CFS BANCSHARES, INC.
STOCK OPTION AND INCENTIVE PLAN
1. PURPOSE OF THE PLAN. The Plan shall be known as the CFS Bancshares, Inc.
Stock Option and Incentive Plan (the "Plan"). The purpose of the Plan is to
attract and retain the best available personnel for positions of substantial
responsibility and to provide additional incentive to all Employees of the
Company or any present or future Parent or Subsidiary of the Company to promote
the success of the business.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Common Stock" shall mean Common Stock, par value $.01 per share,
of the Company.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(d) "Committee" shall mean the Stock Option Committee appointed by the
Board in accordance with paragraph 4(a) of the Plan.
(e) "Company shall mean CFS Bancshares, Inc. as successor to Citizens
Federal Savings and Loan Association of Birmingham
(f) "Continuous Employment" or "Continuous Status as an Employee"
shall mean the absence of any interruption or termination of employment by
the Company or any present or future Parent or Subsidiary of the Company.
Employment shall not be considered interrupted in the case of sick leave,
military leave or any other leave of absence approved by the Company or in
the case of transfers between payroll locations of the Company or between
the Company, its Parent, its Subsidiaries or a successor.
(g) "Effective Date" shall mean the date specified in paragraph 12
hereof.
(h) "Employee" shall mean any person employed on a full-time basis by
the Company or any present or future Parent or Subsidiary of the Company.
(i) "Option" shall mean a stock option granted pursuant to the Plan.
(j) "Optioned Stock" shall mean stock subject to an Option granted
pursuant to this Plan.
(k) "Optionee" shall mean an Employee who receives an Option.
(l) "Parent" shall mean any present or future corporation which would
be a "parent corporation" as defined in Subsections 425(e) and (g) of the
Code.
(m) "Plan" shall mean the CFS Bancshares, Inc. Stock Option and
Incentive Plan.
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(n) "Share" shall mean one share of the Common Stock.
(o) "Subsidiary" shall mean any present or future corporation which
would be a "subsidiary corporation" as defined in Subsections 425(f) and
(g) of the Code.
3. SHARES SUBJECT TO THE PLAN. Except as otherwise required by the
provisions of paragraph 10 hereof, the aggregate number of shares of Common
Stock deliverable upon the exercise of Options pursuant to the Plan shall not
exceed 13,000 shares. Such shares may either be authorized but unissued or
treasury shares.
If an Option should expire or become unexercisable for any reason without
having been exercised in full, the unpurchased shares which were subject thereto
shall, unless the Plan shall have been terminated, be available for the grant of
other Options under the Plan.
4. ADMINISTRATION OF THE PLAN.
(a) Composition of Option Committee. The Plan shall be administered by
an Option Committee (the "Committee") consisting of three directors of the
Company appointed by the Board. Employees who are designated by the
Committee as key executives shall be eligible to receive options hereunder.
No person who shall have been or is a member of the Committee shall be
eligible to receive an Option under the Plan.
(b) Powers of the Option Committee. The Committee is authorized (but
only to the extent not contrary to the express provisions of the Plan or to
resolutions adopted by the Board) to interpret the Plan, to prescribe,
amend and rescind rules and regulations relating to the Plan, to determine
the form and content of Options to be issued under the Plan and to make
other determinations necessary or advisable for the administration of the
Plan, and shall have and may exercise such other power and authority as may
be delegated to it by the Board from time to time. A majority of the entire
Committee shall constitute a quorum and the action of a majority of the
members present at any meeting at which a quorum is present shall be deemed
the action of the Committee.
The President, the Executive Vice President or any Senior Vice
President of the Company is hereby authorized to execute instruments
evidencing Options in behalf of the Company and to cause them to be
delivered to the Optionees.
(c) Effect of Option Committee's Decision. All decisions,
determinations and interpretations of the Committee shall be final and
conclusive on all persons affected thereby.
5. ELIGIBILITY. Options may be granted only to Employees of the Company or
any present or future Parent or Subsidiary. An Employee who has been granted an
Option may; if otherwise eligible, be granted an additional Option or Options.
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The aggregate fair market value (determined as of the date the Option is
granted) of the Shares for which any Employee may be granted Options in any
calendar year (under all Incentive Stock Option Plans, as defined in Section 422
of the Code, of the Company or any present or future Parent or Subsidiary of the
Company) shall not exceed $100,000, plus any unused limit carryover to such
year, as defined in Section 422(c) of the Code.
No Option (for purposes of this paragraph 5 called "New Option") shall be
exercisable while there is outstanding any Incentive Stock Option (as defined in
Section 422 of the Code) which was granted, before the granting of the New
Option, to the Employee to whom the New Option is granted, to purchase stock in
the Company or any present or future Parent or Subsidiary of the Company. A
previously granted Incentive Stock Option shall be treated as outstanding until
such prior option is exercised in full or expires by reason of lapse in time.
6. TERM OF PLAN; TERM OF OPTIONS.
(a) The Plan shall continue in effect for a term of ten (10) years
from its Effective Date, unless sooner terminated pursuant to paragraph 14.
No Option shall be granted under the Plan after ten (10) years from the
Effective Date.
(b) The term of each Option granted under the Plan shall be
established by the Committee, but shall not exceed 10 years.
7. OPTION PRICE. The price per share at which each Option granted under the
Plan may be exercised shall not, as to any particular Option, be less than the
fair market value of the stock at the time such Option is granted. If the Common
Stock is traded otherwise than on a national securities exchange at the time of
the granting of an Option, then the price per share shall be not be less than
the mean between the bid and asked price on the date the Option is granted or,
if there be no bid and asked price on said date, then on the next prior business
day on which there was a bid and asked price. If the Common Stock is listed on a
national securities exchange at the time of granting an Option, then the price
per share shall be not less than the average of the highest and lowest selling
price on such exchange on the date such Option is granted or if there were no
sales on said date, then the price shall be not be less than the mean between
the bid and asked price on such date.
8. EXERCISE OF OPTION.
(a) Procedure for Exercise. Any Option granted hereunder shall be
exercisable at such times and under such conditions as shall be permissible
under the terms of the Plan and of the Option granted to an Optionee. An
Option may not be exercised for a fractional Share.
An Option granted pursuant to the Plan may be exercised, subject to
provisions relative to its termination and limitations on its exercise,
from time to time only by (a) written notice of intent to exercise the
Option with respect to a specified number of shares, and (b) payment to the
Company (contemporaneously with delivery of each such
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notice), in cash, in shares of Common Stock of equivalent market value, or
a combination thereof, of the amount of the Option price of the number of
shares with respect to which the Option is then being exercised. Each such
notice and payment shall be delivered, or mailed by prepaid registered or
certified mail, addressed to the Treasurer of the Company at the Company's
executive offices, until the total number of shares then subject to the
Option has been purchased.
(b) Exercise During Employment or Following Death. Unless otherwise
provided in the terms of an Option, an Option may be exercised by an
Optionee only while he is an Employee and has maintained Continuous Status
As An Employee since the date of the grant of the Option, except if his
Continuous Employment is terminated by reason of death, then to the extent
that the Optionee would have been entitled to exercise the Option
immediately prior to his death, such Option of the deceased Optionee may be
exercised within ninety (90) days from the date of his death by the person
or persons (including his estate) to whom his rights under such Option
shall have passed by will or by laws of descent and distribution.
The Committee's determination whether an Optionee's employment has ceased,
and the effective date thereof, shall be final and conclusive on all persons
affected thereby.
9. NON-TRANSFERABILITY OF OPTIONS. Options granted under the Plan may not
be sold, pledged, assigned, hypothecated, transferred or disposed of in any
manner other than by will or by the laws of descent and distribution. An Option
may be exercised, during the lifetime of the Optionee, only by the Optionee.
10. EFFECTIVE OF CHANGE IN STOCK SUBJECT TO THE PLAN. In the event that
each of the outstanding shares of Common Stock (other than shares held by
dissenting shareholders) shall be changed into or exchanged for a different
number of kind of shares of stock of the Company or of another corporation
(whether by reason of merger, consolidation, recapitalization, reclassification,
stock dividend, split-up, combination of shares, or otherwise), then there shall
be substituted for each share of Common Stock then under Option or available for
Option the number and kind of shares of stock into which each outstanding share
of Common Stock (other than shares held by dissenting shareholders) shall be so
changed or for which each such share shall be so exchanged.
In the event there shall be any other change in the number of, or kind of,
issued shares of Common Stock, or of any stock or other securities into which
such Common Stock shall have been changed, or for which it shall have been
exchanged, then if the Board shall, in its sole discretion, determine that such
change equitably requires an adjustment in the number, or kind, or Option price
of shares then subject to an Option or available for Option, such adjustment
shall be made by the Board and shall be effective and binding of all purposes of
the Plan.
11. TIME OF GRANTING OPTIONS. The date of grant of an Option under the Plan
shall, for all purposes, be the date on which the Committee makes the
determination of granting such Option. Notice of the determination shall be
given to each Employee to whom an Option is so granted within a reasonable time
after the date of such grant.
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12. EFFECTIVE DATE. The Plan shall become effective upon its adoption by
the Board and its ratification by a vote of the holders of a majority of the
shares of the Association present in person or by proxy at a legal meeting, or
upon becoming a capital stock association, if the Association is in the process
of converting from a mutual to a capital stock association, whichever occurs
earlier. The Plan shall continue in effect for a term of ten (10) years from the
earlier of the date the Plan is adopted or approved by the stockholders, unless
sooner terminated under paragraph 15 of the Plan.
13. APPROVAL BY SHAREHOLDERS. The Plan shall be approved by a majority of
the shares of the Association present in person or by proxy at a legal meeting
within twelve (12) months before or after the date it is adopted. If the
Association is in the process of converting from a mutual to a capital stock
association, the Plan will not be considered adopted until the date that the
Association has completed its conversion and becomes a stock association.
14. MODIFICATION OF OPTIONS. At any time and from time to time the Board
may authorize the Committee to direct execution of an instrument providing for
the modification of any outstanding Option, provided no such modification,
extension or renewal shall confer on the holder of said Option any right or
benefit which could not be conferred on him by the grant of a new Option at such
time, or impair the Option without the consent of the holder of the Option.
15. AMENDMENT AND TERMINATION OF THE PLAN. The Board may alter, suspend or
discontinue the Plan except that no action of the Board may increase (other than
as provided in Section 10) the maximum number of shares permitted to be optioned
under the Plan, or reduce the minimum Option price, or extend the period within
which Options may be exercised, unless such action of the Board shall be subject
to approval or ratification by the shareholders of the Company.
No action of the Board may, without the consent of the holder of the
Option, impair any then outstanding Option.
16. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued with
respect to any Option granted under the Plan unless the issuance and delivery of
such Shares shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, the rules and regulations
promulgated thereunder, any applicable state securities law, and the
requirements of any stock exchange upon which the Shares may then be listed.
Inability of the Company to obtain from any regulatory body or authority
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder shall relieve the Company of any liability in respect of
the non-issuance or sale of such Shares.
As a condition to the exercise of an Option, the Company may require the
person exercising to make such representations and warranties as may be
necessary to assure the availability of an exemption from the registration
requirements of federal or state securities law.
17. RESERVATION OF SHARES. The Company, during the term of this Plan, will
reserve and keep available a number of Shares sufficient to satisfy the
requirements of the Plan.
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