Document:

Exhibit 10.3

    

    

    Incentive
      Stock Option

    

    

    

    

    FORM OF

    INCENTIVE STOCK OPTION AWARD AGREEMENT

    

    

    Granted by

    

    

    Magyar
      Bancorp, Inc.

    

    

    under the

    

    

    MAGYAR BANCORP, INC.

    2022 EQUITY INCENTIVE PLAN

    

    

    This stock option agreement (“Option” or “Agreement”) is and will be subject in every respect to the provisions of the Magyar Bancorp, Inc. 2022 Equity Incentive Plan (the “Plan”) of Magyar Bancorp, Inc.
      (the “Company”), which are incorporated herein by reference and made a part hereof, subject to the provisions of this Agreement.  A copy of the
      Plan and related prospectus have been provided to each person granted a stock option pursuant to the Plan.  The holder of this Option (the “Participant”)
      hereby accepts this Option, subject to all the terms and provisions of the Plan and this Agreement, and agrees that all decisions under and interpretations of the Plan and this Agreement by the Compensation Committee of the Board of Directors of the
      Company (the “Committee”) or the Board of Directors will be final, binding and conclusive upon the Participant and the Participant’s heirs, legal
      representatives, successors and permitted assigns.  Except where the context otherwise requires, the term “Company” includes the parent and all present and future subsidiaries of the Company as defined in Section 424(e) and 424(f) of the Internal
      Revenue Code of 1986, as amended from time to time (the “Code”).  Capitalized terms used herein but not defined will have the same meaning as in
      the Plan.

    

    
      	
              1.

            	
              Name of Participant:______________________________ 
                

                

            

    

    

    

    
      	
              2.

            	
              Date of Grant:
                ________________, 20___

            

    

    

    

    
      	
              3.

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

                (subject to adjustment pursuant to Section 9 hereof).

            

    

    

    

    
      	
              •

            	
              This Award is intended to be an Incentive Stock Option. The Option will be an Incentive Stock Option to the maximum extent permitted under Code
                Section 422(d),  which convers incentive tax treatment on the first $100,000 of Incentive Stock Options (based on the exercise price of the Option) that vest in any one calendar year, provided the Participant holds the share(s) received on
                exercise for the longer of one year from the date of exercise or two years from the date of grant of the Option.

            

    

    

    

    
      	
              4.

            	
              Exercise price per
                  share:___________________

                (subject to adjustment pursuant to Section 9 below)

              

            

    

    

    

    	5.	
            Expiration Date of Option: _________, 20      .  Notwithstanding anything in this Agreement to the contrary, no part of this Option may be exercised at any time on or after the expiration date.

          

     

    

     

    

     

    

    
      
        

    

    
     

    

    	6.	
            Vesting Schedule.  Except as otherwise provided in this
              Agreement, this Option first becomes exercisable, subject to the Option’s expiration date, in accordance with the vesting schedule specified herein.

          

    The Options granted under this Agreement shall vest in _____ (__) equal annual installments (provided that fractional Options will not
      vest), with the first installment becoming exercisable on the first anniversary of the date of grant, or        , 20   , and succeeding installments on each anniversary thereafter, through            , 20     , subject to accelerated vesting under Section 10 of this Agreement.  Notwithstanding the foregoing, to the extent the vesting would vest in a fractional
      Option, the number of Options vesting should be rounded to the nearest Option  (with “.5” of an Option rounded up). This Option may not be exercised at any time on or after the Option’s expiration date.

    

    

    As set forth in Section 10 of this Agreement, vesting will automatically accelerate pursuant to Sections 2.7 and
      4.1 of the Plan in the event of death, Disability or Involuntary Termination of Service at or following a Change in Control.

    	7.	
            Exercise Procedure and Delivery of Notice of Exercise of Option. 
              This Option may be exercised in whole or in part by the Participant’s delivery to the Company of written notice (the “Notice of Exercise of Option”
              attached hereto as Exhibit A or as otherwise acceptable to the Company) setting forth the number of shares with respect to which this Option is to be
              exercised, together with payment by cash or other means acceptable to the Committee, in accordance with the Plan.

          

    	8.	
            Delivery of Shares.  Delivery of shares of Stock upon the
              exercise of this Option will comply with all applicable laws (including the requirements of the Securities Act of 1933, as amended) and the applicable requirements of any securities exchange or similar entity.

          

    

    

    	9.	
            Adjustment Provisions.  This Option, including the number of
              shares subject to the Option and the exercise price, will be adjusted upon the occurrence of the events specified in, and in accordance with the provisions of Section 3.4 of the Plan.

          

    

      	
              10.

            	
              Accelerated Vesting and Exercisability Period.

               

                

              The vesting of this Option will accelerate
                as set forth in the following  provisions under the Plan:

            

    

     

    	

          	10.1	
            Death.  In the event of the Participant’s Termination of Service
              by reason of death, any unvested portion of this Option will vest and any unexercised portion of the Option may thereafter be exercised by the Participant’s legal representative or beneficiaries for a period of one (1) year from the
              Participant’s date of death.

          

    	

          	10.2	
            Disability.  In the event of the Participant’s Termination of
              Service by reason of the Participant’s Disability, any unvested portion of this Option will vest and any unexercised portion of the Option may thereafter be exercised by the Participant or the Participant’s legal representative for a period
              of one (1) year following the Termination of Service due to Disability.

          

    	

          	10.3	
            Change in Control.  In the event of the Participant’s Involuntary
              Termination of Service at or following a Change in Control, any unvested portion of the Option will vest and any unexercised portion of the Option may be exercised by the Participant or the Participant’s legal representative for a period of
              one (1) year following the Participant’s Involuntary Termination of Service.

          

     

    

     

    

     

    

    
      2

      
        

    

    

    

    	

          	10.4	
            Retirement.  In the event of the Participant’s Termination of
              Service by reason of the Participant’s Retirement, vested Options may be exercised for a period of one (1) year from the date of Termination of Service. Options that have not vested will expire and be forfeited on the date of Termination of
              Service by reason of Retirement.  “Retirement” has the meaning set forth in Article 8 of the Plan.

          

    	

          	10.5	
            Termination for Cause.  In the event of the Participant’s Termination of Service for Cause, all Options subject to this Agreement that have not been exercised will immediately expire and be forfeited.

          

    	

          	10.6	
            Other Termination.  In the event of the Participant’s Termination from Service for any reason other than due to death, Disability, Retirement, Involuntary Termination at or following a Change in
              Control, or for Cause, this Option may thereafter be exercised, only to the extent it was exercisable at the time of the termination and only for a period of three (3) months following the termination.

          

    	11.	
            Incentive Option Treatment.  The Incentive Stock Options granted
              hereunder are subject to the requirements of Code Section 421.  No Option will be eligible for treatment as an Incentive Stock Option in the event such Option is exercised more than three (3) months following Termination of Service (except in
              the case of Termination of Service due to death or Disability).  In order to obtain Incentive Stock Option treatment for Options exercised by heirs or devisees of the Participant, the Participant’s death must have occurred while the
              Participant was employed or within three (3) months of the Participant’s Termination of Service.

          

    

      	
              12.

            	
              Miscellaneous.

            

    

    

    	

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

          

    

    

    	

          	12.2	
            Except as otherwise provided for in the Plan, this Agreement may not be amended or otherwise modified unless evidenced in writing and signed by the Company and the
              Participant.

          

    

    

    	

          	12.3	
            Except as otherwise provided by the Committee, Incentive Stock Options under the Plan are not transferable except (i) as designated by the Participant by will or by the
              laws of descent and distribution; (ii) to a trust established by the Participant; or (iii) between spouses incident to a divorce or pursuant to a domestic relations order, provided, however,  that in the case of a transfer described under
              (iii), the Option will not qualify as an Incentive Stock Option as of the day of the transfer.

          

    

    

    	

          	12.4	
            Under current tax laws, an Option that is exercised as an Incentive Stock Option is not subject to ordinary income taxes so long as it is held for the requisite holding
              period, which is two (2) years from the grant date of the Option and more than one (1) year from the date of exercise.

          

    

    

    	

          	12.5	
            This Agreement will be governed by and construed in accordance with the laws of the State of Delaware, without reference to principles of conflict of laws, except as
              superseded by applicable federal law.

          

    

    

    	

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

          

     

    

     

    

     

    

    
      3

      
        

    

    

    

    	

          	12.7	
            This Option is subject to forfeiture in accordance with the provisions of Section 7.17 of the Plan or as otherwise adopted by the Company.

          

    

    

    	

          	12.8	
            This Option is subject to all laws, regulations and orders of any governmental authority which may be applicable thereto and, notwithstanding any of the provisions
              hereof, the Company will not be obligated to issue any shares of stock hereunder if the issuance of such shares would constitute a violation of any such law, regulation or order or any provision thereof.

          

    

    

    [Signature Page to Follow]

    
      4

      
        

    

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

    

    

    

    

    	 	 	
            MAGYAR BANCORP, INC.

          
	 	 	
            By:___________________________________ 

              

          
	 	 	
            Title:__________________________________ 

              

          

    

    

    

    

    

    

    PARTICIPANT’S ACCEPTANCE

    

    

    The undersigned hereby accepts the foregoing Option and agrees to the terms and conditions hereof, including the terms and provisions of
      the Magyar Bancorp, Inc. 2022 Equity Incentive Plan.  The undersigned hereby acknowledges receipt of a copy of the Magyar Bancorp, Inc. 2022 Equity Incentive Plan and related prospectus.

    

    

    

    

    	 	 	
            PARTICIPANT

          
	 	 	 
	 	 	:______________________________________ 

          

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    
      5

      
        

    

    EXHIBIT A

    NOTICE OF EXERCISE OF OPTION

    

    

    I hereby exercise the stock option (the “Option”) granted to me by Magyar Bancorp, Inc. (the “Company”), subject to the terms and provisions set forth in the Incentive Stock Option Agreement (the “Agreement”) and the Magyar Bancorp, Inc. 2022 Equity Incentive Plan (the “Plan”), and notify you of my desire to
      purchase _______________ shares of common stock of the Company (“Common Stock”) for a purchase price of $______ per share.

    

    

    I elect to pay the exercise price by:

    

    

    	

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

          

    	

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

          

    	

          	___	
            My check in the sum of $_______ and stock of the Company with a fair market
              value of $______, in full/partial payment of the purchase price.*

          

    

    

    	

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

          

    	

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

          

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

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

    ___ investment

    ___ resale or distribution

    

    

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

    
      	
              Date: _______________, 20___.

            	________________________________________ 

            
	 	
              Participant’s signature

            

    

    

    * If I elect to exercise by exchanging shares I already own, I will constructively return shares that I already own to purchase the new option shares.  If my shares are in certificate form, I must attach a separate statement indicating the certificate number of the shares I am treating
      as having exchanged.  If the shares are held in “street name” by a registered broker, I must provide the Company with a notarized statement attesting to the number of shares owned that will be treated as having been exchanged.  I will keep the shares
      that I already own and treat them as if they are shares acquired by the option exercise.  In addition, I will receive additional shares equal to the difference between the shares I constructively exchange and the total new option shares that I
      acquire.Exhibit 10.4

    

    

    NON-QUALIFIED STOCK OPTION

    

    

    FORM OF

    NON-QUALIFIED STOCK OPTION AWARD AGREEMENT

    

    

    Granted by

    

    

    Magyar Bancorp, Inc.

    

    

    under the

    

    

    MAGYAR BANCORP, INC.

    2022 EQUITY INCENTIVE PLAN

    

    

    This Non-Qualified Stock Option
      Agreement (“Option” or “Agreement”) is and
      will be subject in every respect to the provisions of the Magyar Bancorp, Inc. 2022 Equity Incentive Plan (the “Plan”) of Magyar Bancorp, Inc. (the
      “Company”), which are incorporated herein by reference and made a part hereof, subject to the provisions of this Agreement.  A copy of the Plan and
      related prospectus have been provided to each person granted a stock option pursuant to the Plan.  The holder of this Option (the “Participant”)
      hereby accepts this Option, subject to all the terms and provisions of the Plan and this Agreement, and agrees that all decisions under and interpretations of the Plan and this Agreement by the Compensation Committee of the Board of Directors of the
      Company (the “Committee”) or by the Board of Directors, will be final, binding and conclusive upon the Participant and the Participant’s heirs,
      legal representatives, successors and permitted assigns.  Except where the context otherwise requires, the term “Company” includes the parent and all present and future subsidiaries of the Company as defined in Section 424(e) and 424(f) of the
      Internal Revenue Code of 1986, as amended from time to time (the “Code”).  Capitalized terms used herein but not defined will have the same meaning
      as in the Plan.

     

    

    
      
        	
                1.

              	
                Name of Participant:______________________________

              

      

      

      

      
        	
                2.

              	
                Date of Grant:
                  ____________________

                

              

      

      

      

      
        	
                3.

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

                  (subject to adjustment pursuant to Section 9 hereof).

              

      

      

      

      
        	
                •

              	
                This is a Non-Qualified Stock Option. 

                

              

      

      

      

      
        	
                4.

              	
                Exercise price per share:
                    $___________________

                  (subject to adjustment pursuant to Section 9 below)

                

              

      

      

      

      	5.	
              Expiration Date of Option: ________.  Notwithstanding anything in this Agreement to the contrary, no part of this Option may be exercised at any time on or after the expiration date.

            

       

      

    

    	6.	
            Vesting Schedule.  Except as otherwise provided in this
              Agreement, this Option first becomes exercisable, subject to the Option’s expiration date, in accordance with the vesting schedule specified herein.

          

    The Options granted under this Agreement shall vest in _______ (__) equal annual installments (provided that fractional Options will
      not vest), with the first installment becoming exercisable on the first anniversary of the date of grant, or        , 20   , and succeeding installments on each anniversary thereafter, through            , 20     , subject to accelerated vesting under Section 10 of this Agreement.  Notwithstanding the foregoing, to the extent the vesting would vest in a fractional
      Option, the number of Options vesting should be rounded to the nearest Option  (with “.5” of an Option rounded up). This Option may not be exercised at any time on or after the Option’s expiration date.

     

    

     

    

    
      
        

    

    
    As set forth in Section 10 of this Agreement, vesting will automatically accelerate pursuant to Sections 2.7 and
      4.1 of the Plan in the event of death, Disability or Involuntary Termination of Service at or following a Change in Control.

    	7.	
            Exercise Procedure and Delivery of Notice of Exercise of Option. 
              This Option may be exercised in whole or in part by the Participant’s delivery to the Company of written notice (the “Notice of Exercise of Option”
              attached hereto as Exhibit A or as otherwise acceptable to the Company) setting forth the number of shares with respect to which this Option is to be
              exercised, together with payment by cash or other means acceptable to the Committee, in accordance with the Plan.

          

    	8.	
            Delivery of Shares.  Delivery of shares of Stock upon the
              exercise of this Option will comply with all applicable laws (including the requirements of the Securities Act of 1933, as amended) and the applicable requirements of any securities exchange or similar entity.

          

    

    

    
      	9.	
              Adjustment Provisions.

               

              

            

    

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

    
      	10.	
              Accelerated Vesting and Exercisability Period.

            

    

    The vesting of this Option will accelerate as set forth in the following  provisions under the Plan:

    	

          	10.1	
            Death.  In the event of the Participant’s Termination of Service
              by reason of death, any unvested portion of this Option will vest and any unexercised portion of the Option may thereafter be exercised by the Participant’s legal representative or beneficiaries for a period of one (1) year from the
              Participant’s date of death.

          

    	

          	10.2	
            Disability.  In the event of the Participant’s Termination of
              Service by reason of the Participant’s Disability, any unvested portion of this Option will vest and any unexercised portion of the Option may thereafter be exercised by the Participant or the Participant’s legal representative for a period
              of one (1) year following the Termination of Service due to Disability.

          

    	

          	10.3	
            Change in Control.  In the event of the Participant’s Involuntary
              Termination of Service at or following a Change in Control, any unvested portion of the Option will vest and any unexercised portion of the Option may be exercised by the Participant or the Participant’s legal representative for a period of
              one (1) year following the Participant’s Involuntary Termination of Service.

          

    	

          	10.4	
            Retirement.  In the event of the Participant’s Termination of
              Service by reason of the Participant’s Retirement, vested Options may be exercised for a period of one (1) year from the date of Termination of Service. Options that have not vested will expire and be forfeited on the date of Termination of
              Service by reason of Retirement.  “Retirement” has the meaning set forth in Article 8 of the Plan.

          

     

    

     

    

    
      2

      
        

    

    	

          	10.5	
            Termination for Cause.  In the event of the Participant’s Termination of Service for Cause, all Options subject to this Agreement that have not been exercised will immediately expire and be forfeited.

          

    	

          	10.6	
            Other Termination.  In the event of the Participant’s Termination from Service for any reason other than due to death, Disability, Retirement, Involuntary Termination at or following a Change in
              Control, or for Cause, this Option may thereafter be exercised, only to the extent it was exercisable at the time of the termination and only for a period of three (3) months following the termination.

          

    
      	11.	
              Miscellaneous.

            

    

    

    

    	

          	11.1	
            No Option will confer upon the Participant any rights as a stockholder of the Company prior to the date on which the individual fulfills all conditions for receipt of
              such rights.

          

    

    

    	

          	11.2	
            Except as otherwise provided for in the Plan, this Agreement may not be amended or otherwise modified unless evidenced in writing and signed by the Company and the
              Participant.

          

    

    

    	

          	11.3	
            At the discretion of the Committee, a Non-Qualified Option granted under the Plan may be transferable by the Participant, provided, however, that transfers will be
              limited to Immediate Family Members of Participants, trusts and partnerships established for the primary benefit of such family members or to charitable organizations, and provided, further, that the transfers are not made for consideration
              to the Participant.

          

    

    

    	

          	11.4	
            This Option will be subject to any required federal, state and local tax withholding, which may be effected in the manner or manners permitted by the Company.

          

    	

          	11.5	
            This Agreement will be governed by and construed in accordance with the laws of the State of Delaware, without reference to principals of conflict of laws, except as
              superseded by applicable federal law.

          

    	

          	11.6	
            The granting of this Option does not confer upon the Participant any right to be retained in the service of the Company or any of its subsidiaries.

          

    

    

    	

          	11.7	
            This Option is subject to forfeiture in accordance with the provisions of Section 7.17 of the Plan or as otherwise adopted by the Company.

          

    

    

    	

          	11.8	
            This Option is subject to all laws, regulations and orders of any governmental authority which may be applicable thereto and, notwithstanding any of the provisions
              hereof, the Company will not be obligated to issue any shares of stock hereunder if the issuance of such shares would constitute a violation of any such law, regulation or order or any provision thereof.

          

    

    

    

    

    [Signature Page to Follow]

    
      3

      
        

    

    

    

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

     

    

    
      	 	 	
              MAGYAR BANCORP, INC.

            
	 	 	
              By:___________________________________ 

                

            
	 	 	
              Title:__________________________________ 

                

            

    

     

    

     

    

    

    PARTICIPANT’S ACCEPTANCE

    The undersigned hereby accepts the foregoing Option and agrees to the terms and conditions hereof, including the
      terms and provisions of the Magyar Bancorp, Inc. 2022 Equity Incentive Plan.  The undersigned hereby acknowledges receipt of a copy of the Magyar Bancorp, Inc. 2022 Equity Incentive Plan and related prospectus.

    
      	 	 	
              PARTICIPANT

            
	 	 	 
	 	

            	_______________________________________

            

    

    

    

    

     

    

    

    

    
      4

      
        

    

    EXHIBIT A

    NOTICE OF EXERCISE OF OPTION

    

    

    I hereby exercise the stock option (the “Option”)
      granted to me by Magyar Bancorp, Inc. (the “Company”) or its affiliate, subject to all the terms and provisions set forth in the Non-Qualified
      Stock Option Agreement (the “Agreement”) and the Magyar Bancorp, Inc. 2022 Equity Incentive Plan (the “Plan”) referred to therein, and notify you of my desire to purchase __________________ shares of common stock of the Company (“Common Stock”) for a purchase price of $______ per share.

    

    

    I elect to pay the exercise price by:

    

    

    	

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

          

    	

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

          

    	

          	___	
            My check in the sum of $_______ and stock of the Company with a fair market
              value of $______, in full/partial payment of the purchase price.*

          

    

    

    	

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

          

    	

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

          

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

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

    ___ investment

    ___ resale or distribution

    

    

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

    

      	
              Date: _______________, 20___.

            	________________________________________ 

            
	 	
              Participant’s signature

            

    

     

      

    

    * If I elect to exercise by exchanging shares I already own, I will constructively
        return shares that I already own to purchase the new option shares.  If my shares are in certificate form, I must attach a separate statement indicating the certificate number of the shares I am treating as having exchanged.  If the shares are held
        in “street name” by a registered broker, I must provide the Company with a notarized statement attesting to the number of shares owned that will be treated as having been exchanged.  I will keep the shares that I already own and treat them as if
        they are shares acquired by the option exercise.  In addition, I will receive additional shares equal to the difference between the shares I constructively exchange and the total new option shares that I acquire.

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