Exhibit 10.2


 


WELLS FINANCIAL CORP.


 


2003 STOCK OPTION PLAN


 


1.          Purpose
of the Plan. The Plan shall be known as the Wells Financial Corp. (ACompany@)
2003 Stock Option Plan (the APlan@).
The purpose of the Plan is to attract and retain qualified personnel for positions of substantial responsibility and to provide
additional incentive to officers, directors, employees and other persons providing services to the Company, or any present or future
parent or subsidiary of the Company to promote the success of the business. The Plan is intended to provide for the grant of AIncentive
Stock Options,@ within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the ACode@)
and Non-Incentive Stock Options, options that do not so qualify. The provisions of the Plan relating to Incentive Stock Options
shall be interpreted to conform to the requirements of Section 422 of the Code.


 


2.          Definitions.
The following words and phrases when used in this Plan with an initial capital letter, unless the context clearly indicates otherwise,
shall have the meaning as set forth below. Wherever appropriate, the masculine pronoun shall include the feminine pronoun and the
singular shall include the plural.


 


AAward@
means the grant by the Committee of an Incentive Stock Option or a Non-Incentive Stock Option, or any combination thereof, as provided
in the Plan.         


 


ABank@
shall mean Wells Federal Bank, or any successor corporation thereto.


 


ABoard@
shall mean the Board of Directors of the Company, or any successor or parent corporation thereto.


 


AChange
in Control@ shall mean: (i) the sale of all, or a material
portion, of the assets of the Company; (ii) the merger or recapitalization of the Company whereby the Company is not the surviving
entity; (iii) a change in control of the Company, as otherwise defined or determined by the Office of Thrift Supervision or
regulations promulgated by it; or (iv) the acquisition, directly or indirectly, of the beneficial ownership (within the meaning
of that term as it is used in Section 13(d) of the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder)
of twenty-five percent (25%) or more of the outstanding voting securities of the Company by any person, trust, entity or group.
This limitation shall not apply to the purchase of shares by underwriters in connection with a public offering of Company stock,
or the purchase of shares of up to 25% of any class of securities of the Company by a tax-qualified employee stock benefit plan
which is exempt from the approval requirements, set forth under 12 C.F.R. '574.3(c)(1)(vi) as now in effect or as may hereafter
be amended. The term Aperson@
refers to an individual or a corporation, partnership, trust, association, joint venture, pool, syndicate, sole proprietorship,
unincorporated organization or any other form of entity not specifically listed herein.


 


ACode@
shall mean the Internal Revenue Code of 1986, as amended, and regulations promulgated thereunder.


 


ACommittee@
shall mean the Board or the Stock Option Committee appointed by the Board in accordance with Section 5(a) of the Plan.


 


ACommon
Stock@ shall mean common stock of the Company, or any successor
or parent corporation thereto.


 




    	 



    	 



    

 


ACompany@
shall mean the Wells Financial Corp., the parent corporation of the Bank, or any successor or Parent thereof.


 


AContinuous
Employment@ or AContinuous
Status as an Employee@ shall mean the absence of any interruption
or termination of employment with the Company or any present or future Parent or Subsidiary of the Company. Employment shall not
be considered interrupted in the case of sick leave, military leave or any other leave of absence approved by the Company or in
the case of transfers between payroll locations, of the Company or between the Company, its Parent, its Subsidiaries or a successor.


 


ADirector@
shall mean a member of the Board of the Company, or any successor or parent corporation thereto.


 


ADirector
Emeritus@ shall mean a person serving as a director emeritus, advisory
director, consulting director or other similar position as may be appointed by the Board of Directors of the Bank or the Company
from time to time.


 


ADisability@ means (a) with
respect to Incentive Stock Options, the Apermanent and total disability@ of the Employee as such term is defined at Section 22(e)(3)
of the Code; and (b) with respect to Non-Incentive Stock Options, any physical or mental impairment which renders the Participant
incapable of continuing in the employment or service of the Bank or the Parent in his then current capacity as determined by the
Committee.


 


AEffective
Date@ shall mean the date specified in Section 15 hereof.


 


AEmployee@
shall mean any person employed by the Company or any present or future Parent or Subsidiary of the Company.


 


AFair
Market Value@ shall mean: (i) if the Common Stock is traded otherwise
than on a national securities exchange, then the Fair Market Value per Share shall be equal to the mean between the last bid and
ask price of such Common Stock on such date or, if there is no bid and ask price on said date, then on the immediately prior business
day on which there was a bid and ask price. If no such bid and ask price is available, then the Fair Market Value shall be determined
by the Committee in good faith; or (ii) if the Common Stock is listed on a national securities exchange, including the Nasdaq National
Market, then the Fair Market Value per Share shall be not less than the average of the highest and lowest selling price of such
Common Stock on such exchange on such date, or if there were no sales on said date, then the Fair Market Value shall be not less
than the mean between the last bid and ask price on such date.         


 


AIncentive
Stock Option@ or AISO@
shall mean an option to purchase Shares granted by the Committee pursuant to Section 8 hereof which is subject to the limitations
and restrictions of Section 8 hereof and is intended to qualify as an incentive stock option under Section 422 of the Code.


 


ANon-Incentive
Stock Option@ or ANon-ISO@
shall mean an option to purchase Shares granted pursuant to Section 9 hereof, which option is not intended to qualify under
Section 422 of the Code.


 


AOption@
shall mean an Incentive Stock Option or Non-Incentive Stock Option granted pursuant to this Plan providing the holder of such Option
with the right to purchase Common Stock.


 


AOptioned
Stock@ shall mean stock subject to an Option granted pursuant to
the Plan.


 


AOptionee@
shall mean any person who receives an Option or Award pursuant to the Plan.


 




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AParent@
shall mean any present or future corporation which would be a Aparent
corporation@ of the Bank or the Company as defined in Sections
424(e) and (g) of the Code.


 


AParticipant@
means any Director, officer or employee of the Company or any Parent or Subsidiary of the Company or any other person providing
a service to the Company who is selected by the Committee to receive an Award, or who by the express terms of the Plan is granted
an Award.


 


APlan@
shall mean the Wells Financial Corp. 2003 Stock Option Plan.


 


AShare@
shall mean one share of the Common Stock.


 


ASubsidiary@
shall mean any present or future corporation which constitutes a Asubsidiary
corporation@ as defined in Sections 424(f) and (g) of the Code.


 


3.          Shares
Subject to the Plan. Except as otherwise required by the provisions of Section 13 hereof, the aggregate number of Shares
with respect to which Awards may be made pursuant to the Plan shall not exceed 120,000 Shares. Such Shares may either be from authorized
but unissued shares, treasury shares or shares purchased in the market for Plan purposes. If an Award shall expire, become unexercisable,
or be forfeited for any reason prior to its exercise, new Awards may be granted under the Plan with respect to the number of Shares
as to which such expiration has occurred.


 


4.          Six
Month Holding Period. Subject to vesting requirements, if applicable, except in the event of death or disability of the
Optionee, a minimum of six months must elapse between the date of the grant of an Option and the date of the sale of the Common
Stock received through the exercise of such Option.


 


 5.          Administration
of the Plan.


 


(a)          Composition
of the Committee. The Plan shall be administered by the Board of Directors of the Company or a Committee which shall consist
of not less than two Directors of the Company appointed by the Board and serving at the pleasure of the Board. All persons designated
as members of the Committee shall meet the requirements of a ANon-Employee
Director@ within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended, as found at 17 CFR '240.16b-3. 


 


(b)          Powers
of the Committee. The Committee is authorized (but only to the extent not contrary to the express provisions of the Plan or
to resolutions adopted by the Board) to interpret the Plan, to prescribe, amend and rescind rules and regulations relating to the
Plan, to determine the form and content of Awards to be issued under the Plan and to make other determinations necessary or advisable
for the administration of the Plan, and shall have and may exercise such other power and authority as may be delegated to it by
the Board from time to time. A majority of the entire Committee shall constitute a quorum and the action of a majority of the members
present at any meeting at which a quorum is present shall be deemed the action of the Committee. In no event may the Committee
revoke outstanding Awards without the consent of the Participant.


 




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The President of the Company
and such other officers as shall be designated by the Committee are hereby authorized to execute written agreements evidencing
Awards on behalf of the Company and to cause them to be delivered to the Participants. Such agreements shall set forth the Option
exercise price, the number of shares of Common Stock subject to such Option, the expiration date of such Options, and such other
terms and restrictions applicable to such Award as are determined in accordance with the Plan or the actions of the Committee.


 


(c)          Effect
of Committee's Decision. All decisions, determinations and interpretations of the Committee shall be final and conclusive on
all persons affected thereby.


 


6.          Eligibility
for Awards and Limitations.


 


(a)          The
Committee shall from time to time determine the officers, Directors, employees and other persons who shall be granted Awards under
the Plan, the number of Awards to be granted to each such persons, and whether Awards granted to each such Participant under the
Plan shall be Incentive and/or Non-Incentive Stock Options. In selecting Participants and in determining the number of Shares of
Common Stock to be granted to each such Participant, the Committee may consider the nature of the prior and anticipated future
services rendered by each such Participant, each such Participant's current and potential contribution to the Company and such
other factors as the Committee may, in its sole discretion, deem relevant. Participants who have been granted an Award may, if
otherwise eligible, be granted additional Awards.


 


(b)          The
aggregate Fair Market Value (determined as of the date the Option is granted) of the Shares with respect to which Incentive Stock
Options are exercisable for the first time by each Employee during any calendar year (under all Incentive Stock Option plans, as
defined in Section 422 of the Code, of the Company or any present or future Parent or Subsidiary of the Company) shall not exceed
$100,000. Notwithstanding the prior provisions of this Section 6, the Committee may grant Options in excess of the foregoing limitations,
provided said Options shall be clearly and specifically designated as not being Incentive Stock Options.


 


(c)          In
no event shall Shares subject to Options granted to non-employee Directors in the aggregate under this Plan exceed more than 30%
of the total number of Shares authorized for delivery under this Plan pursuant to Section 3 herein. In no event shall Shares subject
to Options granted to any Employee exceed more than 25% of the total number of Shares authorized for delivery under the Plan.


 


7.          Term
of the Plan. The Plan shall continue in effect for a term of ten (10) years from the Effective Date, unless sooner terminated
pursuant to Section 18 hereof. No Option shall be granted under the Plan after ten (10) years from the Effective Date.


 


8.          Terms
and Conditions of Incentive Stock Options. Incentive Stock Options may be granted only to Participants who are Employees.
Each Incentive Stock Option granted pursuant to the Plan shall be evidenced by an instrument in such form as the Committee shall
from time to time approve. Each Incentive Stock Option granted pursuant to the Plan shall comply with, and be subject to, the following
terms and conditions:


 


(a)          Option
Price.


 


(i)          The
price per Share at which each Incentive Stock Option granted by the Committee under the Plan may be exercised shall not, as to
any particular Incentive Stock Option, be less than the Fair Market Value of the Common Stock on the date that such Incentive Stock
Option is granted.


 




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(ii)         In
the case of an Employee who owns Common Stock representing more than ten percent (10%) of the outstanding Common Stock at the time
the Incentive Stock Option is granted, the Incentive Stock Option exercise price shall not be less than one hundred and ten percent
(110%) of the Fair Market Value of the Common Stock on the date that the Incentive Stock Option is granted.


 


(b)          Payment.
Full payment for each Share of Common Stock purchased upon the exercise of any Incentive Stock Option granted under the Plan shall
be made at the time of exercise of each such Incentive Stock Option and shall be paid in cash (in United States Dollars), Common
Stock or a combination of cash and Common Stock. Common Stock utilized in full or partial payment of the exercise price must have
been owned by the party exercising such Option for not less than six months prior to the date of exercise of such Option, and such
Common Stock shall be valued at the Fair Market Value at the date of exercise. The Company shall accept full or partial payment
in Common Stock only to the extent permitted by applicable law. No Shares of Common Stock shall be issued until full payment has
been received by the Company, and no Optionee shall have any of the rights of a stockholder of the Company until Shares of Common
Stock are issued to the Optionee.


 


(c)          Term
of Incentive Stock Option. The term of exercisability of each Incentive Stock Option granted pursuant to the Plan shall be
not more than ten (10) years from the date each such Incentive Stock Option is granted, provided that in the case of an Employee
who owns stock representing more than ten percent (10%) of the Common Stock outstanding at the time the Incentive Stock Option
is granted, the term of exercisability of the Incentive Stock Option shall not exceed five (5) years.


 


(d)          Exercise
Generally. Except as otherwise provided in Section 10 hereof, no Incentive Stock Option may be exercised unless the Optionee
shall have been in the employ of the Company at all times during the period beginning with the date of grant of any such Incentive
Stock Option and ending on the date three (3) months prior to the date of exercise of any such Incentive Stock Option. The Committee
may impose additional conditions upon the right of an Optionee to exercise any Incentive Stock Option granted hereunder which are
not inconsistent with the terms of the Plan or the requirements for qualification as an Incentive Stock Option. Except as otherwise
provided by the terms of the Plan or by action of the Committee at the time of the grant of the Options, the Options will be first
exercisable as of the date of grant of such Options.


 


(e)          Cashless
Exercise. Subject to vesting requirements, if applicable, an Optionee who has held an Incentive Stock Option for at least six
months may engage in the Acashless exercise@
of the Option. Upon a cashless exercise, an Optionee gives the Company written notice of the exercise of the Option together with
an order to a registered broker-dealer or equivalent third party, to sell part or all of the Optioned Stock and to deliver enough
of the proceeds to the Company to pay the Option exercise price and any applicable withholding taxes. If the Optionee does not
sell the Optioned Stock through a registered broker-dealer or equivalent third party, the Optionee can give the Company written
notice of the exercise of the Option and the third party purchaser of the Optioned Stock shall pay the Option exercise price plus
any applicable withholding taxes to the Company. Such Options shall not be deemed exercised until the Company has received full
payment of the exercise price of such Options.


 


(f)          Transferability.
An Incentive Stock Option granted pursuant to the Plan shall be exercised during an Optionee's lifetime only by the Optionee to
whom it was granted and shall not be assignable or transferable otherwise than by will or by the laws of descent and distribution.


 




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9.          Terms
and Conditions of Non-Incentive Stock Options. Each Non-Incentive Stock Option granted pursuant to the Plan shall be evidenced
by an instrument in such form as the Committee shall from time to time approve. Each Non-Incentive Stock Option granted pursuant
to the Plan shall comply with and be subject to the following terms and conditions.


 


(a)          Options
Granted to Directors. Subject to the limitations of Section 6(c), Non-Incentive Stock Options to purchase 9,000 shares of Common
Stock will be granted to each Director who is not an Employee as of the Effective Date, at an exercise price equal to the Fair
Market Value of the Common Stock on such date of grant. The Options will be first exercisable as of the Effective Date. Such Options
shall continue to be exercisable for a period of ten years following the date of grant without regard to the continued services
of such Director as a Director or Director Emeritus. In the event of the Optionee's death, such Options may be exercised by the
personal representative of his estate or person or persons to whom his rights under such Option shall have passed by will or by
the laws of descent and distribution. All Options shall be immediately exercisable upon a Change of Control of the Company or the
Bank. Options may be granted to newly appointed or elected non-employee Directors within the sole discretion of the Committee.
The exercise price per Share of such Options granted shall be equal to the Fair Market Value of the Common Stock at the time such
Options are granted. Unless otherwise inapplicable, or inconsistent with the provisions of this paragraph, the Options to be granted
to Directors hereunder shall be subject to all other provisions of this Plan.


 


(b)          Option
Price. The exercise price per Share of Common Stock for each Non-Incentive Stock Option granted pursuant to the Plan shall
be at such price as the Committee may determine in its sole discretion, but in no event less than the Fair Market Value of such
Common Stock on the date of grant as determined by the Committee in good faith.


 


(c)          Payment.
Full payment for each Share of Common Stock purchased upon the exercise of any Non-Incentive Stock Option granted under the Plan
shall be made at the time of exercise of each such Non-Incentive Stock Option and shall be paid in cash (in United States Dollars),
Common Stock or a combination of cash and Common Stock. Common Stock utilized in full or partial payment of the exercise price
must have been owned by the party exercising such Option for not less than six months prior to the date of exercise of such Option,
and such Common Stock shall be valued at the Fair Market Value at the date of exercise. The Company shall accept full or partial
payment in Common Stock only to the extent permitted by applicable law. No Shares of Common Stock shall be issued until full payment
has been received by the Company and no Optionee shall have any of the rights of a stockholder of the Company until the Shares
of Common Stock are issued to the Optionee.


 


(d)          Term.
The term of exercisability of each Non-Incentive Stock Option granted pursuant to the Plan shall be not more than ten (10) years
from the date each such Non-Incentive Stock Option is granted.


 


(e)          Exercise
Generally. The Committee may impose additional conditions upon the right of any Participant to exercise any Non-Incentive Stock
Option granted hereunder which is not inconsistent with the terms of the Plan. Except as otherwise provided by the terms of the
Plan or by action of the Committee at the time of the grant of the Options, the Options will be first exercisable as of the date
of grant of such Options.


 


(f)          Cashless
Exercise. Subject to vesting requirements, if applicable, an Optionee who has held a Non-Incentive Stock Option for at least
six months may engage in the Acashless exercise@
of the Option. Upon a cashless exercise, an Optionee gives the Company written notice of the exercise of the Option together with
an order to a registered broker-dealer or equivalent third party, to sell part or all of the Optioned Stock and to deliver enough
of the proceeds to the Company to pay the Option exercise price and


 




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any applicable withholding taxes. If the Optionee
does not sell the Optioned Stock through a registered broker-dealer or equivalent third party, the Optionee can give the Company
written notice of the exercise of the Option and the third party purchaser of the Optioned Stock shall pay the Option exercise
price plus any applicable withholding taxes to the Company. Such Options shall not be deemed exercised until the Company has received
full payment of the exercise price of such Options.


 


(g)          Transferability.
Any Non-Incentive Stock Option granted pursuant to the Plan shall be exercised during an Optionee's lifetime only by the Optionee
to whom it was granted and shall not be assignable or transferable otherwise than by will or by the laws of descent and distribution.


 


10.         Effect
of Termination of Employment, Disability or Death on Incentive Stock Options.


 


(a)          Termination
of Employment. In the event that any Optionee's employment with the Company shall terminate for any reason, other than Disability
or death, all of any such Optionee's Incentive Stock Options, and all of any such Optionee's rights to purchase or receive Shares
of Common Stock pursuant thereto, shall automatically terminate on (A) the earlier of (i) or (ii): (i) the respective expiration
dates of any such Incentive Stock Options, or (ii) the expiration of not more than three (3) months after the date of such
termination of employment; or (B) at such later date as is determined by the Committee at the time of the grant of such Award,
but only if, and to the extent that, the Optionee was entitled to exercise any such Incentive Stock Options at the date of such
termination of employment, and further that such Award shall thereafter be deemed a Non-Incentive Stock Option. In the event that
a Subsidiary ceases to be a Subsidiary of the Company, the employment of all of its employees who are not immediately thereafter
employees of the Company shall be deemed to terminate upon the date such Subsidiary so ceases to be a Subsidiary of the Company.


 


(b)          Disability.
In the event that any Optionee's employment with the Company shall terminate as the result of the Disability of such Optionee,
such Optionee may exercise any Incentive Stock Options granted to the Optionee pursuant to the Plan at any time prior to the earlier
of (i) the respective expiration dates of any such Incentive Stock Options or (ii) the date which is one (1) year after
the date of such termination of employment, but only if, and to the extent that, the Optionee was entitled to exercise any such
Incentive Stock Options at the date of such termination of employment.


 


(c)          Death.
In the event of the death of an Optionee, any Incentive Stock Options granted to such Optionee may be exercised by the person or
persons to whom the Optionee's rights under any such Incentive Stock Options pass by will or by the laws of descent and distribution
(including the Optionee's estate during the period of administration) at any time prior to the earlier of (i) the respective
expiration dates of any such Incentive Stock Options or (ii) the date specified at the time of grant of such Award, if any,
but in either case only if, and to the extent that, the Optionee was entitled to exercise any such Incentive Stock Options at the
date of death. For purposes of this Section 10(c), any Incentive Stock Option held by an Optionee shall be considered exercisable
at the date of his death if the only unsatisfied condition precedent to the exercisability of such Incentive Stock Option at the
date of death is the passage of a specified period of time. At the discretion of the Committee, upon exercise of such Options the
Optionee may receive Shares or cash or a combination thereof. If cash shall be paid in lieu of Shares, such cash shall be equal
to the difference between the Fair Market Value of such Shares and the exercise price of such Options on the exercise date.


 


(d)          Incentive
Stock Options Deemed Exercisable. For purposes of Sections 10(a), 10(b) and 10(c) above, any Incentive Stock Option held by
any Optionee shall be considered exercisable at the date of termination of employment if any such Incentive Stock Option would
have been exercisable at such date of termination of employment without regard to the Disability or death of the Participant.


 




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(e)          Termination
of Incentive Stock Options. Except as may be specified by the Committee at the time of grant of an Option, to the extent that
any Incentive Stock Option granted under the Plan to any Optionee whose employment with the Company terminates shall not have been
exercised within the applicable period set forth in this Section 10, any such Incentive Stock Option, and all rights to purchase
or receive Shares of Common Stock pursuant thereto, as the case may be, shall terminate on the last day of the applicable period.


 


11.         Effect
of Termination of Employment, Disability or Death on Non-Incentive Stock Options. The terms and conditions of Non-Incentive
Stock Options relating to the effect of the termination of an Optionee's employment or service, Disability of an Optionee or his
death shall be such terms and conditions as the Committee shall, in its sole discretion, determine at the time of termination of
service, unless specifically provided for by the terms of the Agreement at the time of grant of the award.


 


12.         Withholding
Tax. The Company shall have the right to deduct from all amounts paid in cash with respect to the cashless exercise of
Options any taxes required by law to be withheld with respect to such cash payments. Where a Participant or other person is entitled
to receive Shares pursuant to the exercise of an Option, the Company shall have the right to require the Participant or such other
person to pay the Company the amount of any taxes which the Company is required to withhold with respect to such Shares, or, in
lieu thereof, to retain, or to sell without notice, a number of such Shares sufficient to cover the amount required to be withheld.


 


13.         Recapitalization,
Merger, Consolidation, Change in Control and Other Transactions.


 


(a)          Adjustment.
Subject to any required action by the stockholders of the Company, within the sole discretion of the Committee, the aggregate number
of Shares of Common Stock for which Options may be granted hereunder, the number of Shares of Common Stock covered by each outstanding
Option, and the exercise price per Share of Common Stock of each such Option, shall all be proportionately adjusted for any increase
or decrease in the number of issued and outstanding Shares of Common Stock resulting from a subdivision or consolidation of Shares
(whether by reason of merger, consolidation, recapitalization, reclassification, split-up, combination of shares, or otherwise)
or the payment of a stock dividend (but only on the Common Stock) or any other increase or decrease in the number of such Shares
of Common Stock effected without the receipt or payment of consideration by the Company (other than Shares held by dissenting stockholders).


 


(b)          Change
in Control. All outstanding Awards shall become immediately exercisable in the event of a Change in Control of the Company
or the Bank. In the event of such a Change in Control, the Committee and the Board of Directors will take one or more of the following
actions to be effective as of the date of such Change in Control:


 


(i)          provide
that such Options shall be assumed, or equivalent options shall be substituted, (ASubstitute
Options@) by the acquiring or succeeding corporation (or an affiliate
thereof), provided that: (A) any such Substitute Options exchanged for Incentive Stock Options shall meet the requirements of Section
424(a) of the Code, and (B) the shares of stock issuable upon the exercise of such Substitute Options shall constitute securities
registered in accordance with the Securities Act of 1933, as amended, (A1933
Act@) or such securities shall be exempt from such registration
in accordance with Sections 3(a)(2) or 3(a)(5) of the 1933 Act, (collectively, ARegistered
Securities@), or in the alternative, if the securities issuable
upon the exercise of such Substitute Options shall not constitute Registered Securities, then the Optionee will receive upon the
exercise of the Substitute Options a cash payment for each Option surrendered equal to the difference between (1) the Fair Market
Value of the consideration to be received for


 




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each share of Common Stock in the Change in
Control transaction times the number of shares of Common Stock subject to such surrendered Options, and (2) the aggregate exercise
price of all such surrendered Options, or


 


(ii)         in
the event of a transaction under the terms of which the holders of the Common Stock of the Company will receive upon consummation
thereof a cash payment (the AMerger Price@)
for each share of Common Stock exchanged in the Change in Control transaction, to make or to provide for a cash payment to the
Optionees equal to the difference between (A) the Merger Price times the number of shares of Common Stock subject to such Options
held by each Optionee (to the extent then exercisable at prices not in excess of the Merger Price) and (B) the aggregate exercise
price of all such surrendered Options in exchange for such surrendered Options.


 


(c)          Extraordinary
Corporate Action. Notwithstanding any provisions of the Plan to the contrary, subject to any required action by the stockholders
of the Company, in the event of any Change in Control, recapitalization, merger, consolidation, exchange of Shares, spin-off, reorganization,
tender offer, partial or complete liquidation or other extraordinary corporate action or event, the Committee, in its sole discretion,
shall have the power, prior or subsequent to such action or event to:


 


(i)          appropriately
adjust the number of Shares of Common Stock subject to each Option, the Option exercise price per Share of Common Stock, and the
consideration to be given or received by the Company upon the exercise of any outstanding Option;


 


(ii)         cancel
any or all previously granted Options, provided that appropriate consideration is paid to the Optionee in connection therewith;
and/or


 


(iii)        make
such other adjustments in connection with the Plan as the Committee, in its sole discretion, deems necessary, desirable, appropriate
or advisable; provided, however, that no action shall be taken by the Committee which would cause Incentive Stock
Options granted pursuant to the Plan to fail to meet the requirements of Section 422 of the Code without the consent of the Optionee.


 


(d)          Acceleration.
The Committee shall at all times have the power to accelerate the exercise date of Options previously granted under the Plan.


 


Except as expressly provided
in Sections 13(a) and 13(b), no Optionee shall have any rights by reason of the occurrence of any of the events described in this
Section 13.


 


14.         Time
of Granting Options. The date of grant of an Option under the Plan shall, for all purposes, be the date on which the Committee
makes the determination of granting such Option. Notice of the grant of an Option shall be given to each individual to whom an
Option is so granted within a reasonable time after the date of such grant in a form determined by the Committee.


 


15.         Effective
Date. The Plan shall become effective upon the date of approval of the Plan by the stockholders of the Company. The Committee
may make a determination related to Awards prior to the Effective Date with such Awards to be effective upon the date of stockholder
approval of the Plan.


 


16.         Approval
by Stockholders. The Plan shall be approved by stockholders of the Company within twelve (12) months before or after the
date the Plan is approved by the Board.


 




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17.         Modification
of Options. At any time and from time to time, the Board may authorize the Committee to direct the execution of an instrument
providing for the modification of any outstanding Option, provided no such modification, extension or renewal shall confer on the
holder of said Option any right or benefit which could not be conferred on the Optionee by the grant of a new Option at such time,
or shall not materially decrease the Optionee's benefits under the Option without the consent of the holder of the Option, except
as otherwise permitted under Section 18 hereof.


 


18.         Amendment
and Termination of the Plan.


 


(a)          Action
by the Board. The Board may alter, suspend or discontinue the Plan, except that no action of the Board may increase (other
than as provided in Section 13 hereof) the maximum number of Shares permitted to be optioned under the Plan, materially increase
the benefits accruing to Participants under the Plan or materially modify the requirements for eligibility for participation in
the Plan unless such action of the Board shall be subject to approval by the stockholders of the Company.


 


(b)          Change
in Applicable Law. Notwithstanding any other provision contained in the Plan, in the event of a change in any federal or state
law, rule, regulation or policy which would make the exercise of all or part of any previously granted Option unlawful or subject
the Company to any penalty, the Committee may restrict any such exercise without the consent of the Optionee or other holder thereof
in order to comply with any such law, rule or regulation or to avoid any such penalty.


 


19.         Conditions
Upon Issuance of Shares; Limitations on Option Exercise; Cancellation of Option Rights. 


 


(a)          Shares
shall not be issued with respect to any Option granted under the Plan unless the issuance and delivery of such Shares shall comply
with all relevant provisions of applicable law, including, without limitation, the Securities Act of 1933, as amended, the rules
and regulations promulgated thereunder, any applicable state securities laws and the requirements of any stock exchange upon which
the Shares may then be listed.


 


(b)          The
inability of the Company to obtain any necessary authorizations, approvals or letters of non-objection from any regulatory body
or authority deemed by the Company's counsel to be necessary to the lawful issuance and sale of any Shares issuable hereunder shall
relieve the Company of any liability with respect to the non-issuance or sale of such Shares.


 


(c)          As
a condition to the exercise of an Option, the Company may require the person exercising the Option to make such representations
and warranties as may be necessary to assure the availability of an exemption from the registration requirements of federal or
state securities law.


 


(d)          Notwithstanding
anything herein to the contrary, upon the termination of employment or service of an Optionee by the Company or its Subsidiaries
for Acause@
as defined at 12 C.F.R. 563.39(b)(1) as determined by the Board of Directors, all Options held by such Participant shall cease
to be exercisable as of the date of such termination of employment or service.


 


(e)          Upon
the exercise of an Option by an Optionee (or the Optionee's personal representative), the Committee, in its sole and absolute discretion,
may make a cash payment to the Optionee, in whole or in part, in lieu of the delivery of shares of Common Stock. Such cash payment
to be paid in lieu of delivery of Common Stock shall be equal to the difference between the Fair Market Value of the Common Stock
on the date of the Option exercise and the exercise price per share of the Option. Such cash payment shall be in exchange for the
cancellation of such Option. Such cash payment shall not be made in the event


 




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that such transaction would result in liability
to the Optionee or the Company under Section 16(b) of the Securities Exchange Act of 1934, as amended, and regulations promulgated
thereunder.


 


20.         Reservation
of Shares. During the term of the Plan, the Company will reserve and keep available a number of Shares sufficient to satisfy
the requirements of the Plan.


 


21.         Unsecured
Obligation. No Participant under the Plan shall have any interest in any fund or special asset of the Company by reason
of the Plan or the grant of any Option under the Plan. No trust fund shall be created in connection with the Plan or any grant
of any Option hereunder and there shall be no required funding of amounts which may become payable to any Participant.


 


22.         No
Employment Rights. No Director, Employee or other person shall have a right to be selected as a Participant under the Plan.
Neither the Plan nor any action taken by the Committee in administration of the Plan shall be construed as giving any person any
rights of employment or retention as an Employee, Director or in any other capacity with the Company, the Bank or other Subsidiaries.


 


23.         Governing
Law. The Plan shall be governed by and construed in accordance with the laws of the State of Minnesota, except to the extent
that federal law shall be deemed to apply.


 




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