EXHIBIT A
WESTBANK CORPORATION
1995 DIRECTORS' STOCK OPTION PLAN
1. Name and Purpose.
1.1 This plan is the 1995 WESTBANK CORPORATION DIRECTORS' STOCK
OPTION PLAN (the "1995 Plan").
1.2 The purposes of the 1995 Plan are to enhance the
Corporation's ability to attract and retain highly qualified
individuals to serve as members of the Corporation's Board of
Directors and to provide additional incentives to Non-Employee
Directors to promote the success of the Corporation. The 1995 Plan
provides Non-Employee Directors of the Corporation an opportunity to
purchase shares of the Stock of the Corporation pursuant to Options.
Options granted under the 1995 Plan shall not constitute "incentive
stock options" within the meaning of Section 422 of the Internal
Revenue Code of 1983, as amended.
1.3 This 1995 Plan is intended to constitute a "formula plan"
and the Non-Employee Directors are intended to be "disinterested
administrators" of the 1985 Stock Option Plan for Key Employees, and
any other stock option plan adopted by the Corporation or any of its
subsidiaries for purposes of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
2. Definitions.
For purposes of interpreting the 1995 Plan and related
documents (including Stock Option Agreements), the following
definitions shall apply:
2.1 "Board" means the Board of Directors of the Corporation.
2.2 "Corporation" means Westbank Corporation, a Massachusetts
corporation.
2.3 "Director" means a member of the Corporation's Board.
2.4 "Effective Date" means the date the 1995 Plan was adopted
by the Board, which date is February 15, 1995.
2.5 "Exercise Price" means the Option Price multiplied by the
number of shares of Stock purchased pursuant to exercise of an
Option.
2.6 "Expiration Date" means the tenth anniversary of the Grant
Date, or, if earlier, the termination of the Option pursuant to
Section 4.2(c).
2.7 "Fair Market Value" means the value of each share of Stock
subject to the 1995 Plan determined as follows: If on the Grant Date
or other determination date the Stock is listed on an established
national or regional stock exchange, is admitted to quotation on the
National Association of Securities Dealers Automated Quotations
System, or is publicly traded on an established securities market,
the Fair Market Value of the Stock shall be the closing price of the
Stock on such exchange or in such market (the highest such closing
price if there is more than one such exchange or market) on the
trading day immediately preceding the Grant Date or other
determination date (or, if there is no such reported closing price,
the Fair Market Value shall be the mean between the highest bid and
lowest asked prices or between the high and low sale prices on such
trading day), or, if no sale of the Stock is reported for such
trading, on the next preceding day on which any sale shall have been
reported. If the Stock is not listed on such an exchange, quoted on
such System or traded on such a market, Fair Market Value shall be
determined by the Board in good faith.
2.8 "Grant Date" means the date on which an Option takes effect
pursuant to Section 7 of the 1995 Plan.
2.9 "Non-Employee Director" means the member of the
Corporation's Board who is not otherwise an officer or employee of
the corporation or any of its subsidiaries.
2.10 "Option" means any option to purchase one or more shares
of Stock pursuant to the 1995 Plan.
2.11 "Optionee" means a person who holds an Option under the
1995 Plan.
2.12 "Option Period" means the period during which Options may
be exercised as defined in Section 9.
2.13 "Option Price" means the purchase price for each share of
Stock subject to an Option.
2.14 "1933 Act" means the Securities Act of 1933, as now in
effect or as hereafter amended.
2.15 "Stock" means the common stock, par value $2.00 per share,
of the Corporation.
2.16 "Stock Option Agreement" means the written agreement
evidencing the grant of an Option hereunder.
2.17 "Attendance Requirement" shall mean a Director's
attendance at seventy-five percent (75%) or more of the aggregate
of: (i) the total number of meetings of the Board of Westbank held
during the twelve (12) full calendar months immediately preceding a
Grant Date; and (ii) the total number of meetings held by all
committees of the Board of Westbank on which the Director served
during the twelve (12) full calendar months immediately preceding a
Grant Date. Notwithstanding the above, however, a Director's
failure to attend a meeting of the Board or a committee of the Board
shall not be counted in determining the percentage of meetings
attended by the Director if the Director presents to the Clerk of
Westbank a letter which is signed by a physician licensed to
practice medicine in any state and which states (under penalty of
false statement) that the Director was unable to attend the meeting
for bona fide medical reasons.
3. Administration of the 1995 Plan.
The 1995 Plan shall be administered by the Non-Employee
Directors. The Non-Employee Directors' responsibilities under the
1995 Plan shall be limited to taking all legal actions necessary to
document the Options provided herein, to maintain appropriate
records and reports regarding those Options, and to take all acts
authorized by this 1995 Plan.
4. Stock Subject to the 1995 Plan.
4.1 Subject to adjustments made pursuant to Section 4.2, the
maximum number of shares of Stock which may be issued pursuant to
the 1995 Plan shall not exceed 125,000. If any Option expires,
terminates or is canceled for any reason before it is exercised in
full, the shares of Stock that were subject to the unexercised
portion of the Option shall be available for future Options granted
under the 1995 Plan.
4.2 (a) If the outstanding shares of Stock are increased or
decreased or changed into or exchanged for a different number or
kind of shares of other securities of the Corporation by reason of
any recapitalization, reclassification, stock split, combination of
shares, exchange of shares, stock dividend or other distribution
payable on capital stock, or other increase or decrease in such
shares effected without receipt of consideration by the Corporation,
occurring after the effective date of the 1995 Plan, the number and
kinds of shares for the purchase of which Options may be granted
under the 1995 Plan shall be adjusted proportionately and
accordingly by the Corporation. In addition, the number and kind of
shares for which Options are outstanding shall be adjusted
proportionately and accordingly so that the proportionate interest
of the holder of the Option immediately following such event shall,
to the extent practicable, be the same as immediately prior to such
event. Any such adjustments in outstanding Options shall not change
the aggregate Option Price payable with respect to shares subject to
the unexercised portion of the Option outstanding but shall include
a corresponding proportionate adjustment in the Option Price per
share.
(b) Subject to Subsection (c) hereof, if the Corporation shall
be the surviving corporation in any reorganization, merger or
consolidation of the Corporation with one or more other
corporations, any Option theretofore granted pursuant to the 1995
Plan shall pertain to and apply to the securities to which a holder
of the number of shares of Stock subject to such Option would have
been entitled immediately following such reorganization, merger or
consolidation, with a corresponding proportionate adjustment of the
Option Price per share so that the aggregate Option Price thereafter
shall be the same as the aggregate Option Price of the shares
remaining subject to the Option immediately prior to such
reorganization, merger or consolidation.
(c) Upon the dissolution or liquidation of the Corporation, or
upon a merger, consolidation or reorganization of the Corporation
with one or more other corporations in which the Corporation is not
the surviving corporation, or upon a sale of all or substantially
all of the assets of the Corporation to another corporation, or upon
any transaction (including, without limitation, a merger or
reorganization in which the Corporation is the surviving
corporation) approved by the Board which results in any person or
entity owning 80 percent or more of the combined voting power of all
classes of stock of the Corporation, the 1995 Plan and all Options
outstanding hereunder shall terminate, except to the extent
provision is made in writing in connection with such transaction for
the continuation of the 1995 Plan, the assumption of the Options
theretofore granted, or for the substitution for such Options of new
Options covering the stock of a successor corporation or a parent or
subsidiary thereof, with appropriate adjustments as to the number
and kinds of shares and exercise prices, in which event the 1995
Plan (if applicable) and Options theretofore granted shall continue
in the manner and under the terms so provided. In the event of any
such termination of the 1995 Plan and Options, each individual
holding an Option shall have the right immediately prior to the
occurrence of such termination and during such period occurring
prior to such termination as the Board in its sole discretion shall
determine and designate, to exercise such Option to the extent that
such Option was otherwise exercisable at the time such termination
occurs. The Board shall send written notice of an event that will
result in such a termination to all individuals who hold Options not
later than the time at which the Corporation gives notice thereof to
its stockholders.
(d) Adjustments under this Section 4.2 related to Stock or
other securities of the Corporation shall be made by the Board,
whose determination in that respect shall be final, binding, and
conclusive. No fractional shares of Stock or units of other
securities shall be issued pursuant to any such adjustment, and any
fractions resulting from any such adjustment shall be eliminated in
each case by rounding downward to the nearest whole share or unit.
(e) The grant of an Option pursuant to the 1995 Plan shall not
affect or limit in any way the right of power of the Corporation to
make adjustments, reclassifications, reorganizations or changes of
its capital or business structure or to merge, consolidate, dissolve
or liquidate, or to sell or transfer all or any part of its business
assets.
5. Eligibility.
Eligibility under this 1995 Plan is limited to Non-Employee
Directors of the Corporation who have: (i) been a member of the
Board of Directors of Westbank for at least twelve (12) months; and
(ii) satisfied the Attendance Requirements.
6. The Option Price.
The Option Price of the Stock covered by each Option granted
under this 1995 Plan shall be the greater of the Fair Market Value
or the par value of such Stock on the Grant Date. The Option Price
shall be subject to adjustment as provide in Section 4.2 hereof.
7. Number of Shares and Grant Dates.
On the Effective Date, each eligible Non-Employee Director then
serving on the Board shall be granted an Option to purchase 3,000
shares of Stock at the price and upon the other terms and conditions
specified in the 1995 Plan. Thereafter, subject to the availability
of shares, upon satisfying the eligibility requirements defined in
Section 5 of this 1995 Plan, each Non-Employee Director so elected
or appointed shall be granted an option to purchase 3,000 shares of
Stock, and on each anniversary of the Effective Date, each eligible
Non-Employee Director, shall be granted under this 1995 Plan an
Option to purchase 1,000 shares of Stock, at the price and upon the
other terms and conditions specified in the 1995 Plan.
8. Vesting of Options.
Subject to the provisions of Section 9, Options shall be vested
upon the respective Grant Date (but shall not be exercisable before
approval of the 1995 Plan by stockholders).
9. Option Period.
An Option shall be exercisable only during the Option Period.
The Option Period shall commence six months after the later of (i)
the Grant Date or (ii) the date on which the 1995 Plan is approved
by the stockholders of the Corporation and shall end at the close of
business on the Expiration Date. Termination of the Optionee's
status as a Director for any reason shall not cause an Option to
terminate.
10. Timing and Method of Exercise.
Subject to the limitations of Sections 8 and 9, an Optionee
may, at any time, exercise an Option with respect to all or any part
of the shares of Stock then subject to such Option by giving the
Corporation written notice of exercise, specifying the number of
shares as to which the Option is being exercised. Such notice shall
be addressed to the Clerk of the Corporation at its principal
office, and shall be effective when actually received (by personal
delivery, fax or other delivery) by the Clerk of the Corporation.
Such notice shall be accompanied by an amount equal to the Exercise
Price of such shares, in the form of any one or combination of the
following: cash or cash equivalents, or shares of Stock valued at
Fair Market Value in accordance with the 1995 Plan. If shares of
Stock that are acquired by the Optionee through exercise of an
Option or an option issued under an Other Plan are surrendered in
payment of the Exercise Price of Options, the Stock surrendered in
payment must have been (i) held by the Optionee for more than six
months at the time of surrender, or (ii) acquired under an Option
granted not less than six months prior to the time of surrender.
However, payment in full of the Exercise Price need not accompany
the written notice of exercise provided the notice of exercise
directs that the Stock certificate or certificates for the shares
for which the Option is exercised be delivered to a licensed broker
acceptable to the Corporation as the agent for the individual
exercising the Option and, at the time such Stock certificate or
certificates are delivered, the broker tenders to the Corporation
cash (or cash equivalents acceptable to the Corporation) equal to
the Exercise Price.
11. No Stockholder Rights under Option.
No Optionee shall have any of the rights of a stockholder with
respect to the shares of Stock subject to an Option except to the
extent the certificates for such shares shall have been issued upon
the exercise of the Option.
12. Continuation of Service.
Nothing in the 1995 Plan shall confer upon any person any right
to continue to serve as a Director.
13. Stock Option Agreement.
Each Option granted pursuant to the 1995 Plan shall be
evidenced by a written Stock Option Agreement notifying the Optionee
of the grant incorporating the terms of this 1995 Plan. The Stock
Option Agreement shall be executed by the Corporation and the
Optionee.
14. Withholding.
The Corporation shall have the right to withhold, or require an
Optionee to remit to the Corporation, an amount sufficient to
satisfy any applicable federal, state, local or foreign withholding
tax requirements imposed with respect to exercise of Options. To
the extent permissible under applicable tax, securities, and other
laws, the Corporation may satisfy a tax withholding requirement by
applying shares of Stock to which the Optionee is entitled as a
result of the exercise of an Option to satisfy withholding
requirements under this Section 14.
15. Non-transferability of Options.
Each Option granted pursuant to this 1995 Plan shall, during
Optionee's lifetime, be exercisable only by Optionee, and neither
the Option nor any right thereunder shall be transferable by the
Optionee by operation of law or otherwise other than by will or the
laws of descent and distribution, or pursuant to a qualified
domestic relations order as defined in Section 414(p)(1)(B) of the
Internal Revenue Code of 1986, as amended and shall not be pledged
or hypothecated (by operation of law or otherwise) or subject to
execution, attachment or similar processes.
16. Use of Proceeds.
Cash proceeds realized from the sale of Stock pursuant to
Options granted under the 1995 Plan shall constitute general funds
of the Corporation.
17. Adoption, Amendment, Suspension and Termination of the 1995 Plan.
17.1 The 1995 Plan shall be effective as of the date of
adoption by the Board, subject to approval of the 1995 Plan within
one year of its adoption by the Board by the affirmative votes of
the holders of a majority of the Stock of the Corporation present,
or represented, and entitled to vote at a meeting duly held in
accordance with applicable laws of the state of Massachusetts,
provided, that upon approval of the 1995 Plan by the stockholders of
the Corporation, all Options granted under the 1995 Plan on or after
the Effective Date shall be fully effective as if the stockholders
had approved the 1995 Plan on the Effective Date.
17.2 Subject to the limitation of Section 17.4, the Board may
at any time suspend or terminate the 1995 Plan, and may amend it
from time to time in such respects as the Board may deem advisable;
provided, however, the Board shall not amend the 1995 Plan in the
following respects without the approval of stockholders then
sufficient to approve the 1995 Plan in the first instance:
(a) To materially increase the maximum number of shares of
Stock that may be issued under the 1995 Plan.
(b) To materially modify the requirements as to eligibility for
participation in the 1995 Plan.
(c) To materially modify the Option Price for any reason other
than those listed in Section 4.2.
17.3 No Option may be granted during any suspension or after
the termination of the 1995 Plan, and no amendment, suspension or
termination of the 1995 Plan shall without the Optionee's consent,
alter or impair any rights or obligations under any Stock Option
Agreement previously entered into under the 1995 Plan. This 1995
Plan shall terminate ten years after the Effective Date unless
previously terminated pursuant to Section 4.2 or by the Board
pursuant to this Section 17.
17.4 Notwithstanding the provisions of Section 17.2, the
formula provisions of this 1995 Plan shall not be amended more than
once in any six-month period other than to comport with changes in
the Internal Revenue Code of 1986, the Employee Retirement Income
Security Act of 1974, if applicable, or the rules promulgated
thereunder.
18. Requirements of Law.
18.1 The Corporation shall not be required to sell or issue any
shares of Stock under any Option if the sale or issuance of such
shares would constitute a violation by the individual exercising the
Option or the Corporation of any provisions of any law or regulation
of any governmental authority, including without limitation any
federal or state securities laws or regulations. Specifically in
connection with the 1933 Act, upon exercise of any Option, unless a
registration statement under such Act is in effect with respect to
the shares of Stock covered by such Option, the Corporation shall
not be required to sell or issue such shares unless the Board has
received evidence satisfactory to the Board that the holder of such
Option may acquire such shares pursuant to an exemption from
registration under such Act. Any determination in this connection
by the Board shall be final, binding, and conclusive. The
Corporation may, but shall in no event be obligated to, register any
securities covered hereby pursuant to the 1933 Act. The Corporation
shall not be obligated to take any affirmative action in order to
cause the exercise of an Option or the issuance of shares pursuant
thereto to comply with any law or regulation of any governmental
authority. As to any jurisdiction that expressly imposes the
requirement that an Option shall not be exercisable unless and until
the shares of Stock covered by such Option are registered or are
subject to an available exemption from registration, the exercise of
such Option (under circumstances in which the laws of such
jurisdiction apply) shall be deemed conditioned upon the
effectiveness of such registration or the availability of such an
exemption.
18.2 The intent of this 1995 Plan is to qualify for the
exemption provided by Rule 16b-3 under the Exchange Act. To the
extent any provision of the 1995 Plan or action by the 1995 Plan
administrators does not comply with the requirements of Rule 16b-3,
it shall be deemed inoperative, to the extent permitted by law and
deemed advisable by the 1995 Plan administrators, and shall not
affect the validity of the 1995 Plan. In the event Rule 16b-3 is
revised or replaced, the Board may exercise discretion to modify the
1995 Plan in any respect necessary to satisfy the requirements of
the revised exemption or its replacement.
19. Governing Law.
The validity, interpretation and effect of this 1995 Plan, and
the rights of all persons hereunder, shall be governed by and
determined in accordance with the laws of Massachusetts, other than
the choice of law rules thereof.