EXHIBIT 4.1
Haven Bancorp, Inc. 1996 Stock Incentive Plan
Haven Bancorp, Inc. 1996 Stock Incentive Plan
______________________________
Adopted on February 29, 1996
Effective as of April 24, 1996
TABLE OF CONTENTS
ARTICLE I
Purpose
Section 1.1 General Purpose of the Plan. 1
ARTICLE II
Definitions
Section 2.1 Administrator 1
Section 2.2 Annual Retainer 1
Section 2.3 Appreciation Right 1
Section 2.4 Award 1
Section 2.5 Award Agreement 1
Section 2.6 Award Recipient 1
Section 2.7 Bank 2
Section 2.8 Beneficiary 2
Section 2.9 Board 2
Section 2.10 Change in Control 2
Section 2.11 Code 3
Section 2.12 Committee 3
Section 2.13 Corporation 3
Section 2.14 Disinterested Board Member 3
Section 2.15 Dividend Equivalent Right 3
Section 2.16 Effective Date 3
Section 2.17 Eligible Director 3
Section 2.18 Eligible Individual 3
Section 2.19 Exercise Period 3
Section 2.20 Exercise Price 3
Section 2.21 Fair Market Value 3
Section 2.22 Haven 4
Section 2.23 Incentive Stock Option 4
Section 2.24 Non-Qualified Stock Option 4
Section 2.25 Option 4
Section 2.26 Option Holder 4
Section 2.27 Person 4
Section 2.28 Plan 4
Section 2.29 Qualified Domestic Relations Order 4
Section 2.30 Retirement 5
Section 2.31 Restricted Stock 5
Section 2.32 Share 5
Section 2.33 Vesting Date 5
ARTICLE III
Administration
Section 3.1 Committee 5
Section 3.2 Committee Action 5
Section 3.3 Committee Responsibilities 6
Section 3.4 Indemnification 7
ARTICLE IV
Available Shares and Award Agreements
Section 4.1 Available Shares 7
Section 4.2 Option Agreements 8
ARTICLE V
Stock Options
Section 5.1 Options Granted to Eligible Individuals 9
Section 5.2 Options Granted to Eligible Directors 9
Section 5.3 Method of Exercise 11
Section 5.4 Limitations on Options 12
Section 5.5 Additional Limitations on Incentive Stock Options 12
ARTICLE VI
Appreciation Rights
Section 6.1 Appreciation Rights Granted to Eligible Individuals 13
Section 6.2 Appreciation Rights Granted to Eligible Directors 14
Section 6.3 Exercise of Appreciation Rights 14
Section 6.4 Effect of Exercise 15
ARTICLE VII
Restricted Stock
Section 7.1 Restricted Stock Granted to Eligible Individuals 15
Section 7.2 Restricted Stock Granted to Eligible Directors 15
Section 7.3 Stock Certificates 16
Section 7.4 Shareholder Rights 16
Section 7.5 Distribution of Shares 17
ARTICLE VIII
Dividend Equivalent Rights
Section 8.1 In General 17
Section 8.2 Form of Dividend Equivalents 17
ARTICLE IX
Amendment and Termination
Section 9.1 Termination 18
Section 9.2 Amendment 18
Section 9.3 Adjustments for Business Reorganization, Stock
Split or Stock Dividend 18
ARTICLE X
Miscellaneous
Section 10.1 Status as an Employee Benefit Plan 19
Section 10.2 No Right to Continued Employment or Board
Membership 20
Section 10.3 Construction of Language 20
Section 10.4 Governing Law 20
Section 10.5 Headings 20
Section 10.6 Non-Alienation of Benefits 20
Section 10.7 Taxes 20
Section 10.8 Approval of Shareholders 21
Section 10.9 Notices 21
HAVEN BANCORP, INC. 1996 STOCK INCENTIVE PLAN
ARTICLE I
Purpose
Section 1.1 General Purpose of the Plan.
The purpose of the Plan is to advance the interests of Haven
Bancorp, Inc. and its shareholders by providing current directors,
officers and employees of Haven and its affiliates with an
incentive to achieve corporate objectives, and attracting and
retaining directors, officers and employees of outstanding
competence, through the award of equity interests in Haven, and by
providing a means for the payment of compensation earned under the
Columbia Federal Savings Bank Executive Incentive Compensation Plan
in the form of stock options and awards.
ARTICLE II
Definitions
The following definitions shall apply for the purposes of this
Plan, unless a different meaning is plainly indicated by the
context.
Section 2.1 Administrator means the person or persons designated
by the Committee pursuant to Section 3.3 to assist the Committee in
the administration of the Plan.
Section 2.2 Annual Retainer means the annual retainer, if any,
being paid to an Eligible Director for service on the Board and/or
the board of directors of the Bank.
Section 2.3 Appreciation Right means a right granted pursuant to
Article VI which shall entitle the holder thereof to receive in
accordance with the terms of such Appreciation Right an amount of
cash equal to the difference between the Fair Market Value of the
Shares subject to the Appreciation Right and the Exercise Price
applicable to such Appreciation Right. For purposes of this
Section 2.3, the Fair Market Value of a Share shall be determined
on the date the Appreciation Right is exercised.
Section 2.4 Award means the grant of an Option, Appreciation Right
or Restricted Stock made pursuant to the Plan.
Section 2.5 Award Agreement means the written agreement evidencing
the grant of an Option, an Appreciation Right or Restricted Stock
Award made pursuant to the Plan.
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Section 2.6 Award Recipient means an Eligible Individual or
Eligible Director who has been granted an Option, an Appreciation
Right or Restricted Stock pursuant to the Plan.
Section 2.7 Bank means Columbia Federal Savings Bank, a federally
chartered stock savings bank and any successor thereto.
Section 2.8 Beneficiary means the person or persons designated by
an Eligible Individual or Eligible Director in such form and manner
as may be required by the Committee or Administrator, to receive
his or her Award in the event all or any portion of such Award
remains unexercised or undistributed upon his or her death or, if
no such Beneficiary has been designated, the legal representative
of the Eligible Individual or Eligible Director.
Section 2.9 Board means the board of directors of Haven.
Section 2.10 Change in Control means an event of the nature that:
(a) would be required to be reported by Haven in response to Item
1 of the current report on Form 8-K, as in effect on the date
hereof, pursuant to Sections 13 or 15(d) of the Securities Exchange
Act of 1934 (the "Exchange Act"); or (b) results in a Change in
Control of the Bank or Haven within the meaning of the Change in
Bank Control Act and the rules and regulations promulgated
thereunder by the appropriate federal banking agency, as in effect
on the date hereof; or (c) results in a transaction requiring prior
Federal Reserve Board ("FRB") approval under the Bank Holding
Company Act of 1956 and the regulations promulgated thereunder by
the FRB, as in effect on the date hereof; or (d) results in a
transaction requiring prior Office of Thrift Supervision ("OTS")
approval under the Home Owners' Loan Act and the regulations
promulgated thereunder by the OTS, as in effect on the date hereof.
Without limiting the foregoing, a Change in Control shall be deemed
to have occurred at such time as: (i) any "person" (as the term is
used in Section 13(d) and 14(d) of the Exchange Act) is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Bank or Haven
representing 20% or more of the Bank's or Haven's outstanding
securities, except for any securities of the Bank purchased by
Haven in connection with the conversion of the Bank to the stock
form and any securities purchased by employee benefit plans
maintained by the Bank or Haven, or such plans' related trusts;
(ii) individuals who constitute the Board of Directors of Haven or
the Board of Directors of the Bank on the date hereof (the
"Incumbent Board") cease for any reason to constitute at least a
majority thereof, provided that any individual becoming a director
subsequent to the date hereof whose election was approved by a vote
of at least three-quarters of the directors comprising the
Incumbent Board, or whose nomination for election by Haven's
stockholders was approved by the same Nominating Committee serving
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under an Incumbent Board, shall be, for purposes of this clause
(ii), considered as though he were a member of the Incumbent Board,
but only if such individual's election or nomination did not
resultfrom an actual or threatened election contest (within the
meaning of Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies
or consents (within the meaning of Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) other than by or on behalf of
the Board of Haven; (iii) a plan of reorganization, merger,
consolidation, sale of all or substantially all the assets of the
Bank or Haven becomes effective or a similar transaction occurs in
which the Bank or Haven is not the resulting entity; (iv) a plan of
reorganization, merger, consolidation, sale of all or substantially
all of the assets of the Bank or Haven or a similar transaction,
which will result in the outstanding shares of the class of
securities then subject to such plan or transaction being exchanged
for or converted into cash or property or securities not issued by
the Bank or Haven, is approved by the stockholders of Haven in
response to a proxy statement that was distributed, soliciting
proxies from stockholders of Haven, by someone other than the
current management of Haven, or (v) 20% or more of the voting
securities of the Bank or Haven then outstanding are tendered and
accepted by an offeror as of the closing of a tender offer for such
securities.
Section 2.11 Code means the Internal Revenue Code of 1986
(including the corresponding provisions of any succeeding law).
Section 2.12 Committee means the Committee described in Section
3.1.
Section 2.13 Corporation means Haven, the Bank and any successor
or successors thereto, and subject to the approval of, and such
terms and conditions as may be imposed by, the Board, such other
savings bank, savings and loan association, bank, corporation,
financial institution or other business organization or institution
as may be or become an affiliate of Haven.
Section 2.14 Disinterested Board Member means a member of the
Board who is not currently an employee of the Company, is not a
former employee of the Company who receives compensation for prior
services and has not at any time previously been an officer of the
Company.
Section 2.15 Dividend Equivalent Right means a right described in
Article IX.
Section 2.16 Effective Date means the date on which the Plan is
approved by the holders of a majority of the Shares represented in
person or by proxy at a meeting duly called and held.
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Section 2.17 Eligible Director means a member of the Board or a
member of the board of directors of the Bank who is not an employee
or an officer of the Corporation.
Section 2.18 Eligible Individual means any employee of the
Corporation whom the Committee may select to receive an Award
pursuant to the Plan, provided, however, that no Eligible Director
shall be identified as an Eligible Individual.
Section 2.19 Exercise Period means the period during which an
Option or an Appreciation Right may be exercised.
Section 2.20 Exercise Price means the price per Share (a) at which
Shares subject to an Option may be purchased upon exercise of the
Option granted pursuant to Sections 5.1 or 5.2, or (b) used to
determine the payment to be made pursuant to the exercise of an
Appreciation Right granted pursuant to Sections 6.1 or 6.2.
Section 2.21 Fair Market Value means, when used in connection with
Shares on a certain date, the average of the reported bid and ask
price of the Shares as reported by the National Association of
Securities Dealers Automated Quotation System (as published by the
Wall Street Journal, if published) on such date or if the Shares
were not traded on such date, on the next preceding day on which
the Shares were traded thereon or the last previous date on which
a sale is reported.
Section 2.22 Haven means Haven Bancorp, Inc., a corporation
organized and existing under the laws of the State of Delaware, and
any successor thereto.
Section 2.23 Incentive Stock Option means a right to purchase
Shares that is granted pursuant to Section 5.1, that is designated
by the Committee to be an Incentive Stock Option and that satisfies
the requirements of Section 5.5 of the Plan and Section 422 of the
Code.
Section 2.24 Non-Qualified Stock Option means a right to purchase
Shares that is either (a) granted pursuant to Section 5.1,
designated by the Committee to be a Non-Qualified Stock Option and
is not intended to satisfy the requirements of Section 422 of the
Code, or (b) granted pursuant to Section 5.2.
Section 2.25 Option means either an Incentive Stock Option or a
Non-Qualified Stock Option granted under this Plan.
Section 2.26 Option Holder means an Eligible Individual or an
Eligible Director who has been granted an Option under the Plan, or
the Beneficiary of such an Eligible Individual or Eligible
Director.
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Section 2.27 Person means an individual, a corporation, a bank, a
savings bank, a savings and loan association, a financial
institution, a partnership, an association, a joint-stock company,
a trust, an estate, an unincorporated organization and any other
business organization or institution.
Section 2.28 Plan means the Haven Bancorp, Inc. 1996 Stock
Incentive Plan, as amended from time to time.
Section 2.29 Qualified Domestic Relations Order means a Domestic
Relations Order that: (a) clearly specifies (i) the name and last
known mailing address of the Option Holder and of each person given
rights under such Domestic Relations Order, (ii) the amount or
percentages of the Option Holder's benefits under this Plan to be
paid to each person covered by such Domestic Relations Order, (iii)
the number of payments or the period to which such Domestic
Relations Order applies, and (iv) the name of this Plan; and (b)
does not require the payment of a benefit in a form or amount that
is (i) not otherwise provided for under the Plan, or (ii)
inconsistent with a previous Qualified Domestic Relations Order.
For the purposes of this Plan, a "Domestic Relations Order"means a
judgment, decree or order (including the approval of a property
settlement) that is made pursuant to a state domestic relations or
community property law and relates to the provision of child
support, alimony payments, or marital property rights to a spouse,
child or other dependent of an Option Holder.
Section 2.30 Retirement means, in the case of an Eligible
Director, such Eligible Director's termination of service, other
than for cause, upon or after (a) completing at least 5 years of
service on the Board or the board of directors of the Bank, without
regard to any breaks in such service, and (b) attaining age 55.
Section 2.31 Restricted Stock means Shares that have been granted
to an Eligible Individual or Eligible Director pursuant to Article
VII, which Shares shall not be transferable by the Award Recipient
by means of sale, assignment, exchange, pledge or otherwise, until
the Vesting Date or Vesting Dates applicable to such Shares.
Section 2.32 Share means a share of common stock of Haven.
Section 2.33 Vesting Date means the date established by the
Committee or prescribed in Sections 5.2, 6.2 or 7.2, as of which
(a) an Option or Appreciation Right may first be exercised, or (b)
the restrictions relating to Restricted Stock will lapse. By way
of example and not by way of limitation, a Vesting Date established
by the Committee with respect to an Award made to an Eligible
Individual may be a fixed calendar date, the date on which
individual, group, departmental, divisional or corporate
performance criteria established by the Committee are achieved
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and/or the date of an Award Recipient's termination of employment
due to death, disability or retirement, or following a Change in
Control.
ARTICLE III
Administration
Section 3.1 Committee
The Plan shall be administered by the Compensation Committee
of the Board (or any successor committee), or such other committee
as shall be designated by or on behalf of the Board to perform the
duties set forth in this Article III; provided, however, that all
members of such Committee must be Disinterested Board Members. If
fewer than 2 members of the Compensation Committee of the Board are
Disinterested Board Members, then the Board shall appoint to the
Committee such additional Disinterested Board Members as shall be
necessary to provide for a Committee consisting of at least 2
Disinterested Board Members.
Section 3.2 Committee Action
The Committee shall hold meetings, at least annually, and may
make such administrative rules and regulations as it may deem
proper. A majority of the members of the Committee shall
constitute a quorum, and the action of a majority of the members of
the Committee present at a meeting at which a quorum is present, as
well as actions taken pursuant to the unanimous written consent of
all of the members of the Committee without holding a meeting,
shall be deemed to be actions of the Committee. All actions of the
Committee shall be final and conclusive and shall be binding upon
the Corporation and all other interested parties.
Section 3.3 Committee Responsibilities
Subject to the terms and conditions of the Plan and such
limitations as may be imposed from time to time by the Board, the
Committee shall be responsible for the overall management and
administration of the Plan and shall have such authority as shall
be necessary or appropriate in order to carry out its
responsibilities, including, without limitation, the authority:
(a) to interpret, construe and implement the Plan, and to
determine and resolve any and all questions that may arise under
the Plan, Awards granted pursuant to the Plan and the terms and
conditions thereof, and any such determinations, interpretations
and other decisions made by the Committee under or with respect to
the Plan or any Award thereunder, shall be final, conclusive and
binding upon the Corporation, any Award Recipient or Beneficiary
and any other Person having an interest in the Plan;
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(b) to adopt rules and regulations and to prescribe forms for
the operation and administration of the Plan;
(c) to appoint an officer, or officers, of Haven or the Bank,
who need not be a member of the Committee, and who shall, subject
to the responsibilities of the Committee and the Board, serve as
the Administrator for the Plan and shall have the responsibility
for the day-to-day control, management, operation and
administration of the Plan, including, subject to the Committee's
discretion, the following:
(i) maintaining records necessary or appropriate for
the administration of the Plan;
(ii) giving and receiving such instructions, notices
and information as may be necessary or appropriate in the
administration of the Plan;
(iii) prescribing forms consistent with the terms of the
Plan and with the interpretations and other actions of the
Committee;
(iv) determining and resolving any question arising in
connection with the Plan or an Award made thereunder, and such
Administrator's decision or action in respect thereof shall be
final and conclusive and binding upon the Corporation, the Award
Recipients, Beneficiaries and any other Person having an interest
under the Plan; provided, however, that any question relating to
inconsistency or omission in the Plan, or interpretation of the
provisions of the Plan, shall be referred to the Committee by the
Administrator, and the decision of the Committee in respect thereof
shall be final;
(v) discharging such other responsibilities or follow
such directions as may be assigned or given by the Committee or the
Board; and
any Person dealing with the Administrator shall be fully protected
in relying upon any written notice, instruction, direction or other
communication signed by the Administrator; and
(d) to take any other action not inconsistent with the
provisions of the Plan that it may deem necessary or appropriate.
Section 3.4 Indemnification
No member of the Committee or an Administrator shall be liable
for any action, omission, or determination relating to the Plan,
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and the Corporation shall indemnify and hold harmless each member
of the Committee, the Administrator and each other director or
employee of the Corporation to whom any duty or power relating to
the administration or interpretation of the Plan has been delegated
against any cost or expense (including counsel fees) or liability
(including any sum paid in settlement of a claim with the approval
of the Committee) arising out of any action , omission or
determination relating to the Plan, unless, in either case, such
action, omission or determination was taken or made by such member,
director or employee in bad faith and without reasonable belief
that it was in the best interests of the Corporation.
ARTICLE IV
Available Shares and Award Agreements
Section 4.1 Available Shares
Subject to Section 9.3, the maximum aggregate number of Shares
with respect to which Options, Restricted Stock and Dividend
Equivalent Rights may be granted at any time pursuant to this Plan
shall be equal to the excess of:
(a) 210,000 Shares; over
(b) the sum of:
(i) the number of Shares with respect to which Options
previously granted under this Plan may then or may in the future be
exercised; plus
(ii) the number of Shares with respect to which Options
previously granted under this Plan have been exercised; plus
(iii) the number of Shares that have been granted as
Restricted Stock under this Plan which have become or may in the
future become vested.
The Shares available pursuant to this Section 4.1 may be either
authorized but unissued Shares, or Shares previously issued and
reacquired by Haven to be held as issued but not outstanding
Shares. Solely for purposes of this Section 4.1: (A) an Option
shall not be considered as having been exercised or remaining
exercisable to the extent that such Option terminates by reason
other than the purchase the related Shares, (B) the exercise of an
Appreciation Right related to an Option shall be treated as a
termination, but not an exercise, of the related Option and (C)
Shares of Restricted Stock that are forfeited prior to vesting
shall be added to the number of Shares available under the Plan.
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Section 4.2 Option Agreements
Any Award granted pursuant to the Plan shall be evidenced by
a written agreement which shall:
(a) specify the number of Shares covered by or relating to
the Award;
(b) in the case of an Option, designate the Option as either
an Incentive Stock Option or a Non-Qualified Stock Option;
(c) in the case of an Option or Appreciation Right:
(i) specify the Exercise Price for the Shares subject
to the Option or Appreciation Right; and
(ii) specify the Exercise Period for the Option or
Appreciation Right;
(iii) specify any Dividend Equivalent Rights relating to
the Option or Appreciation Right;
(d) specify the Vesting Date or Vesting Dates applicable to
such Award;
(e) set forth specifically, or incorporate by reference,the
applicable provisions of the Plan; and
(f) contain such other terms and conditions not inconsistent
with the Plan as the Committee may, in its discretion, prescribe
with respect to an Award granted to an Eligible Individual.
ARTICLE V
Stock Options
Section 5.1 Options Granted to Eligible Individuals
(a) Subject to the limitations of the Plan, the Committee
may, in its discretion, grant to an Eligible Individual an Option
to purchase Shares.
(b) Subject to Section 4.1 and such limitations as the Board
may from time to time impose, the number of Shares subject to an
Option granted to an Eligible Employee shall be determined by the
Committee, in its discretion; provided, however, that the maximum
number of Shares that may be subject to an Option granted to any
Eligible Individual during the period the Plan is in effect shall
be 112,000.
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(c) The Exercise Price of an Option granted to an Eligible
Individual shall be determined by the Committee, in its discretion;
provided, however, that the Exercise Price established for any
Incentive Stock Option shall be determined in accordance with
Section 5.5; and further provided, that the Exercise Price
established for any Option shall not be less than the par value of
a Share on the date on which the Option is granted.
(d) The Exercise Period during which an Option granted to an
Eligible Individual may be exercised, and the Vesting Date or
Vesting Dates on and after which all or a specified portion of the
Shares subject to the Option may be purchased, shall be determined
by the Committee, in its discretion.
(e) The Committee may, in its discretion, establish such
other terms and conditions with respect to an Option granted to an
Eligible Employee as it may deem necessary or appropriate,
including, without limitation, the grant of related Dividend
Equivalent Rights, which terms and conditions shall be specified in
the Award Agreement evidencing such Option.
Section 5.2 Options Granted to Eligible Directors
(a) Subject to Section 4.1, effective as of the Effective
Date, each Eligible Director who is an Eligible Director on such
date shall be granted a Non-Qualified Stock Option to purchase
6,000 Shares. An individual who first becomes an Eligible Director
subsequent to the Effective Date shall be granted, effective on the
date he or she becomes an Eligible Director, a Non-Qualified Stock
Option to purchase 6,000 Shares.
(b) The Exercise Price of an Option granted to an Eligible
Director shall be the Fair Market Value of a Share on the date on
which the Option is granted.
(c) The Exercise Period during which an Option granted to an
Eligible Director may be exercised shall commence on the first
anniversary of the date the Option was granted and shall expire on
the earliest of:
(i) the last day of the one-year period commencing on
the date the Eligible Director ceases to be an Eligible Director,
other than due to a termination for cause;
(ii) the date the Eligible Director ceases to be an
Eligible Director due to a termination for cause; and
(iii) the last day of the ten-year period commencing on
the date on which the Option was granted;
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provided, however, that in the event of an Eligible Director's
termination of service due to Retirement while there is outstanding
any Option granted to such Eligible Director for which the Exercise
Period has not commenced, the Exercise Period applicable to such
Option shall automatically commence as of the effective date of
such Eligible Director's Retirement; and further provided, that in
the event of a Change in Control while there is outstanding any
Option granted to an Eligible Director for which the Exercise
Period has not commenced, the Exercise Period applicable to such
Option shall automatically commence on the earliest date on which
the Change in Control is deemed to have occurred.
(d) The Vesting Dates applicable to an Option granted to an
Eligible Director pursuant to this Section 5.2 shall be:
(i) the first anniversary of the date the Option was
granted with respect to 2,000 of the unvested Shares subject to the
Option;
(ii) the second anniversary of the date the Option was
granted with respect to an additional 2,000 of the unvested Shares
subject to the Option; and
(iii) the third anniversary of the date the Option was
granted with respect to the remaining 2,000 unvested Shares subject
to the Option;
provided, however, that in the event of an Eligible Director's
termination of service due to Retirement while there is outstanding
any Option granted to such Eligible Director for which the
applicable Vesting Date or Vesting Dates specified in this Section
5.2(d) has not occurred, such Option shall become fully vested as
of the effective date of such Eligible Director's Retirement; and
further provided, that in the event of a Change in Control while
there is outstanding any Option granted to an Eligible Director for
which the applicable Vesting Date or Vesting Dates specified in
this Section 5.2(d) has not occurred, such Option shall become
fully vested as of earliest date on which the Change in Control is
deemed to have occurred.
(e) If an Eligible Director granted an Option pursuant to
this Section 5.2 ceases to be an Eligible Director prior to a
Vesting Date specified in Section 5.2(d) for any reason other than
Retirement or a termination of service following a Change in
Control, any Option granted to such Eligible Director that has not
previously become vested shall be forfeited.
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Section 5.3 Method of Exercise
(a) Subject to the limitations of the Plan and the Award
Agreement evidencing an Option, the Option Holder may, at any time
during the Exercise Period, exercise his or her right to purchase
all or any part of the Shares to which the Option relates;
provided, however, that the minimum number of Shares which may be
purchased shall be 100, or, if less, the total number of Shares
relating to the Option which remain unpurchased. An Option Holder
shall exercise an Option to purchase Shares by:
(i) giving written notice to the Committee or
Administrator in such form and manner as the Committee may
prescribe, of his or her intent to exercise the Option;
(ii) delivering to the Committee or Administrator full
payment for the Shares as to which the Option is to be exercised;
and
(iii) satisfying such other conditions as may be
prescribed in the Award Agreement.
Payment for Shares to be purchased upon exercise of an Option shall
be made (A) in United States dollars (by certified or bank check or
such other instrument as the Company may accept); (B) if and to the
extent permitted by the Committee, in the form of Shares already
owned beneficially by the Option Holder for a period of more than
six months and having an aggregate Fair Market Value on the date
the Option is exercised equal to the aggregate Exercise Price to be
paid; or (C) by a combination of (A) and (B). Payment for any
Shares to be purchased upon exercise of an Option may also be made
by delivering a properly executed exercise notice to the Committee
or Administrator, together with a copy of irrevocable instructions
to a broker to deliver promptly to Haven the amount of sale or loan
proceeds to pay the Exercise Price. To facilitate the foregoing,
Haven may enter into agreements for coordinated procedures with one
or more brokerage firms. Notwithstanding the provisions of Section
10.9, the date of exercise shall be the earliest date practicable
following the date on which the notice referred to in this Section
5.3(a) is received by the Committee or Administrator, but in no
event more than three days after such notice is received.
(b) When the requirements of Section 5.3(a) have been
satisfied, the Committee or Administrator shall take such action as
is necessary to cause the issuance, in the name of the Option
Holder or such individual as the Option Holder may designate, of a
stock certificate evidencing the ownership of such Shares. Except
as may be provided under Article VIII with respect to Dividend
Equivalent Rights, an Option Holder shall have no right to vote or
to receive dividends, nor have any other rights with respect to the
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Shares, prior to the date as of which such Shares are transferred
to the Option Holder on the stock transfer records of Haven, and no
adjustments shall be made for any dividends or other rights for
which the record date is prior to the date as of which such
transfer is effected, except as may be required under Section 9.3.
Section 5.4 Limitations on Options
(a) No Eligible Individual shall be granted an Option unless
at the time the Option is granted, each member of the Committee is
a Disinterested Board Member.
(b) An Option by its terms shall not be transferable by the
Option Holder other than by will or by the laws of descent and
distribution, or pursuant to the terms of a Qualified Domestic
Relations Order, and shall be exercisable, during the lifetime of
an Option Holder only by such Option Holder or an alternate payee
designated pursuant to a Qualified Domestic Relations Order.
(c) The obligation of Haven to deliver Shares with respect to
an Option shall, if the Committee or Administrator so requests, be
conditioned upon the receipt of a representation as to the
investment intention of the Option Holder to whom such Shares are
to be delivered, in such form as the Committee or Administrator
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 or upon the occurrence of any other
event eliminating the necessity of such representation. Haven
shall not be required to deliver any Shares 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 Committee or Administrator shall
determine to be necessary or advisable.
Section 5.5 Additional Limitations on Incentive Stock Options
In addition to the limitations of Section 5.4, an Option
designated by the Committee to be an Incentive Stock Option shall
be subject to the following limitations:
(a) if, for any calendar year, the sum of (i) plus (ii)
exceeds $100,000, where (i) equals the Fair Market Value
(determined as of the date of the grant) of Shares subject to an
Option intended to be an Incentive Stock Option which first become
available for purchase during such calendar year, and (ii) equals
the Fair Market Value (determined as of the date of grant) of
Shares subject to any other Options intended to be Incentive Stock
Options and previously granted to the same Eligible Individual
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which first become exercisable in such calendar year, then that
portion of the Shares granted pursuant to such Options which cause
the sum of (i) and (ii) to exceed $100,000 shall be deemed to be
Shares granted pursuant to a Non-Qualified Stock Option or Non-
Qualified Stock Options, with the same terms as the Option or
Options intended to be an Incentive Stock Option;
(b) the Exercise Price established for an Option intended to
be an Incentive Stock Option shall not be less than the reported
closing price of a Share as reported by the National Association of
Securities Dealers Automated Quotation System for the date the
Option is granted; and
(c) the Exercise Price established for an Option intended to
be an Incentive Stock Option that is granted to an Eligible
Individual who, at the time the Option is granted, owns Shares
comprising more than 10% of the total combined voting power of all
classes of stock of Haven, shall not be less than 110% of the
amount determined under Section 5.5(b) without regard to this
Section 5.5(c).
ARTICLE VI
Appreciation Rights
Section 6.1 Appreciation Rights Granted to Eligible Individuals
(a) Subject to the limitations of the Plan, the Committee
may, in its discretion, grant an Appreciation Right to an Eligible
Individual. Such Appreciation Right may, but shall not be required
to, be related to all or a portion of the Shares subject to an
Option that is granted to such Eligible Individual simultaneously
with the Appreciation Right.
(b) Subject to Section 4.1 and such limitations as the Board
may from time to time impose, the number of Shares subject to an
Appreciation Right granted to an Eligible Employee shall be
determined by the Committee, in its discretion; provided, however,
that the number of Shares subject to an Appreciation Right that
relates to an Option shall not exceed the number of Shares subject
to such Option.
(c) The Exercise Price of an Appreciation Right granted to an
Eligible Individual shall be determined by the Committee, in its
discretion; provided, however, that the Exercise Price established
for an Appreciation Right that relates to all or any portion of an
Option shall be the Exercise Price established for such Option.
(d) The Exercise Period during which an Appreciation Right
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granted to an Eligible Individual may be exercised and the Vesting
Date or Vesting Dates, if any, on and after which all or a
specified portion of the Appreciation Right may be exercised, shall
be determined by the Committee, in its discretion; provided,
however, that the Exercise Period established for an Appreciation
Right shall not commence prior to a Change in Control.
(e) The Committee may, in its discretion, establish such
other terms and conditions with respect to an Appreciation Right
granted to an Eligible Employee as it may deem necessary or
appropriate, including, but not limited to, the grant of related
Dividend Equivalent Rights, which terms and conditions shall be
specified in the Award Agreement evidencing such Appreciation
Right.
Section 6.2 Appreciation Rights Granted to Eligible Directors
Each Eligible Director who has been granted an Option pursuant
to Section 5.2 of the Plan shall, at the time the Option is
granted, also be granted an Appreciation Right relating to all of
the Shares subject to such Option, with an Exercise Price equal to
the Exercise Price of the related Option. The Exercise Period
applicable to such Appreciation Right shall be the same as for the
related Option; provided, however, that such Exercise Period shall
not commence prior to the earliest date on which a Change in
Control is deemed to have occurred.
Section 6.3 Exercise of Appreciation Rights
(a) An Award Recipient in possession of an Appreciation Right
who desires to exercise such Appreciation Right shall do so by
delivering to the Committee or Administrator advance written
notice, in the form and manner prescribed by the Committee or
Administrator, of his or her intent to exercise the Appreciation
Right and the number of Shares with respect to which the
Appreciation Right is to be exercised. Except as provided in
section 6.3(c), within ten (10) days after the giving of such a
notice, the Committee shall cause Haven to deliver to the Award
Recipient a monetary payment in an amount per Share equal to the
amount by which the Change in Control Consideration exceeds the
Exercise Price per Share of each of the Appreciation Rights being
exercised.
(b) For purposes of section 6.3(a), the term Change in
Control Consideration shall mean the greater of (i) the highest
price per Share paid by any Person who initiated or sought to
effect the Change in Control for a Share during the period of one
(1) year ending on the date of the relevant Change in Control; and
(ii) the average Fair Market Value of a Share over the last ten
(10) trading days preceding the date of exercise of the
Appreciation Right.
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(c) Notwithstanding anything herein contained to the
contrary, the Appreciation Rights granted hereunder shall be
cancelled immediately prior to the effective time of a Change in
Control resulting from a transaction between the Corporation and
another party pursuant to a written agreement whereby the
consummation of the transaction is conditioned upon the
availability of "pooling of interests" accounting treatment (within
the meaning of A.P.B. No. 16 or any successor thereto); provided,
however, that the cancellation of such Appreciation Rights shall be
subject to the following conditions:
(i) the existence of the Appreciation Rights would (in
the opinion of the firm of independent certified public accountants
regularly engaged to audit the Corporation's financial statements)
render the transaction ineligible for pooling of interests
accounting treatment;
(ii) the cancellation of the Appreciation Rights would
(in the opinion of the firm of independent certified public
accountants regularly engaged to audit the Corporation's financial
statements) render the transaction eligible for pooling of
interests accounting treatment; and
(iii) the transaction is, in fact, consummated.
Section 6.4 Effect of Exercise
The exercise of an Appreciation Right which relates to all or
a portion of an Option shall, for all purposes of the Plan other
than determining the amount of Shares available pursuant to Section
4.1, be treated as an exercise of the related Option and a
subsequent resale of the Shares acquired thereby.
ARTICLE VII
Restricted Stock
Section 7.1 Restricted Stock Granted to Eligible Individuals
(a) Subject to the limitations of the Plan, the Committee
may, in its discretion, grant Restricted Stock to an Eligible
Individual.
(b) Subject to Section 4.1 and such limitations as the Board
may from time to time impose, the number of Shares of Restricted
Stock granted to an Eligible Employee shall be determined by the
Committee, in its discretion; provided, however, that the maximum
number of Shares that may be granted to any Eligible Individual as
Restricted Stock during the period the Plan is in effect shall be
28,000.
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(c) The Vesting Date or Vesting Dates on which all or a
specified portion of the Restricted Stock granted to an Award
Recipient shall become transferable shall be determined by the
Committee, in its discretion; provided, however, that the Vesting
Date or Vesting Dates shall be at least six months after the date
of the grant of the Restricted Stock.
(d) The Committee may, in its discretion, establish such
other terms and conditions with respect to Restricted Stock granted
to an Eligible Employee as it may deem necessary or appropriate,
which terms and conditions shall be specified in the Award
Agreement evidencing such Restricted Stock Award.
Section 7.2 Restricted Stock Granted to Eligible Directors
(a) Subject to Section 4.1, effective as of the Effective
Date and as of the first business day of each of the first four
calendar years beginning after the Effective Date ("Grant Date"),
each Eligible Director who is an Eligible Director on such date
shall be granted a number of Shares of Restricted Stock in lieu of
receiving one-third of the Annual Retainer that would otherwise be
paid in cash to such Eligible Director for the calendar year in
which the Grant Date occurs. The number of Shares of Restricted
Stock to be granted to an Eligible Director on each Grant Date
pursuant this Section 7.2(a) shall be equal to the dollar value of
one-third of the Eligible Director's Annual Retainer for the
calendar year in which the Grant Date occurs, divided by the Fair
Market Value of a Share on the effective date of the grant, and any
fractional Shares resulting from such calculation shall be
disregarded.
(b) The Vesting Date for Restricted Stock awarded to an
Eligible Director pursuant to this Section 7.2 shall be the date
that is six months after the date the Restricted Stock is granted.
(c) If an Award Recipient granted Restricted Stock pursuant
to this Section 7.2 ceases to be an Eligible Director prior to a
Vesting Date specified in Section 7.2(b) for any reason other than
a termination of service following a Change in Control or
Retirement, any Restricted Stock granted to such Award Recipient
that has not previously become vested shall be forfeited.
(d) If an Award Recipient granted Restricted Stock pursuant
to this Section 7.2 ceases to be an Eligible Director due to
Retirement prior to a Vesting Date specified in Section 7.2(b), any
Restricted Stock granted to such Award Recipient that has not
previously become vested shall be deemed vested as of the date of
such Award Recipient's Retirement.
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(e) If, following a Change in Control, an Award Recipient
granted Restricted Stock pursuant to this Section 7.2 ceases to be
an Eligible Director prior to a Vesting Date specified in Section
7.2(b) for any reason, other than for cause, any Restricted Stock
granted to such Award Recipient that has not previously become
vested shall be deemed vested as of the date such Award Recipient
ceases to be an Eligible Director.
Section 7.3 Stock Certificates
A stock certificate or stock certificates evidencing the
Shares of Restricted Stock granted pursuant to this Article VII
shall be registered on Haven's books in the name of the Award
Recipient as of the date the Restricted Stock is granted and shall
bear a legend restricting the transferability of such certificate
or certificates and referring to the terms, conditions and other
restrictions, including forfeiture, applicable to such Shares.
Physical possession or custody of such certificates shall be
retained by Haven until such time as such Shares become vested.
Section 7.4 Shareholder Rights
Subsequent to the date Shares of Restricted Stock have been
granted and prior to the date such Shares have become vested and
are distributed, the Award Recipient shall be entitled to vote the
Shares and receive cash dividends declared and paid with respect to
such Shares. Any stock dividends declared and paid with respect to
such Shares shall be evidenced by a stock certificate or
certificates registered in the name of the Award Recipient,
retained in the possession or custody of Haven, and made subject to
the same restrictions, terms and conditions as the Shares to which
they pertain. Such stock dividends shall become vested and be
distributed at the same time as the Shares to which they pertain.
Section 7.5 Distribution of Shares
As soon as practicable following the Vesting Date of Shares of
Restricted Stock granted pursuant to this Article VII, Haven shall
issue the Award Recipient a stock certificate evidencing his
ownership of the Shares granted as Restricted Stock and any
additional Shares attributable to stock dividends paid on such
Restricted Stock prior to vesting.
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ARTICLE VIII
Dividend Equivalent Rights
Section 8.1 In General
The Committee may provide that each Eligible Individual who
has been granted an Option or Appreciation Right shall, at the time
such Award is granted, also be granted a Dividend Equivalent Right
relating to all or a portion of the Shares subject to such Option
or the Shares with respect to which the Appreciation Right relates.
Section 8.2 Form of Dividend Equivalents
Dividend Equivalent Rights granted under this Article VIII may
take the form of cash payments made currently or credited to a
memorandum account established for the Award Recipient to be
distributed, with earnings, at a later date, adjustments to the
Exercise Price applicable, or the number of Shares subject, to an
Award, or the distribution or crediting of Shares or Share
equivalents, subject to the limitations of Section 4.1. Any
Dividend Equivalent Rights granted pursuant to this Article VIII
shall be subject to such restrictions, terms and conditions as the
Committee may establish.
ARTICLE IX
Amendment and Termination
Section 9.1 Termination
The Board may suspend or terminate the Plan in whole or in
part at any time prior to the tenth anniversary of the Effective
Date by giving written notice of such suspension or termination to
the Committee. Unless sooner terminated, the Plan shall terminate
automatically on the day preceding the tenth anniversary of the
Effective Date. In the event of any suspension or termination of
the Plan, all Awards theretofore granted under the Plan that are
effective on the date of such suspension or termination of the Plan
shall remain effective under the terms of the applicable Award
Agreements.
Section 9.2 Amendment
The Board may amend or revise the Plan in whole or in part at
any time; provided, however, that if the amendment or revision:
(a) materially increases the benefits accruing under the
Plan;
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(b) materially increases the number of Shares which may be
issued under the Plan; or
(c) materially modifies the requirements as to eligibility
for Options, Appreciation Rights or Dividend Equivalent Rights
under the Plan;
such amendment or revision shall be subject to approval by the
shareholders of Haven; and further provided, that sections 5.2, 6.2
and 7.2 shall not be amended more than once every six months other
than to comply with the Code or the Employee Retirement Income
Security Act of 1974, as amended, or the regulations thereunder.
Section 9.3 Adjustments for Business Reorganization, Stock Split
or Stock Dividend
(a) Subject to Section 6.3(c), in the event of any merger,
consolidation, or other business reorganization in which Haven is
the surviving entity, and in the event of any stock split, stock
dividend or other event generally affecting the number of Shares
held by each Person who is then a holder of Shares on the record
date for such event, the number of Shares covered by each
outstanding Award and the number of Shares available under Section
4.1 shall be adjusted to account for such event. The adjustment to
be made pursuant to this Section 9.3 for outstanding Options and
Appreciation Rights shall be effected by multiplying the number of
Shares then covered by each such outstanding Option or Appreciation
Right by an amount ("Adjustment Amount") equal to the number of
Shares that would be owned after such event by a Person who,
immediately prior to such event, was the holder of record of one
Share, and the Exercise Price for such outstanding Option or
Appreciation Right shall be adjusted by dividing the Exercise Price
by the Adjustment Amount; provided, however, that the Committee
may, in its discretion, establish another appropriate method of
adjusting outstanding Options and Appreciation Rights. The
adjustment to be made to the number of Shares relating to other
types of Awards and the number of Shares available under Section
4.1 shall be effected by multiplying the number of such Shares by
the Adjustment Amount.
(b) Subject to Section 6.3(c), in the event of any merger,
consolidation, or other business reorganization in which Haven is
not the surviving entity:
(i) any Awards granted under the Plan which remain
outstanding may be cancelled by the Committee as of the effective
date of such merger, consolidation, business reorganization,
liquidation or sale by the Board upon 30 days' written notice to
each Award Recipient in advance of the effective date of such event
and the Award Recipient shall receive in consideration of such
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cancellation an amount in cash equal to the excess of (A) the
value, as determined by the Committee in its absolute discretion,
of the property (including cash) received by the holder of a Share
as a result of such event over (B) the Exercise Price of such
Award, if any; and
(ii) any Award which is not cancelled pursuant to
Section 9.3(b)(i) shall be exchanged or adjusted in such manner as
the Committee shall deem appropriate, in its absolute discretion,
to account for such merger, consolidation or other business
reorganization and, if appropriate, the Committee may provide, in
its absolute discretion, that a cash payment will be made to the
Award Recipient in connection with such exchange or adjustment of
the Award.
ARTICLE X
Miscellaneous
Section 10.1 Status as an Employee Benefit Plan
This Plan is not intended to satisfy the requirements for
qualification under Section 401(a) of the Code 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.
Section 10.2 No Right to Continued Employment or Board Membership
Neither the establishment of the Plan nor any provisions of
the Plan nor any action of the Board or the Committee with respect
to the Plan shall be held or construed to confer upon any Eligible
Individual or Eligible Director any right to a continuation of
employment by the Corporation or continuation of membership on the
Board or board of directors of the Bank. The Corporation reserves
the right to dismiss any Eligible Individual or otherwise deal with
any Eligible Individual to the same extent as though the Plan had
not been adopted.
Section 10.3 Construction of Language
Whenever appropriate in the Plan, words used in the singular
may be read in the plural, words used in the plural may be read in
the singular, and words importing the masculine gender may be read
as referring equally to the feminine or the neuter. Any reference
to an Article or Section number shall refer to an Article or
Section of this Plan unless otherwise indicated.
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Section 10.4 Governing Law
The Plan shall be construed, administered and enforced
according to the laws of the State of Delaware without giving
effect to the conflict of laws principles thereof, except to the
extent that such laws are preempted by federal law.
Section 10.5 Headings
The headings of Articles and Sections are included solely for
convenience of reference. If there is any conflict between such
headings and the text of the Plan, the text shall control.
Section 10.6 Non-Alienation of Benefits
The right to receive a benefit under the Plan shall not be
subject in any manner to anticipation, alienation or assignment,
nor shall such right be liable for or subject to debts, contracts,
liabilities, engagements or torts.
Section 10.7 Taxes
The Corporation shall have the right to deduct from all
amounts paid by the Corporation in cash with respect to an Award,
any taxes required by law to be withheld with respect to such
Award. Where any Person is entitled to receive Shares pursuant to
an Award, the Corporation shall have the right to require such
Person to pay the Corporation the amount of any tax which the
Corporation is required to withhold with respect to such Shares,
or, in lieu thereof, to retain, or to sell without notice, a
sufficient number of Shares to cover the amount required to be
withheld. The Corporation may consider, but is not required to
grant, a request by the Person entitled to receive Shares subject
to withholding as to the manner in which such withholding shall be
made.
Section 10.8 Approval of Shareholders
All Awards granted under this Plan shall be conditioned on the
approval of the Plan by the shareholders of Haven on or prior to
the date of the first annual meeting of such shareholders
immediately following the adoption of the Plan by Haven. No Award
granted under the Plan shall be effective, nor shall any Option or
Appreciation Right be exercised or any Shares issued or purchased
pursuant to the Plan, prior to such approval.
Section 10.9 Notices
Any communication required or permitted to be given under the
Plan, including any notice, direction, designation, comment,
22
instruction, objection or waiver, shall be in writing and shall be
deemed to have been given at such time as it is delivered
personally or five (5) days after mailing if mailed, postage
prepaid, by registered or certified mail, return receipt requested,
addressed to such party at the address listed below, or at such
other address as one such party may by written notice specify to
the other party:
(a) If to the Committee:
Haven Bancorp, Inc.
93-22 Jamaica Avenue
Woodhaven, New York 11421
Attention: Administrator of the Haven Bancorp, Inc.
1996 Stock Incentive Plan
(b) If to an Award Recipient, to the address as shown in the
Corporation's personnel records.
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