Option Award Agreement



 Exhibit 10.1 
 Option Award Agreement with Patricia M. Schaubeck 
 SUFFOLK BANCORP

 2009 STOCK INCENTIVE PLAN 
 FORM OF INCENTIVE STOCK OPTION AGREEMENT 
 THIS OPTION AGREEMENT
(this “Agreement”), dated as of June 18, 2012 (the “Grant Date”), is made by and between Suffolk Bancorp, a New York corporation (the “Company”), and Patricia M. Schaubeck
(“Participant”). 
 WHEREAS, the Company has adopted and maintains the Suffolk Bancorp 2009 Stock
Incentive Plan (the “Plan”), pursuant to which incentive stock options may be granted to purchase shares of the Company’s Common Stock; and 
 WHEREAS, the Committee has determined that it would be in the best interests of the Company and its stockholders to grant Participant incentive stock options on the terms and subject to the
conditions set forth in this Agreement and the Plan. 
 NOW, THEREFORE, for and in consideration of the premises and the
covenants of the parties contained in this Agreement and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, for themselves, their successors and assigns, hereby agree as follows: 

1. Grant of Option. 
 (a) Grant. The Company hereby grants to Participant an incentive stock option (the “Option” and any portion thereof, the “Options”) to purchase 20,000 shares of
Common Stock (such shares of Common Stock, the “Shares”), on the terms and conditions set forth in this Agreement and as otherwise provided in the Plan. The Option is intended to qualify as an incentive stock option within the
meaning of Section 422 of the Internal Revenue Code (the “Code”) and shall be subject to the terms and conditions of Section 5.12 of the Plan. 
 (b) Incorporation by Reference, Etc. The provisions of the Plan are hereby incorporated herein by reference. Except as otherwise expressly set forth herein, this Agreement shall be construed in
accordance with the provisions of the Plan and any capitalized terms not otherwise defined in this Agreement shall have the definitions set forth in the Plan. 
 2. Exercise Price. The Exercise Price for each Share subject to the Option shall be the Fair Market Value of the stock as of the Grant Date and is $  12.21  . 

3. Vesting. Except as may otherwise be provided herein, the Option shall become non-forfeitable (any Options that shall have
become nonforfeitable pursuant to this Section 3, the “Vested Options”) and shall become exercisable according to the following provisions: 
 (a) General Vesting. Subject to Participant’s continued employment with the Company as of any such date (i) Options in respect of 6,667 Shares shall become Vested Options and shall become
exercisable on the first anniversary of the Grant Date; (ii) Options in 







 
respect of 6,667 Shares shall become Vested Options and shall become exercisable on the second anniversary of the Grant Date; and (iii) Options in respect of 6,666 Shares shall become Vested
Options and shall become exercisable on the third anniversary of the Grant Date. 
 (b) Termination of Service. Except as
provided in the immediately following sentence, in the event that Participant incurs a Termination of Service, any Options that have not theretofore become Vested Options (such Options, the “Unvested Options”) shall be forfeited by
Participant without consideration. Notwithstanding the foregoing, in the event Participant incurs a Termination of Employment (i) by the Company without “Cause” (as defined in the Change of Control Agreement by and
among Participant, The Suffolk County National Bank and the Company dated as of June 18, 2012 (the “Change of Control Agreement”), (ii) by Participant for “Good Reason” (as defined in the Change of Control
Agreement), or (iii) due to Participant’s death or “Disability” (as defined in the Company’s long-term disability plan applicable to Participant as in effect from time to time), any Unvested Option that is outstanding as of
immediately prior to such Termination of Employment shall vest and become exercisable in full effective as of the date of Termination of Employment. 
 (c) Change in Control. Any Unvested Options that are outstanding as of immediately prior to a Change in Control shall vest and become exercisable in full effective as of the date of such Change in
Control. 
 4. Termination. 
 (a) The Option, if still outstanding, shall automatically terminate and become null and void on the first to occur of the following dates: 

(i) the tenth anniversary of the Grant Date; 
 (ii) the second anniversary following Participant’s Termination of Employment, in the case of a Termination of Employment due to death or, in the case of Termination of Employment due to Disability,
in the event that the Participant dies within three months of such Termination of Employment; 
 (iii) the first anniversary
following Participant’s Termination of Employment, in the case of a Termination of Employment due to Disability, unless extended pursuant to clause (ii) above; 
 (iv) three months following Participant’s Termination of Employment, in the case of a Termination of Employment by Participant due to “Retirement” (as such term is used in the Plan), a
Termination of Employment by the Company without Cause or by Participant for Good Reason; 
 (v) three months following
Participant’s Termination of Employment, in the case of a Termination of Employment by Participant without Good Reason and other than due to Retirement; and 
 (vi) the date of Participant’s Termination of Employment, in the case of a Termination of Employment by the Company for Cause. 

  
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 (b) Notwithstanding the provisions of Section 4(a) to the contrary and unless a longer
period is provided under Section 4(a), in the event of Participant’s Termination of Employment for any reason (other than due to a Termination of Employment for Cause) during the two-year period following a Change in Control, the Option
shall remain outstanding and exercisable until the earlier of (i) the tenth anniversary of the Grant Date and (ii) the first anniversary of such Termination of Employment; it being understood that, if Participant exercises the Option after
the date that is three months following such Termination of Employment, such Option shall be treated as a Nonqualified Stock Option. 
 (c) Except as otherwise provided in Section 3(b) of this Agreement, upon a Termination of Employment for any reason, any Unvested Options shall immediately terminate and be forfeited on the date the
Termination of Employment occurs. 
 5. Exercise Procedures. Subject to the terms of this Agreement, including the
provisions of Sections 2, 3 and 4 above and Section 8 below, Participant may exercise part or all of the Vested Option by giving the Company a signed written notice of intent to exercise in accordance with Section 9(b), which shall state
Participant’s election to exercise the Option and the number of Shares in respect of which the Option is being exercised (which must be a whole number). Payment of the Exercise Price shall be by any of the following, or a combination of the
following, at the election of Participant: (a) cash, (b) check or (c) surrender of previously owned Shares (provided that such previously owned Shares shall have been held by Participant for at least six months at the time of exercise
or were purchased on the open market), or to the extent permitted by law, broker-assisted cashless exercise. The Board may impose from time to time such limitations as it deems appropriate on the use of Shares of the Company to satisfy the Exercise
Price of the Option. 
 6. Compliance with Legal Requirements. The grant and exercise of the Option, and any other
obligations of the Company under this Agreement shall be subject to all applicable federal and state laws, rules and regulations and to such approvals by any regulatory or governmental agency as may be required. The Committee, in its sole
discretion, may postpone the issuance or delivery of Shares as the Committee may consider appropriate and may require Participant to make such representations and furnish such information as it may consider appropriate in connection with the
issuance or delivery of the Shares in compliance with applicable laws, rules and regulations. 
 7. Adjustment. In the
event of any event described in Section 2.3 of the Plan occurring after the Grant Date, the adjustment provisions as provided for under Section 2.3 of the Plan shall apply to the Option. 

8. Tax Withholding. As a condition to exercising the Option, in whole or in part, Participant will pay to the Company, or,
pursuant to the withholding provisions of Section 10.10 of the Plan, make provisions satisfactory to the Company for payment of, any federal, state or local tax laws in respect of the exercise of the Option. Participant may elect to have any
withholding obligation satisfied by surrendering to the Company a portion of the Shares that are issued or transferred to Participant upon the exercise of any Options (but only to the extent of the minimum withholding required by law) and the Shares
so surrendered by Participant shall be credited against any such withholding obligation at the Fair Market Value of such Shares on the date of such surrender (and the amount equal to the Fair Market Value of such Shares shall be remitted to the
appropriate tax authorities). 

  
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 9. Miscellaneous. 

(a) Waiver and Amendment. The Committee may waive any conditions or rights under, or amend any terms of, this Agreement and the
Option granted thereunder; provided that any such waiver or amendment that would materially impair the rights of Participant or any holder or beneficiary of any Option theretofore granted shall not to that extent be effective without the
consent of Participant. No waiver of any right hereunder by any party shall operate as a waiver of any other right, or as a waiver of the same right with respect to any subsequent occasion for its exercise, or as a waiver of any right to damages. No
waiver by any party of any breach of this Agreement shall be held to constitute a waiver of any other breach or a waiver of the continuation of the same breach. 
 (b) Notices. All notices, demands and other communications provided for or permitted hereunder shall be made in writing and shall be by registered or certified first-class mail, return receipt
requested, facsimile, courier service or personal delivery: 
  

			
	if to the Company:	 	Suffolk Bancorp
		 	4 West Second Street
		 	P. O. Box 9000
		 	Riverhead, New York 11901
		 	Attention: Director of Human Resources
	
	if to Participant: at the address last on the records of the Company.

 All such notices, demands and other communications shall be deemed to have been duly given when delivered by hand, if
personally delivered; when delivered by courier, if delivered by commercial courier service; five business days after being deposited in the mail, postage prepaid, if mailed; and when receipt is mechanically acknowledged, if by facsimile.

 (c) Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity
or enforceability of any other provision of this Agreement, and each other provision of this Agreement shall be severable and enforceable to the extent permitted by law. 
 (d) No Rights to Service. Nothing contained in this Agreement shall be construed as giving Participant any right to be retained, in any position, as an employee, consultant or director of the
Company or any of its Subsidiaries or Affiliates or shall interfere with or restrict in any way the right of the Company or any of its Subsidiaries or Affiliates, which is hereby expressly reserved, to remove, terminate or discharge Participant at
any time for any reason whatsoever. 
 (e) Beneficiary. Participant may file with the Company a written designation of a
beneficiary on such form as may be prescribed by the Committee and may, from time to time, change or revoke such designation by filing a new designation with the Company. 

  
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 The last such designation received by the Company shall be controlling; provided, however,
that no designation, or change or revocation thereof, shall be effective unless received by the Company prior to Participant’s death, and in no event shall it be effective as of a date prior to such receipt. If no beneficiary designation is
filed by Participant, the beneficiary shall be deemed to be his spouse or, if Participant is unmarried at the time of death, his estate. 
 (f) Successors. The terms of this Agreement shall be binding upon and inure to the benefit of the Company, its successors and assigns, and of Participant and the beneficiaries, executors,
administrators, heirs and successors of Participant. 
 (g) Entire Agreement. This Agreement and the Plan contain the
entire agreement and understanding of the parties hereto with respect to the subject matter contained herein and supersede all prior communications, representations and negotiations with respect thereto. 

(h) Bound by the Plan. By signing this Agreement, Participant acknowledges that he has received a copy of the Plan and has had an
opportunity to review the Plan and agrees to be bound by all the terms and provisions of the Plan. 
 (i) Governing Law.
This Agreement shall be construed and interpreted in accordance with the internal laws of the State of New York without regard to principles of conflicts of law thereof, or principles of conflicts of laws of any other jurisdiction that could cause
the application of the laws of any jurisdiction other than the State of New York. 
 (j) Headings. The headings of the
Sections hereof are provided for convenience only and are not to serve as a basis for interpretation or construction and shall not constitute a part of this Agreement. 
 (k) Signature in Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same
instrument. 
 [Remainder of page intentionally left blank; signature page to follow] 

  
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 IN WITNESS WHEREOF, the parties hereto have executed this Agreement. 

 

			
	SUFFOLK BANCORP
	
	 /s/ Howard C. Bluver

	By: Howard C. Bluver
	Title: President and Chief Executive Officer
	
	Patricia M. Schaubeck
	
	 /s/ Patricia M. Schaubeck



 [Signature Page to Incentive Stock Option Agreement under the Plan]