Exhibit 10.3
NONQUALIFIED STOCK OPTION AGREEMENT
     This Nonqualified Stock Option Agreement (“Agreement”) has been entered
into as of the ___ day of ____________, 20___, between NorthWest Indiana
Bancorp, an Indiana corporation (the “Company”), and __________________, an
[employee/director] of the Company or one of its affiliates (“Participant”),
pursuant to the Company’s Amended and Restated 2004 Stock Option and Incentive
Plan (the “Plan”). Capitalized terms used herein and not defined herein have the
meanings set forth in the Plan.
     WHEREAS, the committee of the Board of Directors of the Company appointed
to administer the Plan (the “Committee”) has determined to grant to Participant
an option to purchase shares of the Company’s Common Stock pursuant to the terms
and conditions as provided in the Plan and this Agreement; and
     WHEREAS, the Company and Participant desire to set forth the terms and
conditions of the option;
     NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, the Company and the Participant agree as follows:
     Section 1. Grant of Option and Exercise Price. Subject to the terms and
conditions stated in the Plan and this Agreement as of _________ ___, ______
(the “Date of Grant”), the Committee has granted to Participant an option (the
“Option”) to purchase _________ shares of the Company’s Common Stock (the
“Shares”) at an exercise price per Share equal to $_________ (the “Exercise
Price”).
     Section 2. Nonqualified Stock Option. The Option is not intended to qualify
as an incentive stock option under Section 422 of the Internal Revenue Code of
1986, as amended.
     Section 3. Exercise of Option. The Option shall become exercisable as
follows or on such earlier date as provided in the Plan:
_______________________________________.
     Section 4. Term of Option. Unless sooner terminated as provided in the
Plan, the Option shall expire ten years from the Date of Grant.
     Section 5. Method of Exercise. The Participant may exercise the Option in
the manner stated in the Plan.
     Section 6. Termination. If the Participant ceases to maintain Continuous
Service for cause, or voluntarily for any reason other than death, Disability or
Retirement, all rights under the Option shall terminate immediately upon
cessation of Continuous Service. If the Participant ceases to maintain
Continuous Service by reason of death, Disability or Retirement, then the
Participant may exercise the Option, but only to the extent the Participant was
entitled to exercise the Option at the date of such cessation, at any time
during the remaining term of the Option. If the Participant ceases to maintain
Continuous Service for any reason other than those set forth above, Participant
may exercise the Option to the extent that the Participant was entitled to
exercise the Option at the date of such cessation for a period of three months
immediately succeeding such cessation of Continuous Service, and in no event
after the expiration date of the Option.
     Section 7. Plan Controlling. The Option and the terms and conditions set
forth in this Agreement are subject in all respects to the terms and conditions
of the Plan, which are controlling. All determinations and interpretations of
the Committee shall be binding and conclusive upon the Participant and his or
her legal representatives.
     Section 8. Qualification of Rights. Neither this Agreement nor the
existence of the Option shall be construed as giving the Participant any right
(a) to be retained as a director or employee of the Company or any of its
affiliates; or (b) as a shareholder with respect to the Shares until the
certificates for the Shares have been issued and delivered to the Participant.
     Section 9. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Indiana.
     Section 10. Notices. All notices and other communications required or
permitted under this Agreement shall be written and shall be delivered
personally or sent by registered or certified first-class mail, postage prepaid
and return receipt required, addressed as follows: if to the Company, to the
Company’s executive offices in Munster, Indiana, and

34

--------------------------------------------------------------------------------

 

if to the Participant or his or her successor, to the address last furnished by
the Participant to the Company. Each notice and communication shall be deemed to
have been given when received by the Company or the Participant.
     Section 11. Transferability. The Participant shall not sell, assign,
transfer, pledge or otherwise encumber the Option, except in the event of death
of Participant, by will or laws of descent and distribution.
     Section 12. Representations and Warranties of Participant. The Participant
represents and warrants to the Company that he or she has received and reviewed
a copy of the Plan.
     Section 13. Withholding. In connection with the delivery of shares of
Common Stock as a result of the exercise of the Option, the Company shall have
the right to require the Participant to pay an amount in cash sufficient to
cover any tax, including any Federal, state or local income tax, required by any
governmental entity to be withheld or otherwise deducted and paid with respect
to such delivery (“Withholding Tax”), and to make payment to the appropriate
taxing authority of the amount of such Withholding Tax.
     Section 14. No Waiver. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver thereof or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.
     IN WITNESS WHEREOF, the Company and Participant have executed this
Agreement as of the date first written above.

            NORTHWEST INDIANA BANCORP
      By:           Name          Title         [Signature of Participant]     

35