EX-10.3





 Exhibit 10.3 

FORM OF INCENTIVE STOCK OPTION AWARD AGREEMENT 

CBM BANCORP, INC. 
 2019
EQUITY INCENTIVE PLAN 
 INCENTIVE STOCK OPTION AWARD AGREEMENT 

This stock option agreement (“Option” or “Agreement”) is and will be subject in every respect to the provisions of the 2019
Equity Incentive Plan (the “Plan”) of CBM BANCORP, INC. (the “Company”) which are incorporated herein by reference and made a part hereof, subject to the provisions of this Agreement. A copy of the Plan has
been provided, or made available, to each person granted a stock option pursuant to the Plan. The holder of this Option (the “Participant”) hereby accepts this Option, subject to all the terms and provisions of the Plan and this
Agreement, and agrees that all decisions under and interpretations of the Plan and this Agreement by the Compensation Committee of the Board of Directors of the Company (“Committee”) will be final, binding and conclusive upon the
Participant and the Participant’s heirs, legal representatives, successors and permitted assigns. Except where the context otherwise requires, the term “Company” will include the parent and all present and future subsidiaries of the
Company as defined in Section 424(e) and 424(f) of the Internal Revenue Code of 1986, as amended from time to time (the “Code”). Capitalized terms used herein but not defined will have the same meaning as in the Plan. 

 

	1.	 Name of Participant: _______________________ 



 

	2.	 Date of Grant: _______________ 



 

	3.	 Total number of shares of Company common stock, $0.01 par value per share, that may be acquired pursuant to
this Option: _________ 


  

	 	•	 This is an Incentive Stock Option (“ISO”) to the maximum extent permitted under Code
Section 422(d). Options which are first exercisable in any calendar year in excess of the ISO limit shall be deemed not to qualify of ISOs. 


  

	4.    Exercise	 price per share. $________ [Maximum # of ISO options that may be first vested in any calendar year:
_________ Options.] 















	5.	 Expiration Date of Option. _____________  



 

	6.	 Vesting Schedule. Except as otherwise provided in this Agreement, this Option first becomes exercisable,
subject to the Option’s expiration date, in accordance with the vesting schedule specified herein, provided that the Participant continues in the Service of the Company as of such Vesting Date, as follows: 



 

									
	Vesting Date	  	Number of Options Vesting	  	 	  	 
					
	                    	  	                    	  		  		  	
					
	                    	  	                    	  		  		  	
					
	                    	  	                    	  		  		  	
					
	                    	  	                    	  		  		  	
					
	                    	  	                    	  		  		  	

 This Option may not be exercised at any time on or after the Option’s expiration date. Vesting will automatically
accelerate pursuant to Sections 2.7 and 4.1 of the Plan (in the event of the death or Disability of the Participant or following a Change in Control). 
  

	7.	 Exercise Procedure. 



 

	 	7.1	 Delivery of Notice of Exercise of Option. This Option will be exercised in whole or in part by the
Participant’s delivery to the Company of written notice (the “Notice of Exercise of Option” attached hereto as Exhibit A) setting forth the number of shares with respect to which this Option is to be exercised, together
with payment by cash or other means acceptable to the Committee, including: 


  

	 	•	 	 Cash or personal, certified or cashier’s check in full/partial payment of the purchase price.



  

	 	•	 	 Stock of the Company in full/partial payment of the purchase price. 



 

	 	•	 	 By a net settlement of the Option, using a portion of the shares obtained on exercise in payment of the exercise
price of the Option (and, if applicable, any required tax withholding). 


  

	 	•	 	 By selling shares from my Option shares through a broker in full/partial payment of the purchase price.



  

	 	7.2	 “Fair Market Value” shall have the meaning set forth in Section 9.1 of the Plan.



  

	8.	 Delivery of Shares. 



 

	 	8.1	 Delivery of Shares. Delivery of shares of Common Stock upon the exercise of this Option will comply with
all applicable laws (including the requirements of the Securities Act) and the applicable requirements of any securities exchange or similar entity. 















	9.	 Change in Control. 



 

	 	9.1	 In the event of a Change in Control, all Options held by the Participant, whether or not exercisable at such
time, will become fully exercisable, subject to the expiration provisions otherwise applicable to the Option. 


  

	 	9.2	 A “Change in Control” will be deemed to have occurred as provided in Section 4.2 of the
Plan. 


  

	10.	 Adjustment Provisions. 



This Option, including the number of shares subject to the Option and the exercise price, will be adjusted upon the occurrence of the events specified in, and
in accordance with the provisions of Section 3.4 of the Plan.
  

	11.	 Termination of Option and Accelerated Vesting. 



This Option will terminate upon the expiration date, except as set forth in the following provisions: 

 

	 	(i)	 Death. This Option will become exercisable as to all shares subject to an outstanding Award, whether or
not then exercisable, in the event of the Participant’s Termination of Service by reason of the Participant’s death. This Option may thereafter be exercised by the Participant’s legal representative or beneficiaries for a period of
one (1) year from the date of death, subject to termination on the expiration date of this Option, if earlier. In order for the Options to have ISO treatment, the Participant’s death must have occurred while employed or within three months
of Termination of Service. 


  

	 	(ii)	 Disability. This Option will become exercisable as to all shares subject to an outstanding Award,
whether or not then exercisable, in the event of the Participant’s Termination of Service by reason of the Participant’s Disability. This Option may thereafter be exercised for a period of one (1) year from the date of such
Termination of Service by reason of Disability, subject to termination on the Option’s expiration date, if earlier. 


  

	 	(iii)	 Termination for Cause. If the Participant’s Service has been terminated for Cause, all Options that
have not been exercised will expire and be forfeited. 


  

	 	(iv)	 Other Termination. If the Participant’s Service terminates for any reason other than due to death
or Disability, or following a Change in Control or for Cause, this Option may thereafter be exercised, to the extent it was exercisable at the time of such termination of service, for a period of three (3) months following termination, subject
to termination on the Option’s expiration date, if earlier. 















	12.	 Miscellaneous. 



 

	 	12.1	 No Option will confer upon the Participant any rights as a stockholder of the Company prior to the date on
which the individual fulfills all conditions for the exercise of such Option and the receipt of such Stock upon the exercise of such Option. 


  

	 	12.2	 This Agreement may not be amended or otherwise modified unless evidenced in writing and signed by the Company
and the Participant. 


  

	 	12.3	 Except as otherwise provided by the Committee, ISOs under the Plan are not transferable except (1) as
designated by the Participant by will or by the laws of descent and distribution, (2) to a trust established by the Participant, or (3) between spouses incident to a divorce or pursuant to a domestic relations order, provided, however,
that in the case of a transfer described under (3), the Option will not qualify as an ISO as of the day of such transfer. 


  

	 	12.4	 This Agreement will be governed by and construed in accordance with the laws of the State of Maryland.



  

	 	12.5	 This Agreement is subject to all laws, regulations and orders of any governmental authority which may be
applicable thereto and, notwithstanding any of the provisions hereof, the Participant agrees that he or she will not exercise the Option granted hereby nor will the Company be obligated to issue any shares of Stock hereunder if the exercise thereof
or the issuance of such shares, as the case may be, would constitute a violation by the Participant or the Company of any such law, regulation or order or any provision thereof as determined by the Company. 



 

	 	12.6	 The granting of this Option does not confer upon the Participant any right to be retained in the service of the
Company or any subsidiary. 


  

	 	12.7	 Subject to written consent by the Committee, the Participant shall have the right to direct the Company to
collect federal, state and local income taxes and the employee portion of FICA taxes (Social Security and Medicare) with respect to any Option, if applicable, in accordance with Section 7.8 of the Plan. Notwithstanding the foregoing, the
Company shall have the right to require the Participant to pay the Company the amount of any tax that the Company is required to withhold with respect to such exercise of the Option or the Company may retain or sell without notice, a sufficient
number of shares of Stock subject to the Option to cover the minimum amount required to be withheld under applicable law. 



[Signature Page to Follow] 












 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in its name and on its behalf as of
the date of grant of this Option set forth above. 
  

			
	CBM BANCORP, INC.


 
			
		
		 	 
		
	By:	 	 
		
	Its:	 	 


 PARTICIPANT’S ACCEPTANCE 

As of the date of grant of this Option set forth above, the undersigned hereby accepts the foregoing Option and agrees to the terms and conditions hereof,
including the terms and provisions of the 2019 Equity Incentive Plan. The undersigned hereby acknowledges receipt of a copy of the Company’s 2019 Equity Incentive Plan. 

 

			
	PARTICIPANT


 
			
		
		 	 
		
	By:	 	 














 EXHIBIT A 

NOTICE OF EXERCISE OF INCENTIVE STOCK OPTION (ISO) 
 I
hereby exercise, all or part of, the incentive stock option (the “Option” or “ISO”) granted to me by CBM Bancorp, Inc. (the “Company”) or its affiliate, subject to all the terms and provisions set forth in the Stock
Option Agreement (the “Agreement”) and the CBM Bancorp, Inc. 2019 Equity Incentive Plan (the “Plan”) referred to therein, and notify you of my desire to purchase __________________ shares of common stock of the Company
(“Common Stock”) for a purchase price of $______ per share. 
 I elect to pay the exercise price by: 

 

	 	___	 Cash or personal, certified or cashier’s check in the sum of $________, in full/partial payment of the
purchase price. 



	 	


	 	___	 Stock of the Company with a fair market value of $_______ in full/partial payment of the purchase price.*




	 	


	 	___	 A net settlement of the Option, using a portion of the shares obtained on exercise in payment of the exercise
price of the Option (and, if applicable, any required tax withholding). 



	 	


	 	___	 Selling _______ shares from my Option shares through a broker in full/partial payment of the purchase price.



 I understand that after this exercise, ____________ shares of Common Stock remain subject to the Option, subject to all terms and
provisions set forth in the Agreement and the Plan. 
  

					
	____________, 20___.	  	_________________________________________	  	
	Date of Exercise	  	Participant’s signature	  	

 *    If I elect to exercise an Option by exchanging shares I already own, I will constructively
return shares that I already own to purchase the new option shares. If my shares are in certificate form, I must attach a separate statement indicating the certificate number of the shares I am treating as having exchanged. If the shares are held in
“street name” by a registered broker, I must provide the Company with a statement attesting to the number of shares owned that will be treated as having been exchanged. I will keep the shares that I already own and treat them as if they
are shares acquired by the option exercise. In addition, I will receive additional shares equal to the difference between the shares I constructively exchange and the total new option shares that I acquire. I certify that either (i) I have held
the shares I am tendering for at least one year after acquiring such shares through the exercise of an ISO, or (ii) I have not obtained such shares through the exercise of an ISO. Further, I acknowledges that if I am exercising ISO options,
failure to retain such shares for a minimum of one year from the date of exercise will result in a disqualified disposition and immediate taxation at ordinary income tax rates. 

BY THE COMPANY 
  

									
	Date Received:	 	 	  	    Company Representative: