Form of Incentive Stock Option Agreement


    Exhibit
      10.1

     

    
 

    [Date]

     

    Form
      of Incentive Stock Option Agreement

    Under
      the Third Century Bancorp Stock Option Plan

     

    [Name
      of
      Optionee:]

     

    You
      are
      hereby granted the option to purchase a total of ________ shares of the Common
      Stock, without par value (“Common Stock”), of Third Century Bancorp (the
“Holding Company”) over the next ten years pursuant to the Holding Company’s
      Stock Option Plan (the “Plan”), on the following terms and
      conditions:

     

    1.  The
      purchase price of the shares of Common Stock subject to this option is
      $___________ per share. You must pay this purchase price in cash at the time
      this option is exercised; provided, however that, with the approval of the
      Holding Company’s Stock Compensation Committee (the “Committee”), beginning on
      and after June 30, 2007, you may exercise your option by tendering to the
      Holding Company whole shares of the Holding Company’s Common Stock owned by you,
      or any combination of whole shares of the Holding Company’s Common Stock owned
      by you and cash, having a fair market value equal to the cash exercise price
      of
      the shares with respect to which the option is exercised by you. For this
      purpose, any shares so tendered shall be deemed to have a fair market value
      equal to the mean between the highest and lowest quoted selling prices for
      the
      shares on the date of exercise of the option (or if there were no sales on
      such
      date the weighted average of the means between the highest and lowest quoted
      selling prices on the nearest date before and the nearest date after the date
      of
      exercise of the option), as reported in The Wall Street Journal or a similar
      publication selected by the Committee. To exercise this option, you must send
      written notice to the Holding Company’s Secretary at the address noted in
      Section 12 hereof. Such notice shall state the number of shares in respect
      of
      which the option is being exercised, shall identify the option exercised as
      an
      incentive stock option, and shall be signed by the person or persons so
      exercising the option. Such notice shall be accompanied by payment of the full
      cash option price for such shares or, if the Committee has authorized the use
      of
      the stock swap feature provided for above, such notice shall be followed as
      soon
      as practicable by the delivery of the option price for such shares. Certificates
      evidencing shares of Common Stock will not be delivered to you until payment
      has
      been made. Under certain circumstances, the Plan permits you to deliver a notice
      to your broker to deliver the cash to the Holding Company upon the receipt
      of
      such cash from the sale of Holding Company Common Stock. Contact the Secretary
      of the Holding Company for further information about this procedure if you
      are
      interested in it.

     

    2.  The
      term
      of this option (the “Option Term”) shall be for a period of ten years from the
      date of this letter, subject to earlier termination as provided in paragraphs
      3
      and 4 hereof. The option may be exercised at any time, or from time to time,
      in
      whole or in part, until the Option Term expires, but in no case may fewer than
      100 such shares be purchased at any one time, except to purchase a residue
      of
      fewer than 100 shares.

     

     

    
      
        
        

      

      
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    3.  If
      you
      cease to be an employee of the Holding Company or any of its subsidiaries for
      any reason other than retirement, permanent and total disability, or death,
      this
      option shall terminate [30 days after your termination of employment]. If your
      employment by the Holding Company or any of its subsidiaries is terminated
      by
      reason of retirement (which means such termination of employment as shall
      entitle you to early or normal retirement benefits under any then existing
      pension plan of the Holding Company or one of its subsidiaries), you may
      exercise this option to the extent it was exercisable at the date of your
      retirement in whole or in part within three years after such retirement, but
      not
      later than the date upon which this option would otherwise expire; provided,
      however, that if you are a director or a director emeritus of the Holding
      Company at the time of your retirement, the option shall continue to vest while
      you serve as director or director emeritus and you may exercise this option
      in
      whole or in part until the later of (a) three years after your date of
      retirement or (b) six months after your service as a director and/or director
      emeritus of the Holding Company terminates, but not later than the date upon
      which this option would otherwise expire. If you cease to be an employee of
      the
      Holding Company or any of its subsidiaries because of your permanent and total
      disability, you may exercise this option in whole or in part at any time within
      one year after such termination of employment by reason of such disability,
      but
      not later than the date upon which this option would otherwise
      expire.

     

    4.  If
      you
      die while employed by the Holding Company or any of its subsidiaries, within
      three years after the termination of your employment because of retirement
      (or,
      if later, six months following your termination of service as a director or
      director emeritus of the Holding Company), or within one year after the
      termination of your employment because of permanent and total disability, this
      option may be exercised in whole or in part by your executor, administrator,
      or
      estate beneficiaries at any time within one (1) year after the date of your
      death but not later than the date upon which this option would otherwise
      expire.

     

    5.  This
      option is non-transferable otherwise than by will or the laws of descent and
      distribution or pursuant to a qualified domestic relations order. It may be
      exercised only by you or your guardian, if any, or, if you die, by your
      executor, administrator, or beneficiaries of your estate who are entitled to
      your option.

     

    6.  All
      rights to exercise this option will expire, in any event, ten years from the
      date of this letter.

     

    7.  Certificates
      evidencing shares issued upon exercise of this option may bear a legend setting
      forth among other things such restrictions on the disposition or transfer of
      the
      shares of the Holding Company as the Holding Company may deem consistent with
      applicable federal and state laws.

     

    8.  Nothing
      in this option shall restrict the right of the Holding Company or its
      subsidiaries to terminate your employment at any time with or without
      cause.

     

    9.  This
      option is subject to all the terms, provisions and conditions of the Plan,
      which
      is incorporated herein by reference, and to such regulations as may from time
      to
      time be adopted by the Committee. A copy of the Plan has been furnished to
      you
      and an additional copy may be obtained from the Holding Company. In the event
      of
      any conflict between the provisions of the Plan and the provisions of this
      letter, the terms, conditions and provisions of the Plan shall control, and
      this
      letter shall be deemed to be modified accordingly.

     

     

    
      
        
        

      

      
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    10.  This
      Stock Option Agreement is intended to grant an option which meets all of the
      requirements of incentive stock options as defined in Section 422A of the
      Internal Revenue Code. Subject to and upon the terms, conditions and provisions
      of the Plan, each and every provision of this Agreement shall be administered,
      construed and interpreted so that the option granted herein shall so qualify
      as
      an incentive stock option. Each provision of this Stock Option Agreement which
      would prevent this option from qualifying as an incentive stock option, if
      any,
      shall be void.

     

    11.  You
      agree
      to advise the Holding Company immediately upon any sale or transfer of any
      shares of Common Stock received upon exercise of this option to the extent
      such
      sale or transfer takes place prior to the later of (a) two years from the date
      of grant or (b) one year from the date of exercise of this option.

     

    12.  All
      notices by you to the Holding Company and your exercise of the option herein
      granted, shall be addressed to Third Century Bancorp, 80 East Jefferson Street,
      Franklin, Indiana 46131, Attention: Secretary, or such other address as the
      Holding Company may, from time to time, specify.

     

    13.  This
      option may not be exercised until the Holding Company has been advised by
      counsel that all other applicable legal requirements have been met.

     

     

    
      	 	
              Very
                truly yours,

               

            
	 	
              THIRD
                CENTURY BANCORP

               

            
	 	 	 
	 	
              By:

               

            	 
	 	 	
              Robert
                D. Heuchan, President and
Chief
                Executive Officer

               

            


    

    


     

    Accepted
      on the date above written:

     

    _______________________________

    [Name
      of
      Optionee]

     

     

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