NORWOOD FINANCIAL CORP. 2006 STOCK OPTION PLAN
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INCENTIVE STOCK OPTION AGREEMENT
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Incentive Stock Option Agreement made this _________ of
___________________________ between Norwood Financial Corp. (Norwood) and
______________________ (Employee).
WHEREAS, Norwood desires to afford the Employee an opportunity to purchase
shares of common stock of Norwood (Common Stock) as hereinafter provided, in
accordance with the provisions of the Norwood Financial Corporation 2006 Stock
Option Plan (Plan), a copy of which is attached.
NOW THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the parties hereto,
intending to legally bound hereunder, agree as follows:
1. GRANT OF OPTION. Norwood hereby grants to the employee the right and
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option (Option) to purchase all or any part of an aggregate of _______ shares of
Common Stock. The Option is in all respects limited and conditioned, as
hereinafter provided, and is subject in all respects to the Plan's terms and
conditions, which are incorporated herein by reference and are made a part
hereof.
2. PURCHASE PRICE. The purchase price of the share of Common Stock covered
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by the Option shall be $________. The date of this Option Agreement is the date
of grant of the Option and it is the determination of the Committee that on this
date the fair market value of said Common Stock was not greater than the Option
price above stated.
3. TERM. This Option shall expire on ___________________, which date is not
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less than one nor more than (I) ten years from the date of grant if the Employee
does not own more than 10% of the combined voting power of all the shares of
stock of Norwood or any subsidiary on the date of grant, or (ii) five years from
the date of grant if the Employee owns more than 10% of the combined voting
power of all the shares of stock of Norwood or any subsidiary on the date of
grant.
4. EXERCISE OF OPTION. This Option may not be exercised earlier than one
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year from the date of grant. Thereafter this Option may be exercised in whole or
in part, subject to the provisions of Paragraph 3.
5. Subject to the terms and conditions of this Option Agreement, the Option
may be exercised by written notice to Norwood, at its principal office, which is
located at 717 Main Street, Honesdale, Pennsylvania 18431. Such notice shall
state the election to exercise the Option and the number of shares with respect
to which it is being exercised;
shall be signed by the person or persons exercising the Option; and shall be
accompanied by the payment of the full purchase price of such shares. The
purchase price shall be paid in cash or its equivalent, or, in whole or in part
through the transfer of shares of Common Stock previously acquired by the
Employee, provided that if such shares of Common Stock were acquired through the
exercise of an incentive stock option, such shares were held by the Employee for
a period not less than the holding period described in section 422A(a)(1) of the
Code and if such shares were acquired though the exercise of nonqualified stock
option, such shares of Common Stock have been held by Employee for more than one
year. Upon receipt of such notice and payment, Norwood shall deliver a
certificate or certificates representing the shares with respect to which the
Option is so exercised. The certificate or certificates for the shares as to
which the Option shall have been so exercised shall be registered in the name of
the person or persons so exercising the Option (or, if the Option shall be
exercised by the Employee and if the Employee shall so request in the notice
exercising the Option, shall be registered in the name of the Employee and his
spouse, jointly, with the right of survivorship) and shall be delivered as
provided above to, or upon the written order of, the person or persons
exercising the Option. In the event the Option shall be exercised by any persons
or persons after the death of the Employee, such notice shall be accompanied by
appropriate proof of the right of such person or persons to exercise the Option.
All shares that shall be purchased upon the exercise of the Option as provided
herein shall be fully paid and non-assessable.
6. NON-TRANSFERABILITY OF OPTION. This Option is not transferable by
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Employee otherwise than by will or by the laws of descent and distribution, and
during the lifetime of the Employee, the Option shall be exercisable only by
Employee.
7. TERMINATION OF EMPLOYMENT. If Employee's employment with Norwood and all
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subsidiary corporations is terminated for any reason other than death or
disability, this Option shall be exercisable at any time prior to the earlier of
the expiration date set forth in Paragraph 3 or three months after the date of
termination, but only to the extent of the accrued right to purchase Common
Stock at the date of such termination.
8. DEATH. If Employee dies during his employment and prior to the
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expiration of this Option as set forth in Paragraph 3, this Option may be
exercised, but only to the extent of the accrued right to purchase Common Stock
at the date of death by Employee's estate, personal representative or
beneficiary who acquired the right to exercise the Option by bequest or
inheritance or by reason of Employee's death, at any time prior the earlier of
two years following the Employee's death or the expiration date set forth in
Paragraph 3.
9. DISABILITY. If Employee becomes disabled, as defined in the Plan, during
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his employment and, prior to the expiration date of the Option as set for in
Paragraph 3, Employee's employment is terminated as a consequence of such
disability, this Option
shall be exercisable by Employee at any time prior to the earlier of one year
following the Employee's termination of employment by reason of disability or
the expiration date specified in Paragraph 3, but only to the extent of the
accrued right to purchase Common Stock at the date of such termination.
10. MISCELLANEOUS.
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(a) The invalidity or unenforceability of any particular provision of this
Agreement shall not affect the other provisions hereof, and the Agreement shall
be construed in all respects as if such invalid or unenforceable provision were
omitted.
(b) No change or modification of this Agreement shall be valid unless the
same be in writing and signed by the party against whom the said modification is
to be enforced.
(c) This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, Norwood has caused this Incentive Option Agreement to
be duly executed by its officers thereunto duly authorized, and the Employee has
hereunto set his hand and seal, all on the day and year first above written.
ATTEST NORWOOD FINANCIAL CORP.
(Corporate Seal)
By:_____________________________ By: ___________________________________
Assistant Secretary Executive Vice President and Chief
Financial Officer
___________________________________
Employee
NORWOOD FINANCIAL CORP. STOCK OPTION PLAN
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NOTICE OF EXERCISE OF GRANTED OPTIONS
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Pursuant to the Incentive Stock Option Agreement (the "Agreement") entered
into on the ___ day of _____________, between Norwood Financial Corp. (Norwood)
and _____________________ (Employee), 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 5 of the Agreement, I request that the
shares be registered in my name.
______ In accordance with Paragraph 5 of the Agreement, I request that the
shares be registered in joint name, with right of survivorship, with my spouse,
________________________.
Please register in the name of
_______________________________________
Employee
_______________________________________
Date
Check one of the following:
_____ This exercise represents the total shares granted to me under the
above Agreement.
_____ This exercise represents _______ shares of the total share granted to
me under the above Agreement. I have ______ shares remaining that I
may exercise within the period covered by the Agreement.