Exhibit 10.3
 

 
BANNER CORPORATION
2014 OMNIBUS INCENTIVE PLAN
 

[FORM OF] NON-QUALIFIED STOCK OPTION AWARD AGREEMENT

NQSO No.
_______________                                                                           Grant
Date: _______________

This Non-Qualified Stock Option Award (“NQSO”) is granted by Banner Corporation
(“Company”) to [Name] (“Option Holder”) in accordance with the terms of this
Non-Qualified Stock Option Award Agreement (“Agreement”) and subject to the
provisions of the Banner Corporation 2014 Omnibus Incentive Plan, as amended
from time to time (“Plan”).  The Plan is incorporated herein by reference.

1.
NQSO Award.  The Company grants to Option Holder NQSOs to purchase
[Number] Shares at an Exercise Price of $[Number] per Share.  These NQSOs are
subject to forfeiture and to limits on transferability until they vest, as
provided in Sections 5 and 6 of this Agreement and in Article V of the Plan.

 
2. 
Vesting Dates.  The NQSOs shall vest as follows, subject to earlier vesting in
the event of a termination of Service as provided in Section 6:

 

 
NQSOs for
Vesting Date  Number of Shares Vesting                

 
3.  
Exercise.  The Option Holder (or in the case of the death of the Option Holder,
the designated legal representative or heir of the Option Holder) may exercise
the NQSOs during the Exercise Period by giving written notice to the
[_________________] [include appropriate officer] in the form required by the
Committee (“Exercise Notice”).  The Exercise Notice must specify the number of
Shares to be purchased, which shall be at least 100 unless fewer shares remain
unexercised.  The exercise date is the date the Exercise Notice is received by
the Company.  The Exercise Period commences on the Vesting Date and expires at
5:00 p.m., pacific time, on the date 10 years after the Grant Date, such later
time and date being hereinafter referred to as the “Expiration Date,” subject to
earlier expiration in the event of a termination of Service as provided in
Section 6.  Any NQSOs not exercised as of the close of business on the last day
of the Exercise Period shall be cancelled without consideration at that time.

 
The Exercise Notice shall be accompanied by payment in full of the Exercise
Price for the Shares being purchased.  Payment shall be made: (a) in cash, which
may be in the form of a check, money order, cashier's check or certified check,
payable to the Company, or (b) by delivering Shares of the Company already owned
by the Option Holder having a Fair Market Value on the exercise date equal to
the aggregate Exercise
 
 
 

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Price to be paid, or (c) by instructing the Company to withhold Shares otherwise
issuable upon the exercise having an aggregate Fair Market Value on the exercise
date equal to the aggregate Exercise Price to be paid or (d) by a combination
thereof.  Payment for the Shares being purchased upon exercise of the Option may
also be made by delivering a properly executed Exercise Notice to the Company,
together with a copy of irrevocable instructions to a broker to deliver promptly
to the Company the amount of sale or loan proceeds to pay the aggregate Exercise
Price and applicable tax withholding amounts (if any), in which event the Shares
acquired shall be delivered to the broker promptly following receipt of payment.
 
4.  
Related Awards:  These NQSOs [are not related to any other Award under the
Plan.] or [are related to Stock Appreciation Rights granted on the Grant
Date.  To the extent any of the SARs are exercised, the NQSOs shall terminate
with respect to the same number of Shares.]

 
5.  
Transferability.  The Option Holder may not sell, assign, transfer, pledge or
otherwise encumber any NQSOs, except in the event of the Option Holder’s death,
by will or by the laws of descent and distribution or pursuant to a Domestic
Relations Order.  The Committee, in its sole and absolute discretion, may allow
the Option Holder to transfer one or more NQSOs to the Option Holder’s Family
Members or a grantor trust, as provided for in the Plan.

 
6.  
Termination of Service.  If the Option Holder terminates Service for any reason
other than in connection with a Change in Control or the death or Disability of
the Option Holder, any NQSOs that have not vested as of the date of that
termination shall be forfeited to the Company, and the Exercise Period of any
vested NQSOs shall expire three months after that termination of Service (but in
no event after the Expiration Date), except where that termination of Service is
due to Retirement, in which case the Exercise Period of any vested NQSOs shall
expire one year after that termination of Service (but in no event after the
Expiration Date) [this clause is optional], or in the case of a Termination for
Cause, in which case all NQSOs held by the Option Holder shall expire
immediately.  If the Option Holder’s Service terminates on account of the Option
Holder’s death or Disability, the Vesting Date for all NQSOs that have not
vested or been forfeited shall be accelerated to the date of that termination of
Service, and the Exercise Period of all NQSOs shall expire one year after that
termination of Service (but in no event after the Expiration Date).
[Post-termination exercise period may be modified at Committee’s election except
with respect to a Termination for Cause.]

 
7.  
Effect of Change in Control.  If a Change in Control occurs prior to the Vesting
Date of an NQSO that is outstanding on the date of the Change in Control, and
the Option Holder experiences an Involuntary Separation from Service during the
365-day period following the date of such Change in Control, then the Vesting
Date for any non-vested NQSO shall be accelerated to the date of the Option
Holder’s Involuntary Separation from Service.  Notwithstanding the preceding
sentence, if at the effective time of the Change in Control the successor to the
Company’s business and/or assets does not either assume the outstanding NQSO or
replace the outstanding NQSO with an award that is determined by the Committee
to be at least equivalent in value to such outstanding NQSO on the date of

 
 
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the Change in Control, then the Vesting Date of such outstanding NQSO shall be
accelerated to the earliest date of the Change in Control.    [May be modified
at Committee’s election for 280G planning purposes for executive officers, or
for directors holding 1% or more of the Company’s outstanding stock.]

 
8.  
Option Holder’s Rights.  The NQSOs awarded hereby do not entitle the Option
Holder to any rights of a shareholder of the Company.

 
9.  
Delivery of Shares to Option Holder.  Promptly after receipt of an Exercise
Notice and full payment of the Exercise Price for the Shares being acquired, the
Company shall issue and deliver to the Option Holder (or other person validly
exercising the NQSO) a certificate or certificates representing the Shares of
Common Stock being purchased, or evidence of the issuance of such Shares in
book-entry form, registered in the name of the Option Holder (or such other
person), or, upon request, in the name of the Option Holder (or such other
person) and in the name of another person in such form of joint ownership as
requested by the Option Holder (or such other person) pursuant to applicable
state law.  The Company’s obligation to deliver a stock certificate or evidence
of the issuance of Shares in book-entry form for Shares purchased upon the
exercise of an NQSO can be conditioned upon the receipt of a representation of
investment intent from the Option Holder (or the Option Holder’s Beneficiary) in
such form as the Committee requires.  The Company shall not be required to
deliver stock certificates or evidence of the issuance of Shares in book-entry
form for Shares purchased prior to: (a) the listing of those Shares on the
Nasdaq; or (b) the completion of any registration or qualification of those
Shares required under applicable law.

 
10.  
Adjustments in Shares.  In the event of any recapitalization, forward or reverse
stock split, reorganization, merger, consolidation, spin-off, combination,
exchange of Shares or other securities, stock dividend, special or recurring
dividend or distribution, liquidation, dissolution or other similar corporate
transaction or event, the Committee, in its sole discretion, shall adjust the
number of Shares or class of securities of the Company covered by the NQSOs or
the Exercise Price of the NQSOs.  The Option Holder agrees to execute any
documents required by the Committee in connection with an adjustment under this
Section 10.

 
11.  
Tax Withholding.  The Company shall have the right to require the Option Holder
to pay to the Company the amount of any tax that the Company is required to
withhold with respect to such Shares, or in lieu thereof, to retain or sell
without notice, a sufficient number of Shares to cover the minimum amount
required to be withheld.  The Company shall have the right to deduct from all
dividends paid with respect to the Shares the amount of any taxes that the
Company is required to withhold with respect to such dividend payments.

 
12.  
Plan and Committee Decisions are Controlling.  This Agreement, the award of
NQSOs to the Option Holder and the issuance of Shares upon the exercise of the
NQSOs are subject in all respects to the provisions of the Plan, which are
controlling.  Capitalized terms herein not defined in this Agreement shall have
the meaning ascribed to them in the Plan.  All decisions, determinations and
interpretations by the Committee respecting the

 
 
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Plan, this Agreement, the award of NQSOs or the issuance of Shares upon the
exercise of the NQSOs shall be binding and conclusive upon the Option Holder,
any Beneficiary of the Option Holder or the legal representative thereof.    The
Grantee acknowledges and agrees that this Award and receipt of any Shares
hereunder by any person is subject to (a) Plan Section 13.10, including possible
reduction, cancellation, forfeiture or recoupment (clawback), and (b) any
policies which the Company may adopt in furtherance of any regulatory
requirements (including, but not limited to, the Dodd-Frank Wall Street Reform
and Consumer Protection Act) or otherwise.

 
13.
Option Holder’s Employment.  Nothing in this Agreement shall limit the right of
the Company or any of its Affiliates to terminate the Option Holder’s service or
employment as a director, advisory director, director emeritus, officer or
employee, or otherwise impose upon the Company or any of its Affiliates any
obligation to employ or accept the services or employment of the Option Holder.

 
14.  
Amendment.  The Committee may waive any conditions of or rights of the Company
or modify or amend the terms of this Agreement; provided, however, that the
Committee may not amend, alter, suspend, discontinue or terminate any provision
of this Agreement if such action may adversely affect the Option Holder without
the Option Holder’s written consent.  To the extent permitted by applicable laws
and regulations, the Committee shall have the authority, in its sole discretion
but with the permission of the Option Holder, to accelerate the vesting of the
Shares or remove any other restrictions imposed on the Option Holder with
respect to the Shares, whenever the Committee may determine that such action is
appropriate.

 
15.  
Option Holder Acceptance.  The Option Holder shall signify acceptance of the
terms and conditions of this Agreement and acknowledge receipt of a copy of the
Plan by signing in the space provided below and returning the signed copy to the
Company.

 
 
 
 
 
 
 
 
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first above written.
 

 
BANNER CORPORATION
         
By ________________________________
   
Its  ________________________________
                           
ACCEPTED BY OPTION HOLDER
         
___________________________________
    (Signature)     
 
   
___________________________________
   
(Print Name)
         
___________________________________
    (Street Address)           
___________________________________
    (City, State & Zip Code)   

 

Beneficiary Designation:

The Option Holder designates the following Beneficiary to receive the Shares
upon the Option Holder’s death:

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