EXHIBIT 4.1
Jamaica Savings Bank FSB Directors' Stock Program
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JAMAICA SAVINGS BANK FSB
DIRECTORS' STOCK PROGRAM
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1. PURPOSE OF THE PLAN. The purpose of the Directors' Stock Program
(the "Plan") is to promote the growth and profitability of Jamaica
Savings Bank FSB (the "Bank") and JSB Financial, Inc. (the "Company")
by providing a program pursuant to which outside directors of the Bank
may be compensated for their services on the Board of Directors of the
Bank (the "Board") as well as their services to the Company, in shares
of common stock of the Company ("Common Stock") thereby increasing each
outside director's equity interest in the Company and further aligning
the outside director's interests with those of the Company's
stockholders.
2. OPERATION OF THE PLAN. Each year, in December, the Chairman will
determine and recommend for approval by the Board, the rate of annual
retainer to be paid to each outside director for service on the Board
for the next succeeding calendar year. Unless the Board shall elect
otherwise, one-third (1/3) of the annual rate of outside director's
fees will be paid to each outside director in shares of Common Stock
effective as of January 1st and the balance of the fees will be paid in
cash, in three installment payments, on April 1st, July 1st and October
1st in such cash dollar amounts to be determined and approved by
resolution of the Board. Payment of the outside director's fees in
shares of Common Stock will be accomplished through the Company's
issuance of shares of Common Stock having a fair market value,
determined as of December 31st, equal to one-third (1/3) of the rate of
the annual retainer payable to each director. Thus, for example, since
the annual retainer to be paid to outside directors for the 1998
calendar year has been determined by the Board to be $30,000, each
outside director will be entitled to a distribution, effective as of
January 1, 1998, of shares of Common Stock having a fair market value
of $10,000, as determined on December 31, 1997 (rounded up to the next
whole share), representing one-third (1/3) of the annual retainer to be
paid to each outside director for Board service during the 1998
calendar year.
3. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
Senior Officer of the Personnel Department of the Bank.
4. SHARE RESERVE. Currently, there are 20,000 shares of Common Stock
reserved in the Company's treasury for distribution to outside
directors under this Plan.
5. DIVIDENDS AND VOTING RIGHTS. Following the distribution of shares of
Common Stock to each outside director under this Plan, the outside
director shall be the record owner of such Common Stock, entitled to
all ownership rights and privileges, including but not limited to,
dividend and voting rights.
6. REGISTRATION REQUIREMENTS. The Company's obligation to deliver
shares of Common Stock to an outside director under this Plan shall, if
the Company so requests, be conditioned upon the receipt of a
representation as to the investment intention of the outside director,
in such form as the Company shall determine to be necessary or
advisable to comply with the provisions of applicable federal, state or
local law. It may be provided that any such representation shall become
inoperative upon a registration of the shares of Common Stock or upon
the occurrence of any other event eliminating the necessity of such
representation. The Company shall not be required to deliver any shares
of Common Stock to any outside director under the Plan prior to (i) the
admission of such shares to listing on any stock exchange on which
shares may then be listed, or (ii) the completion of such registration
or other qualification under any state or federal law, rule or
regulation as the Company shall determine to be necessary or advisable.
7. TAXES. Each outside director shall be solely responsible for the
payment of any or all income or self-employment withholding taxes
associated with the distribution of shares of Common Stock to an
outside director under this Plan.
8. AMENDMENT AND TERMINATION. This Plan may be terminated or amended,
in whole or in part, by the Bank at any time.
9. STATUS AS AN EMPLOYEE BENEFIT PLAN. This Plan is not intended to
satisfy the requirements for qualification under section 401(a) of the
Internal Revenue Code 1986 or to satisfy the definitional requirements
for an "employee benefit plan" under section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended . It is intended to
be a non-qualified incentive compensation program that is exempt from
the regulatory requirements of the Employee Retirement Income Security
Act of 1974, as amended. The Plan shall be construed and administered
so as to effectuate this intent.
10. NO RIGHT TO CONTINUED BOARD SERVICE. This Plan shall not be held or
construed to confer upon any outside director any right to continued
service on the Board of Directors of the Bank.
11. GOVERNING LAW. This Plan shall be construed and enforced in
accordance with the laws of the State of New York without giving effect
to the conflict of laws principles thereof, except to the extent that
such laws are preempted by the federal laws of the United States of
America.
12. TERM OF THE PROGRAM. This Plan shall remain in effect until the
earlier of (i) termination by the Board or (ii) the distribution of all
Plan shares.
13. ADJUSTMENTS FOR BUSINESS REORGANIZATION, STOCK SPLIT OR STOCK
DIVIDEND. In the event of a business reorganization, stock split, stock
dividend or other event generally affecting the number of shares
reserved for distribution in the Company's treasury, the number of Plan
shares shall be adjusted, as determined by the Board, to account for
such event.
14. EFFECTIVE DATE. This Plan shall be effective as of January 1, 1998.