Document:

Restricted stock plan

  Exhibit 10.4                           

     Guaranty Federal Savings Bank

Restricted Stock Plan

and Trust Agreement

 

 

Article I

ESTABLISHMENT OF THE PLAN AND TRUST

 

1.01 Guaranty Federal Savings Bank ("Savings Bank") hereby establishes the Restricted Stock

Plan (the "Plan") and Trust (the "Trust") upon the terms and conditions hereinafter stated in this Restricted

Stock Plan and Trust Agreement (the "Agreement").

 

1.02 The Trustee hereby accepts this Trust and agrees to hold the Trust assets existing on the

date of this Agreement and all additions and accretions thereto upon the terms and conditions hereinafter

stated.

 

Article II

 

PURPOSE OF THE PLAN

 

2.01 The purpose of the Plan is to reward and to retain personnel of experience and ability in

key positions of responsibility with the Savings Bank and its subsidiaries, by providing such personnel of

the Savings Bank and its subsidiaries with an equity interest in the parent corporation of the Savings Bank,

Guaranty Federal Bancshares, Inc. ("Parent"), as compensation for their prior and anticipated future

professional contributions and service to the Savings Bank and its subsidiaries.

 

Article III

 

DEFINITIONS

 

The following words and phrases when used in this Plan with an initial capital letter, unless the

context clearly indicates otherwise, shall have the meaning as set forth below. Wherever appropriate, the

masculine pronoun shall include the feminine pronoun and the singular shall include the plural.

 

3.01 "Beneficiary" means the person or persons designated by the Participant to receive any

benefits payable under the Plan in the event of such Participant's death. Such person or persons shall be

designated in writing on forms provided for this purpose by the Committee and may be changed from time

to time by similar written notice to the Committee. In the absence of a written designation, the Beneficiary

shall be the Participant's surviving spouse, if any, or if none, the Participant's estate.

 

3.02 "Board" means the Board of Directors of the Savings Bank, or any successor corporation

thereto.

 

3.03 "Cause" means the personal dishonesty, incompetence, willful misconduct, breach of

fiduciary duty involving personal profits, intentional failure to perform stated duties, willful violation of

a material provision of any law, rule or regulation (other than traffic violations and similar offense), or a

material violation of a final cease-and-desist order or any other action which results in a substantial financial

loss to the Parent, Savings Bank or its Subsidiaries.

 

3.04 "Change in Control" shall mean: (i) the sale of all, or a material portion, of the assets of

the Parent or Savings Bank; (ii) the merger or recapitalization of the Parent or the Savings Bank whereby

the Parent or Savings Bank is not the surviving entity; (iii) a change in control of the Parent or Savings

Bank, as otherwise defined or determined by the Office of Thrift Supervision ("OTS") or regulations

promulgated by it; or (iv) the acquisition, directly or indirectly, of the beneficial ownership (within the

meaning of that term as it is used in Section 13(d) of the 1934 Act and the rules and regulations

promulgated thereunder) of twenty-five percent (25%) or more of the outstanding voting securities of the

Parent or Savings Bank by any person, trust, entity or group. This limitation shall not apply to the

purchase of shares of up to 25% of any class of securities of the Parent or Savings Bank by a tax-qualified

employee stock benefit plan which is exempt from the approval requirements, set forth under 12 C.F.R.

Â§574.3(c)(1)(vi) as now in effect or as may hereafter be amended. The term "person" refers to an

individual or a corporation, partnership, trust, association, joint venture, pool, syndicate, sole

proprietorship, unincorporated organization or any other form of entity not specifically listed herein. The

decision of the Committee as to whether a Change in Control has occurred shall be conclusive and binding.

 

3.05 "Committee" means the Board of Directors of the Parent or the Restricted Stock Plan

Committee appointed by the Board of Directors of the Parent pursuant to Article IV hereof.

 

3.06 "Common Stock" means shares of the common stock of the Savings Bank or any successor

corporation or Parent thereto.

 

3.07 "Conversion" means the effective date of the stock charter of the Savings Bank and

simultaneous acquisition of all of the outstanding stock of the Savings Bank by the Parent.

 

3.08 "Director" means a member of the Board of the Savings Bank.

 

3.09 "Director Emeritus" means a person serving as a director emeritus, advisory director,

consulting director, or other similar position as may be appointed by the Board of Directors of the Savings

Bank or the Parent from time to time.

 

3.10 "Disability" means any physical or mental impairment which renders the Participant

incapable of continuing in the employment or service of the Savings Bank or the Parent in his current

capacity as determined by the Committee.

 

3.11 "Employee" means any person who is employed by the Savings Bank or a Subsidiary.

 

3.12 "Effective Date" shall mean the date of stockholder approval of the Plan by the Parent's

stockholders.

 

3.13 "Parent" shall mean Guaranty Federal Bancshares, Inc., the parent corporation of the

Savings Bank.

 

3.14 "Participant" means an Employee, Director or Director Emeritus who receives a Plan Share

Award under the Plan.

 

3.15 "Plan Shares" means shares of Common Stock held in the Trust which are awarded or

issuable to a Participant pursuant to the Plan.

 

3.16 "Plan Share Award" or "Award" means a right granted to a Participant under this Plan to

earn or to receive Plan Shares.

 

3.17 "Plan Share Reserve" means the shares of Common Stock held by the Trust pursuant to

Sections 5.03 and 5.04.

 

3.18 "Savings Bank" means Guaranty Federal Savings Bank, and any successor corporation

thereto.

 

3.19 "Subsidiary" means those subsidiaries of the Savings Bank which, with the consent of the

Board, agree to participate in this Plan.

 

3.20 "Trustee" or "Trustee Committee" means that person(s) or entity nominated by the

Committee and approved by the Board pursuant to Sections 4.01 and 4.02 to hold legal title to the Plan

assets for the purposes set forth herein.

 

Article IV

 

ADMINISTRATION OF THE PLAN

 

4.01 Role of the Committee. The Plan shall be administered and interpreted by the Board of

Directors of the Parent or a Committee appointed by said Board, which shall consist of not less than two

non-employee members of the Board, which shall have all of the powers allocated to it in this and other

sections of the Plan. All persons designated as members of the Committee shall be "Non-Employee

Directors" within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended

("1934 Act"). The interpretation and construction by the Committee of any provisions of the Plan or of

any Plan Share Award granted hereunder shall be final and binding. The Committee shall act by vote or

written consent of a majority of its members. Subject to the express provisions and limitations of the Plan,

the Committee may adopt such rules, regulations and procedures as it deems appropriate for the conduct

of its affairs. The Committee shall report its actions and decisions with respect to the Plan to the Board

at appropriate times, but in no event less than one time per calendar year. The Committee shall recommend

to the Board one or more persons or entity to act as Trustee in accordance with the provision of this Plan

and Trust and the terms of Article VIII hereof.

 

4.02 Role of the Board. The members of the Committee and the Trustee shall be appointed or

approved by, and will serve at the pleasure of the Board. The Board may in its discretion from time to time

remove members from, or add members to, the Committee, and may remove, replace or add Trustees. The

Board shall have all of the powers allocated to it in this and other sections of the Plan, may take any action

under or with respect to the Plan which the Committee is authorized to take, and may reverse or override

any action taken or decision made by the Committee under or with respect to the Plan, provided, however,

that the Board may not revoke any Plan Share Award already made except as provided in Section 7.01(b)

herein.

 

4.03 Limitation on Liability. No member of the Board, the Committee or the Trustee shall be

liable for any determination made in good faith with respect to the Plan or any Plan Share Awards granted.

If a member of the Board, Committee or any Trustee is a party or is threatened to be made a party to any

threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or

investigative, by any reason of anything done or not done by him in such capacity under or with respect

to the Plan, the Parent and the Savings Bank shall indemnify such member against expenses (including

attorney's fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him

or her in connection with such action, suit or proceeding if he or she acted in good faith and in a manner

he or she reasonably believed to be in the best interests of the Parent, the Savings Bank and its Subsidiaries

and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was

unlawful. Notwithstanding anything herein to the contrary, in no event shall the Savings Bank take any

actions with respect to this Section 4.03 which is not in compliance with the limitations or requirements

set forth at 12 CFR 545.121, as may be amended from time to time.

 

Article V

 

CONTRIBUTIONS; PLAN SHARE RESERVE

 

5.01 Amount and Timing of Contributions. The Board of Directors of the Savings Bank shall

determine the amounts (or the method of computing the amounts) to be contributed by the Savings Bank

to the Trust established under this Plan. Such amounts shall be paid to the Trustee at the time of

contribution. No contributions to the Trust by Participants shall be permitted except with respect to

amounts necessary to meet tax withholding obligations.

 

5.02 Initial Investment. Any funds held by the Trust prior to investment in the Common Stock

shall be invested by the Trustee in such interest-bearing account or accounts at the Savings Bank as the

Trustee shall determine to be appropriate.

 

5.03 Investment of Trust Assets. Following approval of the Plan by stockholders of the Parent

and receipt of any other necessary regulatory approvals, the Trust shall purchase Common Stock of the

Parent in an amount equal to up to 100% of the Trust's assets, after providing for any required withholding

as needed for tax purposes, provided, however, that the Trust shall not purchase more than 173,632 shares

of Common Stock, representing 4% of the aggregate shares of Common Stock issued by the Parent in the

Conversion. The Trustee may purchase shares of Common Stock in the open market or, in the alternative,

may purchase authorized but unissued shares of the Common Stock or treasury shares from the Parent

sufficient to fund the Plan Share Reserve.

 

5.04 Effect of Allocations, Returns and Forfeitures Upon Plan Share Reserves. Upon the

allocation of Plan Share Awards under Sections 6.02 and 6.05, or the decision of the Committee to return

Plan Shares to the Parent, the Plan Share Reserve shall be reduced by the number of Shares subject to the

Awards so allocated or returned. Any Shares subject to an Award which are not earned because of

forfeiture by the Participant pursuant to Section 7.01 shall be added to the Plan Share Reserve.

 

Article VI

 

ELIGIBILITY; ALLOCATIONS

 

6.01 Eligibility. Employees and Directors Emeritus are eligible to receive Plan Share Awards

within the sole discretion of the Committee. Directors who are not otherwise Employees shall receive Plan

Share Awards pursuant to Section 6.05.

 

6.02 Allocations. The Committee will determine which of the Employees will be granted Plan

Share Awards and the number of Shares covered by each Award, provided, however, that in no event shall

any Awards be made which will violate the Charter or Bylaws of the Savings Bank or its Parent or

Subsidiaries or any applicable federal or state law or regulation. In the event Shares are forfeited for any

reason or additional Shares are purchased by the Trustee, the Committee may, from time to time, determine

which of the Employees will be granted Plan Share Awards to be awarded from forfeited Shares. In

selecting those Employees and Directors Emeritus to whom Plan Share Awards will be granted and the

number of shares covered by such Awards, the Committee shall consider the prior and anticipated future

position, duties and responsibilities of the Employees, the value of their prior and anticipated future services

to the Savings Bank and its Subsidiaries, and any other factors the Committee may deem relevant. All

actions by the Committee shall be deemed final, except to the extent that such actions are revoked by the

Board. Notwithstanding anything herein to the contrary, in no event shall any Participant receive Plan

Share Awards in excess of 25% of the aggregate Plan Shares authorized under the Plan.

 

6.03 Form of Allocation. As promptly as practicable after a determination is made pursuant

to Section 6.02 or Section 6.05 that a Plan Share Award is to be made, the Committee shall notify the

Participant in writing of the grant of the Award, the number of Plan Shares covered by the Award, and the

terms upon which the Plan Shares subject to the award may be earned. The date on which the Committee

makes its award determination or the date the Committee so notifies the Participant shall be considered the

date of grant of the Plan Share Awards as determined by the Committee. The Committee shall maintain

records as to all grants of Plan Share Awards under the Plan.

 

6.04 Allocations Not Required. Notwithstanding anything to the contrary at Sections 6.01,

6.02 or 6.05, no Employee shall have any right or entitlement to receive a Plan Share Award hereunder,

such Awards being at the sole discretion of the Committee and the Board, nor shall the Employees as a

group have such a right. The Committee may, with the approval of the Board (or, if so directed by the

Board) return all Common Stock in the Plan Share Reserve to the Savings Bank at any time, and cease

issuing Plan Share Awards.

 

6.05 Awards to Directors. Notwithstanding anything herein to the contrary, upon the Effective

Date, a Plan Share Award consisting of 8,682 Plan Shares shall be awarded to each Director of the Savings

Bank that is not otherwise an Employee. Such Plan Share Award shall be earned and non-forfeitable at the

rate of one-fifth as of the one-year anniversary of the Effective Date and an additional one-fifth following

each of the next four successive years during such periods of service as a Director or Director Emeritus.

Further, such Plan Share Award shall be immediately 100% earned and non-forfeitable in the event of the

death or Disability of such Director or Director Emeritus, or upon a Change in Control of the Savings Bank

or Parent; provided that such accelerated vesting is not inconsistent with applicable regulations of the Office

of Thrift Supervision ("OTS") or other applicable banking regulatory agency at the time of such Change

in Control. Subsequent to the Effective Date, Plan Share Awards may be awarded to newly elected or

appointed Directors of the Savings Bank by the Committee, provided that total Plan Share Awards granted

to non-employee Directors of the Savings Bank shall not exceed 30% of the total Plan Share Reserve in the

aggregate under the Plan or 5% of the total Plan Share Reserve to any individual non-employee Director.

 

Article VII

 

EARNINGS AND DISTRIBUTION OF PLAN SHARES; VOTING RIGHTS

 

7.01 Earnings Plan Shares; Forfeitures.

(a) General Rules. Unless the Committee shall specifically state to the contrary at the time

a Plan Share Award is granted, Plan Shares subject to an Award shall be earned and non-forfeitable by a

Participant at the rate of one-fifth of such Award following one year after the granting of such Award, and

an additional one-fifth following each of the next four successive years; provided that such Participant

remains an Employee, Director, or Director Emeritus during such period. Notwithstanding anything herein

to the contrary, in no event shall a Plan Share Award granted hereunder be earned and non-forfeitable by

a Participant more rapidly than at the rate of one-fifth of such Award as of the one year anniversary of the

date of grant and an additional one-fifth following each of the next four successive years.

(b) Revocation for Misconduct. Notwithstanding anything herein to the contrary, the Board

shall, by resolution, immediately revoke, rescind and terminate any Plan Share Award, or portion thereof,

previously awarded under this Plan, to the extent Plan Shares have not been delivered thereunder to the

Participant, whether or not yet earned, in the case of a Participant who is discharged from the employ or

service of the Parent, Savings Bank or a Subsidiary for Cause, or who is discovered after termination of

employment or service to have engaged in conduct that would have justified termination for Cause. A

determination of Cause shall be made by the Board within its sole discretion.

(c) Exception for Terminations Due to Death or Disability. Notwithstanding the general

rule contained in Section 7.01(a) above, all Plan Shares subject to a Plan Share Award held by a Participant

whose employment or service with the Parent, Savings Bank or a Subsidiary terminates due to death or

Disability, shall be deemed earned and nonforfeitable as of the Participant's last date of employment or

service with the Parent, Savings Bank or Subsidiary and shall be distributed as soon as practicable

thereafter.

(d) Exception for Termination after a Change in Control. Notwithstanding the general rule

contained in Section 7.01 above, all Plan Shares subject to a Plan Share Award held by a Participant shall

be deemed to be immediately 100% earned and non-forfeitable in the event of a Change in Control of the

Parent or Savings Bank and shall be distributed as soon as practicable thereafter; provided that such

accelerated vesting is not inconsistent with applicable regulations of the OTS or other applicable banking

regulatory agency at the time of such Change in Control.

 

7.02 Accrual and Payment of Dividends. A holder of a Plan Share Award, whether or not

earned, shall also be entitled to receive an amount equal to any cash dividends declared and paid with

respect to shares of Common Stock represented by such Plan Share Award between the date the relevant

Plan Share Award was granted to such Participant and the date the Plan Shares are distributed. Such cash

dividend amounts shall be held in arrears under the Trust and distributed upon the earning of the applicable

Plan Share Award. Such payment shall also include an appropriate amount of earnings, if any, of the Trust

assets with respect to any cash dividends so distributed.

 

7.03 Distribution of Plan Shares.

(a) Timing of Distributions: General Rule. Except as provided in Subsections (d) and (e)

below, Plan Shares shall be distributed to the Participant or his Beneficiary, as the case may be, as soon

as practicable after they have been earned. No fractional shares shall be distributed. Notwithstanding

anything herein to the contrary, at the discretion of the Committee, Plan Shares may be distributed prior

to such Shares being 100% earned, provided that such Plan Shares shall contain a restrictive legend

detailing the applicable limitations of such shares with respect to transfer and forfeiture.

(b) Form of Distribution. All Plan Shares, together with any shares representing stock

dividends, shall be distributed in the form of Common Stock. One share of Common Stock shall be given

for each Plan Share earned. Payments representing cash dividends (and earnings thereon) shall be made

in cash. Notwithstanding anything within the Plan to the contrary, upon a Change in Control whereby

substantially all of the Common Stock of the Parent shall be acquired for cash, all Plan Shares associated

with Plan Share Awards, together with any shares representing stock dividends associated with Plan Share

Awards, shall be, at the sole discretion of the Committee, distributed as of the effective date of such

Change in Control, or as soon as administratively feasible thereafter, in the form of cash equal to the

consideration received in exchange for such Common Stock represented by such Plan Shares.

(c) Withholding. The Trustee may withhold from any payment or distribution made under

this Plan sufficient amounts of cash or shares of Common Stock necessary to cover any applicable

withholding and employment taxes, and if the amount of such payment or distribution is not sufficient, the

Trustee may require the Participant or Beneficiary to pay to the Trustee the amount required to be withheld

in taxes as a condition of delivering the Plan Shares. The Trustee shall pay over to the Parent, Savings

Bank or Subsidiary which employs or employed such Participant any such amount withheld from or paid

by the Participant or Beneficiary.

(d) Timing: Exception for 10% Shareholders. Notwithstanding Subsection (a) above, no Plan

Shares may be distributed prior to the date which is five years from the effective date of the Conversion

to the extent the Participant or Beneficiary, as the case may be, would after receipt of such Shares own in

excess of ten percent (10%) of the issued and outstanding shares of Common Stock held by parties other

than Parent, unless such action is approved in advance by a majority vote of disinterested directors of the

Board of the Parent. Any Plan Shares remaining undistributed solely by reason of the operation of this

Subsection (d) shall be distributed to the Participant or his Beneficiary on the date which is five years from

the effective date of the Conversion.

(e) Regulatory Exceptions. No Plan Shares shall be distributed, however, unless and until

all of the requirements of all applicable law and regulation shall have been fully complied with, including

the receipt of approval of the Plan by the stockholders of the Parent by such vote, if any, as may be

required by applicable law and regulations as determined by the Board.

 

7.04 Voting of Plan Shares. After a Plan Share Award has become earned and non-forfeitable,

the Participant shall be entitled to direct the Trustee as to the voting of the Plan Shares which are associated

with the Plan Share Award and which have not yet been distributed pursuant to Section 7.03, subject to

rules and procedures adopted by the Committee for this purpose. All shares of Common Stock held by the

Trust as to which Participants are not entitled to direct, or have not directed, the voting of such Shares,

shall be voted by the Trustee as directed by the Committee.

 

Article VIII

 

TRUST

 

8.01 Trust. The Trustee shall receive, hold, administer, invest and make distributions and

disbursements from the Trust in accordance with the provisions of the Plan and Trust and the applicable

directions, rules, regulations, procedures and policies established by the Committee pursuant to the Plan.

 

8.02 Management of Trust. It is the intention of this Plan and Trust that the Trustee shall have

complete authority and discretion with respect to the management, control and investment of the Trust, and

that the Trustee shall invest all assets of the Trust, except those attributable to cash dividends paid with

respect to Plan Shares not held in the Plan Share Reserve, in Common Stock to the fullest extent

practicable, except to the extent that the Trustee determines that the holding of monies in cash or cash

equivalents is necessary to meet the obligations of the Trust. In performing their duties, the Trustees shall

have the power to do all things and execute such instruments as may be deemed necessary or proper,

including the following powers:

(a) To invest up to one hundred percent (100%) of all Trust assets in the Common Stock

without regard to any law now or hereafter in force limiting investments for Trustees or other

fiduciaries. The investment authorized herein may constitute the only investment of the Trust, and

in making such investment, the Trustee is authorized to purchase Common Stock from the Parent

or from any other source, and such Common Stock so purchased may be outstanding, newly issued,

or treasury shares.

(b) To invest any Trust assets not otherwise invested in accordance with (a) above in such

deposit accounts, and certificates of deposit (including those issued by the Savings Bank),

obligations of the United States government or its agencies or such other investments as shall be

considered the equivalent of cash.

(c) To sell, exchange or otherwise dispose of any property at any time held or acquired by the

Trust.

(d) To cause stocks, bonds or other securities to be registered in the name of a nominee,

without the addition of words indicating that such security is an asset of the Trust (but accurate

records shall be maintained showing that such security is an asset of the Trust).

(e) To hold cash without interest in such amounts as may be in the opinion of the Trustee

reasonable for the proper operation of the Plan and Trust.

(f) To employ brokers, agents, custodians, consultants and accountants.

(g) To hire counsel to render advice with respect to their rights, duties and obligations

hereunder, and such other legal services or representation as they may deem desirable.

(h) To hold funds and securities representing the amounts to be distributed to a Participant or

his Beneficiary as a consequence of a dispute as to the disposition thereof, whether in a segregated

account or held in common with other assets.

(i) As may be directed by the Committee or the Board from time to time, the Trustee shall

pay to the Saving Bank earnings of the Trust attributable to the Plan Share Reserve.

Notwithstanding anything herein contained to the contrary, the Trustee shall not be required to

make any inventory, appraisal or settlement or report to any court, or to secure any order of a court for the

exercise of any power herein contained, or to maintain bond.

 

8.03 Records and Accounts. The Trustee shall maintain accurate and detailed records and

accounts of all transactions of the Trust, which shall be available at all reasonable times for inspection by

any legally entitled person or entity to the extent required by applicable law, or any other person determined

by the Committee.

 

8.04 Earnings. All earnings, gains and losses with respect to Trust assets shall be allocated in

accordance with a reasonable procedure adopted by the Committee, to bookkeeping accounts for

Participants or to the general account of the Trust, depending on the nature and allocation of the assets

generating such earnings, gains and losses. In particular, any earnings on cash dividends received with

respect to shares of Common Stock shall be allocated to accounts for Participants, except to the extent that

such cash dividends are distributed to Participants, if such shares are the subject of outstanding Plan Share

Awards, or, otherwise to the Plan Share Reserve.

 

8.05 Expenses. All costs and expenses incurred in the operation and administration of this Plan,

including those incurred by the Trustee, shall be paid by the Savings Bank.

 

8.06 Indemnification. Subject to the requirements and limitations of applicable laws and

regulations, the Parent and the Savings Bank shall indemnify, defend and hold the Trustee harmless against

all claims, expenses and liabilities arising out of or related to the exercise of the Trustee's powers and the

discharge of their duties hereunder, unless the same shall be due to their gross negligence or willful

misconduct.

 

Article IX

 

MISCELLANEOUS

 

9.01 Adjustments for Capital Changes. The aggregate number of Plan Shares available for

issuance pursuant to the Plan Share Awards and the number of Shares to which any Plan Share Award

relates shall be proportionately adjusted for any increase or decrease in the total number of outstanding

shares of Common Stock issued subsequent to the effective date of the Plan resulting from any split,

subdivision or consolidation of the Common Stock or other capital adjustment, change or exchange of the

Common Stock, or other increase or decrease in the number or kind of shares effected without receipt or

payment of consideration by the Parent.

 

9.02 Amendment and Termination of the Plan. The Board may, by resolution, at any time,

amend or terminate the Plan. The power to amend or terminate the Plan shall include the power to direct

the Trustee to return to the Parent all or any part of the assets of the Trust, including shares of Common

Stock held in the Plan Share Reserve, as well as shares of Common Stock and other assets subject to Plan

Share Awards which have not yet been earned by the Participants to whom they have been awarded.

However, the termination of the Trust shall not affect a Participant's right to earn Plan Share Awards and

to the distribution of Common Stock relating thereto, including earnings thereon, in accordance with the

terms of this Plan and the grant by the Committee or the Board. Notwithstanding the foregoing, no action

of the Board may increase (other than as provided in Section 9.01 hereof) the maximum number of Plan

Shares permitted to be awarded under the Plan as specified at Section 5.03, materially increase the benefits

accruing to Participants under the Plan or materially modify the requirements for eligibility for participation

in the Plan unless such action of the Board shall be subject to ratification by the stockholders of the Parent.

 

9.03 Nontransferable. Plan Share Awards and rights to Plan Shares shall not be transferable

by a Participant, and during the lifetime of the Participant, Plan Shares may only be earned by and paid

to the Participant who was notified in writing of the Award by the Committee pursuant to Section 6.03.

No Participant or Beneficiary shall have any right in or claim to any assets of the Plan or Trust, nor shall

the Parent, Savings Bank, or any Subsidiary be subject to any claim for benefits hereunder.

 

9.04 No Employment Rights. Neither the Plan nor any grant of a Plan Share Award or Plan

Shares hereunder nor any action taken by the Trustee, the Committee or the Board in connection with the

Plan shall create any right, either express or implied, on the part of any Participant to continue in the

employ or service of the Parent, Savings Bank, or a Subsidiary thereof.

 

9.05 Voting and Dividend Rights. No Participant shall have any voting or dividend rights of

a stockholder with respect to any Plan Shares covered by a Plan Share Award, except as expressly provided

in Sections 7.02 and 7.04 above, prior to the time said Plan Shares are actually distributed to such

Participant.

 

9.06 Governing Law. The Plan and Trust shall be governed by and construed under the laws

of the State of Missouri, except to the extent that Federal Law shall be deemed applicable.

 

9.07 Effective Date. The Plan shall be effective as of the date of approval of the Plan by

stockholders of the Parent, subject to the receipt of approval or non-objection by the OTS or other

applicable banking regulator, if applicable.

 

9.08 Term of Plan. This Plan shall remain in effect until the earlier of (i) termination by the

Board, (ii) the distribution of all assets of the Trust, or (iii) 21 years from the Effective Date. Termination

of the Plan shall not effect any Plan Share Awards previously granted, and such Plan Share Awards shall

remain valid and in effect until they have been earned and paid, or by their terms expire or are forfeited.

 

9.09 Tax Status of Trust. It is intended that the Trust established hereby shall be treated as a

grantor trust of the Savings Bank under the provisions of Section 671 et seq. of the Internal Revenue Code

of 1986, as amended, as the same may be amended from time to time.Incentive stock option agreement 2004 plan

Exhibit 10.12

 

INCENTIVE STOCK OPTION AGREEMENT

 

	

	 	 	 
	

	 

GUARANTY FEDERAL BANCSHARES, INC.

2004 STOCK OPTION PLAN

 

A STOCK OPTION (the "Option") for a total of _____________ shares of common stock $______ par value ("Common Stock") of Guaranty Federal Bancshares, Inc. (the "Corporation"), is hereby granted to ___________________________ (the "Optionee"). The Option in all respects is subject to the terms and conditions of the Guaranty Federal Bancshares, Inc. 2004 Stock Option Plan (the "Plan"), which is incorporated by reference herein, receipt of which is hereby acknowledged by Optionee. The Option is intended to qualify as an Incentive Stock Option. Any capitalized terms that are not defined in this Agreement shall have the same meaning as in the Plan.

 

Option Price. The Option price is $______________ for each Share, being 100% of the fair market value, as determined by the Committee, of the Common Stock on the Date of Grant specified below.

Expiration Date. The expiration date for the Option is _______________________, 20___.

Vesting. This Option shall be exercisable in accordance with the provisions of the Plan, provided the holder of the Option is an Employee, Director or Director Emeritus of the Corporation as of the date of exercise, as follows:

	

Date
	

Shares
	
Percentage of 

Total Shares

Awarded Which 

Are Exercisable/

Non-forfeitable

	 	 	 
	
As of    
	 	
20%

	
As of    
	 	
40%

	
As of    
	 	
60%

	
As of    
	 	
80%

	
As of    
	 	
100%

This Option shall vest to the extent and as of the dates specified above if Optionee serves continuously from the date of grant as an Employee, Director or Director Emeritus. Upon termination of Optionee’s service as an Employee, Director or Director Emeritus, Optionee will accrue no more vesting service. The Option shall be 100% vested and exercisable upon Optionee’s death or upon a Change in Control.

 

Exercise.

Method of Exercise. This Option shall be exercisable by a written notice which shall:

State the election to exercise the Option, the number of Shares with respect to which it is being exercised, the person in whose name the stock certificate or certificates for such Shares is to be registered, and his address and Social Security Number (or if more than one, the names, addresses and Social Security Numbers of such persons);

Contain such representations and agreements as to the holder’s investment intent with respect to the Shares to be acquired upon exercise as required by the Committee;

Be signed by the person or persons entitled to exercise the Option and, if the Option is being exercised by any person or persons other than the Optionee, be accompanied by proof, satisfactory to the Committee, of the right of such person or persons to exercise the Option; and

Be delivered in person or by certified mail to the Treasurer of the Corporation.

Payment of Exercise Price. Payment of the exercise price for the Shares with respect to which the Option is exercised shall be made in full in one of the following forms:

Certified or bank cashier’s or teller’s check; or

Delivery to the Committee of Shares that are free and clear of any liens, encumbrances, claims or security interests, having an aggregate Fair Market Value, as of the date of exercise, equal to the purchase price for the Shares being acquired upon exercise of the Option, provided that at the time of exercise the Common Stock is publicly traded and either the Optionee has held the Shares for the period required to avoid a change to the Corporation’s reported earnings (generally six months) or the Optionee did not acquire the Shares directly or indirectly from the Corporation; or

In the Committee’s sole discretion, by the Optionee authorizing a third party to sell Shares acquired upon exercise of the Option, and to remit to the Company the amount equal to the purchase price.

Restrictions on Exercise. This Option may not be exercised if the issuance of Common Stock upon such exercise would constitute a violation of any applicable federal or state securities or other law or valid regulation. This Option may be exercised during Optionee’s lifetime only by the Optionee and shall not be assignable or transferable otherwise than by will or by the laws of descent and distribution. As a condition to the exercise of this Option, the Corporation may require the person exercising this Option to make any representation and warranty to the Corporation as the Corporation determines may be required by any applicable law or regulation.

Exercise Term. This Option may not be exercised before the date of grant (six (6) months after the date of grant if Optionee is an Insider), and will expire and may not be exercised after the earliest of the following:

The expiration date set out in Section 2 above;

Three (3) months after the date Optionee ceased to be an Employee, Director or Director Emeritus, unless Optionee’s status ended due to 

Disability, in which case this Option will expire and may not be exercised more than one (1) year following the date Optionee ceased to be an Employee, Director or Director Emeritus, or 

death, in which case this Option will expire and may not be exercised more than two (2) years following the date of death; or

the tenth (10th) anniversary of the date of grant.

To be treated as an "incentive stock option," Optionee must be an Employee continuously from the date of grant through the date three (3) months before the date the Option is exercised, except in the event of death or Disability. This could occur if Optionee continued to provide services to the Corporation as a Director or Director Emeritus after Optionee’s termination of employment, in which case the Option could be treated as a Non-Incentive Stock Option.

 

Non-transferability of Option. This Option may not be transferred in any manner otherwise than by will or the laws of descent and distribution and may be exercised during the lifetime of the Optionee only by the Optionee. The terms of this Option shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee.

Securities Law Compliance. Notwithstanding anything herein to the contrary, the Option may not be exercised unless the Shares issuable upon such exercise are then registered under the Securities Act of 1933, as amended, or, if such Shares are not so registered, the Committee has determined that such exercise and issuance would be exempt from the registration requirements of such Act. The exercise of the Option also must comply with other applicable laws and regulations governing the Option, and the Option may not be exercised if the Corporation determines that such exercise would not be in material compliance with such laws and regulations.

Withholding. The exercise of the Option in whole or in part constitutes authorization for the Corporation to withhold from payroll and other amounts due the Optionee, including from Shares otherwise issuable upon exercise of the Option, any amounts required to satisfy any federal, state or local tax withholding obligations that may arise in connection with the Option. The Option may not be exercised unless all such tax withholding obligations are satisfied.

Related Matters. Notwithstanding anything herein to the contrary, additional conditions or restrictions related to the Option may be contained in the Plan.

GUARANTY FEDERAL BANCSHARES, INC.

Date of Grant:                    By:                             

, Optionee

	

	 	 	 
	

	 

INCENTIVE STOCK OPTION EXERCISE FORM

 

GUARANTY FEDERAL BANCSHARES, INC.

2004 STOCK OPTION PLAN

 

(Date)

Guaranty Federal Bancshares, Inc.

1341 W. Battlefield

Springfield, Missouri 65807

 

Dear Sir:

 

The undersigned elects to exercise the Incentive Stock Option to purchase __________ shares of Common Stock of Guaranty Federal Bancshares, Inc. under and pursuant to the Incentive Stock Option Agreement dated                     .

 

Delivered herewith is a certified or bank cashier’s or teller’s check and/or shares of Common Stock, valued at the fair market value of the stock on the date of exercise, as set forth below.

 

$    of cash or check

    shares of Common Stock

$    Total

The name or names to be on the stock certificate or certificates and the address and Social Security Number of such person(s) is as follows:

 

Name: 

 

Address: 

 

Social Security Number: 

 

I agree to notify you in writing within fifteen (15) days after the date of any disposition of any of the shares of Common Stock issued upon exercise of this Option that occurs within two (2) years after the date of grant of this Option or within one (1) year after such shares of Common Stock are issue upon exercise of this Option.

 

Very truly yours,

	

	 	 	 
	

	 

 

	

	 	 	 
	

	 

SECTION 6039 NOTICE

 

TO:        [Name of Person who exercised an incentive stock option during prior year]

 

FROM:    Guaranty Federal Bancshares, Inc.

 

RE:        Exercise of Incentive Stock Option

 

Pursuant to Internal Revenue Code Section 6039(a)(1), the following information is being furnished to you with regard to your exercise of an incentive stock option under Guaranty Federal Bancshares, Inc. 2004 Stock Option Plan during 20___:

 

1.    Corporation transferring the stock to you upon exercise of the option:

Guaranty Federal Bancshares, Inc.

1341 W. Battlefield

Springfield, MO 65807

Employer Identification Number: 43-1720231

 

2.    The corporation whose stock was transferred upon exercise of the option was the same as in item 1.

 

3.    Person to whom stock was transferred upon exercise of the option:

 

Name:

Address:

 

Social Security Number:

 

4.    Date option granted:

 

5.    Date of transfer of stock to you upon exercise of the option:

 

6.    Number of shares transferred to you upon exercise of the option:

 

7.    Total fair market value (at time of exercise) of stock transferred to you upon exercise of the option:8.    Aggregate option exercise price:

 

Please keep this statement for income tax purposes.

 

Dated:    January _____, 20___

 

GUARANTY FEDERAL BANCSHARES, INC.

By:                             

Exhibit 10.13

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