Document:

Exhibit
10.37

 

ENTERPRISE
BANCORP, INC.

 

Description
of Directors’ Compensation (as of December 31, 2004)

 

The Company pays no separate compensation to the
Directors for their service as members of the Company’s (i.e., Enterprise
Bancorp, Inc.) Board of Directors.  The
Bank (i.e., Enterprise Bank and Trust Co.) pays $350 to Directors for Board of
Directors meetings, $350 to Directors for executive committee meetings, $350 to
Directors for audit committee meetings, $250 to Directors for all other
committee meetings, a $500 monthly retainer to all Directors and a $200 monthly
retainer to executive committee members. 
The Bank also pays quarterly retainers of $1,250 to the chairpersons of
the asset liability, investment management and trust, and audit committees,
$1,000 to the chairperson of the compensation committee, $750 to the
chairperson of the loan committee, $625 to the chairperson of the corporate
governance/nominating committee, $500 to the chairperson of the banking
technology committee and $250 to the chairperson of the marketing and business
development committee.  Directors who are
also full-time salaried officers of the Bank are not paid for attending Board
of Directors or committee meetings.

 

For the year 2004, Directors had the right to make an
irrevocable election (by December 31, 2003) to receive shares of Common Stock
in lieu of receiving an elected portion of cash fees.  The number of shares issued to Directors
pursuant to this election was based on a valuation analysis of the Common Stock
as of January 2, 2004.  Pursuant to the
terms of the election, shares were not considered earned, and were not issued
to a Director, until the Director had actually earned the cash fees in lieu of
which the shares were to be issued.  If a
Director who had elected to receive shares of Common Stock in lieu of cash fees
pursuant to this election had ceased to serve as a member of the Board of
Directors for any reason prior to his or her having earned the fees in lieu of
which shares were to be issued, the Director would have received a cash amount
(and no shares) equal to the fees earned through the date on which he or she
ceased to serve as a Director.  For the
year 2004, the Company issued a total of 5,933 shares of Common Stock to
fourteen Directors at a per share issuance price of $30.68.  This per share price reflects the value of
the Common Stock at January 2, 2004, based on a valuation analysis performed by
an outside financial advisor, which was used to determine the fair market value
of the Common Stock in connection with employee stock options that were granted
as of such date.  For the year 2005,
Directors have the same option to receive shares of the Company’s Common Stock
in lieu of cash fees at a per share issuance price of $32.85, which reflects
the value of the Common Stock at January 3, 2005, based on a replication by
management of a valuation analysis that has been performed in June of each year
by an outside financial advisor, which has been used to determine the fair
market value of the Common Stock in connection with the Company’s
administration of its dividend reinvestment plan.

 

The Company believes that giving Directors the option
to receive stock in lieu of cash fees further aligns Directors’ interests with
those of the Company’s shareholders.Exhibit 10.38.1

 

ENTERPRISE BANCORP, INC.

 

Incentive Stock Option Agreement

 

This Agreement made as of this (xx) day of (mmmmmm, yyyy) by and
between Enterprise Bancorp, Inc., a Massachusetts corporation (the “Company”),
and «FirstName» (the “Optionee”).

 

WITNESSETH THAT:

 

WHEREAS, the Company has instituted a program entitled “Enterprise
Bancorp, Inc. [Amended and Restated 1998] [2003] Stock Incentive Plan” (the “Plan”);
and

 

WHEREAS, the Compensation Committee of the Board of Directors, or the
full Board of Directors, as the case may be, of the Company has authorized the
grant of stock options upon the terms and conditions set forth below; and

 

WHEREAS, the Compensation Committee or the full Board of Directors, as
the case may be, has authorized the grant of this stock option pursuant and
subject to the terms of the Plan, a copy of which is attached hereto and
incorporated herein; and

 

WHEREAS, the Compensation Committee or the full Board of Directors, as
the case may be, has designated this stock option an incentive stock option in
accordance with Section 5 of the Plan;

 

NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the Company and the Optionee agree
as follows.

 

1.             Grant.  Subject to the terms of the Plan and this
Agreement, the Company hereby grants to the Optionee a stock option (the “Option”)
to purchase from the Company «JobTitle»
shares of its common stock, $0.01 par value per share (“Stock”). This Option is
intended to constitute an incentive stock option within the meaning of Section
422 of the Code.

 

2.             Exercise Price.  This Option may be exercised at the exercise
price of $xx.xx per share of Stock, subject to adjustment as provided herein
and in the Plan.

 

3.             Term and
Exercisability of Option.  This
Option shall expire on the earlier of [not later than grant date
+ ten years - one day] or the last day of the exercise period
determined pursuant to subsection (c) of this Section 3. At any time before its
expiration, this Option may be exercised to the extent set forth in the
schedule at Exhibit 1, provided that:

 

(a)           at
the time of exercise the Optionee is not in violation of any employee
confidentiality, noncompetition or other agreement with the Company or a
Subsidiary;

 

(b)           the
Optionee’s employment relationship with the Company or an ISO Subsidiary (“Relationship”)
must be in effect on the relevant date under the schedule set

 

 

forth at Exhibit 1 in order for any scheduled increment in the
exercisable portion of the Option to become effective; and

 

(c)           this
Option may not be exercised if three months or more have elapsed following the
date of termination of the Relationship between the Optionee and the Company or
a Subsidiary, except that if the Relationship terminates by reason of the Optionee’s
permanent and total disability (as determined by the Compensation Committee or
the full Board of Directors, as the case may be, on the basis of medical advice
satisfactory to it) or death, “twelve months” shall be substituted for “three
months” in this sentence.

 

4.             Method of Exercise.  Prior to its expiration and to the extent
that the right to purchase shares of Stock has vested hereunder, this Option
may be exercised from time to time by written notice to the Company,
substantially in the form attached hereto as Exhibit 2, stating the number of
shares with respect to which this Option is being exercised and accompanied by
either (a) payment in full of the exercise price for the number of shares to be
delivered, by means of payment acceptable to the Company in accordance with
Section 5(c) of the Plan, or (b) a description of a “cashless exercise”
procedure and such other documents and undertakings as are necessary to satisfy
that procedure. As soon as practicable after its receipt of such notice, the
Company shall, without transfer or issue tax to the Optionee (or other person
entitled to exercise this Option), deliver to the Optionee (or other person
entitled to exercise this Option), at the principal executive offices of the
Company or such other place as shall be mutually acceptable, a stock
certificate or certificates for such shares out of theretofore authorized but
unissued shares or reacquired shares of its Stock as the Company may elect;
provided, however, that the time of such delivery may be postponed by the
Company for such period as may be required for it with reasonable diligence to
comply with any applicable requirements of law. Payment of the exercise price
may be made in cash or cash equivalents or, in accordance with the terms and conditions
of Section 5(c) of the Plan, in whole or in part in shares of Common Stock of
the Company; provided, however, that the Compensation Committee or the full
Board of Directors, as the case may be, reserves the right upon receipt of any
written notice of exercise from the Optionee to require payment in cash with
respect to the shares contemplated in such notice; and provided, further, that
the Optionee may not make payment in shares of Stock that he acquired upon the
earlier exercise of any incentive stock option, unless he has held the shares
until at least two years after the date the incentive stock option was granted
and at least one year after the date the incentive stock option was exercised.
If the Optionee (or other person entitled to exercise this Option) fails to pay
for and accept delivery of all of the shares specified in such notice upon
tender of delivery thereof, his right to exercise this Option with respect to
such shares not paid for may be terminated by the Company.

 

5.             Nonassignability of
Option.  This Option shall not be
assignable or transferable by the Optionee except by will or by the laws of
descent and distribution. During the life of the Optionee, this Option shall be
exercisable only by him, by a conservator or guardian duly appointed for him by
reason of his incapacity or by the person appointed by the Optionee in a
durable power of attorney acceptable to the Company’s counsel.

 

6.             Compliance with
Securities Act; Lock-Up Agreement. 
The Company shall not be obligated to sell or issue any shares of Stock
or other securities pursuant to the exercise of this

 

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Option unless the shares of Stock or other securities with respect to
which this Option is being exercised are at that time effectively registered or
exempt from registration under the Securities Act and applicable state
securities laws. In the event shares or other securities shall be issued that
shall not be so registered, the Optionee hereby represents, warrants and agrees
that he will receive such shares or other securities for investment and not
with a view to their resale or distribution, and will execute an appropriate
investment letter satisfactory to the Company and its counsel. The Optionee
further hereby agrees that as a condition to the purchase of shares upon
exercise of this Option, he will execute an agreement in a form acceptable to
the Company to the effect that the shares shall be subject to any underwriter’s
lock-up agreement in connection with a public offering of any securities of the
Company that may from time to time apply to shares held by officers and
employees of the Company, and such agreement or a successor agreement must be
in full force and effect.

 

7.             Legends.  The Optionee hereby acknowledges that the
stock certificate or certificates evidencing shares of Stock or other
securities issued pursuant to any exercise of this Option may bear a legend
setting forth the restrictions on their transferability described in Section 6
hereof, if such restrictions are then in effect.

 

8.             Rights as
Stockholder.  The Optionee shall have
no rights as a stockholder with respect to any shares covered by this Option
until the date of issuance of a stock certificate to him for such shares. No
adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.

 

9.            Termination or
Amendment of Plan.  The Board may
terminate or amend the Plan at any time. No such termination or amendment will
affect rights and obligations under this Option, to the extent it is then in
effect and unexercised.

 

10.          Effect Upon
Employment.  Nothing in this Option
or the Plan shall be construed to impose any obligation upon the Company or any
Subsidiary to employ the Optionee or to retain the Optionee in its employ.

 

11.          Time for Acceptance.  Unless the Optionee shall evidence his
acceptance of this Option by execution of this Agreement within thirty days
after its delivery to him, the Option and this Agreement shall be null and void.

 

12.          Notice of
Disqualifying Disposition.  The
Optionee agrees to notify the Company promptly in the event that he sells,
transfers, exchanges or otherwise disposes of any shares of Stock issued upon
the exercise of the Option before the later of (a) the second anniversary of
the date of grant of the Option and (b) the first anniversary of the date the
shares were issued upon his exercise of the Option.

 

13.           Right of Repayment.  In the event that the Optionee accepts
employment with or performs services for a competitor of the Company within one
year after the date of exercise of this Option or any portion of it, the
Optionee shall pay to the Company an amount equal to the excess of the Fair
Market Value of the shares as to which the Option was exercised on the date of
exercise over the price paid for such shares; provided, however, that the
Compensation Committee or the full Board of Directors, as the case may be, in
its discretion may release the

 

3

 

Optionee from the requirement to make such payment, if the Compensation
Committee or the full Board of Directors, as the case may be, determines that
the Optionee’s acceptance of such employment or performance of such services is
not inimical to the best interests of the Company. The Company may deduct from
any compensation or other amount payable by the Company to the Optionee the
amount of payment due under the preceding sentence. For purposes of this
Section 13, the term “Company” refers to the Company and all Subsidiaries.

 

14.          General Provisions.

 

(a)           Amendment; Waivers.  This Agreement, including the Plan, contains
the full and complete understanding and agreement of the parties hereto as to
the subject matter hereof and, except as otherwise permitted by the express
terms of the Plan and this Agreement, it may not be modified or amended nor may
any provision hereof be waived, except by a further written agreement duly
signed by each of the parties; provided, however, that a modification or
amendment that does not materially diminish the rights of the Optionee
hereunder, as they may exist immediately before the effective date of the
modification or amendment, shall be effective upon written notice of its
provisions to the Optionee. The waiver by either of the parties hereto of any
provision hereof in any instance shall not operate as a waiver of any other
provision hereof or in any other instance.

 

(b)          Binding Effect.  This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective heirs, executors,
administrators, representatives, successors and assigns.

 

(c)           Governing Law.  This Agreement has been executed in
Massachusetts and shall be governed by and construed in accordance with the
laws of The Commonwealth of Massachusetts.

 

(d)           Construction.  This Agreement is to be construed in
accordance with the terms of the Plan. In case of any conflict between the Plan
and this Agreement, the Plan shall control. The titles of the sections of this
Agreement and of the Plan are included for convenience only and shall not be
construed as modifying or affecting their provisions. The masculine gender
shall include both sexes; the singular shall include the plural and the plural
the singular unless the context otherwise requires. Capitalized terms not
defined herein shall have the meanings given to them in the Plan.

 

(e)           Notices.  Any notice in connection with this Agreement
shall be deemed to have been properly delivered if it is in writing and is
delivered by hand or facsimile or sent by registered mail, postage prepaid, to
the party addressed as follows, unless another address has been substituted by
notice so given:

 

	
  To the Optionee:

  	
   

  	
  To his address as set forth on the signature page hereof.

  
	
   

  	
   

  	
   

  
	
  To the Company:

  	
   

  	
  Enterprise Bancorp, Inc.

  
	
   

  	
   

  	
  222 Merrimack Street

  
	
   

  	
   

  	
  Lowell, Massachusetts 01852

  
	
   

  	
   

  	
  Attn: Mr. James A. Marcotte

  

 

4

 

	
  Copy to:

  	
   

  	
  Edwards & Angell, LLP

  
	
   

  	
   

  	
  101 Federal Street

  
	
   

  	
   

  	
  Boston, Massachusetts 02110

  
	
   

  	
   

  	
  Attn: Stephen J. Coukos, Esq.

  

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed as a sealed instrument by its officer thereunto duly authorized as of
the date set forth below.

 

	
  Date of grant:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ENTERPRISE BANCORP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  George L. Duncan

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signed:

  	
   

  	
   

  
							

 

5

 

ACCEPTANCE

 

I hereby accept the foregoing Option, an
incentive stock option, in accordance with its terms and conditions and in
accordance with the terms and conditions of the Enterprise Bancorp, Inc.
[Amended and Restated 1998] [2003] Stock Incentive Plan.

 

	
   

  	
   

  	
   

  	
   

  
	
  Date

  	
  (Signature of Optionee)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  «FirstName»

  	
   

  
	
  Notice Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date of grant:

  	
   

  	
   

  	
   

  	
   

  
						

 

6

 

Exhibit 2 to Incentive Stock

 Option
Agreement

 

[FORM FOR EXERCISE OF INCENTIVE STOCK OPTION]

[SAMPLE ONLY]

 

Enterprise Bancorp, Inc.

222 Merrimack Street

Lowell, Massachusetts 01852

 

RE:          Exercise
of Incentive Stock Option under Enterprise Bancorp, Inc. [Amended and Restated
1998] [2003] Stock Incentive Plan

 

Gentlemen:

 

I hereby elect to exercise the stock option granted to me on                         ,
200     by and to the extent of purchasing                       
shares of the Common Stock of Enterprise Bancorp, Inc. for the exercise price
of $                  
per share, subject to the terms and conditions of the Incentive Stock Option
Agreement between myself and Enterprise Bancorp, Inc. dated as of                                         ,
200     (the “Agreement”).

 

Enclosed please find payment, in cash or in such other property as is
permitted under the Enterprise Bancorp, Inc. [Amended and Restated 1998] [2003]
Stock Incentive Plan (the “Plan”), of the purchase price for the shares.  If I am making payment of any part of the
purchase price by delivery of shares of stock of Enterprise Bancorp Inc., I
hereby confirm that I have investigated and considered the possible income tax
consequences of making such payments in that form.

 

I agree to any securities lock-up agreement between one or more
underwriters and shareholders of the Company who are officers or employees of
the Company or a Subsidiary, and any successor to that agreement, with regard
to the shares acquired upon this exercise of my stock option.

 

I hereby specifically confirm to Enterprise Bancorp, Inc. that I am
acquiring the shares for investment and not with a view to their sale or
distribution, and that the shares shall be held subject to all of the terms and
conditions of the Plan and the Agreement.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date

  	
  (Signed
  by                  
  or other party duly

  
	
   

  	
  exercising option)

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