised, during the lifetime of the Optionee, only by the Optionee.
12. Adjustment Upon Changes in Capitalization. In the event there is any
change in the Common Stock through the declaration of stock dividends, or
through recapitalization resulting in a stock split, or combination or exchange
of Shares, or otherwise, the Board shall appropriately adjust the number or
class of Shares covered by any Option but which are unexercised, as well as the
price to be paid therefore so as to equal the same number of Shares that a
record holder of an equal number of Shares immediately prior to such event would
own or be entitled to receive after the happening of such event. In the event
of any such change in the outstanding Common Stock, the Board shall
appropriately adjust the aggregate number and class of shares available under
the Plan.
In the case of any such change in the Common Stock, the aggregate option
price in each Optionee's Stock Option Agreement of all the Shares covered
thereby prior to such change, shall be the aggregate option price for all the
shares or other securities substituted for such shares or to which such shares
are adjusted, and the Option Price per share after such change shall be
determined accordingly.
In case of any consolidation of the Bank Holding Company with, or merger of
the Bank Holding Company into, any other corporation (other than a consolidation
or merger in which the Bank Holding Company is the continuing corporation), or
in case of any sale or transfer of all or substantially all of the assets of the
Bank Holding Company, and, in particular, in the event of the acquisition of the
majority of the Common Stock of the Bank Holding Company by a holding company,
the Corporation formed by such consolidation or the corporation into which the
Bank Holding Company shall have been merged or the corporation which shall have
acquired such assets or Common Stock, as the case may be (the "Acquiring
Corporation"), shall execute and deliver to each Optionee a supplemental stock
option agreement providing that the Holder of each option then outstanding shall
have the right, during the period such option shall be outstanding pursuant to
its terms, to exercise such option as to the kind and amount of shares of stock
receivable upon such acquisition, consolidation, merger, sale or transfer by a
holder, immediately prior to such acquisition, consolidation, merger, sale or
transfer, of the total number of shares subject to the Option. Such
supplemental stock option agreement shall provide for adjustments which shall be
as nearly equivalent as may be practical to the adjustments provided for in this
Article. The provisions of this Section
shall similarly apply to successive acquisitions, consolidations, mergers, sales
or transfers. The supplemental stock option agreement shall also provide for the
exercise of Options using stock of the corporation which is the subject of the
Option.
No fractional Shares of the Common stock shall be issuable on account of
any action aforesaid, and the aggregate number of Shares into which Shares then
covered by the Option when changed as a result of such action shall be reduced
to the largest number of whole shares resulting from such action unless the
Board (or in the event of an acquisition, consolidation, merger, sale or
transfer as described above, the Board of Directors of the Acquiring
corporation), in its discretion, shall determine to issue scrip certificates, in
such event, shall be in a form and have such terms and conditions as the Board
(or the Board of Directors of Acquiring Corporation, as the case may be) in its
discretion shall prescribe.
13. Time of Granting Options. The date of grant of an Option under the
Plan shall, for all purposes, be the date on which the Board makes the
determination granting such Option. Notice of the determination shall be given
to each Employee to whom an Option is so granted within a reasonable time after
the date of such grant.
14. Amendment and Termination of the Plan.
(a) Amendment. The Board, without approval of the shareholders, may amend
the Plan from time to time in such respects as the Board may deem desirable,
provided, however, the Board may not extend the term of the Plan, increase or
decrease the aggregate number of Shares subject to the Plan (except as provided
in Section 12 of the Plan), or alter the class of employees eligible to receive
Options without the approval of the Bank Holding Company's shareholders.
(b) Termination. The Board, without approval of the shareholders, may at
any time terminate the Plan.
(c) Effect of Amendment of Termination. Any such amendment or termination
of the Plan shall not affect Options already granted and such Options shall
remain in full force and effect as if this Plan had not been amended or
terminated and shall be deemed to incorporate the terms of this plan as it
existed on the dates the Options were granted.
15. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an Option granted under the Plan unless the exercise of such Option
and the issuance and delivery of such Shares pursuant thereto shall comply with
all relevant provisions of law, including, without limitation, the Securities
Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the
rules and regulations promulgated thereunder, the requirements of any stock
exchange upon which the Shares may then be listed, and the applicable state
securities laws, and shall be further subject to the approval of counsel for the
Bank Holding Company with respect to such compliance.
As a condition to the exercise of an Option, the Bank Holding Company may
require a person exercising such Option to represent and warrant at the time of
any such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Bank Holding Company such a representation is
necessary or desirable under any of the aforementioned relevant provisions of
law.
16. Reservation of Shares. The Bank Holding company, during the term of
this Plan, will at all times reserve and keep available, the number of Shares as
shall be sufficient to satisfy the requirements of the Plan.
Inability of the Bank Holding Company to obtain from any regulatory body
having jurisdiction such authority as is deemed by the Bank Holding Company's
counsel to be necessary to the lawful issuance and sale of any Shares hereunder
shall relieve the Bank Holding company of any liability with respect of the non-
issuance or sale of such Shares as to which such requisite authority shall not
have been obtained.
17. Use of Proceeds. All proceeds received by the Bank Holding Company
under the Plan shall be used for its general corporate purposes.
18. Tax Withholding Requirement. The Board may require the remit to the
Bank Holding Company any amount of federal, state or local taxes required to be
withheld by the Bank Holding Company in the event the Optionee disposes Shares
received pursuant to the exercise of an option without satisfying the holding
period requirements of Section 422(a)(1) of the code.