Document:

EXHIBIT 10.3

 

 

Stock Option

Granted by

Pathfinder Bancorp, Inc.

under the

PATHFINDER BANCORP, INC.

2016 EQUITY INCENTIVE PLAN

This stock option agreement ("Option" or "Agreement") is and will be subject in every respect to the provisions of the 2016 Equity Incentive Plan (the "Plan") of Pathfinder 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.  Capitalized terms used herein but not defined will have the same meaning as in the Plan.  Any reference to the "Bank" herein shall refer to Pathfinder Bank and any reference to "Employer" shall mean either or both the Company and the Bank.

1.    Name of Participant: _________________________ 

2.    Date of Grant:  ____________, 20

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

    (subject to adjustment pursuant to Section 10 hereof). 

· This is a Non-Qualified Option.

4.   Exercise price per share:     $ _______

(subject to adjustment pursuant to Section 10 below)

5.   Expiration Date of Option:  ____________, 20          .

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.

	
Date

	
Vested Portion of Award

	
__________ __, 20_

	
%

	
__________ __, 20_

	
%

	
__________ __, 20_

	
%

	
__________ __, 20_

	
%

	
__________ __, 20_

	
%

This Option may not be exercised at any time on or after the Option's expiration date. Vesting will automatically accelerate pursuant to Section 2.9 and 4.1 of the Plan (in the event of death or Disability or an Involuntary Termination at 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 minimum required tax withholding).

	
·

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

In order to exercise the Option, please deliver the Notice of Exercise and payment (if applicable) to the Company at the following address:

Pathfinder Bancorp, Inc.

214 W. First St.

Oswego, New York 13126

		Attention:	
Edward J. Mervine Esq.

Senior Vice President, General Counsel and Corporate Secretary

		7.2	
"Fair Market Value" shall have the meaning set forth in Section 8.1(s) of the Plan.

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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 an Involuntary Termination at or following 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.

	
(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.

 

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(iii)

	
Retirement.  Vested Options may be exercised for a period of one (1) year from the date of Termination of Service by reason of Retirement, subject to termination on the Option's expiration date, if earlier (and, for purposes of clarity, non-vested Options will be forfeited on the date of Termination of Service by reason of Retirement).  "Retirement" shall have the meaning set forth in Section 8.1(gg) of the Plan (i.e., retirement from employment as an Employee or Service as a Director on or after attainment of age 65 or after age 55 with 15 years of Service or, with respect to retirement as a Director only, on or after attainment of age 60 and 10 years of continuous Service).

	
(iv)

	
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.

	
(v)

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

12.   Employee Covenant Regarding Confidentiality.

In consideration for the receipt of this Award, if the Participant is an Employee, the Participant agrees not to divulge, disclose, disseminate or make accessible to any employee, customer, vendor of the Company or the Bank or any affiliate, except to the extent requested to do so in writing by the Chief Executive Officer or General Counsel of the Company or the Bank, any information or details regarding this Award, or the fact of receipt of this Award, provided, however, that nothing in this Section shall prevent the disclosure by the Participant of any such information to the Participant's spouse, accountant, legal or financial advisor, and provided further, that nothing herein shall be intended to prevent any Participant who is deemed an "insider" under Section 16 of the Exchange Act from filing any forms or documents with any regulatory body, including the Securities Exchange Commission, regarding the receipt or exercise of the Award.  The Participant hereby acknowledges that failure to comply with this Section may result in forfeiture of the Award.

13.   Miscellaneous.

		13.1	
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 receipt of such rights.

		13.2	
This Agreement may not be amended or otherwise modified unless evidenced in writing and signed by the Company and the Participant.

		13.3	
In the discretion of the Committee, a non-qualified Option granted under the Plan may be transferable by the Participant, provided, however, that such  transfers will be limited to Immediate Family Members of Participants, trusts and partnerships established for the primary benefit of such family members or to charitable organizations, and provided, further, that such transfers are not made for consideration to the Participant.

 

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		13.4	
This Agreement will be governed by and construed in accordance with the laws of the State of New York.

		13.5	
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 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.

13.6           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.

[Signature Page to Follow]

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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.

PATHFINDER BANCORP, INC.

By: _______________________ 

Its: _______________________ 

PARTICIPANT'S ACCEPTANCE

The undersigned hereby accepts the foregoing Option and agrees to the terms and conditions hereof, including the terms and provisions of the 2016 Equity Incentive Plan.  The undersigned hereby acknowledges receipt of a copy of the Company's 2016 Equity Incentive Plan.

PARTICIPANT

__________________

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EXHIBIT A

NOTICE OF EXERCISE OF OPTION

I hereby exercise the stock option (the "Option") granted to me by Pathfinder 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 Pathfinder Bancorp, Inc. 2016 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 minimum 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.

I hereby represent that it is my intention to acquire these shares for the following purpose:

___ investment

___ resale or distribution

Please note: if your intention is to resell (or distribute within the meaning of Section 2(11) of the Securities Act of 1933) the shares you acquire through this Option exercise, the Company or transfer agent may require an opinion of counsel that such resale or distribution would not violate the Securities Act of 1933 prior to your exercise of such Option.

Date: ____________, _____.            _________________________________________

Participant's signature

* If I elect to exercise 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 notarized 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.

7EXHIBIT 10.4

 

 

Restricted Stock Award

Granted by

PATHFINDER BANCORP, INC.

under the

PATHFINDER BANCORP, INC.

2016 EQUITY INCENTIVE PLAN

This restricted stock agreement ("Restricted Stock Award" or "Agreement") is and will be subject in every respect to the provisions of the 2016 Equity Incentive Plan (the "Plan") of Pathfinder 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 Restricted Stock Award pursuant to the Plan.  The holder of this Restricted Stock Award (the "Participant") hereby accepts this Restricted Stock Award, 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 Committee appointed to administer the Plan ("Committee") or the Board 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.  Any reference to the "Bank" herein shall refer to Pathfinder Bank and any reference to "Employer" shall mean either or both the Company and the Bank.

1.   Name of Participant______________________________________________________

2.   Date of Grant: ___________, 20__

3.    Total number of shares of Company common stock, $0.01 par value per share, covered by the Restricted Stock Award:

       (subject to adjustment pursuant to Section 9 hereof).

4.    Vesting Schedule.  Except as otherwise provided in this Agreement, this Restricted Stock Award first becomes earned in accordance with the vesting schedule specified herein.

	
Date

	
Vested Portion of Award

	
__________ __, 20_

	
__%

	
__________ __, 20_

	
__%

	
__________ __, 20_

	
__%

	
__________ __, 20_

	
__%

	
__________ __, 20_

	
__%

Vesting will automatically accelerate pursuant to Sections 2.9 and 4.1 of the Plan (in the event of death, Disability or Involuntary Termination at or following a Change in Control).

5.   Grant of Restricted Stock Award.

The Restricted Stock Award will be in the form of issued and outstanding shares of Stock that will be either registered in the name of the Participant and held by the Company, together with a stock power executed by the Participant in favor of the Company, pending the vesting or forfeiture of the Restricted Stock, or registered in the name of, and delivered to, the Participant.  Notwithstanding the foregoing, the Company may, in its sole discretion, issue Restricted Stock in any other format (e.g., electronically) in order to facilitate the paperless transfer of such Awards.

If certificated, the certificates evidencing the Restricted Stock Award will bear a legend restricting the transferability of the Restricted Stock.  The Restricted Stock awarded to the Participant will not be sold, encumbered, hypothecated or otherwise transferred except in accordance with the terms of the Plan and this Agreement.

6.    Terms and Conditions.

 

		6.1	
The Participant will have the right to vote the shares of Restricted Stock awarded hereunder on matters which require shareholder vote.

		6.2	
Any cash dividends or distributions declared with respect to shares of Stock subject to the Restricted Stock Award will be delayed and distributed to the Participant at the time the Restricted Stock vests.  No dividend will be paid with respect to any Restricted Stock Award subject to performance-based vesting conditions unless and until the Participant vests in such Restricted Stock Award.  Any stock dividends declared on shares of Stock subject to a Restricted Stock Award will be subject to the same restrictions and will vest at the same time as the shares of Restricted Stock from which said dividends were derived.

7.    Delivery of Shares.

 

Delivery of shares of Stock under this Restricted Stock Award will comply with all applicable laws (including, the requirements of the Securities Act), and the applicable requirements of any securities exchange or similar entity.

8.   Change in Control.

		8.1	
In the event of an Involuntary Termination at or following a Change in Control, all Restricted Stock Awards held by the Participant will become fully vested.

		8.2	
A "Change in Control" will be deemed to have occurred as provided in Section 4.2 of the Plan.

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9.   Adjustment Provisions.

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

10.   Effect of Termination of Service on Restricted Stock Award.

10.1 This Restricted Stock Award will vest as follows:

	
(i)

	
Death.  In the event of the Participant's Termination of Service by reason of the Participant's death, all Restricted Stock will vest as to all shares subject to an outstanding Award, whether or not immediately vested, at the date of Termination of Service.

	
(ii)

	
Disability.  In the event of the Participant's Termination of Service by reason of Disability, all Restricted Stock will vest as to all shares subject to an outstanding Award, whether or not immediately vested, at the date of Termination of Service.

	
(iii)

	
Retirement.  In the event of the Participant's Termination of Service by reason of the Participant's Retirement, any Restricted Stock award that has not vested as of the date of Termination of Service will expire and be forfeited.  "Retirement" shall have the meaning set forth in Section 8.1(gg) of the Plan (i.e., retirement from employment as an Employee or Service as a Director on or after attainment of age 65 or after attainment of age 55 with 15 years of Service or, with respect to a Director only, retirement as a Director on or after attainment of the age 60 with 10 years of continuous Service.

	
(iv)

	
Termination for Cause.  If the Participant's Service has been terminated for Cause, all Restricted Stock granted to a Participant that has not vested will expire and be forfeited.

	
(iv)

	
Other Termination.  If a Participant terminates Service for any reason other than due to death, Disability, Retirement or for Cause, all shares of  Restricted Stock awarded to the Participant which have not vested as of the date of Termination of Service will expire and be forfeited.

11.   Employee Covenant Regarding Confidentiality.

In consideration for the receipt of this Award, if the Participant is an Employee, the Participant agrees not to divulge, disclose, disseminate or make accessible to any employee, customer, vendor of the Company or the Bank or any affiliate, except to the extent requested to do so in writing by the Chief Executive Officer or General Counsel of the Company or the Bank, any information or details regarding this Award, or the fact of receipt of this Award, provided, however, that nothing in this Section shall prevent the disclosure by the Participant of any such information to the Participant's spouse, accountant, legal or financial advisor, and provided further, that nothing herein shall be intended to prevent any Participant who is deemed an "insider" under Section 16 of the Exchange Act from filing any forms or documents with any regulatory body, including the Securities Exchange Commission, regarding the receipt of the Award.  The Participant hereby acknowledges that failure to comply with this Section may result in forfeiture of the Award.

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12.   Miscellaneous.

		12.1	
No Restricted Stock Award 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 receipt of such rights.

		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	
Restricted Stock Awards are not transferable prior to the time such Awards vest in the Participant.

		12.4	
This Restricted Stock Award will be governed by and construed in accordance with the laws of the State of New York.

		12.5	
This Restricted Stock Award 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 Company will not be obligated to issue any shares of stock hereunder if the issuance of such shares would constitute a violation of any such law, regulation or order or any provision thereof.

[Signature Page Follows]

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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 Restricted Stock Award set forth above.

PATHFINDER BANCORP, INC.

By:_______________________

Its:_______________________

PARTICIPANT'S ACCEPTANCE*

The undersigned hereby accepts the foregoing Restricted Stock Award and agrees to the terms and conditions hereof, including the terms and provisions of the 2016 Equity Incentive Plan.  The undersigned hereby acknowledges receipt of a copy of the Company's 2016 Equity Incentive Plan.

PARTICIPANT

____________________________

* You must signify your acceptance of the Award by signing and returning a copy of this Award Agreement to Edward J. Mervine, Esq., Senior Vice President, General Counsel and Corporate Secretary, within 10 business days of the Date of Grant specified on page 1.  If you do not sign and return a copy of this Award Agreement within 10 business days, your Restricted Stock Award will be deemed forfeited.

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