Bancorp Connecticut, Inc. 1997 Stock Option Plan

BANCORP CONNECTICUT, INC.
1997 STOCK OPTION PLAN


I. ESTABLISHMENT OF PLAN; DEFINITIONS


1. Purpose. The purpose of the Bancorp Connecticut, Inc. 1997 Stock Option Plan is to provide an incentive to key Employees and Directors of Bancorp Connecticut, Inc. (the "Corporation") and its subsidiaries, including Southington Savings Bank (the "Bank"), who are in a position to contribute materially to the long-term success of the Corporation and the Bank, to increase their interest in the Corporation's and Bank's welfare, and to aid in attracting and retaining employees of outstanding ability.


2. Definitions. Unless the context clearly indicates otherwise, the following terms shall have the meanings set forth below:


(a) "Bank" shall mean Southington Savings Bank, a Connecticut stock
savings bank.


(b) "Board" shall mean the Board of Directors of the Corporation.


(c) "Code" shall mean the Internal Revenue Code of 1986, as it may be
amended from time to time.


(d) "Corporation" shall mean Bancorp Connecticut, Inc., a Delaware
corporation.


(e) "Directors" shall mean members of the Board.


(f) "Disability" shall mean a medically determinable physical or mental
condition which causes an Employee or Director to be unable to engage
in any substantial gainful activity and which can be expected to
result in death or to be of long-continued and indefinite duration.


(g) "Employee" shall mean any common law employee, including officers, of
the Corporation or the Bank as determined under the Code and the
Treasury Regulations thereunder.


(h) "Fair Market Value" on any day shall mean (i) the closing price for
one share of Stock or (ii) the average of the highest reported bid and
lowest reported asked price for one share of Stock as furnished by The
Nasdaq Stock Market or a similar organization, in each case on such
day. For example, if the highest reported bid were $8 per share and
the lowest reported asked price were $10 per share, the Fair Market
Value would be $9 per share.


(i) "Grantee" shall mean an Employee or Director granted a Stock Option
under this Plan.


(j) "Incentive Stock Option" shall mean an option granted pursuant to the
Incentive Stock Option provisions as set forth in Part II of this
Plan.


(k) "Non-Qualified Stock Option" shall mean an option granted pursuant to
the Non-Qualified Stock Option provisions as set forth in Part III of
this Plan.


(l) "Plan" shall mean the Bancorp Connecticut, Inc. 1997 Stock Option Plan
as set forth herein and as amended from time to time.


(m) "Stock" shall mean authorized but unissued shares of the Common Stock
of the Corporation or reacquired shares of the Corporation's Common
Stock.


(n) "Stock Option" shall mean an option granted pursuant to this Plan to
purchase shares of Stock.


(o) "Ten Percent Shareholder" shall mean an Employee who at the time a
Stock Option is granted owns stock possessing more than ten percent
(10%) of the total combined voting power of all stock of the
Corporation or of its parent or subsidiary corporation.


3. Shares of Stock Subject to this Plan. Subject to the provisions of Section 2 of Part IV, the Stock which may be issued or transferred pursuant to Stock Options granted under this Plan and the Stock which is subject to outstanding but unexercised Stock Options under this Plan shall not exceed 303,810 shares in the aggregate. If a Stock Option shall expire or terminate for any reason, in whole or in part, without being exercised, the number of shares of Stock as to which such expired or terminated Stock Option shall not have been exercised may again become available for the grant of Stock Options. There shall be no terms and conditions in a Stock Option which provide that the exercise of an Incentive Stock Option reduces the number of shares of Stock for which an outstanding Non-Qualified Stock Option may be exercised; and there shall be no terms and conditions in a Stock Option which provide that the exercise of a Non-Qualified Stock Option reduces the number of shares of Stock for which an outstanding Incentive Stock Option may be exercised.


4. Administration of this Plan. This Plan shall be administered by the Board. Subject to the express provisions of this Plan, the Board shall have authority to interpret this Plan, to prescribe, amend, and rescind rules and regulations relating to it, to determine the terms and provisions of Stock Option agreements, and to make all other determinations necessary or advisable for the administration of this Plan. Any controversy or claim arising out of or related to this Plan shall be determined unilaterally by and at the sole discretion of the Board.


5. Amendment or Termination. The Board may, at any time, alter, amend, suspend, discontinue, or terminate this Plan; provided, however, that such action shall not adversely affect the right of Grantees to Stock Options previously granted and no amendment, without the approval


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of the stockholders of the Corporation, shall increase the maximum number of shares which may be awarded under this Plan in the aggregate, or modify the purchase price of shares under this Plan or the eligibility requirements for participation in this Plan.


6. Effective Date and Duration of this Plan. Subject to the approval of the stockholders of the Corporation on or before such date, this Plan shall become effective on May 15, 1997. This Plan shall terminate at the close of business on May 14, 2007 and no Stock Option may be granted under this Plan thereafter, but such termination shall not affect any Stock Option theretofore granted.


II. INCENTIVE STOCK OPTIONS


1. Granting of Incentive Stock Options.


(a) Only Employees shall be eligible to receive Incentive Stock Options
under this Plan.


(b) The purchase price of each share of Stock subject to an Incentive
Stock Option shall not be less than 100% of the Fair Market Value of a
share of the Stock on the date the Incentive Stock Option is granted;
provided, however, that the purchase price of each share of Stock
subject to an Incentive Stock Option granted to a Ten Percent
Shareholder shall not be less than 110% of the Fair Market Value of a
share of the Stock on the date the Incentive Stock Option is granted.


(c) No Incentive Stock Option shall be exercisable more than ten years
from the date such Incentive Stock Option is granted; provided,
however, that an Incentive Stock Option granted to a Ten Percent
Shareholder shall not be exercisable more than five years from the
date the Incentive Stock Option was granted.


(d) The Board shall determine and designate from time to time those
Employees who are to be granted Incentive Stock Options and specify
the number of shares of Stock subject to each Incentive Stock Option.


(e) The Board, in its sole discretion, shall determine whether any
particular Incentive Stock Option shall become exercisable in one or
more installments, specify the installment dates, and, within the
limitations herein provided, determine the total period during which
the Incentive Stock Option is exercisable. Further, the Board may make
such other provisions as may appear generally acceptable or desirable
to the Board or necessary to qualify its grants under the provisions
of Section 422 of the Code.


(f) The Board may grant at any time new Incentive Stock Options to an
Employee who has previously received Incentive Stock Options or other
options, whether such prior Incentive Stock Options or other options
are still outstanding, have previously been exercised in whole or in
part, or are canceled in connection with the issuance


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of new Incentive Stock Options. The exercise price of the new
Incentive Stock Options may be established by the Board without regard
to the existing Incentive Stock Options or other options.


(g) Notwithstanding any other provisions hereof, the aggregate Fair Market
Value (determined at the time the option is granted) of the Stock with
respect to which Incentive Stock Options are exercisable for the first
time by any Employee during any calendar year (under all such plans of
the Corporation and the Bank and any parent or subsidiary corporation
of either) shall not exceed $100,000. To the extent that such $100,000
limit shall be exceeded in any calendar year, any such Stock Options
exercisable for the first time in excess of such limitation shall be
treated as Non-Qualified Stock Options.


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2. Exercise of Incentive Stock Options. The exercise price of an Incentive Stock Option shall be payable on exercise of the option (i) in cash or by check, bank draft or postal or exp ...