ASB FINANCIAL CORP.
1995 STOCK OPTION AND INCENTIVE PLAN
1. Purpose. The purpose of the ASB Financial Corp. 1995 Stock Option and
Incentive Plan (this "Plan") is to promote and advance the interests of ASB
Financial Corp. (the "Company") and its shareholders by enabling the Company
to attract, retain and reward directors, managerial and other key employees of
the Company and any Subsidiary (hereinafter defined), and to strengthen the
mutuality of interests between such directors and employees and the Company's
shareholders, by providing such persons with a proprietary interest in
pursuing the long-term growth, profitability and financial success of the
Company.
2. Definitions. For purposes of this Plan, the following terms shall have
the meanings set forth below:
(a) "Award" or "Awards" means an award or grant made to a
Participant under Section 6 of this Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended, or
any successor thereto, together with rules, regulations and
interpretations promulgated thereunder.
(d) "Committee" means the Committee of the Board constituted as
provided in Section 3 of this Plan.
(e) "Common Shares" means the common shares, without par value, of
the Company or any security of the Company issued in substitution, in
exchange or in lieu thereof.
(f) "Company" means ASB Financial Corp., an Ohio corporation, or any
successor corporation.
(g) "Employment" means regular employment with the Company or a
Subsidiary and does not include service as a director only.
(h) "Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute.
(i) "Fair Market Value" shall be determined as follows:
(i) If the Common Shares are traded on a national
securities exchange at the time of grant of the Stock Option,
then the Fair Market Value shall be the average of the highest
and the lowest selling price on such exchange on the date such
Stock Option is granted or, if there were no sales on such
date, then on the next prior business day on which there was a
sale.
(ii) If the Common Shares are not listed on a national
securities exchange at the time of the grant of the Stock
Option, then the Fair Market Value shall be the mean between
the closing high bid and low asked quotation with respect to a
Common Share on such date on The Nasdaq Stock Market.
(iii) If the Common Shares are not traded on a national
securities exchange or quoted on The Nasdaq Stock Market, then
the Fair Market Value shall be as determined by the Committee.
(j) "Incentive Stock Option" means any Stock Option granted pursuant
to the provisions of Section 6 of this Plan that is intended to be and is
specifically designated as an "incentive stock option" within the meaning
of Section 422 of the Code.
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(k) "Non-Qualified Stock Option" means any Stock Option granted
pursuant to the provisions of Section 6 of this Plan that is not an
Incentive Stock Option.
(l) "OTS" means the Office of Thrift Supervision, Department of the
Treasury.
(m) "Participant" means an employee or director of the Company or a
Subsidiary who is granted an Award under this Plan. Notwithstanding the
foregoing, for the purposes of the granting of any Incentive Stock Option
under this Plan, the term "Participant" shall include only employees of
the Company or a Subsidiary.
(n) "Plan" means the ASB Financial Corp. 1995 Stock Option and
Incentive Plan, as set forth herein and as it may be hereafter amended
from time to time.
(o) "Stock Option" means an Award to purchase Common Shares granted
pursuant to the provisions of Section 6 of this Plan.
(p) "Subsidiary" means any corporation or entity in which the
Company directly or indirectly controls 50% or more of the total voting
power of all classes of its stock having voting power, and includes,
without limitation, American Savings Bank, fsb.
(q) "Terminated for Cause" has the meaning set forth in Section
12(c) of this Plan.
3. Administration.
(a) This Plan shall be administered by the Committee to be comprised
of not less than three of the members of the Board who are not employees
of the Company, to be appointed from time to time by the Board. Members
of the Committee shall serve at the pleasure of the Board, and the Board
may from time to time remove members from, or add members to, the
Committee. A majority of the members of the Committee shall constitute a
quorum for the transaction of business. Action approved in writing by the
unanimous consent of the members of the Committee then serving shall be
fully as effective as if the action had been taken by unanimous vote at a
meeting duly called and held.
(b) The Committee is authorized to construe and interpret this Plan;
to promulgate, amend and rescind rules and regulations relating to the
implementation of this Plan; and to make all other determinations
necessary or advisable for the administration of this Plan. The Committee
may designate persons other than members of the Committee to carry out
its responsibilities under such conditions and limitations as it may
prescribe. Any determination, decision or action of the Committee in
connection with the construction, interpretation, administration, or
application of this Plan shall be final, conclusive and binding upon all
persons participating in this Plan and any person validly claiming under
or through persons participating in this Plan. The Company shall effect
the granting of Awards under this Plan in accordance with the
determinations made by the Committee, by execution of instruments in
writing in such form as approved by the Committee.
4. Duration of, and Common Shares Subject to, this Plan.
(a) TERM. This Plan shall terminate on the date which is ten (10)
years from the date on which this Plan is adopted by the Board, except
with respect to Awards then outstanding. Notwithstanding the foregoing,
no Incentive Stock Option may be granted under this Plan after the date
which is ten (10) years from the date on which this Plan is adopted by
the Board or the date on which this Plan is approved by the shareholders
of the Company, whichever is earlier.
(b) COMMON SHARES SUBJECT TO PLAN. The maximum number of Common
Shares in respect of which Awards may be granted under this Plan, subject
to adjustment as provided in Section 9 of this Plan, shall be ten percent
(10%) of the total Common Shares sold in connection with the conversion
of American Savings Bank, fsb (formerly known as American Savings
Association) from mutual to stock form. In addition, no more than 25% of
the shares subject to Awards may be awarded to any individual, no more
than 5% of such shares may be awarded to any non-employee director and no
more than 30% of such shares may be awarded to non-employee directors in
the aggregate.
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For the purpose of computing the total number of Common Shares available
for Awards under this Plan, there shall be counted against the foregoing
limitations the number of Common Shares subject to issuance upon exercise or
settlement of Awards as of the dates on which such Awards are granted. If any
Awards are forfeited, terminated, expire unexercised, or exchanged for other
Awards, the Common Shares which were theretofore subject to such Awards shall
again be available for Awards under this Plan to the extent of such forfeiture
or expiration of such Awards.
Common Shares which may be issued under this Plan may be either
authorized and unissued shares or issued shares which have been reacquired by
the Company. No fractional shares shall be issued under this Plan.
5. Eligibility and Grants. Persons eligible for Awards under this Plan
shall consist of directors and managerial and other key employees of the
Company or a Subsidiary who hold positions with significant responsibilities
or whose performance or potential contribution, in the judgment of the
Committee, will benefit the future success of the Company or a Subsidiary. In
selecting the directors and employees to whom Stock Options will be awarded
and the number of shares subject to such Stock Options, the Committee shall
consider the position, duties and responsibilities of the eligible directors
and employees, the value of their services to the Company and the Subsidiaries
and any other factors the Committee may deem relevant.
6. Stock Options. Stock Options granted under this Plan may be in the
form of Incentive Stock Options or Non-Qualified Stock Options, and such Stock
Options shall be subject to the following terms and conditions and shall
contain such additional terms and conditions, not inconsistent with the
express provisions of this Plan, as the Committee shall deem desirable:
(a) GRANT. Stock Options may be granted under this Plan on terms and
conditions not inconsistent with the provisions of this Plan and in such
form as the Committee may from time to time approve.
(b) STOCK OPTION PRICE. The option exercise price per Common Share
purchasable under a Stock Option shall be determined by the Committee at
the time of grant; provided, however, that in no event shall the exercise
price of a Stock Option be less than one hundred percent (100%) of the
Fair Market Value of the Common Shares on the date of the grant of such
Stock Option. Notwithstanding the foregoing, in the case of a Participant
who owns Common Shares representing more than ten percent (10%) of the
outstanding Common Shares at the time the Incentive Stock Option is
granted, the option exercise price shall in no event be less than one
hundred and ten percent (110%) of the Fair Market Value of the Common
Shares at the time the Incentive Stock Option is granted.
(c) STOCK OPTION TERMS. Subject to the right of the Company to
provide for earlier termination in the event of any merger, acquisition
or consolidation involving the Company, the term of each Stock Option
shall be fixed by the Committee; except that the term of Incentive Stock
Options will not exceed ten (10) years after the date the Incentive Stock
Option is granted; provided, however, that in the case of a Participant
who owns a number of Common Shares representing more than ten percent
(10%) of the Common Shares outstanding at the time the Incentive Stock
Option is granted, the term of the Incentive Stock Option shall not
exceed five (5) years.
(d) EXERCISABILITY. Except as set forth in Section 6(f) of this
Plan, Stock Options awarded under this Plan shall become exercisable at
the rate of one-fifth of the Award per year commencing on the date that
is one year after the date of the grant of the Award and shall be subject
to such other terms and conditions as shall be determined by the
Committee at the date of grant.
(e) METHOD OF EXERCISE. A Stock Option may be exercised, in whole or
in part, by giving written notice of exercise to the Company specifying
the number of Common Shares to be purchased. Such notice shall be
accompanied by payment in full of the purchase price in cash or, if
acceptable to the Committee in its sole discretion, in Common Shares
already owned by the Participant, or by surrendering outstanding Awards.
The Committee may also permit Participants, either on a selective or
aggregate basis, to simultaneously exercise Options and sell Common
Shares thereby acquired, pursuant to a brokerage or similar arrangement,
approved in advance by the Committee, and use the proceeds from such sale
as payment of the purchase price of such shares.
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(f) SPECIAL RULE FOR INCENTIVE STOCK OPTIONS. With respect to Stock
Options granted under this Plan, to the extent the aggregate Fair Market
Value (determined as of the date the Incentive Stock Option is granted)
of the number of shares with respect to which Incentive Stock Options are
exercisable under all plans of the Company or a Subsidiary for the first
time by a Participant during any calendar year exceeds One Hundred
Thousand Dollars ($100,000) or such other limit as may be required by the
Code, such Stock Options shall be Non-Qualified Stock Options to the
extent of such excess.
7. Termination of Employment or Directorship. Except in the event of the
death or disability of a Participant, upon the resignation, removal of
retirement from the Board of Directors of any Participant who is a director of
the Company or any Subsidiary or upon the termination of Employment of a
Participant who is not a director of the Company or any Subsidiary, any option
which has not yet become exercisable shall thereupon terminate and be of no
further force or effect.
8. Non-transferability of Awards. No Award under this Plan, and no rights
or interests therein, shall be assignable or transferable by a Participant
except by will or the laws of descent and distribution. During the lifetime of
a Participant, Stock Options are exercisable only by, and payments in
settlement of Awards will be payable only to, the Participant or his or her
legal representative.
9. Adjustments Upon Changes in Capitalization.
(a) The existence of this Plan and the Awards granted hereunder
shall not affect or restrict in any way the right or power of the Board
or the shareholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's capital
structure or its business, any merger, acquisition or consolidation of
the Company, any issuance of bonds, debentures, preferred or prior
preference stocks ahead of or affecting the Company's capital stock or
the rights thereof, the dissolution or liquidation of the Company or any
sale or transfer of all or any part of its assets or business, or any
other corporate act or proceeding, including any merger or acquisition
which would result in the exchange of cash, stock of another company or
options to purchase the stock of another company for any Stock Option
outstanding at the time of such corporate transaction or which would
involve the termination of all Stock Options outstanding at the time of
such corporate transaction.
(b) In the event of any change in capitalization affecting the
Common Shares of the Company, such as a stock dividend, stock split,
recapitalization, merger, consolidation, split-up, combination or
exchange of shares or other form of reorganization, or any other change
affecting the Common Shares, such proportionate adjustments, if any, as
the Board in its discretion may deem appropriate to reflect such change
shall be made with respect to the aggregate number of Common Shares for
which Awards in respect thereof may be granted under this Plan, the
maximum number of Common Shares which may be sold or awarded to any
Participant, the number of Common Shares covered by each outstanding
Award, and the price per share in respect of outstanding Awards.
(c) The Committee may also make such adjustments in the number of
shares covered by, and the price or other value of, any outstanding
Awards in the event of a spin-off or other distribution (other than
normal cash dividends) of Company assets to shareholders. In the event
that another corporation or business entity is being acquired by the
Company, and the Company agrees to assume outstanding employee stock
options and/or the obligation to make future grants of options or rights
to employees of the acquired entity, the aggregate number of Common
Shares available for Awards under Section 4 of this Plan may be increased
accordingly.
10. Amendment and Termination of this Plan. Without further approval of
the shareholders, the Board may at any time terminate this Plan, or may amend
it from time to time in such respects as the Board may deem advisable, except
that the Board may not, without approval of the shareholders, make any
amendment which would (a) increase the aggregate number of Common Shares which
may be issued under this Plan (except for adjustments pursuant to Section 9 of
this Plan), (b) materially modify the requirements as to eligibility for
participation in this Plan, or (c) materially increase the benefits accruing
to Participants under this Plan. The above notwithstanding, the Board may
amend this Plan to take into account changes in applicable securities, federal
income tax and other applicable laws.
11. Modification of Options. The Board may authorize the Committee to
direct the execution of an instrument providing for the modification of any
outstanding Stock Option which the Board believes to be in the best interests
of the Company; provided, however, that no such modification, extension or
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renewal shall confer on the holder of such Stock Option any right or benefit
which could not be conferred on him by the grant of a new Stock Option at such
time and shall not materially decrease the Participant's benefits under the
Stock Option without the consent of the holder of the Stock Option, except as
otherwise permitted under this Plan.
12. Miscellaneous.
(a) TAX WITHHOLDING. The Company shall have the right to deduct from
any settlement, including the delivery or vesting of Common Shares, made
under this Plan any federal, state or local taxes of any kind required by
law to be withheld with respect to such payments or to take such other
action as may be necessary in the opinion of the Company to satisfy all
obligation for the payment of such taxes. If Common Shares are used to
satisfy tax withholding, such shares shall be valued based on the Fair
Market Value when the tax withholding is required to be made.
(b) NO RIGHT TO EMPLOYMENT. Neither the adoption of this Plan nor
the granting of any Award shall confer upon any employee of the Company
or a Subsidiary any right to continued employment with the Company or any
Subsidiary, as the case may be, nor shall it interfere in any way with
the right of the Company or a Subsidiary to terminate the employment of
any of its employees at any time, with or without cause.
(c) ANNULMENT OF AWARDS. The grant of any Award under this Plan
payable in cash is provisional until cash is paid in settlement thereof.
The grant of any Award payable in Common Shares is provisional until the
Participant becomes entitled to the certificate in settlement thereof. In
the event the Employment or the directorship of a Participant is
Terminated for Cause (hereinafter defined), any Award which is
provisional shall be annulled as of the date of such termination for
cause. For the purpose of this Section 12(c), the term "Terminated for
Cause" means any removal of a director or discharge of an employee for
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 or similar offenses), a
material violation of a final cease-and-desist order or any other action
of a director or employee which results in a substantial financial loss
to the Company or a Subsidiary.
(d) OTHER COMPANY BENEFIT AND COMPENSATION PROGRAMS. Payments and
other benefits received by a Participant under an Award made pursuant to
this Plan shall not be deemed a part of a Participant's regular,
recurring compensation for purposes of the termination indemnity or
severance pay law of any country and shall not be included in, nor have
any effect on, the determination of benefits under any other employee
benefit plan or similar arrangement provided by the Company or a
Subsidiary unless expressly so provided by such other plan or
arrangements, or except where the Committee expressly determines that an
Award or portion of an Award should be included to accurately reflect
competitive compensation practices or to recognize that an Award has been
made in lieu of a portion of competitive annual cash compensation. Awards
under this Plan may be made in combination with or in tandem with, or as
alternatives to, grants, awards or payments under any other Company or
Subsidiary plans. This Plan notwithstanding, the Company or any
Subsidiary may adopt such other compensation programs and additional
compensation arrangements as it deems necessary to attract, retain and
reward directors and employees for their service with the Company and its
Subsidiaries.
(e) SECURITIES LAW RESTRICTIONS. No Common Shares shall be issued
under this Plan unless counsel for the Company shall be satisfied that
such issuance will be in compliance with applicable federal and state
securities laws. Certificates for Common Shares delivered under this Plan
may be subject to such stock-transfer orders and other restrictions as
the Committee may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock
exchange upon which the Common Shares are then listed, and any applicable
federal or state securities law. The Committee may cause a legend or
legends to be put on any such certificates to make appropriate reference
to such restrictions.
(f) AWARD AGREEMENT. Each Participant receiving an Award under this
Plan shall enter into an agreement with the Company in a form specified
by the Committee agreeing to the terms and conditions of the Award and
such related matters as the Committee shall, in its sole discretion,
determine.
(g) COST OF PLAN. The costs and expenses of administering this Plan
shall be borne by the Company.
(h) GOVERNING LAW. This Plan and all actions taken hereunder shall
be governed by and construed in accordance with the laws of the State of
Ohio, except to the extent that federal law shall be deemed applicable.
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(i) EFFECTIVE DATE. This Plan shall be effective upon the later of
adoption by the Board and approval by the Company's shareholders.
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