exv10w26



 





Exhibit 10.26




2007 NON-QUALIFIED STOCK OPTION PLAN

FOR

RELIANCE BANCSHARES, INC.



STATEMENT of the 2007 Non-Qualified Stock Option Plan dated May 16, 2007 for Reliance
Bancshares, Inc (herein called the “Company”).




     1. Purpose. This 2007 Non-Qualified Stock Option Plan (the “Plan”) is intended to advance
the interests of the Company and its subsidiary bank and thrift by rewarding the directors of each
of the Company and its subsidiary bank and thrift for past service and to induce said directors
upon whose judgment, initiative and effort the Company is partially dependent for its successful
operation, to agree to serve or to continue to serve in that capacity and to make themselves
available for re-election as directors and to encourage their attendance at meetings and other
functions of the Company and its subsidiary bank and thrift. The Board of Directors of the Company
(the “Board”) has increased the frequency of its meetings and is aware of the increased
responsibilities and duties of the Company directors and the bank and thrift directors, all
resulting from the rapid expansion of the Company and its subsidiary bank and thrift. For these
reasons, the Board has concluded that additional compensation should be provided the directors and
it is of the opinion that stock options are a desirable means of accomplishing this objective.
Options granted under the Plan are intended to be options which do not meet the requirements of
Section 422 of the Internal Revenue Code of 1986.



     2. Option Stock. Options under this Plan shall pertain to authorized and unissued shares of
$0.25 par value, Class A common stock of the Company (hereinafter sometimes called “option
shares”). The total number of shares available for options under this Plan shall not exceed
200,000 in the aggregate. The limitations established by the preceding sentence shall be subject
to adjustment as provided in paragraph 8. The Company shall at all times while this Plan is in
force reserve such number of shares of $0.25 par value, Class A common stock as will be sufficient
to satisfy the requirements of this Plan.



     3. Participants. The Board, upon the recommendation of its Compensation Committee, is hereby
authorized to grant options to purchase shares of $0.25 par value, Class A common stock of the
Company to designated legal directors of the Company and its subsidiary bank and thrift (the
“participants”) in amounts, at prices, with vesting over periods of time and subject to the terms
and conditions provided herein. The Board shall also have the right to grant options to new legal
directors in different amounts and upon terms, conditions and prices as determined by the Board
from time to time, if it concludes that the same are appropriate for the participants to whom they
are granted.



     4. Price. The option price of the Company’s $0.25 par value, Class A common stock granted to
participants under this Plan as described in paragraph 3 shall be $1.50 per share over the fair
market price as determined by the Board at the time a grant is made, all as recorded in the minutes
of the Board.



     5. Time of Exercise. There shall be a delay in vesting of any options initially granted
under this Plan until the following conditions are satisfied, including (a) any participant shall
have served as a director for a minimum of one (1) year after election or appointment as a director
or after the Company obtains control of a subsidiary bank or thrift; (b) the participant holds
$0.25 par value Class A common stock equal to the number of option shares granted hereunder in his
or her name or in joint names or in the name of an affiliate or with a beneficial interest in the
participant; and (c) the participant achieves an attendance record each year after the grant of
options under the Plan equal to at least 75% of the regularly scheduled board meetings for the
Company or its subsidiary bank or thrift (one meeting of which may be attended telephonically), at
which time that annual portion of the option shares granted shall be deemed fully vested.
Attendance for purposes of annual vesting shall begin June 1, 2007, or at a later date as
determined by the Board, and the following twelve (12) months shall apply for vesting purposes for
the successive one (1) year periods thereafter. Only the Board may grant excused meetings under
the Plan. When fully vested, the options may be exercised in whole or in part at any time, or from
time to time



 









 






thereafter until the expiration or termination of the options. All options hereunder shall expire
on May 16, 2017.



     6. Transfer of Ownership. In the event that there is a transfer of ownership of the
Company, the limitations provided in paragraphs 5(a) and 5(c) shall become null and void and all
options shall become immediately exercisable in full, provided the limitations imposed in paragraph
5(b) have been met. A transfer of ownership shall occur upon the change in ownership or control of
at least 51% of the issued and outstanding shares of Class A common stock, $0.25 par value, of the
Company, or upon the execution of an agreement by the Company or its controlling shareholders
providing for the merger, consolidation, reorganization or other form of business combination of
the Company, or the sale or exchange of all or substantially all of the assets of the Company
unless the current business of the Company is continued following any such transaction by a
resulting entity (which may be, but need not be, the Company) and the shareholders of the Company
immediately prior to such transaction hold directly or indirectly at least 60% of the voting power
of the resulting entity. There is also a transfer of ownership if the shareholders of the Company
adopt a plan of complete or substantial liquidation or an agreement providing for the distribution
of all or substantially all of its assets.



     7. Method of Granting. The Secretary or President of the Company shall forthwith send notice
thereof to each of the participants, in such form as the Board shall approve, stating the number of
shares optioned to such participant, the option price per share, the vesting periods, and attaching
a copy of this Statement of the 2007 Non-Qualified Stock Option Plan. The date indicated in the
notice shall be the date of granting the option to such participant for all purposes of this Plan.
The notice may be accompanied by an option agreement to be signed by the Company and by the
participant if the Board shall so direct, which shall be in such form and shall contain such
provisions as the Board shall deem advisable.



     8. Adjustments of the Option Stock.




     (a) If, at any time, or from time to time, after the grant of option shares but prior to the
exercise of all the or any part of an option under this Plan, the Company shall effect a
subdivision or combination of its $0.25 par value, Class A common stock, or other option shares as
that term is used below, into a greater or smaller number of shares, or a reclassification of such
$0.25 par value, Class A common stock or other option shares into shares of another class or into
other securities, or the Company shall be consolidated or merged with any other corporation, then
there shall be thereafter deliverable by the Company, or by the corporation surviving a merger or
consolidation, upon any exercise of such option, in lieu of each $0.25, par value Class A common
stock or other option shares and for the same price, such shares or securities as shall have been
substituted for such $0.25 par value, Class A common stock or other option shares in connection
with such subdivision, combination, reclassification, consolidation, or merger. Such substituted
shares or securities shall be deemed option shares for the purpose of this Plan.



     (b) Notwithstanding anything stated above to the contrary, upon the occasion of a merger or
consolidation of the Company with any other corporation, any options previously granted under this
Plan which shall not have been exercised in the manner described below shall be deemed canceled,
unless the surviving corporation shall assume the options under this Plan or shall issue substitute
options in place of them.



     (c) If at any time, or from time to time, after the grant of option shares but prior to the
exercise of all or any part of the options under this Plan, the Board shall declare in respect of
the Company’s $0.25 par value, Class A common stock or other option shares any dividend payable in
shares of the Company of any class or any stock split, then there shall be deliverable upon any
exercise thereafter of any option under this Plan, in addition to each option share and for no
additional price, such additional share or shares as shall have been distributable as a result of
such share dividend or split in respect of an option share; except that fractional shares shall not
be so deliverable. Any such share dividend or split shall be deemed part of the option shares for
the purposes of this Plan.



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     9. Assignments. Any option granted under this Plan shall be exercisable only by the
participant to whom granted during his or her lifetime and shall not be assignable or transferable
otherwise than by will or by the laws of descent and distribution, provided, however, that any
participant may assign to or designate that the option shares or a portion of the same shall be
titled in the name of a trust, employee benefit plan, individual retirement account or other entity
in which the participant is the sole beneficiary, owner or designee or in joint names with a
spouse.



     10. Severance, Death.




     (a) In the event that a participant shall cease to be a director of the Company or of a
subsidiary bank or thrift of the Company for any reason except death or dismissal for cause, any
vested option granted to him or her under this Plan which shall not have been then exercised in the
manner described below, shall be exercisable by the participant within one (1) year after
severance, or until the expiration of the option as provided in paragraph 5, if that be sooner
except that the Board may in its absolute discretion extend the privilege to such participant to
exercise any options previously granted to him or her which have not then expired.



     (b) In the event that a participant shall die while a director of the Company or of a
subsidiary bank or thrift of the Company, any vested option granted to him or her under this Plan
which shall not have been exercised in the manner described below, at the time of his or her death,
shall be exercisable by the estate of the participant or by any person who acquired such option by
bequest or inheritance from the participant, within three (3) years after the death of the
participant, or until the expiration of the option as provided in paragraph 5, if that be sooner.
References to the “participant” that follow shall be deemed to include any person entitled to
exercise the option after the death of the participant under the terms of this paragraph. Upon
death an option shall be deemed fully vested.



     (c) In the event that a legal director of the Company shall cease to be such a director and
shall remain or immediately thereafter become a legal or advisory director of a subsidiary bank or
thrift or if a legal director of a subsidiary bank or thrift of the Company shall cease to be such
a director and shall immediately become an advisory director of a subsidiary bank or thrift of the
Company, such a participant shall not forfeit his or her stock options granted under this Plan,
whether fully or partially vested under this Plan and such a participant shall continue to have or
own said stock options in his or her new capacity as a legal or advisory director regardless of the
number of options, subject to the terms and conditions of this Plan and prior service and
attendance as a legal director shall carry over to the new position of said participant with regard
to vesting.



     11. Manner of Exercise. Any option shares granted under this Plan may be purchased by
written notice of election delivered prior to the expiration of the option to the Company at its
principal office by hand delivery, telecopier, electronic messaging system or certified mail,
stating the number of shares with respect to which the option is being exercised and specifying a
date, not less than five nor more than 15 days after the date of such notice, on which the shares
will be taken and payment made for them.



     12. Closing. On the date specified in the notice of election referred to above, or an
adjourned date provided for later in this paragraph, the Company shall deliver or cause to be
delivered to the participant certificates for the number of shares with respect to which the option
is being exercised, against payment for them and delivery to the Company of the certificate
described in paragraph 13 below. Delivery of the shares may be made at the principal office of the
company or at the office of a transfer agent appointed for shares of the Company. Shares shall be
registered in the name of the participant unless the participant otherwise directs in his or her
notice of election. No shares shall be issued until full payment for them has been made by cash or
certified check; and a participant has none of the rights of a shareholder until shares are issued
as herein provided. In the event of any failure to take up and pay for the number of shares
specified in the notice of election on the date stated on it, or an adjourned date, the option
shall become inoperative as to such number of shares, but shall continue with respect to any



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remaining shares covered by the option and not yet acquired pursuant to it. If any law or any
regulation of the Securities and Exchange Commission or of any other body having jurisdiction shall
require the Company or the participant to take any action in connection with the shares specified
in a notice of election, then the date specified therein for the delivery of the shares shall be
adjourned until the completion of the necessary action.



     13. Securities Registration. At the closing provided for above, the participant shall agree
to hold the shares acquired by his exercise of the option for investment and not with a view to
resale or distribution thereof to the public, and he or she shall deliver to the Company a
certificate to that effect. In the event that the Company shall nevertheless deem it necessary to
register under the Securities Act of 1933 or other applicable statutes any shares with respect to
which an option shall have been exercised or to qualify any such shares for exemption from the
Securities Act of 1933 under regulations of the Securities and Exchange Commission, then the
Company shall take such action at its own expense before delivery of such shares. In the event
the shares of the Company shall be listed on any national stock exchange at the time of the
exercise of an option under this Plan, then, whenever required, the Company shall register the
shares with respect to which such option is exercised under the Securities Exchange Act of 1934 and
shall make prompt application for the listing on such shares at the sole expense of the Company.



     14. Use of Proceeds. The proceeds from the sale of option shares shall be used exclusively
for the general corporate purposes of the Company and shall not be used for other purposes.



     15. Amendment and Discontinuance. The Board may alter, amend, suspend or discontinue this
Plan; provided, however, that the Board shall not, without the written consent of the holders of
the options, alter or impair unexercised options that may have been previously granted under this
Plan, except insofar as a merger or consolidation of the Company, or a termination of employment of
a participant, or a liquidation or dissolution shall affect a cancellation of an option under the
terms of paragraphs 8(b), 10 or 16, hereof.



     16. Liquidation. Upon the complete liquidation of the Company, any options previously
granted under this Plan shall be deemed canceled, except as otherwise provided in paragraph 8(b)
above on the occasion of a merger or consolidation.



     17. Concurrent Operation. This Plan shall operate concurrently with the 2005
Non-Qualified Stock Option Plan of the Company for any legal directors of the bank or the thrift
with respect to fulfillment of the attendance requirements that may be applicable to a particular
director.



     18. Director Approval. This Plan has been approved by the Board of Directors of the Company
and is effective as of May 16, 2007.




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