Exhibit 99.1
2004 Incentive Stock Option Plan for Key Employees
Stock Option Agreement - Installment
May 16, 2007
Employee's Name
Street Address
City, State Zip Code
Re: Stock Option
Dear Mr./Ms. Employee:
On May 16, 2007, the Board of Directors of First Ipswich Bancorp (the
"Corporation"), which administers the First Ipswich Bancorp 2004 Incentive Stock
Option Plan for Key Employees, as amended from time to time, (the "Plan")
awarded you Stock Options under the Plan to purchase shares of the Corporation's
Common Stock ($1.00 par value) (hereafter "Stock"). This letter will serve as an
option agreement between the Corporation and you and sets forth the terms and
conditions of the options granted you.
1. Term of Option. The Corporation hereby grants to you, effective as of
the date hereof, options (the "Options") pursuant to the Plan to purchase ____
shares of Stock at a purchase price of $___ per share. Please execute this
agreement on the signature line provided below to indicate your acceptance of
the Options and your agreement to comply with the terms and conditions of this
agreement.
2. When Options Vest. The Options granted to you shall vest over four (4)
years with twenty-five percent (25%) of the Options vesting on May 16, 2008 and
each succeeding anniversary of this Agreement until all the Options are vested.
You may exercise any Options that have vested from time to time.
The Options will terminate ten (10) years from the date of this agreement,
unless terminated sooner under the provisions of this agreement or exhausted by
your purchase of all shares of Stock subject hereto.
3. How Options May Be Exercised. You may exercise the Options by giving
the Corporation written notice of your desire to do so, stating the whole number
of shares you wish to purchase. Your notice must be accompanied by (a) payment
in full of the purchase price of the shares of Stock you wish to purchase, (b)
payment in full of all local, state and federal taxes due on account of the
exercise of the Options, and (c) your written representation that such shares
are being acquired for investment, or such other evidence of compliance with
federal and state securities laws as may be requested by the Corporation.
Payment of the exercise price (excluding taxes due on account of the exercise of
the Options) may be made (i) in United States dollars in cash or by check, bank
draft or money order payable to the order of the Corporation, (ii) through the
actual or constructive delivery of shares of Stock owned by you for more than
six months with a fair market value equal to the exercise price, or (iii) by a
combination of (i) and (ii). As promptly as practicable thereafter, the
Corporation will deliver to you stock certificates for the number of shares
which you have purchased. Your exercise of the Options shall be effective when
the Corporation receives your notice of exercise as described above. With
respect to shares covered by these Options, you shall have no rights as a
shareholder of the Corporation until a stock certificate or certificates have
been delivered to you. Delivery of shares of Stock purchased hereunder shall be
effective when a stock transfer agent or the Corporation has deposited stock
certificates for such shares with the United States mail or delivered them to
you.
4. Non-Transferability, Acquisition for Investment. The Options may not be
transferred by you, other than by will or the laws of descent and distribution
of the state in which you are domiciled at the time of your death. During your
lifetime, the Options may be exercised only by you or, if legally incapacitated,
your personal representative. By accepting these Options, you agree that you are
acquiring the Options for your own account, for investment, and not with the
intention of reselling the Options.
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5. Termination of Service, Retirement, Death, Disability. Unless
terminated earlier pursuant to Section 2 or this Section 5, the Options shall
expire three (3) months after termination of your service with the Corporation
or any of its subsidiaries (with or without cause, voluntary or involuntary) for
reasons other than death or Total and Permanent Disability (as defined in the
Plan), during which 3-month period the Options may be exercised only to the
extent that it was exercisable upon such termination of service.
If your service with the Corporation or any of its subsidiaries terminates
for reasons of death or Total and Permanent Disability, then the Options shall
vest fully and, unless terminated earlier pursuant to Section 2, expire twelve
(12) months after such termination of service. If your service terminates for
reasons other than death or Total and Permanent Disability and you shall die
during the 3-month period described above, Options shall, unless terminated
earlier pursuant to Section 2, expire one (1) year from the date of termination
of service, during which time the Options may be exercised to the extent
exercisable on the date of termination of service.
If you are terminated for Cause by either the Corporation or any of its
subsidiaries, all unexercised Options (whether vested or not) shall immediately
terminate and be of no further force and effect. As used herein, "cause" shall
mean if (i) you have been convicted by a court of competent jurisdiction of any
criminal offense involving dishonesty or breach of trust; (ii) you have
committed an act of fraud against the Corporation, its subsidiaries or any of
them; (iii) you have refused to perform the duties reasonably assigned to you by
the Corporation or of any of its subsidiaries; or (iv) you have engaged in
willful misconduct injurious to the Corporation, its subsidiaries or any of
them, monetarily or otherwise.
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6. Tax Treatment. The Options are intended to entitle you to favorable tax
treatment under the Internal Revenue Code. Generally you will not incur taxable
income in the year you exercise any Options and any gain realized upon sale of
the Stock will be treated as capital gain if you do not sell the Stock before
two (2) years after the date of issuance of the Options and one (1) year after
you exercise any Options. Exercise of the Options and/or disposition of shares
of Stock acquired in connection therewith may need to be taken into account in
connection with the alternative minimum tax, which may apply. If the holding
period requirements are not met, then other rules apply.
The foregoing is only intended to highlight in a general way certain tax
features of the Options under present law and cannot be relied upon to present
actual tax treatment in particular circumstances or to constitute a
representation concerning tax treatment in the future.
7. Acceleration of Options. In the event there shall occur a "change in
control" (as hereinafter defined) of the Corporation while the Options are
outstanding, the foregoing provisions providing that the Options be exercisable
in part after specific dates shall not be effective, and the Options shall, to
the extent not previously exercised, be immediately exercisable in full.
For purposes of this agreement, a "change in control" of the Corporation
shall occur if any person or entity or any group of persons acting in concert
(other than the Raymond Family) shall own more than fifty percent of the common
stock of the Corporation or any successor of the Corporation by merger or
otherwise. The "Raymond Family" shall mean Neil St. John Raymond, his spouse,
issue and their spouses, and trusts of which any of the described persons is a
beneficiary, which shall include trusts or custodianship arrangements under
retirement plans, and custodian, nominee, agency or similar arrangements created
by or which benefit any described persons.
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8. Legal Restrictions on Payments Hereunder.
(a) Notwithstanding any other provision of this agreement to the contrary,
neither the Corporation nor any subsidiary shall have any obligation that is
otherwise prohibited by the laws, regulations or regulatory agreements or orders
applicable to the Corporation or any subsidiary, including without limitation 12
C.F.R. Part 359. Neither the Corporation nor any subsidiary shall make, nor be
obligated to make, any "golden parachute payment" (as defined in 12 C.F.R. Part
359) to you, except as provided therein, as a result of entering into this
agreement or otherwise. You acknowledge that the Corporation and The First
National Bank of Ipswich, its wholly-owned subsidiary, are currently prohibited
under 12 C.F.R. Part 359 from making, or agreeing to make, any golden parachute
payment except as provided therein.
(b) You agree that if your employment terminates at a time when a payment
to you hereunder would be deemed to be a golden parachute payment under 12
C.F.R. Part 359 or is otherwise prohibited under law, regulation or regulatory
agreement or order, the only obligation of the Corporation and of any subsidiary
shall be to request permission to make a golden parachute payment (to the extent
such payment may be permitted by the approving authorities under 12 C.F.R. Part
359 or such law, regulation or regulatory agreement or order) if the Board of
Directors of the Corporation and any subsidiary shall determine, in their
discretion, that they have a reasonable basis for making such request.
9. Miscellaneous. Neither the grant of the Options to you nor the purchase
by you of Stock pursuant to the Options shall: (a) give you a right to continued
employment with the Corporation or a subsidiary or limit the Corporation's or a
subsidiary's right to terminate your employment; or (b) give you or any other
person a pre-emptive right to acquire any capital stock of the Corporation.
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Notice to the Corporation for purposes of Section 3 of this agreement or
for any other purpose in connection with this agreement or the Options may be
given by hand delivery or first class mail, postage prepaid, addressed to First
Ipswich Bancorp, 31 Market Street, Ipswich, MA 01938, Attn: President, or to
such other address as the Corporation may indicate to you in writing, and shall
be effective upon receipt by the Corporation. Any notice which the Corporation
may give to you under this agreement shall be given by hand delivery or first
class mail, postage prepaid, to your address as listed at the beginning of this
agreement or to such other address as you may indicate in writing to the
Corporation, and shall be effective when delivered or deposited with the United
States mail.
This agreement, and all rights and obligations of the parties hereto, are
subject to the terms and conditions of the Plan, a copy of which is on file with
the Corporation. Any disputes concerning the rights and obligations of the
parties hereto shall be resolved by the Board of Directors of the Corporation,
pursuant to the Plan.
Please indicate your acceptance of the terms and conditions of this
agreement by signing where indicated below.
Very truly yours,
FIRST IPSWICH BANCORP
By: _____________________________________
Its
I hereby agree to be bound by the terms and conditions of the foregoing
agreement and the Plan.
_________________________________________
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