Document:

ex10-8.htm

Exhibit 10.8

 

HMN FINANCIAL, INC.

2009 EQUITY INCENTIVE PLAN

 

RESTRICTED STOCK AGREEMENT*

(Executive Management Incentive Plan)

 

	
Full Name of Participant:

	 
	
Number of Shares Covered:
	
Grant Date:

	 	 
	 	 
	
Vesting Schedule:

	

Vesting Date(s)

 
	
Number of Share(s) Which

Become Vested

 

 

 

 

	  

 

 

This is a Restricted Stock Agreement (“Agreement”) between HMN Financial, Inc., a Delaware corporation (the “Company”), and the Participant identified in the table above.

 

RECITALS

 

WHEREAS, the Company maintains the HMN Financial, Inc. 2009 Equity Incentive Plan (the “Plan”);

 

WHEREAS, the Board of Directors of the Company has appointed the Compensation Committee (the “Committee”) to administer the Plan and determine the Awards to be granted under the Plan; and     

 

WHEREAS, the Committee has determined that the Participant is eligible to receive an Award under the Plan in the form of Restricted Stock in partial payment of an incentive compensation award provided to the Participant pursuant to the Company’s Executive Management Incentive Plan (the “Executive Plan”);

 

NOW, THEREFORE, the Company and the Participant mutually agree as follows:

 

*     Any capitalized term used in this Agreement will have the meaning set forth in this Agreement (including the table at the beginning of this Agreement) or, if not defined in this Agreement, set forth in the Plan as it currently exists or as it is amended in the future.

 

 

 

 

 

TERMS AND CONDITIONS

 

	
1.
	
Issuance of Restricted Shares. 

 

(a)     Subject to the terms and conditions of this Agreement, the Company has granted to the Participant a Restricted Stock Award involving the number of Shares specified at the beginning of this Agreement. Such Shares of Restricted Stock are subject to the restrictions provided for in this Agreement, and in the Plan, and are referred to collectively as the “Restricted Shares” and each as a “Restricted Share.” The term “Restricted Shares” also refers to all securities received by the Participant in replacement of or in connection with the Restricted Shares acquired hereby pursuant to a recapitalization, reclassification, stock dividend, stock split, stock combination or other relevant event.

 

(b)     Each Restricted Share will be evidenced by a book-entry in the name of the Participant with the Company’s transfer agent or by one or more Common Stock certificates issued in the name of the Participant. Any such Common Stock certificate will be deposited with the Company or its designee, together with an assignment separate from the certificate, in blank, signed by the Participant, and bear an appropriate legend referring to the restricted nature of the Restricted Stock evidenced thereby. Any book-entry will be subject to transfer restrictions and accompanied by a similar legend. Upon the vesting of Shares of Restricted Stock and the corresponding lapse of the restrictions and forfeiture conditions, the transfer restrictions and restrictive legend applicable to any book-entry evidencing such Shares will be removed, or a certificate for the Shares bearing no restrictive legend will be delivered to the Participant or a Successor or a Transferee.

 

	
2.
	
Forfeiture and Transfer Restrictions. 

 

	 	
(a)
	
Forfeiture. If (i) the Participant’s Service is terminated for any reason, whether by the Company with or without cause, voluntarily or involuntarily by the Participant or otherwise, or (ii) the Participant attempts to transfer or otherwise dispose of any of the Restricted Shares or the Restricted Shares become subject to attachment or any similar involuntary process, in violation of this Agreement, then any Restricted Shares that have not previously vested will be forfeited by the Participant to the Company, and the Participant will thereafter have no right, title or interest whatsoever in such Restricted Shares. The Company unilaterally may instruct the Company’s transfer agent to adjust the stock register of the Company to reflect the forfeiture of any Restricted Shares. If the Company does not have custody of any and all certificates representing Restricted Shares so forfeited, the Participant must immediately return to the Company any and all certificates representing Restricted Shares so forfeited. Additionally, the Participant must deliver to Company a stock power duly executed in blank relating to any and all certificates representing Restricted Shares forfeited to the Company in accordance with the previous sentence or, if such stock power has previously been tendered to the Company, the Company will be authorized to deem such previously tendered stock power delivered, and the Company will be authorized to cancel any and all certificates representing Restricted Shares so forfeited and issue and deliver to the Participant a new certificate for any Shares which vested prior to forfeiture. For purposes of this Agreement, neither the transfer of the Participant between any combination of the Company and its Affiliates, nor a leave of absence granted to the Participant by the Company, will be deemed a termination of employment.

 

 

-2-

 

 

	
 
	
(b)
	Limitation on Transfer. Until such time as the Restricted Shares have become vested under Section 3 of this Agreement, they may not be sold, transferred, assigned, pledged or otherwise encumbered or disposed of. Any attempt to assign, transfer, pledge, hypothecate, or otherwise dispose of the Restricted Shares contrary to the provisions hereof, and the levy of any attachment or similar process upon the Restricted Shares, will be void.

 

	
3.
	
Vesting. 

 

	 	
(a)
	
Scheduled Vesting. So long as the Participant’s Service continues, the Restricted Shares will cease to be subject to forfeiture and the transferability restrictions under Section 2 hereof in the numbers and on the dates specified in the vesting schedule in the table at the beginning of this Agreement, or at such earlier time as may be specified in subsections (b) and (c) of this Section 3. Restricted Shares that have so ceased to be subject to forfeiture and transferability restrictions are sometimes referred to as “vested” or as “Vested Shares” in this Agreement.

 

	 	
(b)
	
Death or Disability. If the Participant’s Service terminates because of death or Disability prior to the final scheduled vesting date of this Award, all Restricted Shares subject to this Award will vest and become Vested Shares as of the date of the Participant’s termination of Service. 

 

	 	
(c)
	
Change in Control. If a Change in Control occurs prior to the final scheduled vesting date of this Award and while the Participant’s Service continues, all Restricted Shares subject to this Award will vest and become Vested Shares as of the date of the Change in Control.

 

	
4.
	
Stockholder Rights.  Except as otherwise specifically provided in this Agreement or the Plan, the Participant will have all the rights of a stockholder of the Company with respect to the Restricted Shares as of the Grant Date specified at the beginning of this Agreement. Any dividends or distributions, other than regular cash dividends, declared and paid with respect to Restricted Shares will be subject to the same risk of forfeiture and other restrictions as the underlying Shares. 

 

	
5.
	
Tax Withholding. The parties hereto recognize that the Company or one of its Affiliates may be obligated to withhold federal and state taxes or other taxes upon the vesting of the Restricted Shares, or, in the event that the Participant elects under Code Section 83(b) to report the receipt of the Restricted Shares as income in the year of receipt, upon the Participant’s receipt of the Restricted Shares. The Participant agrees that, at such time, if the Company or its Affiliate is required to withhold such taxes, the Participant will promptly pay, in cash upon demand to the Company or the Subsidiary having such obligation, such amounts as will be necessary to satisfy such obligation. In lieu of all or any part of a cash payment from a person receiving Restricted Shares under the Plan, the Committee may permit the individual to cover all or any part of the required withholdings (up to the Participant’s minimum required tax withholding rate or such other rate that will not trigger a negative accounting impact) through a reduction in the number of Restricted Shares delivered or a delivery or tender to the Company of Shares held by the Participant or other person, in each case valued in the same manner as used in computing the withholding taxes under applicable laws.

 

 

-3-

 

 

The Participant further acknowledges that the Company has directed the Participant to seek independent advice regarding the applicable provisions of the Code, the income tax laws of any municipality, state or foreign country in which the Participant may reside, and the tax consequences of the Participant’s death.

 

	
6.
	
Restrictive Legends and Stop-Transfer Orders.

 

	
 
	
(a)
	Legends. Any certificate or certificates representing the Restricted Shares will bear the following legend (as well as any legends required by applicable state and federal corporate and securities laws) noting the existence of the restrictions set forth in this Agreement:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A RESTRICTED STOCK AGREEMENT BETWEEN THE COMPANY AND THE PARTICIPANT, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.”

 

	
 
	
(b)
	Stop-Transfer Notices. The Participant agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.

 

	
 
	
(c)
	Refusal to Transfer. The Company will not be required (i) to transfer on its books any Restricted Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement or (ii) to treat as owner of the Restricted Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom the Restricted Shares will have been so transferred.

 

	
7.
	
No Right to Continued Service or Future Awards. This Agreement awards Restricted Stock to the Participant, but does not impose any obligation on the Company to make any future grants or issue any future awards to the Participant or otherwise continue the participation of the Participant under the Plan or the Executive Plan. This Agreement will not give the Participant a right to continued employment or Service with the Company or any Affiliate, and the Company or Affiliate employing the Participant may terminate his or her Service and otherwise deal with the Participant without regard to the effect it may have upon him or her under this Agreement

 

By executing this Agreement, the Participant expressly acknowledges the above.

 

 

-4-

 

 

	
8.
	
Interpretation of This Agreement. All decisions and interpretations made by the Committee with regard to any question arising hereunder or under the Plan or the Executive Plan will be binding and conclusive upon the Company and the Participant. If there is any inconsistency between the provisions of this Agreement and the Plan, the provisions of the Plan will govern. 

 

	
9.
	
Binding Effect. This Agreement will be binding in all respects on the heirs, representatives, Successors and assigns of the Participant, and any successor or assignee of the Company.

 

	
10.
	
Choice of Law. This Agreement is entered into under the laws of the State of Delaware and will be construed and interpreted thereunder (without regard to its conflict-of-law principles).

 

	
11.
	
Entire Agreement. This Agreement and the Plan set forth the entire agreement and understanding of the parties hereto with respect to the issuance and sale of the Restricted Shares and the administration of the Plan and supersede all prior agreements, arrangements, plans, and understandings relating to the issuance and sale of these Restricted Shares and the administration of the Plan.

 

	
12.
	
Amendment and Waiver. Except as provided in the Plan, this Agreement may be amended, waived, modified, or canceled only by a written instrument executed by the parties or, in the case of a waiver, by the party waiving compliance.

 

	
13.
	
Acknowledgment of Receipt of Copy. By execution hereof, the Participant acknowledges having received a copy of the Plan.

 

	
14.
	
Participant’s Rights Limited. Participant acknowledges that the Company and its Affiliates are subject to the supervisory authority of the Office of the Comptroller of the Currency (the “OCC”) as well as additional or successor financial regulators. Accordingly, the Company and its Affiliates may be bound by, and are subject to compliance with, any applicable order, rule or regulation of, memorandum of understanding with, or directive or consent, approval or no objection requirement of, the OCC or other supervisory authority or financial regulator (the “Supervisory Restrictions”).

 

By executing this Agreement, the Participant expressly acknowledges and confirms that:

 

	 	
(a)
	
This Agreement will not give the Participant the right to continued employment or service with the Company or any Affiliate, and the Participant’s then employer may terminate the Participant’s employment or service at any time and otherwise deal with the Participant without regard to the effect it may have upon the Participant under this Agreement. Any termination of the Participant’s employment or service other than termination for Cause shall not prejudice the Participant’s vested right to compensation or other benefits under this Agreement. The Participant shall have no right to receive compensation or other benefits under this Agreement for any period after termination for Cause. 

 

 

-5-

 

 

	 	
(b)
	
If the Participant is suspended and/or temporarily prohibited from participating in the conduct of the affairs of the Company’s Subsidiary, Home Federal Savings Bank (the “Bank”), by a notice served under Section 8(e)(3) or (g)(1) of Federal Deposit Insurance Act (12 U.S.C. §1818(e)(3) and (g)(1)), the Company’s obligations under this Agreement shall be suspended as of the date of service unless stayed by appropriate proceedings. If the charges in the notice are dismissed, the Company may in its discretion (i) pay the Participant all or part of the compensation withheld while its obligations under this Agreement were suspended, and (ii) reinstate (in whole or in part) any of its obligations which were suspended.

 

	 	
(c)
	
If the Participant is removed and/or permanently prohibited from participating in the conduct of the affairs of the Bank by an order issued under Section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C. §1818(e)(4) or (g)(1)), all obligations of the Company under this Agreement shall terminate as of the effective date of the order, but vested rights of the contracting parties under this Agreement shall not be affected.

 

	 	
(d)
	
If the Bank is in default (as defined in Section 3(x)(1) of the Federal Deposit Insurance Act), all obligations under this Agreement shall terminate as of the date of default, but this paragraph 14(d) shall not affect any vested rights of the contracting parties under this Agreement.

 

	 	
(e)
	
All obligations under this Agreement shall be terminated, except to the extent determined that continuation of this Agreement is necessary to the continued operation of the Bank:

 

	 	
(1)
	
By the Director of the OCC or his or her designee, at the time the Federal Deposit Insurance Corporation or Resolution Trust Corporation enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in 13(c) of the Federal Deposit Insurance Act; or

 

	 	
(2)
	
By the Director of the OCC or his or her designee, at the time the Director or his or her designee approves a supervisory merger to resolve problems related to operation of the Bank or when the Bank is determined by the Director to be in an unsafe or unsound condition.

 

Any rights of the parties to this Agreement that have already vested, however, shall not be affected by such action.

 

 

-6-

 

 

IN WITNESS WHEREOF, the Participant and the Company have executed this Agreement as of the date of issuance specified at the beginning of this Agreement.

 

	
 
	
PARTICIPANT

	
 
	 	
 

	
 
	 	
 

	
 
	 	
 

	
 
	 	
 

	 	 	 
	
 
	
HMN FINANCIAL, INC.

	
 
	 	
 

	
 
	 	
 

	
 
	By	
 

	 	  Its	 

 

 

-7-ex10-9.htm

Exhibit 10.9

 

HMN FINANCIAL, INC.

 

INCENTIVE STOCK OPTION AGREEMENT

 

UNDER THE 2009 EQUITY INCENTIVE PLAN

 

 

HMN Financial, Inc. (the “Company”), pursuant to its 2009 Equity Incentive Plan (the “Plan”), hereby grants an Option to purchase shares of the Company’s common stock to you, the Participant named below. The terms and conditions of the Option Award are set forth in this Agreement, consisting of this cover page and the Option Terms and Conditions on the following pages, and in the Plan document, a copy of which has been provided to you. Any capitalized term that is not defined in this Agreement shall have the meaning set forth in the Plan as it currently exists or as it is amended in the future.

 

	
Full Name of Participant:

	 
	
Number of Shares Covered:
	
Grant Date:

	 	 
	
Exercise Price Per Share:

 
	
Expiration Date:

	
Vesting and Exercise Schedule:

 

Date(s) 

 
	
 

Number of Shares as to Which 

Option Becomes Vested and Exercisable

 

 

 

 

By signing below or otherwise evidencing your acceptance of this Agreement in a manner approved by the Company, you agree to all of the terms and conditions contained in this Agreement and in the Plan document. You acknowledge that you have received and reviewed these documents and that they set forth the entire agreement between you and the Company regarding your right to purchase shares of the Company’s common stock pursuant to this Option.

 

	
PARTICIPANT: 
	
 
	
HMN FINANCIAL, INC.  
	
 

	
 
	
 
	
 
	
 
	
 

	 	 	 	 	 
	
 
	
 
	
By:
	
 
	
 

	
 
	
 
	
Title:
	
 
	
 

 

 

 

 

 

HMN Financial, Inc.

2009 Equity Incentive Plan

Incentive Stock Option Agreement

 

OPTION TERMS AND CONDITIONS

 

1.            Incentive Stock Option. This Option is intended to be an “incentive stock option” within the meaning of Section 422 of the Internal Revenue Code (the “Code”) and will be interpreted accordingly. To the extent that, for any reason, the Option does not qualify as an incentive stock option under Code Section 422, the Option will be treated as a non-statutory stock option, subject to the tax consequences applicable to such options and potentially tax withholding upon exercise in accordance with Section 15 of the Plan.

 

	
2.
	
Vesting and Exercisability of Option. 

 

(a)           Scheduled Vesting. This Option will vest and become exercisable as to the number of Shares and on the dates specified in the Vesting and Exercise Schedule on the cover page to this Agreement, so long as your Service to the Company does not end. The Vesting and Exercise Schedule is cumulative, meaning that to the extent the Option has not already been exercised and has not expired or been terminated or cancelled, you or the person otherwise entitled to exercise the Option as provided in this Agreement may at any time purchase all or any portion of the Shares subject to the vested portion of the Option.

 

(b)           Accelerated Vesting. Notwithstanding Section 2(a), this Option Award shall immediately vest and become exercisable in full if:

 

	 	
(1)
	
Your Service to the Company ends due to your death or Disability, in which case this Option will remain exercisable for twelve months following your termination of Service (but in no event later than its Expiration Date as specified on the cover page); or

 

	 	
(2)
	
A Change in Control or a Corporate Transaction of the type described in clauses (i) and (ii) of the definition thereof occurs. In such case, this Option will remain fully exercisable for twenty-four months after the Change in Control or Corporate Transaction (but in no event later than its Expiration Date as specified on the cover page), subject to the remainder of this subsection. Notwithstanding the foregoing, the Committee may elect to take action as described in Section 13(a)(1), 13(a)(2) or 13(a)(5) of the Plan under the circumstances described in this subsection 2(b)(2). If the Committee acts under Section 13(a)(1), any stock option substituted for this Option shall be fully vested and exercisable and remain exercisable for the same period as this Option. If the Committee acts under either Section 13(a)(2) or 13(a)(5), the accelerated vesting and exercisability, cancellation and any buyout of this Option Award shall occur as provided therein. 

 

 

 

 

Page 2 of 6

 

 

	
3.
	
Expiration. This Option will expire and will no longer be exercisable on the earliest of:

 

	 	
(a)
	
At 4:00 p.m. Central Time on the Expiration Date specified on the cover page of this Agreement;

 

	 	
(b)
	
At 4:00 p.m. Central Time on the expiration date of any applicable period specified in Section 6(d)(3) of the Plan or Section 2(b)(1) of this Agreement during which this Option may be exercised after your termination of Service;

 

	 	
(c)
	
Immediately upon your termination of Service for Cause; or

 

	 	
(d)
	
At 4:00 p.m. Central Time on the date (if any) fixed for termination or cancellation of this Option pursuant to Section 13(a)(2) or 13(a)(5) of the Plan. 

 

No one may exercise this Option after it has expired, notwithstanding any other provision of this Agreement.

 

	
4.
	
Procedure to Exercise Option.

 

(a)          Notice of Exercise. This Option may be exercised by delivering written notice of exercise to the Company at its headquarters in the form attached to this Agreement or a similar form containing substantially the same information and addressed or delivered to the Chief Financial Officer of the Company, or to the Company’s outside Plan administrator if one has been appointed (the “Notice of Exercise”). The Notice of Exercise will state the election to exercise the Option, the number of Shares to be purchased, the method of payment of the aggregate exercise price and the directions for the delivery of the Shares to be acquired and will be signed by the person exercising this Option. If the person exercising this Option is your, he or she must also submit appropriate proof of his or her right to exercise this Option.

 

 

Page 3 of 6

 

 

(b)     Tender of Payment. Upon submitting a Notice of Exercise to the Company, you must provide for payment of the exercise price of the Shares being purchased through one or a combination of the following methods:

 

(1)     cash (including check, bank draft, or money order payable to the Company);

 

(2)     by delivery to the Company of Shares (by actual delivery or attestation of ownership in a form approved by the Company) already owned by you that are not subject to any security interest and that have an aggregate Fair Market Value on the date of exercise equal to the exercise price of the Shares being purchased; 

 

(3)     to the extent permitted by law, a broker-assisted cashless exercise in which you irrevocably instruct a broker to deliver to the Company proceeds of a sale of all or a portion of the Shares to be issued pursuant to the exercise (or a loan secured by such Shares) in payment of the exercise price of such Shares; or

 

(4)      by authorizing the Company to retain, from the total number of Shares as to which the Option is exercised, that number of Shares having an aggregate Fair Market Value on the date of exercise equal to the exercise price of the Shares being purchased.

 

You should note that payment of the exercise price by either of the methods set forth in subparagraphs (3) and (4) above will result in the loss of incentive stock option tax treatment to the extent shares subject to the Option are sold or withheld. In addition, if the Committee determines, in any given circumstance, that payment of the exercise price with Shares as described in subparagraphs (2) and (4) above is undesirable for any reason, you may be precluded from paying any portion of the exercise price in either manner.

 

(c)     Delivery of Shares. As soon as practicable after the Company receives a Notice of Exercise and payment of the exercise price as provided above, and has determined that all other conditions to exercise, including compliance with applicable laws as provided in Section 20(c) of the Plan, have been satisfied, the Company will deliver to the person exercising the Option, in the name of such person, the Shares being purchased (net of the number of Shares sold or withheld, if any, to pay the exercise price), as evidenced by issuance of a stock certificate or certificates, electronic delivery of such Shares to a brokerage account designated by such person, or book-entry registration of such Shares with the Company’s transfer agent. The Company will pay any original issue or transfer taxes with respect to the issue or transfer of the Shares and all fees and expenses incurred by it in connection therewith. All Shares so issued will be fully paid and nonassessable. 

 

	
5.
	
Service Requirement. Except as otherwise provided in Section 6(d)(3) of the Plan or Section 2(b) of this Agreement, this Option may be exercised only while you continue to provide Service to the Company or any Affiliate, and only if you have continuously provided such Service since the Grant Date of this Option.

 

 

 

Page 4 of 6

 

 

	
6.
	
Limitation on Transfer. During your lifetime, only you (or your Successor or Transferee) may exercise this Option. The Option may not be assigned or transferred other than by will or the laws of descent and distribution or pursuant to a divorce decree or qualified domestic relations order as defined by the Code, or Title I of ERISA. Any attempt to assign, transfer, pledge, hypothecate, or otherwise dispose of this Option contrary to the provisions hereof, and the levy of any attachment or similar process upon this Option, will be void.

 

	
7.
	
No Stockholder Rights Before Exercise. Neither you nor any Successor or Transferee will have any rights as a stockholder of the Company with respect to any Shares subject to this Option unless and until the date you have become, or your Successor or Transferee has become, the holder of record of such Shares.

 

	
8.
	
Adjustment for Changes in Capitalization. If an “equity restructuring” (as defined in Section 17 of the Plan) occurs that causes the per share value of the Shares to change, the Committee will make such equitable adjustments to the Option as are contemplated by Section 17 of the Plan in order to avoid dilution or enlargement of your rights hereunder. The Committee may make such equitable adjustments to this Option as and to the extent provided in Section 17 of the Plan in connection with other changes in the Company’s capitalization contemplated by Section 17 of the Plan. 

 

	
9.
	
Tax Consequences. You hereby acknowledge that if any Shares received pursuant to the exercise of any portion of this Option are sold within two years from the Grant Date or within one year from the effective date of exercise of this Option, or if certain other requirements of the Internal Revenue Code (the “Code”) are not satisfied, such Shares will be deemed under the Code not to have been acquired by you pursuant to an “incentive stock option” as defined in the Code, with potentially negative tax consequences for you. You agree to promptly notify the Company if you sell any Shares received upon the exercise of this Option within the time periods specified in the previous sentence. The Company shall not be liable to you if this Option for any reason is deemed not to be an “incentive stock option” within the meaning of the Code. 

 

	
10.
	
Interpretation of This Agreement. All decisions and interpretations made by the Committee with regard to any question arising under this Agreement or the Plan will be binding and conclusive upon the Company and you (or your Successor or Transferee). If there is any inconsistency between the provisions of this Agreement and the Plan, the provisions of the Plan will govern. 

 

	
11.
	
Discontinuance of Employment. Neither this Agreement, the Plan, nor the Option will confer on you any right with respect to continued Service with the Company or any of its Affiliates, nor interfere in any way with the right of the Company or any Affiliate to terminate your Service. Nothing in this Agreement will be construed as creating an employment contract for any specified term between you and the Company or any Affiliate. Neither any period of notice, if any, nor any payment in lieu thereof, upon termination of Service, wrongful or otherwise, will be considered as extending your period of Service for the purposes of the Plan or any Option granted thereunder.

 

 

 

Page 5 of 6

 

 

	
12.
	
Obligation to Reserve Sufficient Shares. The Company will at all times during the term of this Option reserve and keep available a sufficient number of Shares to satisfy this Agreement.

 

	
13.
	
Binding Effect. This Agreement will be binding in all respects on your heirs, representatives, successors and assigns (and included for the sake of clarification, a Successor or Transferee of yours), and on the successors and assigns of the Company.

 

	
14.
	
Choice of Law. This Agreement is entered into under the laws of the State of Delaware and will be construed and interpreted thereunder (without regard to its conflict-of-law principles).

 

	
15.
	
Entire Agreement. This Agreement and the Plan set forth the entire agreement and understanding of the parties hereto with respect to the grant and exercise of this Option and the administration of the Plan and supersede all prior agreements, arrangements, plans, and understandings relating to the grant and exercise of this Option and the administration of the Plan.

 

	
16.
	
Amendment and Waiver. Except as otherwise provided in the Plan, this Agreement may be amended, waived, modified, or canceled only by a written instrument executed by the parties or, in the case of a waiver, by the party waiving compliance.

 

	
17.
	
Acknowledgment of Receipt of Copy. By execution hereof, you acknowledge having received a copy of the Plan.

 

	
18.
	
Regulatory Compliance. Notwithstanding any other provision of this Agreement:

 

	 	
(a)
	
Any payment or benefit to be made or provided to you pursuant to this Agreement shall be subject to and conditioned upon compliance with 12 CFR Part 359, “Golden Parachute and Indemnification Payments.” 

 

	 	
(b)
	
Incorporated by reference herein are the terms required to be contained in employment contracts by 12 CFR Section 563.39. 

 

 

 

By signing the cover page of this Agreement, you agree to all the terms and conditions described above and in the Plan document.

 

 

Page 6 of 6

 

 

Attachment 1

 

Notice of Exercise

 

__________________, ______

 

 

HMN Financial, Inc.

1016 Civic Center Drive N.W. 

Rochester, Minnesota 55901-6057 

Attention: Chief Financial Officer

 

Ladies and Gentlemen:

 

I hereby exercise the following option (the “Option”) granted to me with respect to the number of shares of Common Stock, par value $0.01 (“Shares”), of HMN Financial, Inc. (the “Company”), indicated below:

 

	  	
Participant’s Name: 
	  
	  	  	  
	  	
Grant Date:
	  
	  	  	  
	  	
Exercise Price Per Share:
	  
	  	  	  
	  	
Number of Shares With Respect to Which the Option is Hereby Exercised:
	
 

	  	  	  
	  	
Exercise Price:
	  
	  	  	  

 

☐     Enclosed with this Notice is a check, bank draft or money order in the amount of the Exercise Price.

 

☐     Enclosed with this Notice is a copy of my irrevocable instruction to my broker, __________________________________, to deliver to the Company proceeds of the sale of some or all of the Shares being acquired in an amount equal to the Exercise Price.

 

☐     Enclosed with this letter is a certificate evidencing unencumbered Shares (duly endorsed in blank) having an aggregate Fair Market Value equal to or in excess of the Exercise Price.

 

☐     I elect to pay the Exercise Price through a reduction in the number of Shares to be delivered to me upon this exercise of the Option.

 

 

 

 

 

 

Attachment 1

 

If I am enclosing Shares with this letter, I hereby represent and warrant that I am the owner of such Shares free and clear of all liens, security interests and other restrictions or encumbrances. I agree that I will pay any required withholding taxes in connection with this exercise.

 

Please issue the number of Shares with respect to which the Option is being exercised in the manner indicated below:

 

	
 
	
☐
	
Issue a certificate (the “Certificate”) for the Shares (net of any Shares withheld in payment of the Exercise price) in the name of the person(s) indicated below and deliver the Certificate to the address indicated:

 

	
Name(s) in Which to Issue Certificate:
	  	
 

	  	  	  
	
Address to Which Certificate Should be Delivered:
	  	 
	 	 	 
	 	 	 
	 	 	 
	  	  	  
	
Principal Mailing Address for Holder of the Certificate (if different from above):
	  	
 

	 	 	 
	 	 	 
	 	 	 

 

	
 
	
☐
	
Electronic delivery of the Shares to my brokerage account as indicated below:

 

	
Name of Brokerage Firm:
	
 
	
 

	 	 	 
	
My Account Number:
	
 
	
 

	 	 	 
	
Brokerage Firm DWAC Participant Number:
	
 
	
 

 

	 	
☐
	
Create a book-entry registration of the Shares (net of any Shares withheld in payment of the Exercise price) in the name of the person(s) indicated below: 

 

	
Name(s) in Which to Create Book-Entry Registration:
	  	
 

	  	  	  
	
Mailing Address for Book-Entry Holders:
	  	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	Very truly yours,
	 	 	 
	 	 	 
	 	 	Signature
	 	 	 
	 	 	 
	 	 	Name, please print
	 	 	 
	 	 	 
	 	 	Social Security Number

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