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EXHIBIT 10.16
INCENTIVE STOCK OPTION AWARD
PURSUANT TO THE PINNACLE FINANCIAL PARTNERS, INC.
2000 STOCK INCENTIVE PLAN
THIS AWARD is made as of the Grant Date by PINNACLE FINANCIAL PARTNERS,
INC. (the "Company") to_____________________________________ (the "Optionee").
Upon and subject to the Terms and Conditions attached hereto and
incorporated herein by reference, the Company hereby awards as of the Grant Date
to Optionee an incentive stock option (the "Option"), as described below, to
purchase the Option Shares.
A. Grant Date: _________________________.
B. Type of Option: Incentive Stock Option.
C. Plan under which granted: Pinnacle Financial Partners, Inc.
2000 Stock Incentive Plan.
D. Option Shares: All or any part of __________shares of the
Company's $1.00 par value common stock (the "Common Stock"),
subject to adjustment as provided in the attached Terms and
Conditions.
E. Exercise Price: $________ per share, subject to adjustment as
provided in the attached Terms and Conditions. The Exercise
Price is, in the judgment of the Committee, not less than 100%
of the Fair Market Value of a share of Common Stock on the
Grant Date or, in the case of an Over 10% Owner, not less than
110% of the Fair Market Value of a share of Common Stock on
the Grant Date.
F. Option Period: The Option may be exercised only during the
Option Period which commences on the Grant Date and ends,
generally, on the earliest of (a) the tenth (10th) anniversary
of the Grant Date (unless the Optionee is an Over 10% Owner,
in which case the fifth (5th) anniversary of the Grant Date);
(b) ninety (90) days following the date the Optionee ceases to
be an employee of the Company (including any Parent or
Subsidiary) except as provided under clause (c); or (c) one
(1) year following the date the Optionee ceases to be an
employee of the Company (including any Parent or Subsidiary)
due to death, Disability or retirement on or after reaching
age fifty-five (55); provided that the Option may be exercised
as to no more than the vested Option Shares, determined
pursuant to the Vesting Schedule. NOTE THAT OTHER LIMITATIONS
TO EXERCISING THE OPTION, AS DESCRIBED IN THE ATTACHED TERMS
AND CONDITIONS, MAY APPLY.
G. Vesting Schedule: The Option Shares shall become vested in
accordance with Schedule 1 hereto.
IN WITNESS WHEREOF, the Company has executed and sealed this Award as
of the Grant Date set forth above.
PINNACLE FINANCIAL PARTNERS, INC.
By:
-------------------------------------
Title:
-------------------------------------
<PAGE>
TERMS AND CONDITIONS
TO THE
INCENTIVE STOCK OPTION AWARD
PURSUANT TO THE PINNACLE FINANCIAL PARTNERS, INC.
2000 STOCK INCENTIVE PLAN
1. EXERCISE OF OPTION. Subject to the provisions provided herein
or in the Award made pursuant to the Pinnacle Financial Partners, Inc. 2000
Stock Incentive Plan:
(a) the Option may be exercised with respect to all or
any portion of the vested Option Shares at any time during the Option
Period by the delivery to the Company, at its principal place of
business, of a written notice of exercise in substantially the form
attached hereto as Exhibit 1, which shall be actually delivered to the
Company no earlier than thirty (30) days and no later than ten (10)
days prior to the date upon which Optionee desires to exercise all or
any portion of the Option; and
(b) payment to the Company of the Exercise Price
MULTIPLIED BY the number of Option Shares being purchased (the
"Purchase Price") as provided in Section 2.
(c) Notwithstanding any other provision of this
Agreement, in the event that the capital of the Bank falls below the
minimum requirements determined by the primary Federal regulator of the
Bank (the "Regulator"), the Regulator may direct the Company to require
the Optionee to exercise, or otherwise forfeit, the Option in whole or
in part. If the Regulator gives such direction, the Company will notify
the Optionee within forty-five (45) days from the date the Regulator
notifies the Company or the Bank in writing that the Optionee must
exercise, or otherwise forfeit, the Option in whole or in part. If the
Optionee does not exercise the Option in accordance with the Company's
direction within twenty-one (21) days of the Company's notification to
the Optionee, the Committee may provide for the cancellation of the
Option.
Upon acceptance of such notice and receipt of payment in full of the Purchase
Price, the Company shall cause to be issued a certificate representing the
Option Shares purchased.
2. PURCHASE PRICE. Payment of the Purchase Price for all Option
Shares purchased pursuant to the exercise of an Option shall be made in cash,
certified check or if and when the Common Stock becomes traded by brokers,
whether on a national securities exchange or otherwise, by receipt of the
Purchase Price in cash from a broker, dealer or other "creditor" as defined by
Regulation T issued by the Board of Governors of the Federal Reserve System
following delivery by the Optionee to the Committee of instructions in a form
acceptable to the Committee regarding delivery to such broker, dealer or other
creditor of that number of Option Shares with respect to which the Option is
exercised.
3. RIGHTS AS SHAREHOLDER. Until the stock certificates reflecting
the Option Shares accruing to the Optionee upon exercise of the Option are
issued to the Optionee, the Optionee shall have no rights as a shareholder with
respect to such Option Shares. The Company shall make no adjustment for any
dividends or distributions or other rights on or with respect to Option Shares
for
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which the record date is prior to the issuance of that stock certificate,
except as the Plan or the attached Award otherwise provides.
4. RESTRICTION ON TRANSFER OF OPTION AND OF OPTION SHARES. The
Option evidenced hereby is nontransferable other than by will or the laws of
descent and distribution and shall be exercisable during the lifetime of the
Optionee only by the Optionee (or in the event of his Disability, by his
personal representative) and after his death, only by his legatee or the
executor of his estate.
5. CHANGES IN CAPITALIZATION.
(a) If the number of shares of Common Stock shall be
increased or decreased by reason of a subdivision or combination of
shares of Common Stock, the payment of a stock dividend in shares of
Common Stock or any other increase or decrease in the number of shares
of Common Stock outstanding effected without receipt of consideration
by the Company, an appropriate adjustment shall be made by the
Committee, in a manner determined in its sole discretion, in the number
and kind of Option Shares and in the Exercise Price.
(b) If the Company shall be the surviving corporation in
any merger consolidation, extraordinary dividend (including spin-off)
recapitalization, reclassification of shares or similar reorganization,
the Optionee shall be entitled to purchase the number and class of
securities to which a holder of the number of shares of Common Stock
subject to the Option at the time of the transaction would have been
entitled to receive as a result of such transaction, and a
corresponding adjustment, where appropriate, shall be made in the
Exercise Price. In the event of a Change in Control or other corporate
transaction pursuant to which the Company is not the surviving entity,
the Committee may provide for the assumption of the Option by the
surviving entity or the substitution of a new option, adjusted in a
manner similar to that contemplated by the immediately preceding
sentence; however, if the surviving entity does not agree to the
assumption or substitution of the Option, the Committee may elect to
terminate the Option Period as of the effective date of the Change in
Control in consideration of the payment to the Optionee of the sum of
the difference between the then aggregate Fair Market Value of the
Common Stock and the aggregate Exercise Price for each Option Share
which has not been exercised as of the effective date of the Change in
Control. A dissolution or liquidation of the Company shall cause the
Option to terminate as to any portion thereof not exercised as of the
effective date of the dissolution or liquidation.
(c) The existence of the Plan and the Option granted
pursuant to this Agreement shall not affect in any way the right or
power of the Company to make or authorize any adjustment,
reclassification, reorganization or other change in its capital or
business structure, any merger or consolidation of the Company, any
issue of debt or equity securities having preferences or priorities as
to the Common Stock or the rights thereof, the dissolution or
liquidation of the Company, any sale or transfer of all or any part of
its business or assets, or any other corporate act or proceeding. Any
adjustment pursuant to this Section may provide, in the Committee's
discretion, for the elimination without payment therefor of any
fractional shares that might otherwise become subject to any Option.
6. SPECIAL LIMITATION ON EXERCISE. No purported exercise of the
Option shall be effective without the approval of the Committee, which may be
withheld to the extent that the
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exercise, either individually or in the aggregate together with the exercise of
other previously exercised stock options and/or offers and sales pursuant to any
prior or contemplated offering of securities, would, in the sole and absolute
judgment of the Committee, require the filing of a registration statement with
the United States Securities and Exchange Commission or with the securities
commission of any state. If a registration statement is not in effect under the
Securities Act of 1933 or any applicable state securities law with respect to
shares of Common Stock purchasable or otherwise deliverable under the Option,
the Optionee (a) shall deliver to the Company, prior to the exercise of the
Option or as a condition to the delivery of Common Stock pursuant to the
exercise of an Option exercise, such information, representations and warranties
as the Company may reasonably request in order for the Company to be able to
satisfy itself that the Option Shares are being acquired in accordance with the
terms of an applicable exemption from the securities registration requirements
of applicable federal and state securities laws and (b) shall agree that the
shares of Common Stock so acquired will not be disposed of except pursuant to an
effective registration statement, unless the Company shall have received an
opinion of counsel that such disposition is exempt from such requirement under
the Securities Act of 1933 and any applicable state securities law.
7. LEGEND ON STOCK CERTIFICATES. Certificates evidencing the
Option Shares, to the extent appropriate at the time, shall have noted
conspicuously on the certificates a legend intended to give all persons full
notice of the existence of the conditions, restrictions, rights and obligations
set forth herein and in the Plan.
8. GOVERNING LAWS. This Award and the Terms and Conditions shall
be construed, administered and enforced according to the laws of the State of
Tennessee.
9. SUCCESSORS. This Award and the Terms and Conditions shall be
binding upon and inure to the benefit of the heirs, legal representatives,
successors and permitted assigns of the Optionee and the Company.
10. NOTICE. Except as otherwise specified herein, all notices and
other communications under this Award shall be in writing and shall be deemed to
have been given if personally delivered or if sent by registered or certified
United States mail, return receipt requested, postage prepaid, addressed to the
proposed recipient at the last known address of the recipient. Any party may
designate any other address to which notices shall be sent by giving notice of
the address to the other parties in the same manner as provided herein.
11. SEVERABILITY. In the event that any one or more of the
provisions or portion thereof contained in the Award and these Terms and
Conditions shall for any reason be held to be invalid, illegal or unenforceable
in any respect, the same shall not invalidate or otherwise affect any other
provisions of the Award and these Terms and Conditions, and the Award and these
Terms and Conditions shall be construed as if the invalid, illegal or
unenforceable provision or portion thereof had never been contained herein.
12. ENTIRE AGREEMENT. Subject to the terms and conditions of the
Plan, the Award and the Terms and Conditions express the entire understanding of
the parties with respect to the Option.
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<PAGE>
13. VIOLATION. Any transfer, pledge, sale, assignment, or
hypothecation of the Option or any portion thereof shall be a violation of the
terms of the Award or these Terms and Conditions and shall be void and without
effect.
14. HEADINGS AND CAPITALIZED TERMS. Section headings used herein
are for convenience of reference only and shall not be considered in construing
the Award or these Terms and Conditions. Capitalized terms used, but not
defined, in either the Award or the Terms and Conditions shall be given the
meaning ascribed to them in the Plan.
15. SPECIFIC PERFORMANCE. In the event of any actual or threatened
default in, or breach of, any of the terms, conditions and provisions of the
Award and these Terms and Conditions, the party or parties who are thereby
aggrieved shall have the right to specific performance and injunction in
addition to any and all other rights and remedies at law or in equity, and all
such rights and remedies shall be cumulative.
16. NO RIGHT TO CONTINUED RETENTION. Neither the establishment of
the Plan nor the award of Option Shares hereunder shall be construed as giving
the Optionee the right to continued employment with the Company or any
affiliate.
17. QUALIFIED STATUS OF OPTION. In accordance with Section 2.4 of
the Plan, the aggregate Fair Market Value (determined as of the date an
Incentive Stock Option is granted) of the Option Shares which become exercisable
for the first time by an individual during any calendar year shall not exceed
$100,000. If the foregoing limitation is exceeded with respect to any portion of
the Option Shares, that portion of the Option Shares which cause the limitation
to be exceeded shall be treated as a Non-Qualified Stock Option. In addition, if
any portion of the Option is exercised by the Optionee more than three (3)
months following the date the Optionee terminates employment due to retirement
on or after reaching age fifty-five (55), that portion of the Option shall be
treated as a Non-Qualified Stock Option.
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<PAGE>
EXHIBIT 1
---------
NOTICE OF EXERCISE OF
STOCK OPTION TO PURCHASE
COMMON STOCK OF
PINNACLE FINANCIAL PARTNERS, INC.
Name______________________
Address___________________
Date______________________
Pinnacle Financial Partners, Inc.
3401 West End Avenue, Suite 306
Nashville, TN 37203
Re: Exercise of Incentive Stock Option
Gentlemen:
Subject to acceptance hereof by Pinnacle Financial Partners, Inc. (the
"Company") and pursuant to the provisions of the Pinnacle Financial Partners,
Inc. 2000 Stock Incentive Plan (the "Plan"), I hereby give notice of my election
to exercise options granted to me to purchase ______________ shares of Common
Stock of the Company under the Incentive Stock Option Award (the "Award") dated
as of ____________. The purchase shall take place as of __________, 200__ (the
"Exercise Date").
On or before the Exercise Date, I will pay the applicable purchase
price as follows:
[ ] by delivery of cash or a certified check for
$___________ for the full purchase price payable to
the order of Pinnacle Financial Partners, Inc.
[ ] by delivery of the purchase price by
_________________________, a broker, dealer or other
"creditor" as defined by Regulation T issued by the
Board of Governors of the Federal Reserve System. I
hereby authorize the Company to issue a stock
certificate for the number of shares indicated above
in the name of said broker, dealer or other creditor
or its nominee pursuant to instructions received by
the Company and to deliver said stock certificate
directly to that broker, dealer or other creditor (or
to such other party specified in the instructions
received by the Company from the broker, dealer or
other creditor) upon receipt of the purchase price.
Exhibit 1 - Page 1 of 3
<PAGE>
As soon as the stock certificate is registered in my name, please
deliver it to me at the above address.
If the Common Stock being acquired is not registered for issuance to
and resale by the Optionee pursuant to an effective registration statement on
Form S-8 (or successor form) filed under the Securities Act of 1933, as amended
(the "1933 Act"), I hereby represent, warrant, covenant, and agree with the
Company as follows:
The shares of the Common Stock being acquired by me will be acquired
for my own account without the participation of any other person, with
the intent of holding the Common Stock for investment and without the
intent of participating, directly or indirectly, in a distribution of
the Common Stock and not with a view to, or for resale in connection
with, any distribution of the Common Stock, nor am I aware of the
existence of any distribution of the Common Stock;
I am not acquiring the Common Stock based upon any representation, oral
or written, by any person with respect to the future value of, or
income from, the Common Stock but rather upon an independent
examination and judgment as to the prospects of the Company;
The Common Stock was not offered to me by means of publicly
disseminated advertisements or sales literature, nor am I aware of any
offers made to other persons by such means;
I am able to bear the economic risks of the investment in the Common
Stock, including the risk of a complete loss of my investment therein;
I understand and agree that the Common Stock will be issued and sold to
me without registration under any state law relating to the
registration of securities for sale, and will be issued and sold in
reliance on the exemptions from registration under the 1933 Act,
provided by Sections 3(b) and/or 4(2) thereof and the rules and
regulations promulgated thereunder;
The Common Stock cannot be offered for sale, sold or transferred by me
other than pursuant to: (A) an effective registration under the 1933
Act or in a transaction otherwise in compliance with the 1933 Act; and
(B) evidence satisfactory to the Company of compliance with the
applicable securities laws of other jurisdictions. The Company shall be
entitled to rely upon an opinion of counsel satisfactory to it with
respect to compliance with the above laws;
The Company will be under no obligation to register the Common Stock or
to comply with any exemption available for sale of the Common Stock
without registration or filing, and the information or conditions
necessary to permit routine sales of securities of the Company under
Rule 144 under the 1933 Act are not now available and no assurance has
been given that it or they will become available. The Company is under
no obligation to act in any manner so as to make Rule 144 available
with respect to the Common Stock;
I have and have had complete access to and the opportunity to review
and make copies of all material documents related to the business of
the Company, including, but not limited to, contracts, financial
statements, tax returns, leases, deeds and other books and records. I
have
Exhibit 1 - Page 2 of 3
<PAGE>
examined such of these documents as I wished and am familiar with the
business and affairs of the Company. I realize that the purchase of the
Common Stock is a speculative investment and that any possible profit
therefrom is uncertain;
I have had the opportunity to ask questions of and receive answers from
the Company and any person acting on its behalf and to obtain all
material information reasonably available with respect to the Company
and its affairs. I have received all information and data with respect
to the Company which I have requested and which I have deemed relevant
in connection with the evaluation of the merits and risks of my
investment in the Company;
I have such knowledge and experience in financial and business matters
that I am capable of evaluating the merits and risks of the purchase of
the Common Stock hereunder and I am able to bear the economic risk of
such purchase; and
The agreements, representations, warranties and covenants made by me
herein extend to and apply to all of the Common Stock of the Company
issued to me pursuant to this Award. Acceptance by me of the
certificate representing such Common Stock shall constitute a
confirmation by me that all such agreements, representations,
warranties and covenants made herein shall be true and correct at that
time.
I understand that the certificates representing the shares being
purchased by me in accordance with this notice shall bear a legend
referring to the foregoing covenants, representations and warranties
and restrictions on transfer, and I agree that a legend to that effect
may be placed on any certificate which may be issued to me as a
substitute for the certificates being acquired by me in accordance with
this notice. I further understand that capitalized terms used in this
Notice of Exercise without definition shall have the meanings given to
them in the Plan.
Very truly yours,
___________________________________
AGREED TO AND ACCEPTED:
PINNACLE FINANCIAL PARTNERS, INC.
By:______________________________
Title:___________________________
Number of Shares
Exercised:_______________________
Number of Shares
Remaining:_______________________ Date:_________________________
Exhibit 1 - Page 3 of 3
<PAGE>
SCHEDULE 1
VESTING SCHEDULE
INCENTIVE STOCK OPTION AWARD
ISSUED PURSUANT TO THE
PINNACLE FINANCIAL PARTNERS, INC.
2000 STOCK INCENTIVE PLAN
A. The Option Shares shall become vested Option Shares following
completion of the years of service as an employee of the Company or any
Parent or Subsidiary as indicated in the schedule below.
<TABLE>
<CAPTION>
Percentage of Option Shares Years of Service
Which are Vested Shares after the Grant Date
---------------------------- ---------------------
<S> <C>
20% 1
40% 2
60% 3
80% 4
100% 5
</TABLE>
B. Notwithstanding Part A, in the event of a Change in Control prior to
the third anniversary of the date the Bank opens for business (the
"Opening Date"), the Option shall become vested as indicated in the
following Vesting Schedule:
<TABLE>
<CAPTION>
Percentage of Option Shares Years of Service
Which are Vested Shares after the Opening Date
--------------------------- ----------------------
<C> <C>
33 1/3% 1
66 2/3% 2
100% 3
</TABLE>
C. Notwithstanding Part A, in the event of a Change in Control subsequent
to the third anniversary of the Opening Date, the Option will be fully
vested as of a date determined by the Committee which is no less than
thirty (30) days prior to the effective date of the Change in Control.
D. For purposes of the Vesting Schedule, Optionee shall be granted a year
of service for each twelve-consecutive-month period following the Grant
Date and during which Optionee continues, at all times, as an employee
of the Company or any Parent or Subsidiary.
Schedule 1 - Page 1 of 1
