Document:

Unassociated Document

    Exhibit
      4.1

     

    

      2005
        STOCK OPTION PLAN

      FOR

      EUROBANCSHARES,
        INC.

       

      Section
        1.  Purpose.
        The
        purpose of this 2005 STOCK OPTION PLAN FOR EUROBANCSHARES, INC. is to advance
        the interests of EuroBancshares, Inc., a Puerto Rico corporation (the
“Company”), by providing an additional incentive to attract and retain qualified
        and competent employees, upon whose efforts and judgment the success of the
        Company is largely dependent, through the encouragement of stock ownership
        in
        the Company.

       

      Section
        2.  Definitions.
        As used
        herein, the following terms shall have the meanings indicated:

       

      (a)  “Administrator”
        shall
        mean, the persons described in Section
        12
        which
        are authorized to administer the Plan at the time of reference. 

       

      (b)  “Available
        Shares”
        shall
        mean, at each time of reference, the total number of Shares described in
        Section
        3
        with
        respect to which the Administrator may grant an Option, all of which Available
        Shares shall be held in the Company’s treasury or shall be made available from
        authorized and unissued Shares.

       

      (c)  “Bank”
        shall
        mean Eurobank, a commercial bank organized under the laws of the Commonwealth
        of
        Puerto Rico.

       

      (d)  “Board”
        shall
        mean the Board of Directors of the Company.

       

      (e)  “Company”
        shall
        mean EuroBancshares, Inc., a Puerto Rico corporation. 

       

      (f)  “Cause”
        shall
        mean the occurrence of any of the following events: 

       

      (i)  The
        determination by the Board in the exercise of its reasonable judgment, after
        consultation with its legal counsel, that an Optionee has committed an act
        or
        acts constituting (i) a felony or other crime, whether a felony or a
        misdemeanor, involving moral turpitude, dishonesty or theft, (ii) dishonesty
        or
        disloyalty with respect to the Company, or (iii) fraud;

       

      (ii)  The
        determination by the Board in the exercise of its reasonable judgment, after
        consultation with its legal counsel, that an Optionee of the Company has
        committed a breach or violation of his or her employment agreement with the
        Company (if any), and fails to cure such breach or violation within the time
        specified in such employment agreement; 

       

      (iii)  The
        determination by the Board, after consultation with its legal counsel, that
        an
        Optionee has engaged in gross misconduct in the course and scope of his
        employment or service with the Company including indecency, immorality, gross
        insubordination, dishonesty, unlawful harassment or discrimination, or use
        of
        illegal drugs; or 

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      (iv)  In
        the
        event an Optionee is prohibited from engaging in the business of banking
        by any
        governmental regulatory agency having jurisdiction over the
        Company.

       

      For
        the
        purpose of this Plan, no act, or failure to act, on the part of the Optionee
        shall be deemed “intentional” unless done, or omitted to be done, by the
        Optionee not in good faith and without reasonable belief that his action
        or
        omission was in the best interest of the Bank or the Company. Notwithstanding
        the foregoing, the Optionee shall not be deemed to have been terminated for
        “Cause” hereunder unless and until there shall have been delivered to the
        Optionee a copy of a resolution duly adopted by the affirmative vote of a
        majority of the Board then in office (with the Optionee abstaining if a member
        thereof) at a meeting of the Board called and held for such purpose (after
        at
        least ten (10) days notice to the Optionee and an opportunity for the Optionee,
        together with his counsel, to be heard before the Board), finding that in
        the
        good faith opinion of the Board the Optionee had committed an act set forth
        above and specifying the particulars thereof in detail. The number of votes
        needed to constitute a majority shall be determined based on the total number
        of
        members of the Board then serving, including any abstaining member. Nothing
        herein shall limit the right of the Optionee or his beneficiary to contest
        the
        validity or propriety of any such determination.

       

      (g)  “Change
        in Control”
        shall
        mean:

       

      (i)  a
        dissolution or liquidation of the Company or the Bank; 

       

      (ii)  a
        merger
        or consolidation (other than a merger effecting a re-incorporation of the
        Bank
        or the Company in another state or territory or any other merger or
        consolidation in which the shareholders of the surviving corporation and
        their
        proportionate interests therein immediately after the merger or consolidation
        are substantially identical to the shareholders of the Bank or the Company
        and
        their proportionate interests therein immediately prior to the merger or
        consolidation) in which the Bank or the Company is not the surviving corporation
        (or survives only as a subsidiary of another corporation in a transaction
        in which the shareholders of the parent of the Bank or the Company and their
        proportionate interests therein immediately after the transaction are not
        substantially identical to the shareholders of the Bank or the Company and
        their
        proportionate interests therein immediately prior to the transaction; provided,
        however, that the Board may at any time prior to such a merger or consolidation
        provide by resolution that there has been no Change in Control and that the
        foregoing provisions of this parenthetical shall not apply if a majority
        of the
        Board of such parent immediately after the transaction consists of individuals
        who constituted a majority of the Board immediately prior to the
        transaction); or

       

      (iii)  a
        transaction in which any person or entity (other than a shareholder of the
        Bank
        or the Company on the date of the Option Agreement) becomes the owner of
        fifty
        percent (50%) or more of the total combined voting power of all classes of
        stock
        of the Bank or the Company (provided, however, that the Board may at any
        time
        prior to such transaction provide by resolution that there has been no Change
        in
        Control and that this Section (f)(iii)
        shall
        not apply if such acquiring person is a corporation and a majority of the
        Board
        of the acquiring corporation immediately after the transaction consists of
        individuals who constituted a majority of the Board immediately prior to
        the
        acquisition of such fifty percent (50%) or more total combined voting
        power).

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      (h)  “Date
        of Exercise”
        shall
        mean the later of: (i) the date on which the Company has received written
        notice
        of the exercise, in whole or in part, of the Option, and (ii) the date on
        which
        full payment of (A) the aggregate Exercise Price of the Option Shares being
        acquired, and (B) applicable tax withholding, has been made.

       

      (i)  “Date
        of Grant”
        shall
        mean the date on which the Administrator takes formal action to grant an
        Option,
        provided that it is followed, as soon as reasonably possible, by written
        notice
        to the Eligible Person receiving the Option, and by the Administrator providing
        the Optionee with an Option Agreement. 

       

      (j)  “Director”
        shall
        mean a member of the Board. 

       

      (k)  “Eligible
        Person(s)”
        shall
        mean those persons who are Employees or Directors of the Company, a Related
        Corporation or the Bank. In addition, but only with respect to Nonstatutory
        Options, the term “Eligible Person(s)” shall include Consultants. For purposes
        of this Plan, “Consultants” refers to persons engaged to provide services to the
        Company or the Bank as independent contractors whether or not such engagement
        is
        pursuant to a written agreement.

       

      (l)  “Employee(s)”
        shall
        mean those persons who are employees of the Company, a Related Corporation,
        or
        the Bank, as determined under the Code.

       

      (m)  “Fair
        Market Value”
        shall
        mean:
 

     

    (i)  
      If
      Shares of the same class are listed or admitted to unlisted trading privileges
      on any national or regional securities exchange at the date of determining
      the
      Fair Market Value, the last reported sale price on such exchange on the last
      business day prior to the date in question; 

     

    (ii)  If
      Shares
      of the same class are not listed or admitted to unlisted trading privileges
      as
      provided in Section (m)(i)
      and
      sales prices for such shares in the over-the-counter market are reported by
      the
      National Association of Securities Dealers, Incorporated Automated Quotations,
      Incorporated (“NASDAQ”) National Market System at the date of determining the
      Fair Market Value, the last reported sale price so reported on the last business
      day prior to the date in question; 

     

    (iii)  If
      Shares
      of the same class are not listed or admitted to unlisted trading privileges
      as
      provided in Section (m)(i)
      and
      sales prices for such shares are not reported by the NASDAQ National Market
      System as provided in Section (m)(ii),
      and bid
      and asked prices therefor in the over-the-counter market are reported by NASDAQ
      (or, if not so reported, by the National Quotation Bureau Incorporated or the
      OTC Bulletin Board) at the date of determining the Fair Market Value, the
      average of the closing bid and asked prices on the last business day prior
      to
      the date in question; or

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (iv)  If
      Shares
      of the same class are not listed or admitted to unlisted trading privileges
      as
      provided in Section (m)(i)
      and
      sales prices or bid and asked prices for such shares are not reported by NASDAQ
      (or the National Quotation Bureau Incorporated or the OTC Bulletin Board) as
      provided in Section (m)(ii)
      or
      Section (m)(iii)
      at the
      date of determining the Fair Market Value, the value determined in good faith
      by
      the Board; provided, however, that with respect to Incentive Options, in no
      event shall the value be less than the book value per share determined according
      to the financial statements of the Company for the taxable year immediately
      prior to the date such Incentive Options are granted.

     

    (n)  “Internal
      Revenue Code”
      or
“Code”
      shall
      mean the Puerto Rico Internal Revenue Code of 1994, as it now exists or may
      be
      amended from time to time.

     

    (o)  “Incentive
      Option”
      shall
      mean Options that are intended to satisfy the requirements of Section 1046
      of
      the Code.

     

    (p)  “Nonstatutory
      Option”
      shall
      mean Options that are not intended to satisfy the requirements of Section 1046
      of the Code.

     

    (q)  “Option”
      shall,
      unless otherwise specifically noted, mean any stock option granted under this
      Plan, which Option shall refer to a right to purchase Shares, granted pursuant
      to the Plan. 

     

    (r)  “Option
      Agreement”
      shall
      mean an agreement between an Optionee and the Company containing the terms
      and
      conditions of the Option.

     

    (s)  “Option
      Shares”
      shall
      mean Shares subject to the Option of reference at the time of
      reference.

     

    (t)  “Optionee”
      shall
      mean a person to whom an Option is granted or any successor to the rights of
      such Option under this Plan by reason of the death of a natural person to whom
      an Option is granted under this Plan. 

     

    (u)  “Owner”
      shall
      mean the person (including, without limitation, the Optionee) who owns the
      Purchased Shares at the time of reference.

     

    (v)  “Plan”
      shall
      mean this 2005 Stock Option Plan for EuroBancshares, Inc.

     

    (w)  “Purchased
      Shares”
      shall
      mean Shares which have been acquired through the exercise of the
      Option.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (x)  “Related
      Corporation”
      shall
      mean either:

     

    (i)  any
      corporation in an unbroken chain of corporations ending with the employer
      corporation if, on the Date of Grant, each of the corporations other than the
      employer corporation owns stock possessing eighty percent (80%) or more of
      the
      total combined voting power of all classes of stock in one of the other
      corporations in such chain; or

     

    (ii)  any
      corporation in an unbroken chain of corporations beginning with the employer
      corporation if, at the Date of Grant, each of the corporations other than the
      last corporation in the chain owns stock possessing eighty percent (80%) or
      more
      of the total combined voting power of all classes of stock in one of the other
      corporations in such chain.

     

    (y)  “Separation”
      or
“Separates”
      shall
      mean the date on which Optionee ceases to have an employment relationship with
      the Company or the Bank for any reason, including death or disability;
provided,
      however,
      a
      Separation will not be considered to have occurred while an Employee is on
      sick
      leave, military leave, or any other leave of absence approved by the Company,
      if
      the period of such leave does not exceed ninety (90) days, or, if longer, so
      long as the Employee’s right to reemployment with the Company is guaranteed
      either by statute or by contract.

     

    (z)  “Share(s)”
      shall
      mean a share or shares of the common stock of the Company, and, following a
      Change in Control, without limitation, shall include and refer to the number
      and
      class of securities that would have been issuable to an Optionee in consummation
      of such Change in Control had such Optionee’s Option been exercised immediately
      prior to such Change in Control. 

     

    (aa)  “Spread”
      shall
      mean the excess of: (i) the fair market value (for federal income tax reporting
      purposes, as determined by the Administrator in its sole discretion) on the
      Date
      of Exercise of the Shares acquired, over (ii) the Exercise Price of the Shares
      acquired.

     

    (bb)  “US
      Code”
      shall
      mean the United States Internal Revenue Code of 1986, as amended.

     

    (cc)  “Vested,
      Vesting, Unvested”
      and
      similar references, shall mean the number of Option Shares which have Vested,
      become nonforfeitable, and are exercisable under the terms of the Plan or the
      Option Agreement, or both, at the time of reference.

     

    Section
      3.  Available
      Shares.

     

    (a)  As
      of the
      Effective Date, 700,000 Shares shall automatically, and without further action,
      become Available Shares to be granted as Options. Of this total Available
      Shares, 440,000 Shares are specifically set aside for the purpose of granting
      Incentive Options under the Plan. To the extent any Option shall terminate,
      expire or be canceled, (including, without limitation, a cancellation described
      in Section
      3(b)),
      the
      Available Shares subject to such Option shall remain Available
      Shares.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    (b)  Without
      limitation, the Administrator shall have the authority to effect, at any time
      and from time to time, with the consent of the affected Optionee, the
      cancellation of any or all outstanding Options of such Optionee and to grant,
      in
      substitution, to such Optionee new Options covering the same or different number
      of Shares; provided,
      however, that
      substituted Incentive Options shall comply with the requirements of Section
      4(e)
      and
Section
      4(f)
      and the
      requirements of Code Section 1046.

     

    Section
      4.  Conditions
      for Grant of Options.

     

    (a)  Each
      Option shall be evidenced by an Option Agreement that may contain any term
      deemed necessary or desirable by the Administrator, provided such terms are
      not
      inconsistent with this Plan or any applicable law. Optionees shall be those
      persons selected by the Administrator from Eligible Persons; provided,
      however, that
      only
      Employees or Directors of the Company, a Related Corporation or the Bank may
      receive grants of Incentive Options under the Plan. If an Optionee receives
      both
      Incentive Options and Nonstatutory Options, a separate Option Agreement shall
      be
      issued for each type of Option granted. Each Option Agreement relating to an
      Incentive Option granted under this Plan shall contain such limitations and
      restrictions upon the exercise of the Incentive Option to which it relates
      as
      shall be necessary for the Incentive Option to which such Option Agreement
      relates to constitute a qualified stock option, as defined in Section 1046
      of
      the Code. If this Plan or any Option Agreement does not contain any provision
      required to be included herein under Section 1046 of the Code, that
      provision shall be deemed to be incorporated herein with the same force and
      effect as if that provision had been set out at length herein; provided,
      however,
      that,
      to the extent any Option that is intended to qualify as an Incentive Option
      cannot so qualify, that Option (to that extent) shall be deemed a Nonstatutory
      Option for all purposes of this Plan and any Option Agreement. 

     

    (b)  In
      granting Options, the Administrator shall take into consideration the
      contribution the person has made or may make to the success of the Company
      and
      the Bank and such other factors as the Administrator shall determine. The
      Administrator shall also have the authority to consult with and receive
      recommendations from officers and other personnel of the Company with regard
      to
      these matters. The Administrator may from time to time in granting Options
      under
      the Plan prescribe such other terms and conditions concerning such Options
      as it
      deems appropriate, including, without limitation, relating an Option to
      achievement of specific goals established by the Administrator or the continued
      employment of the Optionee for a specified period of time, provided that such
      terms and conditions are not more favorable to an Optionee than those expressly
      permitted herein.

     

    (c)  The
      Administrator in its sole discretion shall determine in each case whether
      periods of military or governmental service shall constitute a continuation
      of
      employment for the purposes of this Plan or any Option.

     

    (d)  Neither
      the Plan nor any Option granted under the Plan shall confer upon any person
      any
      right to continuance of employment by the Company or the Bank; provided,
      further,
      that
      nothing herein shall be deemed to limit the ability of the Company or the Bank
      to enter into any other compensation arrangement(s) with any Eligible
      Person.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    (e)  Notwithstanding
      any other provision herein contained, no Optionee may receive an Incentive
      Option under the Plan if such Optionee, on the Date of Grant, owns Shares
      possessing more than ten percent (10%) of the total combined voting power of
      all
      classes of Shares, unless the Exercise Price for such Incentive Option is at
      least one hundred ten percent (110%) of the Fair Market Value of the Shares
      on
      the Date of Grant, and such Incentive Option is not exercisable after the date
      five (5) years from the Date of Grant.

     

    (f)  The
      aggregate Fair Market Value (determined with respect to each Incentive Option
      as
      of the Date of Grant) of the Option Shares with respect to which Incentive
      Options are exercisable for the first time by an Optionee during any calendar
      year under all plans of the Company, or any other related employer shall not
      exceed $100,000.

     

    Section
      5.  Exercise
      Price.
      Subject
      to Section
      4(e),
      the
      Exercise Price per Share of an Option shall be one hundred percent (100%) of
      the
      Fair Market Value of the shares at the Date of Grant.

     

    Section
      6.  Payment
      of Exercise Price and Withholding.
      The
      Exercise Price of any Option Shares, and the amount that the Administrator
      determines to be necessary for the Company to withhold in accordance with
      applicable federal or state income tax withholding requirements, shall be paid
      solely in cash, by certified or cashier’s check, by money order or wire transfer
      a wire transfer of immediately available funds; provided,
      however,
      that
      the Administrator, in its sole discretion, may accept a personal check in full
      or partial payment of the Exercise Price and withholding; provided,
      further,
      that to
      the extent, if any, expressly permitted by the terms of the Option Agreement,
      and not to any greater extent, the Exercise Price, or the withholding, or both,
      may be paid by the surrender of Shares, including Vested but unexercised Option
      Shares and Purchased Shares. If either (or both) the Exercise Price or the
      withholding is paid with Shares, including Vested but unexercised Option Shares
      and Purchased Shares, the amount of such payment will be equal to the Fair
      Market Value of the Shares, Option Shares, or Purchased Shares surrendered;
      provided,
      however,
      that
      the Optionee must indicate his or her intention to surrender a certain number,
      or dollar value, of Shares, Option Shares, or Purchased Shares in payment of
      the
      Exercise Price, or withholding, or both, in his or her required written notice
      of exercise.

     

    Section
      7.  Exercisability
      of Options.

     

    (a)  Any
      Option shall become exercisable in such amounts and at such intervals as the
      Administrator shall provide in any Option Agreement, except as otherwise
      provided in this Section
      7,
      provided in each case that the Option has not expired on the Date of
      Exercise.

     

    (b)  The
      expiration date of an Option shall be determined by the Administrator at the
      Date of Grant, but in no event shall an Incentive Option be exercisable after
      the expiration of ten (10) years from the Date of Grant (subject to Section
      4(e)).

     

    (c)  Without
      limitation, the Administrator may in its sole discretion accelerate the date
      on
      which any Shares shall become Vested, including that, subject to the
      Administrator’s right under Section
      8(b),
      all
      Unvested Options may, as set forth in the Option Agreement, become Vested and
      fully exercisable upon a Change in Control of the Company.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    (d)  Notwithstanding
      any provisions hereof to the contrary, if any Option is accelerated under
      Subsection 7(c), the portion of such Option that may be exercised to acquire
      Shares that the Optionee would not be entitled to acquire but for such
      acceleration, or the Unvested Shares which become Vested (the “Acceleration
      Shares”), is limited to that number of Acceleration Shares that can be acquired
      without causing the Optionee to have an “excess parachute payment” as determined
      under Section 280G of the US Code, determined by the Administrator, in its
      sole
      discretion, by taking into account all of the Optionee’s “parachute payments”
      determined under Section 280G of the US Code. If as a result of this Subsection
      7(d), the Optionee may not acquire all of the Acceleration Shares, then the
      Acceleration Shares that the Optionee may acquire shall be the Unvested Shares
      whose date of Vesting is nearest the date of acceleration, it being the intent
      hereof to accelerate the maximum number of Unvested Option Shares which may
      be
      accelerated without causing Optionee to have an excess parachute payment.

     

    Section
      8.  Termination
      of Option Period.

     

    (a)  Unless
      otherwise provided in the Option Agreement, the unexercised portion of such
      Option shall automatically and without notice terminate and become null and
      void
      at the time of the earliest to occur of the following:

     

    (i)  the
      ninetieth (90th) day after the date on which Optionee Separates, other than
      Separation for Cause;

     

    (ii)  the
      date
      on which the Optionee Separates, if the Administrator, in its sole discretion,
      determines that such Separation is, or was, for Cause;

     

    (iii)  the
      tenth
      (10th) anniversary of the Date of Grant of the Incentive Option; or

     

    (iv)  one
      (1)
      year after the date on which the Optionee Separates, if the Administrator,
      in
      its sole discretion, determines that such Separation is, or was, for reason
      of
      disability.

     

    Without
      limitation, the Administrator, in its sole discretion, may extend the date
      on
      which, absent such extension, an Option would terminate, but not beyond the
      date
      specified in Subsection (8)(a)(iii).

     

    (b)  Except
      to
      the extent expressly provided to the contrary in the Option Agreement, the
      Administrator, in its sole discretion may, by giving written notice (a
“Cancellation Notice”), cancel, effective upon the date of the consummation of
      any Change in Control, all or any of the Vested portion of such Option that
      remains unexercised on such date. Such Cancellation Notice shall be given a
      reasonable period of time (but not less than 15 days) prior to the proposed
      date
      of such cancellation, and may be given either before or after shareholder
      approval (if any is required) of the Change in Control, and may be condition
      on
      the actual occurrence of the Change in Control. 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    Section
      9.  Adjustment
      of Shares Subject to Option.

     

    (a)  If
      at any
      time while the Plan is in effect or unexercised Options are outstanding, there
      shall be any increase or decrease in the number of issued and outstanding Shares
      through the declaration of a stock dividend or through any recapitalization
      resulting in a stock split-up, combination or exchange of Shares, then in such
      event:

     

    (i)  appropriate
      adjustment shall be made in the maximum number of Shares then subject to being
      optioned under the Plan, so that the same proportion of the Company’s issued and
      outstanding Shares shall continue to be subject to being so optioned;
      and

     

    (ii)  appropriate
      adjustment shall be made in the number of Shares and the Exercise Price thereof,
      so that the same proportion of the Company’s issued and outstanding Shares shall
      remain subject to purchase at the same aggregate Exercise Price.

     

    (b)  The
      Administrator may change the terms of Options outstanding under this Plan,
      with
      respect to the Exercise Price or the number of Option Shares, or both, when,
      in
      the Administrator’s sole discretion, such adjustments become appropriate by
      reason of any corporate transaction and, without limitation, following a Change
      in Control: (i) the Option Shares assumed shall be appropriately adjusted,
      immediately after such Change in Control, to continue to be Option Shares as
      defined herein, and (ii) there shall be an appropriate adjustment in the
      Exercise Price so that the Shares shall remain subject to purchase at the same
      aggregate Exercise Price; provided,
      however, that
      no
      adjustments shall be made to Incentive Options unless: (x) the excess of the
      aggregate Fair Market Value of the Option Shares immediately after such
      adjustment over the aggregate Exercise Price of the Incentive Option is not
      more
      than the excess of the Fair Market Value of all Options Shares immediately
      before the adjustment over the aggregate Exercise Price of the Incentive
      Options; and (y) the new or adjusted Incentive Options do not give the Optionee
      additional benefits that the Optionee did not have prior to
      adjustment.

     

    (c)  Subject
      to the terms and conditions of, and within the limitations of, the Plan, the
      Board of Directors may modify, extend, or renew outstanding Options granted
      under the Plan or accept the surrender of Options outstanding under the Plan
      (to
      the extent not previously exercised) and authorize the granting of substitute
      Options (to the extent not previously exercised). Except as provided in
Section
      9(b),
      no
      modification of an Option granted under the Plan shall, without the consent
      of
      the Optionee, alter or impair any rights or obligations under any Option
      previously granted under the Plan to such Optionee under the Plan, except as
      may
      be necessary, with respect to Incentive Options, to satisfy the requirements
      of
      Section 1046 of the Code.

     

    (d)  Except
      as
      otherwise expressly provided herein, the issuance by the Company of shares
      of
      its capital stock of any class, or securities convertible into shares of capital
      stock of any class, either in connection with direct sale or upon the exercise
      of rights or warrants to subscribe therefor, or upon conversion of shares or
      obligations of the Company convertible into such shares or other securities,
      shall not affect, and no adjustment by reason thereof shall be made with respect
      to the number of Available Shares or the number of or Exercise Price of Option
      Shares.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    (e)  Without
      limiting the generality of the foregoing, the existence of outstanding Options
      granted under the Plan shall not affect in any manner the right or power of
      the
      Company to make, authorize or consummate: (i) any or all adjustments,
      recapitalizations, reorganizations or other changes in the Company’s capital
      structure or its business; (ii) any merger or consolidation of the Company;
      (iii) any issue by the Company of debt securities, or preferred or
      preference stock that would rank above the Shares subject to outstanding
      Options; (iv) the dissolution or liquidation of the Company; (v) any
      sale, transfer or assignment of all or any part of the assets or business of
      the
      Company; or (vi) any other corporate act or proceeding, whether of a
      similar character or otherwise.

     

    Section
      10.  Transferability
      of Options and Shares.
      Each
      Option Agreement shall provide that such Option shall not be transferable by
      the
      Optionee otherwise than by will or the laws of descent and distribution and
      that
      so long as an Optionee lives, only such Optionee or his guardian or legal
      representative shall have the right to exercise such Option.

     

    Section
      11.  Issuance
      of Shares.
      No
      person shall be, or have any of the rights or privileges of, a shareholder
      of
      the Company with respect to any of the Option Shares unless and until
      certificates representing such Option Shares shall have been issued and
      delivered to such person. In the event that an Optionee exercises both an
      Incentive Option, or portion of one, and a Nonstatutory Stock Option, or a
      portion of one, separate certificates shall be issued, one for the Shares
      subject to the Incentive Option and one for the Shares subject to the
      Nonstatutory Stock Option. As a condition of any transfer of the certificate
      of
      Purchased Shares, the Administrator may obtain such other agreements or
      undertakings, if any, as the Administrator may deem necessary or advisable
      to
      assure compliance with any provision of the Plan, the Option Agreement or any
      law or regulation including, but not limited to, the following:

     

    (a)  A
      representation, warranty or agreement by the Optionee to the Company at the
      time
      any Option is exercised that the Optionee is acquiring the Purchased Shares
      to
      be issued to the Optionee for investment and not with a view to, or for sale
      in
      connection with, the distribution of any such Purchased Shares; and

     

    (b)  A
      representation, warranty or agreement to be bound by any legends that are,
      in
      the opinion of the Administrator, necessary or appropriate to comply with the
      provisions of any securities laws deemed by the Administrator to be applicable
      to the issuance of the Shares and are endorsed upon the Purchased Share
      certificates.

     

    Section
      12.  Administration
      of the Plan.

     

    (a)  The
      Plan
      shall be administered by the Administrator, which shall be the Board except
      to
      the extent (if any) that the Board has delegated some or all of its authority
      to
      a one or more officers or Directors, or both, in which event, other than the
      power to appoint the Administrator, and as otherwise limited by the Board,
      in
      writing, in the document delegating such its authority, such selected persons
      shall function as the Administrator for all purposes hereof. In the event that
      the Shares are registered under Section 12 of the Securities and Exchange Act
      of
      1934, as amended (the “Act”), the Board shall appoint a committee that will
      serve as the Administrator which is to be comprised of at least three (3)
      persons, all of which shall be “outside directors,” such that the Plan, in all
      applicable respects, and transactions related to the Plan, will qualify for
      the
      exemptions from Section 16(b) of the Act provided by Rule 16b-3. “Outside
      director” shall mean a number of the Board who qualifies as an “outside
      director” under the regulations promulgated under Section 162 of the US Code and
      as a “non-employee director” under Rule 16b-3 promulgated under the
      Act.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    (b)  The
      Administrator, from time to time, may adopt rules and regulations for carrying
      out the purposes of the Plan. The determinations and the interpretation and
      construction of any provision of the Plan by the Administrator shall be final
      and conclusive.

     

    (c)  Any
      and
      all decision or determinations of the Administrator shall be made either: (i)
      by
      a majority vote of the members of the Administrator at a meeting; or (ii)
      without a meeting by the written approval of a majority of the members of the
      Administrator. 

     

    (d)  Subject
      to the express provisions of this Plan, the Administrator shall have the
      authority, in its sole and absolute discretion: (i) to adopt, amend, and rescind
      administrative and interpretive rules and regulations relating to this Plan
      or
      any Options; (ii) as provided in Section
      9(a)
      and
(b),
      upon
      certain events to make appropriate adjustments to the Exercise Price and number
      of Option Shares; and (iv) to make all other determinations and perform all
      other acts necessary or advisable for administering this Plan, including the
      delegation of such ministerial acts and responsibilities as the Administrator
      deems appropriate. The Administrator may correct any defect or supply any
      omission or reconcile any inconsistency in this Plan or any Option Agreement
      in
      the manner and to the extent it shall deem expedient to carry it into effect,
      and it shall be the sole and final judge of such expediency. The Administrator
      shall have full discretion to make all determinations on the matters referred
      to
      in this Section
      12(d),
      and
      such determinations shall be final, binding and conclusive.

     

    Section
      13.  Government
      Regulations.
      This
      Plan, Options and the obligations of the Company to sell and deliver Purchased
      Shares, shall be subject to all applicable laws, rules and regulations, and
      to
      such approvals by any governmental agencies as may be required; including,
      without limitation, compliance with 12 U.S.C. § 1828(k) and regulations
      promulgated thereunder.

     

    Section
      14.  Miscellaneous.

     

    (a)  The
      proceeds received by the Company from the sale of Option Shares shall be used
      for general corporate purposes.

     

    (b)  The
      grant
      of an Option shall be in addition to any other compensation paid to the Optionee
      or other stock option plans of the Company or other benefits with respect to
      Optionee’s position or agency with the Company. 

     

    (c)  The
      members of the Board and the Administrator (if not the Board) shall not be
      liable for any act, omission, or determination taken or made in good faith
      with
      respect to this Plan or any Option, and members of the Board and the
      Administrator shall, in addition to all other rights of indemnification and
      reimbursement, be entitled to indemnification and reimbursement by the Company
      in respect of any claim, loss, damage, or expense (including attorneys’ fees,
      the costs of settling any suit, provided such settlement is approved by
      independent legal counsel selected by the Company, and amounts paid in
      satisfaction of a judgment, except a judgment based on a finding of bad faith)
      arising from such claim, loss, damage, or expense to the full extent permitted
      by law and under any directors’ and officers’ liability or similar insurance
      coverage that may from time to time be in effect.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    (d)  Any
      issuance or transfer of Purchased Shares to an Optionee, or to his legal
      representative, heir, legatee, or distributee, in accordance with the provisions
      of this Plan or the applicable Option Agreement, shall, to the extent thereof,
      be in full satisfaction of all claims of such persons under the Plan. The
      Administrator may require any Optionee, legal representative, heir, legatee
      or
      distributee as a condition precedent to such payment or issuance or transfer
      of
      Shares, to execute a release and receipt for such payment or issuance or
      transfer of Shares in such form as it shall determine.

     

    (e)  Neither
      the Board, the Administrator, nor the Company guarantees Shares from loss or
      depreciation.

     

    (f)  All
      expenses incident to the administration, termination, or protection of this
      Plan
      or any Option Agreement, including, but not limited to, legal and accounting
      fees, shall be paid by the Company; provided,
      however,
      the
      Company may recover any and all damages, fees, expenses and costs arising out
      of
      any actions taken by the Company to enforce its rights under this Plan or any
      Option Agreement.

     

    (g)  Records
      of the Company shall be conclusive for all purposes under this Plan or any
      Option, unless determined by the Administrator to be incorrect.

     

    (h)  The
      Company shall, upon request or as may be specifically required under this Plan
      or any Option Agreement, furnish or cause to be furnished all of the information
      or documentation that is necessary or required by the Administrator to perform
      its duties and functions under this Plan or any Option Agreement.

     

    (i)  The
      Company assumes no liability to any Optionee or his legal representatives,
      heirs, legatees or distributees for any act of, or failure to act on the part
      of, the Administrator.

     

    (j)  Any
      action required of the Company relating to this Plan or any Option shall be
      by
      resolution of its Administrator or by a person authorized to act by written
      delegation of the Administrator.

     

    (k)  If
      any
      provision of this Plan, or any Option Agreement, is held to be illegal or
      invalid for any reason, the illegality or invalidity shall not affect the
      remaining provisions of this Plan or any Option, but such provision shall be
      fully severable, and the Plan or Option Agreement, as applicable, shall be
      construed and enforced as if the illegal or invalid provision had never been
      included in the Plan or Option Agreement, as applicable.

     

    (l)  Whenever
      any notice is required or permitted under this Plan, such notice must be in
      writing and personally delivered or sent by mail or delivery by a nationally
      recognized courier service. Any notice required or permitted to be delivered
      under this Plan shall be deemed to be delivered on the date on which it is
      personally delivered, or, if mailed, whether actually received or not, on the
      third business day after it is deposited in the United States mail, certified
      or
      registered, postage prepaid, addressed to the person who is to receive it at
      the
      address that such person has previously specified in accordance with this
Section
      14(l),
      or, if
      by courier, seventy-two (72) hours after it is sent, addressed as described
      in
      this Section
      14(l).
      The
      Company or the Optionee may change, at any time and from time to time, by
      written notice to the other, the address that it or he had previously specified
      for receiving notices. Until changed in accordance with this Plan, the Company
      and the Optionee shall be deemed to have specified as its and his address for
      receiving notices, as to the Company, its principal executive offices in San
      Juan, Puerto Rico, and, as to this Optionee, the most current address of the
      Optionee set forth in the Company’s employment records.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    (m)  Any
      person entitled to notice under this Plan may waive such notice.

     

    (n)  This
      Plan
      shall be binding upon the Optionee, his legal representatives, heirs, legatees
      and distributees upon the Company, its successors, and assigns, and upon the
      Board and its successors.

     

    (o)  The
      titles and headings of Sections are included for convenience of reference only
      and are not to be considered in construction of this Plan’s
      provisions.

     

    (p)  All
      questions arising with respect to the provisions of this Plan shall be
      determined by application of the laws of the Commonwealth of Puerto Rico to
      the
      maximum extent permitted under applicable law.

     

    (q)  Words
      used in the masculine shall apply to the feminine where applicable, and wherever
      the context of this Plan dictates, the plural shall be read as the singular
      and
      the singular as the plural.

     

    (r)  Without
      limitation, the amount received by an Optionee as a result of the exercise
      of
      the Option shall not constitute compensation with respect to which any other
      employee benefits of the Company are determined, including, again without
      limitation, benefits under any bonus, pension, profit-sharing, retirement,
      life
      insurance, severance, or salary continuation plan.

     

    Section
      15.  Amendment
      and Discontinuation of the Plan.
      The
      Board may from time to time amend the Plan, and the Administrator may amend
      any
      Option Agreement; provided,
      however,
      that
      subject to changes in law or other legal requirements that would permit
      otherwise, or except to the extent provided in Section
      8
      and
Section
      9,
      no such
      amendment may substantially impair any Option previously granted to any Optionee
      without the consent of such Optionee; provided
      further, that,
      as
      applied to Incentive Options and absent shareholder approval, no amendment
      to
      the Plan shall change the class of Employees that constitute Eligible Persons
      nor shall any amendment alter the amount of Available Shares with respect to
      Incentive Options. 

     

    Section
      16.  Effective
      Date and Termination Date.
      This
      Plan shall become effective on the later of the date that the Plan is approved
      by shareholders of the Company, or the date the Plan is approved by the Board
      of
      Directors of the Company (provided that the shareholders of the Company have
      previously approved this Plan). The Plan shall automatically terminate on the
      tenth (10th) anniversary of the effective date, unless terminated sooner;
      provided, however, that subject to Section
      8(a)(iii),
      the
      termination of the Plan shall not terminate or have any other effect on any
      outstanding and unexercised Options.

     

    [Signature
      Page Follows]

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    Executed
      this ____________ day of ____________ 2005. 

    
      	 	 	 
	 	EUROBANCSHARES,
              INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Rafael
              Arrillaga-Torréns, Jr.
	 	
              President
                and Chief Executive Officer

            

    

     

     

    
      
        
        

      

      14Unassociated Document

    Exhibit
      4.2

     

    EUROBANCSHARES,
      INC.

    
      2005
        STOCK OPTION PLAN

       

      INCENTIVE
        STOCK OPTION AGREEMENT

       

      THIS
        OPTION AGREEMENT (the “Option Agreement”) is made and entered into effective as
        of ___________, (the “Date of Grant”) between EuroBancshares, Inc. (the
“Company”), and ___________________ (the “Optionee”) in connection with the
        grant of an Option under the EuroBancshares, Inc. 2005 Stock Option Plan
        (the
“Plan”). For purposes of this Option Agreement, defined terms shall have the
        meanings given to them by the Plan.

       

      W
        I T N E S S E T H:

       

      WHEREAS,
        the Optionee is an Employee of, or performs services as a Director of, the
        Company, a Related Corporation or the Bank.

       

      WHEREAS,
        the Company desires to encourage the Optionee to own Shares and to give him
        added incentive to advance the interests of the Company and the Bank through
        the
        Plan; 

       

      WHEREAS,
        the Company desires to grant the Optionee an Option to purchase Shares under
        terms and conditions established by the Administrator;

       

      NOW,
        THEREFORE, in consideration of these premises, the parties agree that the
        following shall constitute the Option Agreement between the Company and the
        Optionee:

       

      1.  Grant
        of Incentive Option.
        Subject
        to the terms and conditions set forth in the Plan and this Option Agreement,
        the
        Company grants to the Optionee an Option to purchase from the Company during
        the
        period ending _____ years [no more than 10 years] from the date of this Option
        Agreement __________ Shares at an Exercise Price of $_____
        per
        share, subject to adjustment, if any, as provided in the Plan. 

       

      The
        Options granted under this Option Agreement shall become exercisable according
        to the following schedule:

      
        	 	 
	
                Shares
                  Exercisable

              	
                Date
                  Exercisable

              
	 	 
	 	 
	 	 

      

      

      Notwithstanding
        the above, all Options shall become fully Vested and exercisable immediately
        upon the occurrence of a Change in Control, as described in Section
        2(g)
        of the
        Plan, so long as the Optionee is still employed on the date of such Assumption
        Event.

       

      In
        addition, the number of Option Shares exercisable that shall qualify as
        Incentive Options shall be reduced to the extent necessary so that the sum
        of:

       

      
        	(a)  	
                the
                  aggregate Fair Market Value of Option Shares that first become
                  purchasable
                  in a calendar year under this Option;
                  and

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	(b)  	
                the
                  aggregate Fair Market Value of Shares subject to any other incentive
                  stock
                  option (within the meaning of Section 1046 of the Code) of the
                  Company,
                  that first become purchasable in a calendar year under such incentive
                  stock option,

              

      

       

      does
        not
        (with respect to the Optionee) exceed $100,000, with such Fair Market Value
        to
        be determined as of the date this Option or such other incentive stock option
        is
        granted.

       

      2.  Exercise
        Rights.
        The
        Option granted pursuant to
        Paragraph 1
        may be
        exercised during its term in full or in part, to the extent Vested, as to
        any
        number of whole Shares (but no fractional Shares), subject to the provisions
        of
        the Plan and of the following provisions.

       

      Exercise
        of an Option shall not be effective until the Administrator has received
        written
        notice of exercise pursuant to Paragraph 3.
        Such
        notice must specify the number of whole Shares to be purchased and be
        accompanied by payment in full of the aggregate Exercise Price of the number
        of
        Purchased Shares purchased. The Company shall not in any case be required
        to
        sell, issue, or deliver a fractional Share with respect to any
        Option.

       

      3.  Notice
        of Exercise.
        This
        Option may be exercised in accordance with Paragraphs 1
        and 2
        by
        written notice to the Administrator at the address provided in this Option
        Agreement, which notice shall:

       

      
        	(a)  	
                specify
                  the number of Option Shares to be purchased and the Exercise Price
                  to be
                  paid for such Option Shares;

              

      

       

      
        	(b)  	
                if
                  the person exercising this Option is not the Optionee himself,
                  contain or
                  be accompanied by evidence satisfactory to the Administrator of
                  such
                  person’s right to exercise this
                  Option;

              

      

       

      
        	(c)  	
                be
                  accompanied by payment in full of the Exercise Price in the form
                  of cash,
                  a certified or cashier’s check to the order of the Company, or a wire
                  transfer of immediately available funds; provided,
                  however,
                  that the Administrator, in its sole discretion, may accept a personal
                  check in full or partial payment of the Exercise Price and withholding;
                  and provided,
                  further, that
                  the Optionee may, in the sole discretion of the Administrator,
                  pay the
                  Exercise Price by the surrender of Shares, including Vested, but
                  unexercised, Option Shares and Purchased Shares. If the Exercise
                  Price is
                  paid with Shares, including Vested, but unexercised, Option Shares
                  and
                  Purchased Shares, the amount of such payment will equal to the
                  Fair Market
                  Value on the Date of Exercise of the Shares, Vested but unexercised
                  Option
                  Shares, or Purchased Shares
                  surrendered;

              

      

       

      
        	(d)  	
                be
                  accompanied by the amount that the Company deems necessary to satisfy
                  the
                  Company’s obligation to withhold federal, state, or local income or other
                  taxes, if any, incurred by reason of the exercise. Such amount
                  shall be
                  paid in cash; provided,
                  however, that
                  such amount may, in the sole discretion of the Administrator, be
                  paid by
                  the surrender of Shares, including Vested, but unexercised Option
                  Shares,
                  and Purchased Shares. If withholding is paid with Shares, Vested
                  but
                  Unexercised Option Shares or Purchased Shares, the amount of such
                  payment
                  will be equal to the Fair Market Value on the Date of Exercise
                  of the
                  Shares, Vested but Unexercised Option Shares or Purchased Shares
                  surrendered.

              

      

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      4.  Investment
        Letter.
        The
        Optionee agrees that the Purchased Shares shall be acquired for his own account
        for investment only and not with a view to, or for resale in connection with,
        any distribution or public offering thereof within the meaning of applicable
        securities laws. If the Administrator so determines, any Purchased Share
        certificates shall bear a legend to the effect that the Purchased Shares
        have
        been so acquired. The Company may, but in no event shall be required to,
        bear
        any expenses of complying with applicable securities laws or the rules and
        regulations of any national securities exchange or other regulatory authority
        in
        connection with the registration, qualification, or transfer, as the case
        may
        be, of this Option or any Purchased Shares. The foregoing restrictions on
        the
        transfer of the Purchased Shares shall be inoperative if: (a) the Company
        previously shall have been furnished with an opinion of counsel, satisfactory
        to
        it, to the effect that such transfer will not require registration under
        applicable securities laws, or (b) the Purchased Shares shall have been duly
        registered in compliance with applicable securities laws.

       

      5.  Transferability
        and Exercise Restrictions.
        This
        Option shall not be sold, transferred, assigned, pledged, alienated, or
        encumbered in any manner except by will or by the laws of descent and
        distribution. During the Optionee’s lifetime this Option may be exercised only
        by Optionee. Any attempt to transfer, assign, pledge, alienate, encumber,
        or
        otherwise dispose of this Option contrary to the provisions of the Plan or
        this
        Option Agreement, whether voluntary or involuntary, by operation of law or
        otherwise, except a transfer by will or by the laws of descent or distribution,
        shall be null and void and without effect.

       

      6.  Status
        of Optionee.
        The
        Optionee shall have no right as a shareholder with respect to any Option
        Shares
        until a certificate representing such Purchased Shares is issued to him.
        No
        adjustment shall be made for dividends (ordinary or extraordinary, whether
        in
        cash or other property), distributions, or other rights for which the record
        date is prior to the date such certificate is issued, except as provided
        in
Section
        9
        of the
        Plan.

       

      7.  No
        Effect on Capital Structure.
        This
        Option Agreement shall not affect the right of the Company to reclassify,
        recapitalize, or otherwise change its capital or debt structure or to merge,
        consolidate, convey any or all of its assets, dissolve, liquidate, windup,
        or
        otherwise reorganize.

       

      8.  Termination
        of Option.
        If an
        Optionee ceases to be an Eligible Person for any reason other than death,
        disability, or retirement, the Option shall terminate on the ninetieth
        (90th)
        day
        after such cessation, unless such cessation is due to Separation for Cause
        (as
        defined in the Plan), in which event the Option shall terminate immediately
        upon
        such Separation for Cause. If an Optionee ceases to be an Eligible Person
        by
        reason of death, the Optionee’s estate, heirs or legatees, as the case may be,
        shall have the rights of a beneficiary. If an Optionee ceases to be an Eligible
        Person by reason of disability, Optionee shall have the right for twelve
        (12)
        months after the date of disability to exercise the Option, to the extent
        such
        Option is otherwise exercisable on such date. If an Optionee ceases to be
        an
        Eligible Person by reason of retirement, the Optionee shall have the right
        for
        three (3) months after the date of retirement to exercise the Option, to
        the
        extent such Option is otherwise exercisable on such date. Notwithstanding
        any
        other provision of this Plan, this Option shall not be exercisable after
        the
        expiration of ten (10) years from the date it is granted or the period specified
        in Section
        8
        of the
        Plan. 

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      9.  Administrator’s
        Authority.
        Any
        question concerning the interpretation of this Agreement, any adjustments
        required to be made under this Agreement, and any controversy which may arise
        under this Agreement shall be determined by the Administrator in its sole
        discretion.

       

      10.  Incentive
        Option Qualification.
        This
        Option is intended to qualify as a “qualified stock option” within the meaning
        of Section 1046 of the Code and shall be so construed; provided, however,
        that
        nothing in this Option Agreement shall be interpreted as a representation,
        guarantee or other undertaking on the part of the Company that this Option
        is or
        will be determined to be an “incentive stock option” within such section or any
        other section of the Code.

       

      11.  Plan
        Controls.
        The
        terms of this Option Agreement are governed by the terms of the Plan, a copy
        of
        which has been provided to Optionee and is made a part of this Option Agreement
        as if fully set forth in this Option Agreement, and in the case of any
        inconsistency between the terms of this Option Agreement and the Plan that
        is
        not expressly authorized by the terms of the Plan, the terms of the Plan
        shall
        control.

       

      12.  Notice.
        Whenever
        any notice is required or permitted under this Option Agreement, such notice
        must be in writing and delivered (personally or by courier), telecopied (if
        confirmed) or sent by mail. Any notice required or permitted to be delivered
        under this Option Agreement shall be deemed to be delivered on the date which
        it
        is personally delivered, or, whether actually received or not, on the third
        business day after it is deposited in the United States mail, certified or
        registered, postage prepaid, addressed to the person who is to receive it
        at the
        address which such person has previously specified by written notice delivered
        in accordance with this Option Agreement. The Company or Optionee may change,
        at
        any time and from time to time, by written notice to the other, the address
        previously specified for receiving notices. It is the Optionee’s responsibility
        to provide a current address to the Board. Failure to do so will forfeit
        Optionee’s right to any notices otherwise required. Until changed in accordance
        with this Option Agreement, the Company and the Optionee specify their
        respective addresses as set forth below:

       

      
        	 	 	 
	 	Administrator: 	EuroBancshares,
                Inc. 
	 	 	Attention: President & Chief Executive
                Officer 
	 	 	270 Muñoz
                Rivera 
	 	 	San Juan, Puerto Rico
                00918 
	 	 	 
	 	Company: 	EuroBancshares, Inc. 
	 	 	Attention: President & Chief Executive
                Officer 
	 	 	270 Muñoz
                Rivera 
	 	 	San Juan, Puerto Rico
                00918 
	 	 	 
	 	Optionee: 	
                

                 
	 	 	
                

                  
	 	 	
                

                  

      

       

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      13.  Information
        Confidential.
        As
        partial consideration for the granting of this Option, the Optionee agrees
        that
        he will keep confidential all information and knowledge that he has relating
        to
        the manner and amount of participation in the Plan; provided, that such
        information may be disclosed as required by law and may be given in confidence
        to the Optionee’s spouse, tax and financial advisors, or to a financial
        institution to the extent that such information is necessary to secure a
        loan.

       

      14.  Disclosure
        and Discussion Obligations.
        By
        accepting an Option under the Plan, the Optionee agrees (i) that he will
        not
        disclose any confidential financial or other information regarding the Company
        or its subsidiaries to any person or entity without the prior written consent
        of
        the Board; (ii) that he will not initiate or engage in any discussions with
        any
        person or entity regarding any merger, consolidation or sale of all or a
        significant portion of the assets of the Company or its subsidiaries without
        the
        prior written consent of the Board; and (iii) that he will immediately report
        to
        the Board any unsolicited inquiry received from any person or entity regarding
        a
        merger, consolidation or sale of all or a significant portion of the assets
        of
        the Company or its subsidiaries.

       

      15.  Governing
        Law.
        The
        provisions of this Option Agreement shall be governed by the contract law
        of the
        Commonwealth of Puerto Rico.

       

      [Signature
        Page Follows]

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF,
        the
        Company and the Optionee have executed this Option Agreement.

      
        
          	
                	 	 
	 	EUROBANCSHARES,
                  INC.
	 
 	 
 	 
 
	 	By:  	
                  
  
	 	Its: 	
                  

                    
	 	Date:  	
                  

                    
	 	OPTIONEE 
	 	 	 
	 	 	 
	 	
                  

                    
	 	Date:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}]]