PINNACLE BANKSHARES CORPORATION
2004 INCENTIVE STOCK PLAN
INCENTIVE STOCK OPTION AGREEMENT
WITH TANDEM SAR
Granted <<grant date>>
This Incentive Stock Option Agreement with Tandem SAR (Agreement) is entered into as of <<grant date>> pursuant to the 2004 Incentive Stock Plan, as amended December 20, 2012 (the Plan), of Pinnacle Bankshares Corporation, a Virginia corporation (the Company), and evidences the grant of an Option and Tandem SAR (as defined in the Plan), and the terms, conditions and restrictions pertaining thereto, to <<name>> (the Employee).
1. Award of Shares. Pursuant to the Plan, effective on <<grant date>> (the Award Date), the Company awarded to the Employee the right and option to purchase (the Award), upon the terms and conditions hereinafter set forth, all or any part of a total of <<number>> (<<number>>) shares of the Companys Stock at the Option Price of $<<exercise price>> per share.
2. Time and Limitations on Exercise of Option. This Option shall not be exercisable after <<expiration date>>; provided, however, that this Option may be terminated earlier as provided below. In addition and except as provided in Paragraph 7 below, this Option shall first be exercisable with respect to <<vesting schedule>>. In addition, this Option may only be exercised for whole shares of the Companys Stock.
3. Conditions of Exercise of Option During Employees Lifetime. During the Employees lifetime, this Option may be exercised only by the Employee, and then only if the Employee has been an employee of the Company or one or more of its Subsidiaries continuously from the Award Date to the date of exercise; provided, however, that if the Employee or the Company terminates his or her employment for any reason (including termination because of retirement or permanent and total disability), the Employee shall be entitled to exercise this Option only to the extent it was exercisable by the Employee at the date of such termination of employment, subject to any accelerated exercise provided in Paragraph 7 below, and further provided that this Option shall not be exercisable more than twelve (12) months after such termination of employment. The Board of Directors of the Company, or a committee thereof, reserves the right, however, to extend this twelve month period up to two years after the date of termination of employment (but not beyond <<expiration date>>). Notwithstanding the foregoing, the Company reserves the right to terminate and declare forfeited all or any unexercised portion of this Option held by the Employee in the event (i) his or her employment is terminated as a result of any illegal act or intentional act evidencing bad faith by the Employee toward the Company or one of its Subsidiaries or (ii) during the period this Option remains exercisable following termination of his or her employment for any reason, whether such termination was voluntary or involuntary, the Employee accepts employment with or provides services to a company or organization that, in the sole discretion of the Company, competes with the Company or any Subsidiary or affiliate of the Company.