Document:

exv10w4

 

Exhibit 10.4

SFSB, INC.

DIRECTOR STOCK OPTION AGREEMENT

     This Stock Option Agreement is entered into as of the ___day of ___2005 by and between SFSB,
Inc. (the “Company”), a Maryland corporation, and                                         (“Grantee”).

ARTICLE 1

DEFINITIONS

     Definitions. As used in this Agreement, in addition to the terms defined elsewhere
herein, the following terms have the following meanings when used herein with initial capital
letters:

     (a) “Agreement” shall mean this Stock Option Agreement and shall include the applicable
provisions of any Plan which are hereby incorporated into and made a part of the Agreement.

     (b) “Common Stock” shall mean shares of common stock of the Company, par value $.01 per share,
or any security into which such Common Stock may be changed by reason of any transaction or event
of the type referred to in Section 17 of the Plan.

     (c) “Grant Date” shall mean the date on which the Committee formally acts to grant an Option
to Grantee.

     (d) “Option” shall mean an option to acquire Common Stock that is granted pursuant to, as
contemplated by or is evidenced by this Agreement.

     (e) “Option Price” shall mean the price per share of Common Stock at which the Option may be
exercised.

     (f) “Plan” shall mean the SFSB, Inc. 2005 Stock Option Plan (the “2005 Option Plan”), a copy
of which is attached hereto as Exhibit C.

     In addition, other capitalized terms used but not defined herein shall have the meaning
ascribed to such terms in the Plan.

 

 

ARTICLE 2

GRANT OF OPTION

     Section 2.1 Grant of Nonqualified Stock Options.

     The Company, pursuant to the 2005 Stock Option Plan, hereby grants to Grantee, as of the date
hereof, the following Options:

	 	 	 	 	 	 	 
	Grant Date

	 	Number of Options
	 	Option Price
	 
	 	 	 	 	 	 
	_________

	 	 	_________	 	 	$                                        

     Section 2.2 Term of Option. The Option granted pursuant to Sections 2.1 shall expire
on the tenth anniversary of its grant date, unless the Option terminates earlier pursuant to other
provisions of this Agreement or the Plan.

     Section 2.3 Vesting. Subject to the terms of the Plan with respect to vesting, the
Options granted pursuant to Section 2.1 shall vest and become exercisable in accordance with the
vesting schedule set forth on Exhibit A, attached hereto and incorporated by reference
herein. The extent to which the Options are vested and exercisable as of a particular vesting date
shall be rounded down to the nearest whole share. However, vesting is rounded up to the nearest
whole share on the last vesting date. Notwithstanding the foregoing, in no event may a vested
Option be exercised until at least one year after the Grant Date.

     Section 2.4 Compliance with Regulations of the OTS; Forfeiture. Subject to the terms
of the Plan, the grant of Options made hereby are subject to the provision of the regulation
promulgated by the Office of Thrift Supervision (the “OTS”). In addition, in accordance with the
rules and regulation of the OTS applicable to the Company, the Options granted herby must be
exercised or forfeited in the event the Company, or its affiliates, including Slavie Federal
Savings Bank, becomes critically undercapitalized (as defined in 12 C.F.R. § 65.4, or any successor
law or regulation), is subject to OTS enforcement action, or receives a capital directive under 12
C.F.R § 565.7 or any successor law or regulation.

ARTICLE 3

EXERCISE OF OPTION

     Section 3.1 Manner of Exercise. The Option may be exercised, in whole or in part, by
delivering written notice to the Secretary of the Company in such form as the Board of Directors
may require from time to time. Such notice shall specify the number of shares of Common Stock
subject to the Option as to which the Option is being exercised, and shall be accompanied by full
payment of the Option Price of the shares of Common Stock as to which the Option is being
exercised. In addition, if the shares subject to the Plan are not registered under the Securities
Act of 1933, as amended, or are not otherwise exempt from such registration, such notice shall be
accompanied by a written statement that the shares are purchased for investment and not with a view
to distribution and acknowledgment of restrictions on the transferability of the shares. Payment
of the Option Price shall be made as provided in the Plan. The Option may be
exercised only in multiples of whole shares and no partial shares shall be issued. A form of
notice is attached hereto as Exhibit B.

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     Section 3.2 Issuance of Shares and Payment of Option Price Upon Exercise. Upon
exercise of the Option, in whole or in part, in accordance with the terms of this Agreement and
upon payment of the Option Price for the shares of Common Stock as provided in the Plan, the
Company shall issue to Grantee the number of shares of Common Stock paid for, in the form of fully
paid and non-assessable Common Stock.

ARTICLE 4

TERMINATION OF OPTION

     Unless the Option has been terminated earlier pursuant to the provisions of this Agreement,
the Option granted to Grantee hereunder shall terminate as provided in the Plan.

ARTICLE 5

MISCELLANEOUS

     Section 5.1 Non-Guarantee of Employment. Nothing in the Plan or this Agreement shall
be construed as a contract of employment between the Company or any affiliate and Grantee, or as a
contractual right of Grantee to continue in the employ or as a director of the Company or any
affiliate, or as a limitation of the right of the Company or an affiliate to remove Grantee at any
time.

     Section 5.2 No Rights of Stockholder. Grantee shall not have any of the rights of a
stockholder with respect to the shares of Common Stock that may be issued upon the exercise of the
Option until such shares of Common Stock have been issued to him or her upon the due exercise of
the Option.

     Section 5.3 Agreement Subject to Charter and By-Laws. This Agreement is subject to the
Charter and By-Laws of the Company, and any applicable federal or state laws, rules or regulations.

     Section 5.4 Gender. As used herein the masculine shall include the feminine as the
circumstances may require.

     Section 5.5 Headings. The headings in the Agreement are for reference purposes only
and shall not affect the meaning or interpretation of the Agreement.

     Section 5.6 Notices. All notices and other communications made or given pursuant to
the Agreement shall be in writing and shall be sufficiently made or given if hand delivered or
mailed by certified mail, addressed to Grantee at the address contained in the records of the
Company or an affiliate, and to the Company for the attention of its Secretary at its principal
office.

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     Section 5.7 Tax Withholding. The Company shall have the right to deduct from all
Options granted any federal, state, local or employment taxes which it deems are required by law to
be withheld with respect to such grants. In addition, the Company shall have the right to require
a Grantee, upon grant or exercise of an option, to pay to the Company the minimum amount of any
federal or state taxes, including payroll taxes, if any, that the Company is required to withhold.

ARTICLE 6

SCOPE OF AGREEMENT

     Section 6.1 Entire Agreement; Modification. The Agreement, along with the Plan,
contains the entire agreement between the parties with respect to the subject matter contained
herein and supersedes all prior agreements or understandings between the parties with respect to
Options described in this Agreement. This Agreement may not be modified or amended except as
provided in the Plan or in a written document signed by each of the parties hereto.

     Section 6.2 Conformity with Plan. This Agreement is intended to conform in all
respects with, and is subject to all applicable provisions of, the Plan, which is incorporated
herein by reference. In the event of any inconsistencies between this Agreement and the Plan, the
Plan shall control.

     Section 6.3 Counterparts. The Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed to be an original and all of which together shall
constitute one and the same instrument.

     Section 6.4 Acknowledgment. BEFORE SIGNING HEREUNDER, THE GRANTEE SHOULD READ AND
THOROUGHLY REVIEW THE PLAN ATTACHED HERETO AS EXHIBIT C. BY SIGNING HEREUNDER, THE GRANTEE
ACKNOWLEDGES RECEIPT OF THE PLAN AND REPRESENTS THAT GRANTEE HAS READ AND THOROUGHLY REVIEWED THE
PLAN.

[Remainder of page left blank intentionally]

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     IN WITNESS WHEREOF, the parties have executed the Agreement as of the date first above
written.

	 	 	 	 	 	 	 
	ATTEST:	 	SFSB, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 
	 	 
	 
	 	 	 	 	 	 
	WITNESS:	 	GRANTEE	 	 
	 
	 	 	 	 	 	 
	 
	 	 
	 	 

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EXHIBIT A

VESTING SCHEDULE

1/5
—  _________, 20___;

1/5 —  _________, 20___;

1/5 —  _________, 20___;

1/5 —  _________, 20___; and

1/5 —  _________, 20___.

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EXHIBIT B

SFSB, Inc.

1614 Churchville Road

Bel Air, Maryland 21015

Attn: Secretary

Dear Secretary:

     I hereby exercise the Option granted to me on _______________ by SFSB, Inc. (the “Company”),
subject to all the terms and provisions of that certain Stock Option Agreement between me and the
SFSB, Inc. 2005 Stock Option Plan (the “Plan”), and notify you of my desire to purchase
___shares of Common Stock of the Company at a price of $_________per share pursuant to the
exercise of said Option.

Total Amount Enclosed: $                    

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	 	 	 	 	 	 	(Optionee)	 	 
	 	 	 
	 	 	 	 
	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Received by SFSB, Inc. on	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 

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EXHIBIT C

SFSB, INC

2005 STOCK OPTION PLAN

8exv10w5

 

Exhibit 10.5

SFSB, INC.

SLAVIE FEDERAL SAVINGS BANK

Director Compensation Policy

     This Director Compensation Policy (the “Director Compensation Policy”) sets forth the policies
of SFSB, Inc. (the “Company”) and Slavie Federal Savings Bank (the “Bank”), pertaining to the
remuneration which the Company and the Bank shall pay to members (“Directors”) of their respective
Boards of Directors.

1. Remuneration for Officers and Employees. All Directors, including Directors who are
officers or employees of the Company or the Bank are entitled to remuneration for serving as a
Director.

2. Cash Compensation for Meetings. Slavie Federal Savings Bank shall pay each director,
including the employee directors (currently, Messrs. Logan and Wagner), $700 for each regular
meeting and the annual meeting, $75 for each quarterly meeting and an amount determined by the
board of directors for special meetings. All directors are also eligible for an annual bonus,
which shall be awarded at the discretion of the board of directors. In addition, each non-employee
director shall be paid $200 for the first hour of each committee meeting attended, and $50 for each
additional half-hour with a $700 maximum fee per committee meeting. Members of the loan committee
shall also receive a monthly fee of $50. Directors shall be paid for two excused absences from
board and committee meetings. Directors shall only be paid for additional absences if the absence
is for a medical reason.

3. Special Cash Compensation. The Board of Directors or the compensation committee of the
Board of Directors of Slavie Federal Savings Bank may authorize discretionary payments to one or
more Directors or the entire Board of Directors as a result of outstanding service.

4. Equity Compensation. The Board of Directors or the appropriate committee of the Board
of Directors of the Company or the Bank may authorize payments to one or more Directors or the
entire Board of Directors as a result of their service in the form of
equity securities of the Company.

5. Expense Reimbursements. All Directors of the Company and Slavie Federal Savings Bank
are entitled to reimbursement for reasonable expenses incurred on behalf of the Company and Slavie
Federal Savings Bank.

6. Compensation to Secretary. The Secretary of Slavie Federal Savings Bank, in addition
to any fees such person may receive as a director, shall be compensated $150.00 for each regular,
annual and special board meeting attended and $75.00 for each quarterly meeting.

7. Compensation to Directors of SFSB, Inc. Unless and until the Company becomes actively
involved in additional businesses other than owning all the capital stock of Slavie Federal Savings
Bank, no separate compensation will be paid to the directors of the Company in addition to that
paid to them by Slavie Federal Savings Bank in their capacities as directors of Slavie Federal
Savings Bank. The Company may determine in the future that such separate compensation is
appropriate.

7. Amendment or Termination. This Director Compensation Policy may be amended, altered or
terminated at the election of the Board of Directors of the Company in its absolute discretion.

8. Effective Date. This Director Compensation Policy was adopted by the Board of
Directors of the Company and the Bank on February 7, 2005 and
was amended on August 1, 2005.

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