Exhibit 10.3

 

Stock Option Agreement

Director — NQSO — 5 year vesting

 

STOCK OPTION

 

Granted by

 

OCONEE FEDERAL FINANCIAL CORP.

 

under the

 

OCONEE FEDERAL FINANCIAL CORP.

2012 EQUITY INCENTIVE PLAN

 

This stock option agreement (“Option” or “Agreement”) is and will be subject in
every respect to the provisions of the 2012 Equity Incentive Plan (the “Plan”)
of Oconee Federal Financial Corp. (the “Company”) which are incorporated herein
by reference and made a part hereof, subject to the provisions of this
Agreement.  A copy of the Plan has been provided to each person granted a stock
option pursuant to the Plan.  The holder of this Option (the “Participant”)
hereby accepts this Option, subject to all the terms and provisions of the Plan
and this Agreement, and agrees that all decisions under and interpretations of
the Plan and this Agreement by the Committee appointed to administer the Plan
(“Committee”) or the Board will be final, binding and conclusive upon the
Participant and the Participant’s heirs, legal representatives, successors and
permitted assigns.  Capitalized terms used herein but not defined will have the
same meaning as in the Plan.

 

1.             Name of Participant:

 

2.             Date of Grant:  April 27, 2012.

 

3.             Total number of shares of Company common stock, $0.01 par value
per share, that may be acquired pursuant to this Option: 

(subject to adjustment pursuant to Section 9 hereof).

 

·      This is a Non-Qualified Option.

 

4.             Exercise price per share:     $ 11.58

(subject to adjustment pursuant to Section 10 below)

 

5.             Expiration Date of Option:  April 27, 2022.

 

6.             Vesting Schedule.  Except as otherwise provided in this
Agreement, this Option first becomes exercisable, subject to the Option’s
expiration date, in accordance with the vesting schedule specified herein.

 

The Options granted under this Agreement shall vest in five (5) equal annual
installments, with the first installment becoming exercisable on the first
anniversary of the date of grant, or April 27, 2013, and succeeding installments
on each anniversary thereafter, through April 27, 2017.  To the extent the
Options awarded to me are not equally divisible by “5,” any excess Options shall
vest on April 27, 2017.

 

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This Option may not be exercised at any time on or after the Option’s expiration
date. Vesting will automatically accelerate pursuant to Sections 2.8 and 4.1 of
the Plan (in the event of death or Disability or Retirement or Termination of
Service as a Director following a Change in Control).

 

7.            Exercise Procedure.

 

7.1           Delivery of Notice of Exercise of Option.  This Option will be
exercised in whole or in part by the Participant’s delivery to the Company of
written notice (the “Notice of Exercise of Option” attached hereto as Exhibit A)
setting forth the number of shares with respect to which this Option is to be
exercised, together with payment by cash or other means acceptable to the
Committee, including:

 

(i)                                      by tendering shares of Common Stock
valued at Fair Market Value (as defined in Section 7.2 hereof) as of the day of
exercise;

 

(ii)                                  by irrevocably authorizing a third party,
acceptable to the Committee, to sell shares of Common Stock (or a sufficient
portion of the shares) acquired upon exercise of the Option and to remit to the
Company a sufficient portion of the sale proceeds to pay the entire exercise
price and any tax withholding resulting from such exercise;

 

(iii)                                by a net settlement of the Option, using a
portion of the shares obtained on exercise in payment of the exercise price of
the Option;

 

(iv)                              by personal, certified or cashier’s check;

 

(iv)                              by other property deemed acceptable by the
Committee; or

 

(v)                                 by any combination thereof.

 

7.2           “Fair Market Value” shall have the meaning set forth in Section
8.1(r) of the Plan.

 

8.             Delivery of Shares.

 

Delivery of Shares.  Delivery of shares of Common Stock upon the exercise of
this Option will comply with all applicable laws (including the requirements of
the Securities Act) and the applicable requirements of any securities exchange
or similar entity.

 

9.             Adjustment Provisions.

 

This Option, including the number of shares subject to the Option and the
exercise price, will be adjusted upon the occurrence of the events specified in,
and in accordance with the provisions of Section 3.3 of the Plan.

 

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10.           Termination of Option and Accelerated Vesting.

 

This Option will terminate upon the expiration date, except as set forth in the
following  provisions:

 

(i)             Death.  This Option will become exercisable as to all shares
subject to an outstanding Award, whether or not then exercisable, in the event
of the Participant’s Termination of Service by reason of the Participant’s
death.  This Option may thereafter be exercised by the Participant’s legal
representative or beneficiaries for a period of one (1) year from the date of
death, subject to termination on the expiration date of this Option, if earlier.

 

(ii)            Disability.  This Option will become exercisable as to all
shares subject to an outstanding Award, whether or not then exercisable, in the
event of the Participant’s Termination of Service by reason of the Participant’s
Disability. This Option may thereafter be exercised for a period of one (1) year
from the date of such Termination of Service by reason of Disability, subject to
termination on the Option’s expiration date, if earlier.

 

(iii)           Termination for Cause.  If the Participant’s Termination of
Service is for Cause, all Options that have not been exercised will expire and
be forfeited.

 

(iv)          A Change in Control.  In the event of the Participant’s
Termination of Service as a Director following a Change in Control, all Options
held by the Participant, whether or not exercisable at such time, will become
fully exercisable, subject to the expiration provisions otherwise applicable to
the Option.  A “Change in Control” will be deemed to have occurred as provided
in Section 4.2 of the Plan.

 

(v)           Retirement.  This Option will become exercisable as to all shares
subject to an outstanding Award, whether or not then exercisable, in the event
of the Participant’s Termination of Service by reason of the Participant’s
Retirement (as defined in Section 8.1(aa) of the Plan).  This Option may
thereafter be exercised for a period of one (1) year from the date of such
Termination of Service by reason of Retirement, subject to termination on the
Option’s expiration date, if earlier.

 

(vi)          Other Termination.  If the Participant’s Termination of Service is
for any reason other than death, Disability, Retirement, for Cause or following
a Change of Control, this Option may thereafter be exercised, to the extent it
was exercisable at the time of such termination, for a period of three (3)
months following termination, subject to termination on the Option’s expiration
date, if earlier.

 

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11.           Miscellaneous.

 

11.1       No Option will confer upon the Participant any rights as a
stockholder of the Company prior to the date on which the individual fulfills
all conditions for receipt of such rights.

 

11.2       This Agreement may not be amended or otherwise modified unless
evidenced in writing and signed by the Company and the Participant.

 

11.3       In the discretion of the Committee, a non-qualified Option granted
under the Plan may be transferable by the Participant; provided, however, that
such  transfers will be limited to Immediate Family Members of Participants,
trusts and partnerships established for the primary benefit of such family
members or to charitable organizations, and provided, further, that such
transfers are not made for consideration to the Participant.

 

11.4       This Option will be governed by and construed in accordance with the
laws of the State of South Carolina.

 

11.5       The granting of this Option does not confer upon the Participant any
right to be retained in the service of the Company or any subsidiary.

 

[Remainder of Page Intentionally Blank]

 

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IN WITNESS WHEREOF, the Company has caused this instrument to be executed in its
name and on its behalf as of the date of grant of this Option set forth above.

 

 

OCONEE FEDERAL FINANCIAL CORP.

 

 

 

 

 

By:

 

 

Its:

 

 

PARTICIPANT’S ACCEPTANCE

 

The undersigned hereby accepts the foregoing Option and agrees to the terms and
conditions hereof, including the terms and provisions of the Company’s 2012
Equity Incentive Plan.  The undersigned hereby acknowledges receipt of a copy of
the Company’s 2012 Equity Incentive Plan.

 

 

PARTICIPANT

 

 

 

 

 

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EXHIBIT A

 

NOTICE OF EXERCISE OF OPTION
(BY OUTSIDE DIRECTOR)

 

I hereby exercise the stock option (the “Option”) granted to me by Oconee
Federal Financial Corp. (the “Company”) or its affiliate, subject to all the
terms and provisions set forth in the Stock Option Agreement (the “Agreement”)
and the Oconee Federal Financial Corp. 2012 Equity Incentive Plan (the “Plan”)
referred to therein, and notify you of my desire to purchase
                           shares of common stock of the Company (“Common
Stock”) for a purchase price of $                per share.

 

Enclosed please find (check one):

 

o            Cash or personal, certified or cashier’s check in the sum of
$            , in full/partial payment of the purchase price.

 

o            Stock of the Company with a fair market value of $              in
full/partial payment of the purchase price.*

 

o            My check in the sum of $             and stock of the Company with
a fair market value of $            , in full/partial payment of the purchase
price.*

 

o            Please sell               shares from my Option shares through a
broker in full/partial payment of the purchase price.

 

I understand that after this exercise,                shares of Common Stock
remain subject to the Option, subject to all terms and provisions set forth in
the Agreement and the Plan.

 

I hereby represent that it is my intention to acquire these shares for the
following purpose:

 

o            investment

o            resale or distribution

 

Please note: if your intention is to resell (or distribute within the meaning of
Section 2(11) of the Securities Act of 1933) the shares you acquire through this
Option exercise, the Company or transfer agent may require an opinion of counsel
that such resale or distribution would not violate the Securities Act of 1933
prior to your exercise of such Option.

 

Date:                        ,            .

 

 

Participant’s signature

 

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*              If I elect to exercise by exchanging shares I already own, I will
constructively return shares that I already own to purchase the new option
shares.  If my shares are in certificate form, I must attach a separate
statement indicating the certificate number of the shares I am treating as
having exchanged.  If the shares are held in “street name” by a registered
broker, I must provide the Company with a notarized statement attesting to the
number of shares owned that will be treated as having been exchanged.  I will
keep the shares that I already own and treat them as if they are shares acquired
by the option exercise.  In addition, I will receive additional shares equal to
the difference between the shares I constructively exchange and the total new
option shares that I acquire.

 

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EXHIBIT B

ACKNOWLEDGMENT OF RECEIPT OF SHARES

 

I hereby acknowledge the delivery to me by Oconee Federal Financial Corp. (the
“Company”) or its affiliate on
                                                     , of stock certificates for
                                       shares of common stock of the Company
purchased by me pursuant to the terms and conditions of the Stock Option
Agreement and the Oconee Federal Financial Corp. 2012 Equity Incentive Plan, as
applicable, which shares were transferred to me on the Company’s stock record
books on                                      .

 

 

Date:

 

 

 

 

 

 

Participant’s signature

 

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