EXHIBIT 4.2
FORM OF STOCK OPTION AGREEMENT
TO BE ENTERED INTO WITH RESPECT TO
INCENTIVE STOCK OPTIONS
STOCK OPTION AGREEMENT
FOR INCENTIVE STOCK OPTIONS UNDER SECTION 422
OF THE INTERNAL REVENUE CODE
PURSUANT TO THE
ADVANCE FINANCIAL BANCORP
1998 STOCK OPTION PLAN
STOCK OPTIONS for a total of _____________ shares of Common Stock of
Advance Financial Bancorp (the "Company"), which Option is intended to qualify
as an Incentive Stock Option under Section 422 of the Internal Revenue Code of
1986, as amended, 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 the 1998 Stock Option Plan (the "Plan") adopted by
the Company which is incorporated by reference herein, receipt of which is
hereby acknowledged.
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.
2. Exercises of Option. This Option shall be exercisable in accordance with
provisions of the Plan, provided the holder of such Option is an employee,
director or director emeritus of the Company as of such date, as follows:
(a) Schedule of Rights to Exercise.
Percentage of
Total Shares
Awarded Which
Are Exerciseable/
Date Options Non-forfeitable
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January 20, 1998 ....................... ______ 25%
As of January 20, 1999.................. ______ 50%
As of January 20, 2000.................. ______ 75%
As of January 20, 2001.................. ______ 100%
Options awarded to the Optionee shall continue to vest annually during such
period that he serves as an employee, director or director emeritus of Advance
Financial Savings Bank or the Company. Notwithstanding any provisions in this
Section 2, in no event shall this Option be exercisable prior to six months
following the date of grant. Options shall be 100% vested and exercisable upon
the death or disability of the Optionee, or upon a Change in Control of the
Company. Options shall become "non-incentive" options and remain exercisable for
remaining term upon retirement after not less than 10 years of service, if not
exercised within 3 months of retirement.
(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 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 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. Dividend Equivalent Rights. The Stock Options represented by this
Agreement shall include the right of the Optionee to receive payment of dividend
equivalent rights. Such rights shall provide that upon the payment of a cash
dividend on the Common Stock, the holder of such Options shall receive payment
of cash in an amount equivalent to the cash dividend payable as if such Options
had been exercised and such Common Stock held as of the dividend record date.
Such rights shall expire upon the expiration or exercise of such underlying
Options. Such rights are non-transferable and shall attach to Options
represented by this Agreement whether or not such Options are immediately
exercisable.
6. 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.
Advance Financial Bancorp
Date of Grant: , 1999 By:
------------------ ------------------------
Attest:
- --------------------------------
[SEAL]
INCENTIVE STOCK OPTION EXERCISE FORM
PURSUANT TO THE
ADVANCE FINANCIAL BANCORP
1998 STOCK OPTION PLAN
-----------------
(Date)
Advance Financial Bancorp
1015 Commerce Street
Wellsburg, West Virginia 26070
Dear Sir:
The undersigned elects to exercise the Incentive Stock Option to purchase
shares of Common Stock of Advance Financial Bancorp under and pursuant to a
Stock Option Agreement dated , 19 .
Delivered herewith is a certified or bank cashier's or teller's check
and/or shares of Common Stock, valued at the fair market value of the stock on
the date of exercise, as set forth below.
$ of cash or check
-------------
of Common Stock
-------------
$ Total
=============
The name or names to be on the stock certificate or certificates and the
address and Social Security Number of such person(s) is as follows:
Name
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Address
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Social Security Number
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Very truly yours,
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