Document:

EX-10.2

 

EXHIBIT 10.2

UNITED BANKSHARES, INC.

2006 STOCK OPTION PLAN

OPTION AGREEMENT

     THIS
OPTION AGREEMENT, made as of ___ (“Grant Date”) by and between UNITED BANKSHARES,
INC. (“the Company”) and XXXXXXX (“Employee”).

     WHEREAS, the United Bankshares, Inc. 2006 Stock Option Plan (“the Plan”), providing for awards
of non-statutory stock options, was adopted by the Board of Directors of the Company on ___,
and approved by its shareholders on ___; and

     WHEREAS, the Plan provides that the United Bankshares, Inc. Compensation Committee (“the
Committee”) shall administer the Plan; and

     WHEREAS, the Plan provides that the Committee may select any officer or key employee of the
Company or of its subsidiaries to participate in the Plan; and

     WHEREAS, the Committee has selected Employee who meets the Plan’s eligibility requirements to
participate in the Plan and to be granted an option to purchase the shares of stock described
hereafter in accordance with the terms of this Option Agreement and the Plan; and

     WHEREAS, the Committee by resolution effective ___, authorized the
Chairman to award stock options to deserving, eligible employees and further authorized the
Chairman, President or Executive Vice President, and Secretary of the Company to execute this
Option Agreement evidencing the grant of such option.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set
forth, the parties agree as follows:

     1. Grant of Option. The Company hereby irrevocably grants to Employee, as a matter of
separate agreement and not in lieu of salary or any other compensation for services, the right and
option (“Option”) to purchase all or any part of an aggregate of 0,000 shares of authorized common
stock of the Company on the terms and conditions herein set forth. The term “common stock” as used
herein shall, except as otherwise indicated by the context, mean the $2.50 par value common stock
of the Company authorized as of the date hereof. The options awarded hereunder are not intended to
qualify as incentive stock options (ISOs) as defined in the Internal Revenue Code of 1986, as
amended (“Code”).

     2. Option Price. The purchase price for each share of common stock covered by the
Option shall be $00.00 per share, which amount represents the fair market value of the stock on the
Grant Date as determined in good faith by the Committee.

     3. Term. The term of the Option shall be for a period of ten (10) years from the
Grant Date unless the Option expires or is terminated at an earlier time as hereinafter provided.

 

 

     4. Rights as Stockholders. The Employee shall not have any of the rights of a
stockholder with respect to the shares of common stock covered by the Option until such shares
shall be issued upon the due exercise of the Option.

     5. Nonassignable and Nontransferable. Pursuant to the Plan, each Option, and all
rights thereunder, shall be nonassignable and nontransferable other than by will or the laws of
descent and distribution. With the exception hereafter noted for disability, during Employee’s
lifetime, an Option may only be exercised by the Employee. If Employee suffers total and permanent
disability, an Option may be exercised by Employee, if capable, or by Employee’s committee,
guardian, attorney-in-fact or other authorized person or entity. After the death of Employee, an
Option may be exercised by his or her personal representative, legatee or heir, as the case may be.

     6. Exercisability of Option. The Option shall become exercisable in accordance with
the following vesting schedule:

	 	 	 	 	 	 	 	 	 	 	 
	 	 	Years from	 	 	 	 	 	 
	 	 	Grant of Option	 	Percentage Vested	 	 	 	 
	 
	 	1	 	 	0	%	 	 	 	 
	 
	 	2	 	 	0	%	 	 	 	 
	 
	 	3	 	 	100	%	 	 	 	 

     In order for options to vest, an optionee must be an employee on the date the options are
scheduled to vest (as outlined in the preceding schedule) or in the case of a change in control,
(as described below) the optionee must be an employee on the date the change in control is deemed
to have occurred in order to have the vesting of outstanding options accelerated.

     Provided, however, in the event of a change in control, vesting shall be accelerated and
Employee shall be permitted to exercise all options granted beginning on the date of a binding
contract which will result in a change in control, whether or not the contract is performed, and
ending on the effective date of the change in control.

     For the purpose of this Agreement, a “change in control” shall be deemed to have occurred:
(i) if any “person” (as such term is used in Section 13(d) and 14(d) of the Securities Exchange Act
of 1934 (the “Exchange Act”)) or group of persons, together with its affiliates excluding employee
benefit plans of United Bank or its subsidiaries, shall become the beneficial owner (as such term
is used in the Exchange Act), directly or indirectly of common stock of the Company representing
twenty percent (20%) or more of the combined voting power of the Company’s then outstanding
securities eligible to be voted in an election of directors, unless two-thirds of the Board, as
constituted immediately prior to the date of the change in control, decide in their discretion that
no change in control has occurred: (ii) if at any time individuals who at the date of this
Agreement constitute at least a majority of the Board of Directors cease for any reason other than
death or voluntary resignation (being a resignation not requested by any other person or persons,
including without limitation, the retirement of a director at the end of his or her term) to
constitute at least a majority thereof; (iii) if there is a change in control of a nature that, in
the opinion of counsel for the Company, would be required to be reported in response to Item 6(e)
of Schedule 14A under the Exchange Act, unless two-thirds of the Board, as constituted

 

 

immediately prior to the date of the change in control, decide in their discretion that no
change in control has occurred; (iv) the shareholders of the Company approve a plan of complete
liquidation or winding-up of the Company; or (v) any event which United’s Board of Directors
determine constitutes a “change in control.”

     7. Termination of Option. Except as provided otherwise herein, all rights under the
Option shall expire, to the extent not heretofore exercised, ten years from the grant of this
Option. In the event of a change in control, all unexpired options shall terminate, if not sooner,
as of the effective date of the change in control. The surviving or resulting corporation or other
entity, in its absolute discretion, may grant options to purchase its shares on such terms and
conditions as it desires.

     8. Employment Status of Employee. Except as hereinafter provided with respect to
disability and death and subject to the termination of option provisions in Section 7 above, each
vested Option, to the extent it shall not have been exercised, shall terminate upon three (3)
months after the termination of employment of the Employee. In the event termination of employment
is the result of the optionee’s permanent and total disability, as defined in Section 22(e)(3) of
the Internal Revenue Code, or successor section, each vested Option, to the extent it shall not
have been exercised, shall terminate one (1) year after the termination of employment of the
Employee. The three (3) month and one (1) year limitations are waived entirely for exercises by
estates or by persons receiving Options because of the death of the Employee. Provided, however,
that nothing in this section shall operate to extend the term of the Option beyond the term stated
in Section 3 hereof, subject to earlier termination of the option as provided in Section 7 above.
Any option that is not vested at the time of an optionee’s termination or death will expire
commensurate with such termination of employment or death, as applicable.

     9. Change of Duties. This Option shall not be affected (i) by any change of duties or
position (including transfer to or from a subsidiary), so long as the Employee continues to be an
employee of the Company or of any of its subsidiaries, or (ii) by a temporary leave of absence that
does not sever the employment relationship. For this purpose, a temporary leave of absence for a
period of less than three (3) months must be approved by an officer of the Company [or in
accordance with procedures applicable to approved leaves under the Family and Medical Leave Act of
1993—discuss], and a temporary leave of absence for a period of three (3) months or more must be
approved by the Board of Directors of the Company.

     10. Changes in Capital Structure. The number, kind, or class (or any combination
thereof) of shares of stock reserved under Section 4 of the Plan; the grant limitations also
defined in Section 4 of the Plan; the number, kind, or class (or any combination thereof) of shares
of stock subject to options; and the exercise price of the options shall be adjusted by the
Committee in an equitable manner to reflect any change in the capitalization of the Company,
including, but not limited to, such changes as stock dividends or stock splits.

     11. Exercise of Option. Subject to the terms and conditions of this Option Agreement,
the Option may be exercised by written notice to United Bankshares, Inc. at the Company’s offices,
which are presently at United Square, Fifth & Avery Streets, Parkersburg, West Virginia 26101.
Such notice shall state the date of this Agreement, the election to exercise the Option, and the
number of shares in respect of which it is being exercised, and shall be signed by the person or
persons so exercising the Option. Such notice shall be accompanied by payment of the full purchase
price of the

 

 

shares or by
alternative means of exercise as determined by the Committee. The Company shall issue and
deliver a certificate or certificates representing the shares as soon as practicable after the
notice is received. The certificate or certificates for the shares as to which the Option shall
have been so exercised shall be registered in the name of the person or persons exercising the
Option and shall be delivered to or upon the written order of the person or persons exercising the
Option. In the event the Option is being exercised pursuant to Section 5 hereof by any person or
persons other than Employee, the notice shall be accompanied by appropriate proof of the right of
such person or persons to exercise the Option. All shares issued as provided herein will be fully
paid and non-assessable.

     12. Order of Exercise. Any vested option granted pursuant to this Plan may be
exercised in any order, at the discretion of Employee.

     13. Reservation of Shares. The Company shall at all times during the term of the
Option reserve a number of shares of common stock that will be sufficient to satisfy the
requirements of this Option Agreement, and will from time to time use its best efforts to comply
with all laws and regulations which, in the opinion of counsel for the Company, shall be applicable
thereto.

     14. Inclusion of Subsidiary and Successor Corporations. For purposes of this Option
Agreement, employment by a subsidiary corporation of the Company shall be considered employment by
the Company. As used in this paragraph, the term “subsidiary corporation” shall mean any present
or future subsidiary corporation of the Company coming within the definition of “subsidiary
corporation” contained in Section 424(f) of the Internal Revenue Code of 1986, as amended, or any
successor section. This Option Agreement shall be binding upon any successor or successors of the
Company and reference herein to the Company, unless clearly inapplicable, shall be deemed to
include any such successor or successors of the Company.

     15. Effect of Plan. The Option granted hereunder is granted pursuant to the terms of
and is in all respects limited and conditioned as provided in the United Bankshares, Inc. 2006
Stock Option Plan, a copy of which is attached to and made a part of this Option Agreement. In the
event any conflict exists between the terms and conditions of the Plan at the Grant Date and this
Option Agreement, the terms and conditions of the Plan shall prevail.

     16. Disclosure. Employee acknowledges receipt of a copy of the United Bankshares,
Inc. 2006 Stock Option Plan, and a copy of the most recent United Bankshares, Inc. Annual Report.

     17. Construction. If any provision of this Option Agreement is held to be illegal or
void, such illegality or invalidity shall not affect the remaining provisions of the Option
Agreement, but shall be fully severable, and the Option Agreement shall be construed and enforced
as if the illegal or invalid provisions had never been inserted. For all purposes of the Option
Agreement, where the context permits, the singular shall include the plural, and the plural shall
include the singular. All decisions of the Committee upon questions regarding the Option Agreement
shall be conclusive and binding on all persons. The headings of the paragraphs of this Option
Agreement have been included for convenience of reference only, are not to be considered a part
hereof and shall in no way modify or restrict any of the terms of provisions hereof.

 

 

     18. Governing Law. This Option Agreement shall be governed by, and construed in
accordance with, the laws of the State of West Virginia.

     IN WITNESS WHEREOF, the Company has caused this Option Agreement to be executed by its
officers thereunto duly authorized, and Employee has signed the same, all as of the day and year
first above written:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	UNITED BANKSHARES, INC.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Its:	 	Chairman and CEO
	 
	 	 	 	 	 	 	 	 
	[CORPORATE SEAL]	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	ATTEST:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	[SEAL]
	 	 	 	 	 	 	 
	 	 	 	 	EMPLOYEEEX-10.1 DESCRIPTION OF CHAIRMAN OF THE BOARD FEE

 

Exhibit 10.1

Description of Chairman of the Board Fee, Base Salary,

and the Material Terms of the Amendment to Applied Innovation Inc.’s

2006 Management Bonus Program

Chairman of the Board of Directors Fee

	 	 	 	 	 
	Name
	 	Fee

	 
	Gerard B. Moersdorf, Jr.
	 	$25,000 per year, payable quarterly

2006 Base Salary Increase

	 	 	 	 	 
	Name
	 	Base Salary
	 
	 
	William H. Largent
	 	$180,000(1)
	President and Chief Executive Officer
	 	 	 	 

 

			
	(1)	 	The increase in Mr. Largent’s salary is retroactive to February 1, 2006.

2006 Bonus Calculations

     Under the Company’s 2006 Management Bonus Program (the “Program”), William H. Largent has the
opportunity to earn cash bonuses based upon the achievement of certain revenue and adjusted
operating income targets. Upon the achievement of the threshold revenue and adjusted operating
income targets, Mr. Largent will receive a bonus between 32.5% and 80% of his base salary in
accordance with the chart below:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Payout as a Percentage of Base Salary	 
	 	 	Threshold	 	 	Target	 	 	Maximum	 
	William H. Largent
	 	 	32.5	%	 	 	50	%	 	 	80	%

     For purposes of the Program, adjusted operating income is defined as operating income
exclusive of stock option and restricted stock expenses. Mr. Largent must be employed by the
Company on December 31, 2006 to be eligible to receive any bonus under the Program.

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