Exhibit 10.1

 

THE BANCORP, INC.

 

2005 OMNIBUS EQUITY COMPENSATION PLAN

 

INCENTIVE STOCK OPTION GRANT

 

This STOCK OPTION GRANT, dated as of                         , (the “Date of
Grant”), is delivered by The Bancorp, Inc. (the “Company”) to
                         (the “Grantee”).

 

 

RECITALS

 

The Bancorp, Inc. 2005 Omnibus Equity Compensation Plan (the “Plan”) provides
for the grant of options to purchase shares of common stock of the Company. The
Compensation Committee of the Board of Directors of the Company (the
“Committee”) has decided to make a stock option grant as an inducement for the
Grantee to promote the best interests of the Company and its stockholders. A
copy of the Plan is attached.

 

NOW, THEREFORE, the parties to this Agreement, intending to be legally bound
hereby, agree as follows:

 

1.    Grant of Option.

 

(a) Subject to the terms and conditions set forth in this Agreement and in the
Plan, the Company hereby grants to the Grantee an incentive stock option (the
“Option”) to purchase                  shares of common stock of the Company
(“Shares”) at an exercise price of $                 per Share. The Option shall
become exercisable according to Paragraph 2 below.

 

(b) The Option is designated as an incentive stock option, as described in
Paragraph 5 below. However, if and to the extent the Option exceeds the limits
for an incentive stock option, as described in Paragraph 5, the Option shall be
a nonqualified stock option.

 

2.    Exercisability of Option. The Option shall become exercisable on the
following dates, if the Grantee is employed by, or providing service to, the
Employer (as defined in the Plan) on the applicable date:

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Date

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       Shares for Which the Option
is Exercisable

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The exercisability of the Option is cumulative, but shall not exceed 100% of the
Shares subject to the Option. The Option shall become fully exercisable on
                             , 20    , if the Grantee is employed by, or
providing service to, the Employer on such date. If the foregoing schedule would
produce fractional Shares, the number of Shares for which the Option becomes
exercisable shall be rounded down to the nearest whole Share.

 

3.    Term of Option.

 

(a) The Option shall have a term of ten years from the Date of Grant and shall
terminate at the expiration of that period, unless it is terminated at an
earlier date pursuant to the provisions of this Agreement or the Plan.

 

(b) The Option shall automatically terminate upon the happening of the first of
the following events:

 

(i) The expiration of the 90-day period after the Grantee ceases to be employed
by, or provide service to, the Employer, if the termination is for any reason
other than Disability (as defined below), death or Cause (as defined below).

 

(ii) The expiration of the one-year period after the Grantee ceases to be
employed by, or provide service to, the Employer on account of the Grantee’s
Disability. For purposes of this Agreement, “Disability” shall mean a Grantee’s
becoming disabled within the meaning of section 22(e)(3) of the Internal Revenue
Code of 1986, as amended (the “Code”).

 

(iii) The expiration of the one-year period after the Grantee ceases to be
employed by, or provide service to, the Employer, if the Grantee dies while
employed by, or providing service to, the Employer, or within 90 days after the
Grantee ceases to be so employed or provide services on account of a termination
described in subparagraph (i) above.

 

(iv) The date on which the Grantee ceases to be employed by, or provide service
to, the Employer for Cause. In addition, notwithstanding the prior provisions of
this Paragraph 3, if the Grantee engages in conduct that constitutes Cause after
the Grantee’s employment or service terminates, the Option shall immediately
terminate. For purposes of this Agreement, “Cause” shall mean a finding by the
Committee that the Grantee (A) has breached his or her employment or service
contract with the Employer; (B) has engaged in disloyalty to the Employer,
including, without limitation, fraud, embezzlement, theft, commission of a
felony or proven dishonesty; (C) has disclosed

 

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trade secrets or confidential information of the Employer to persons not
entitled to receive such information; (D) has breached any written
non-competition or non-solicitation agreement between the Grantee and the
Employer; or (E) has engaged in such other behavior detrimental to the interests
of the Employer as the Committee determines

 

Notwithstanding the foregoing, in no event may the Option be exercised after the
date that is immediately before the tenth anniversary of the Date of Grant. Any
portion of the Option that is not exercisable at the time the Grantee ceases to
be employed by, or provide service to, the Employer shall immediately terminate.

 

4.    Exercise Procedures.

 

(a) Subject to the provisions of Paragraphs 2 and 3 above, the Grantee may
exercise part or all of the exercisable Option by giving the Company written
notice of intent to exercise in the manner provided in this Agreement,
specifying the number of Shares as to which the Option is to be exercised and
the method of payment. Payment of the exercise price shall be made in accordance
with procedures established by the Committee from time to time based on type of
payment being made but, in any event, prior to issuance of the Shares. The
Grantee shall pay the exercise price (i) in cash or by certified check,
(ii) with the approval of the Committee, by delivering Shares of the Company,
which shall be valued at their Fair Market Value (as defined in the Plan) on the
date of delivery, or by attestation (on a form prescribed by the Committee) to
ownership of Shares having a Fair Market Value on the date of exercise equal to
the exercise price, (iii) in cash, on the T+3 settlement date that occurs after
the exercise date specified in the notice of exercise, provided that the Grantee
exercises the Option through an irrevocable agreement with a registered broker
and the payment is made in accordance with procedures permitted by Regulation T
of the Federal Reserve Board and such procedures do not violate applicable law,
or (iv) by such other method as the Committee may approve. The Committee may
impose from time to time such limitations as it deems appropriate on the use of
Shares of the Company to exercise the Option.

 

(b) The obligation of the Company to deliver Shares upon exercise of the Option
shall be subject to all applicable laws, rules, and regulations and such
approvals by governmental agencies as may be deemed appropriate by the
Committee, including such actions as Company counsel shall deem necessary or
appropriate to comply with relevant securities laws and regulations. The Company
may require that the Grantee (or other person exercising the Option after the
Grantee’s death) represent that the Grantee is purchasing Shares for the
Grantee’s own account and not with a view to or for sale in connection with any
distribution of the Shares, or such other representation as the Committee deems
appropriate.

 

(c) All obligations of the Company under this Agreement shall be subject to the
rights of the Company as set forth in the Plan to withhold amounts required to
be withheld for any taxes, if applicable. Subject to Committee approval, the
Grantee may elect to satisfy any tax withholding obligation of the Employer with
respect to the Option by having Shares withheld up to an amount that does not
exceed the minimum applicable withholding tax rate for federal (including FICA),
state and local tax liabilities.

 

5.    Designation as Incentive Stock Option.

 

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(a) This Option is designated an incentive stock option under Section 422 of the
Code. If the aggregate fair market value of the stock on the date of the grant
with respect to which incentive stock options are exercisable for the first time
by the Grantee during any calendar year, under the Plan or any other stock
option plan of the Company or a parent or subsidiary, exceeds $100,000, then the
Option, as to the excess, shall be treated as a nonqualified stock option that
does not meet the requirements of Section 422. If and to the extent that the
Option fails to qualify as an incentive stock option under the Code, the Option
shall remain outstanding according to its terms as a nonqualified stock option.

 

(b) The Grantee understands that favorable incentive stock option tax treatment
is available only if the Option is exercised while the Grantee is an employee of
the Company or a parent or subsidiary of the Company or within a period of time
specified in the Code after the Grantee ceases to be an employee. The Grantee
understands that the Grantee is responsible for the income tax consequences of
the Option, and, among other tax consequences, the Grantee understands that he
or she may be subject to the alternative minimum tax under the Code in the year
in which the Option is exercised. The Grantee will consult with his or her tax
adviser regarding the tax consequences of the Option.

 

(c) The Grantee agrees that the Grantee shall immediately notify the Company in
writing if the Grantee sells or otherwise disposes of any Shares acquired upon
the exercise of the Option and such sale or other disposition occurs on or
before the later of (i) two years after the Date of Grant or (ii) one year after
the exercise of the Option. The Grantee also agrees to provide the Company with
any information requested by the Company with respect to such sale or other
disposition.

 

6.    Change of Control. The provisions of the Plan applicable to a Change of
Control shall apply to the Option, and, in the event of a Change of Control, the
Committee may take such actions as it deems appropriate pursuant to the Plan.

 

7.    Restrictions on Exercise. Only the Grantee may exercise the Option during
the Grantee’s lifetime. After the Grantee’s death, the Option shall be
exercisable (subject to the limitations specified in the Plan) solely by the
legal representatives of the Grantee, or by the person who acquires the right to
exercise the Option by will or by the laws of descent and distribution, to the
extent that the Option is exercisable pursuant to this Agreement.

 

8.    Grant Subject to Plan Provisions. This grant is made pursuant to the Plan,
the terms of which are incorporated herein by reference, and in all respects
shall be interpreted in accordance with the Plan. The grant and exercise of the
Option are subject to interpretations, regulations and determinations concerning
the Plan established from time to time by the Committee in accordance with the
provisions of the Plan, including, but not limited to, provisions pertaining to
(a) rights and obligations with respect to withholding taxes, (b) the
registration, qualification or listing of the Shares, (c) changes in
capitalization of the Company and (d) other requirements of applicable law. The
Committee shall have the authority to interpret and construe the Option pursuant
to the terms of the Plan, and its decisions shall be conclusive as to any
questions arising hereunder.

 

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9.    No Employment or Other Rights. The grant of the Option shall not confer
upon the Grantee any right to be retained by, or in the employ or service of,
the Employer and shall not interfere in any way with the right of the Employer
to terminate the Grantee’s employment or service at any time. The right of the
Employer to terminate at will the Grantee’s employment or service at any time
for any reason is specifically reserved.

 

10.    No Stockholder Rights. Neither the Grantee, nor any person entitled to
exercise the Grantee’s rights in the event of the Grantee’s death, shall have
any of the rights and privileges of a stockholder with respect to the Shares
subject to the Option, until certificates for Shares have been issued upon the
exercise of the Option.

 

11.    Assignment and Transfers. The rights and interests of the Grantee under
this Agreement may not be sold, assigned, encumbered or otherwise transferred
except, in the event of the death of the Grantee, by will or by the laws of
descent and distribution. In the event of any attempt by the Grantee to
alienate, assign, pledge, hypothecate, or otherwise dispose of the Option or any
right hereunder, except as provided for in this Agreement, or in the event of
the levy or any attachment, execution or similar process upon the rights or
interests hereby conferred, the Company may terminate the Option by notice to
the Grantee, and the Option and all rights hereunder shall thereupon become null
and void. The rights and protections of the Company hereunder shall extend to
any successors or assigns of the Company and to the Company’s parents,
subsidiaries, and affiliates. This Agreement may be assigned by the Company
without the Grantee’s consent.

 

12.    Applicable Law. The validity, construction, interpretation and effect of
this instrument shall be governed by and construed in accordance with the laws
of the State of Delaware, without giving effect to the conflicts of laws
provisions thereof.

 

13.    Notice. Any notice to the Company provided for in this instrument shall
be addressed to the Company in care of the Committee at the corporate
headquarters of the Company, and any notice to the Grantee shall be addressed to
such Grantee at the current address shown on the payroll of the Employer, or to
such other address as the Grantee may designate to the Employer in writing. Any
notice shall be delivered by hand, sent by telecopy or enclosed in a properly
sealed envelope addressed as stated above, registered and deposited, postage
prepaid, in a post office regularly maintained by the United States Postal
Service.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Company has caused its duly authorized officers to
execute and attest this Agreement, and the Grantee has executed this Agreement,
effective as of the Date of Grant.

 

        THE BANCORP, INC.           Attest:                 By:    

 

I hereby accept the Option described in this Agreement, and I agree to be bound
by the terms of the Plan and this Agreement. I hereby further agree that all of
the decisions and determinations of the Committee shall be final and binding.

 

Grantee:     Date:    

 

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