PERPETUAL MIDWEST FINANCIAL, INC.
1993 STOCK OPTION AND INCENTIVE PLAN
1. Plan Purpose. The purpose of the Plan is to promote the
long-term interests of the Corporation and its
stockholders by providing a means for attracting and
retaining directors, officers and employees of the
Corporation and its Affiliates. It is intended that
designated Options granted pursuant to the provisions of
this Plan to persons employed by the Corporation or its
Affiliates will qualify as Incentive Stock Options.
Options granted to persons who are not employees will be
Non-Qualified Stock Options.
2. Definitions. The following definitions are applicable to
the Plan:
"Affiliate" - means any "parent corporation" or
"subsidiary corporation" of the Corporation, as such terms
are defined in Section 424(e) and (f), respectively, of
the Code.
"Bank" - means Perpetual Savings Bank, FSB and any
successor entity.
"Award" - means the grant of an Incentive Stock Option, a
Non-Qualified Stock Option, a Stock Appreciation Right, a
Limited Stock Appreciation Right, or of Restricted Stock,
or any combination thereof, as provided in the Plan.
"Code" - means the Internal Revenue Code of 1986, as
amended.
"Committee" - means the Committee referred to in Section 3
hereof.
"Continuous Service" - means the absence of any
interruption or termination of service as a director,
advisory director, officer or employee of the Corporation
or an Affiliate, except that when used with respect to
persons granted an Incentive Option means the absence of
any interruption or termination of service as an employee
of the Corporation or an Affiliate. Service shall not be
considered interrupted in the case of sick leave, military
leave or any other leave of absence approved by the
Corporation or in the case of transfers between payroll
locations of the Corporation or between the Corporation,
its parent, its subsidiaries or its successor. With
respect to any advisory director, continuous service shall
mean availability to perform such functions as may be
required of the Bank's advisory directors.
"Corporation" - means Perpetual Midwest Financial, Inc., a
Delaware corporation.
"Employee" - means any person, including an officer or
director, who is employed by the Corporation or any
Affiliate.
"ERISA" - means the Employee Retirement Income Security
Act of 1974, as amended.
"Exercise Price" - means (i) in the case of an Option, the
price per Share at which the Shares subject to such Option
may be purchased upon exercise of such Option and (ii) in
the case of a Right, the price per Share (other than the
Market Value per Share on the date of exercise and the
Offer Price per Share as defined in Section 10 hereof)
which, upon grant, the Committee determines shall be
utilized in calculating the aggregate value which a
Participant shall be entitled to receive pursuant to
Sections 9, 10 or 13 hereof upon exercise of such Right.
"Incentive Stock Option" - means an option to purchase
Shares granted by the Committee pursuant to Section 6
hereof which is subject to the limitations and
restrictions of Section 8 hereof and is intended to
qualify under Section 422 of the Code.
"Limited Stock Appreciation Right" - means a stock
appreciation right with respect
to Shares granted by the Committee pursuant to Sections 6
and 10 hereof.
"Market Value" - means the average of the high and low
quoted sales price on the date in question (or, if there
is no reported sale on such date, on the last preceding
date on which any reported sale occurred) of a Share on
the Composite Tape for the New York Stock Exchange-Listed
Stocks, or, if on such date the Shares are not quoted on
the Composite Tape, on the New York Stock Exchange, or, if
the Shares are not listed or admitted to trading on such
Exchange, on the principal United States securities
exchange registered under the Securities Exchange Act of
1934 on which the Shares are listed or admitted to
trading, or, if the Shares are not listed or admitted to
trading on any such exchange, the mean between the closing
high bid and low asked quotations with respect to a Share
on such date on the National Association of Securities
Dealers, Inc., Automated Quotations System, or any similar
system then in use, or, if no such quotations are
available, the fair market value on such date of a Share
as the Committee shall determine.
"Non-Employee Director" - means a director who a) is not
currently an officer or employee of the Corporation; b) is
not a former employee of the Corporation who receives
compensation for prior services (other than from a tax-
qualified retirement plan); c) has not been an officer of
the Corporation; d) does not receive remuneration from the
Corporation in any capacity other than as a director; and
e) does not possess an interest in any other transactions
or is not engaged in a business relationship for which
disclosure would be required under Item 404(a) or (b) of
Regulation S-K.
"Non-Qualified Stock Option" - means an option to purchase
Shares granted by the Committee pursuant to Section 6
hereof, which option is not intended to qualify under
Section 422(b) of the Code.
"Option" - means an Incentive Stock Option or a Non-
Qualified Stock Option.
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"Participant" - means any director, advisory director,
officer or employee of the Corporation or any Affiliate
who is selected by the Committee to receive an Award and
any director or advisory director of the Corporation who
is granted an Award pursuant to Section 21 hereof.
"Plan" - means the 1993 Stock Option and Incentive Plan of
the Corporation, including all amendments, if any.
"Related" - means (i) in the case of a Right, a Right
which is granted in connection with, and to the extent
exercisable, in whole or in part, in lieu of, an Option or
another Right and (ii) in the case of an Option, an Option
with respect to which and to the extent a Right is
exercisable, in whole or in part, in lieu thereof has been
granted.
"Restricted Period" - means the period of time selected by
the Committee for the purpose of determining when
restrictions are in effect under Section 11 hereof with
respect to Restricted Stock awarded under the Plan.
"Restricted Stock" - means Shares which have been
contingently awarded to a Participant by the Committee
subject to the restrictions referred to in Section 11
hereof, so long as such restrictions are in effect.
"Right" - means a Limited Stock Appreciation Right or a
Stock Appreciation Right.
"Shares" - means the shares of common stock of the
Corporation.
"Stock Appreciation Right" - means a stock appreciation
right with respect to Shares granted by the Committee
pursuant to Sections 6 and 9 hereof.
3. Administration. The Plan shall be administered by a
Committee consisting of two or more members, each of whom
shall be a Non-Employee Director. The members of the
Committee shall be appointed by the Board of Directors of
the Corporation. Except as limited by the express
provisions of the Plan, the Committee shall have sole and
complete authority and discretion to (i) select
Participants and grant Awards; (ii) determine the number
of Shares to be subject to types of Awards generally, as
well as to individual Awards granted under the Plan; (iii)
determine the terms and conditions upon which Awards shall
be granted under the Plan; (iv) prescribe the form and
terms of instruments evidencing such grants; and (v)
establish from time to time regulations for the
administration of the Plan, interpret the Plan, and make
all determinations deemed necessary or advisable for the
administration of the Plan. A majority of the Committee
shall constitute a quorum, and the acts of a majority of
the members present at any meeting at which a quorum is
present, or acts approved in writing by a majority of the
Committee without a meeting, shall be acts of the
Committee.
4. Participation in Committee Awards. The Committee may
select from time to time
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Participants in the Plan from those directors (including
advisory directors), officers and employees, of the
Corporation or its Affiliates who, in the opinion of the
Committee, have the capacity for contributing to the
successful performance of the Corporation or its
Affiliates.
5. Shares Subject to Plan. Subject to adjustment by the
operation of Section 12 hereof, the maximum number of
Shares with respect to which Awards may be made under the
Plan is 12% of the total Shares issued in the Bank's
conversion to the capital stock form. The Shares with
respect to which Awards may be made under the Plan may be
either authorized and unissued shares or issued shares
heretofore or hereafter reacquired and held as treasury
shares. Shares which are subject to Related Rights and
Related Options shall be counted only once in determining
whether the maximum number of Shares with respect to which
Awards may be granted under the Plan has been exceeded.
An Award shall not be considered to have been made under
the Plan with respect to any Option or Right which
terminates or with respect to Restricted Stock which is
forfeited, and new Awards may be granted under the Plan
with respect to the number of Shares as to which such
termination or forfeiture has occurred.
6. General Terms and Conditions of Options and Rights. The
Committee shall have full and complete authority and
discretion, except as expressly limited by the Plan, to
grant Options and/or Rights and to provide the terms and
conditions (which need not be identical among
Participants) thereof. In particular, the Committee shall
prescribe the following terms and conditions: (i) the
Exercise Price of any Option or Right, which shall not be
less than the Market Value per Share at the date of grant
of such Option or Right, (ii) the number of Shares subject
to, and the expiration date of, any Option or Right, which
expiration date shall not exceed ten years from the date
of grant, (iii) the manner, time and rate (cumulative or
otherwise) of exercise of such Option or Right, and (iv)
the restrictions, if any, to be placed upon such Option or
Right or upon Shares which may be issued upon exercise of
such Option or Right. The Committee may, as a condition
of granting any Option or Right, require that a
Participant agree not to thereafter exercise one or more
Options or Rights previously granted to such Participant.
7. Exercise of Options or Rights.
(a) Except as provided herein, an Option or Right
granted under the Plan shall be exercisable
during the lifetime of the Participant to whom
such Option or Right was granted only by such
Participant and, except as provided in
paragraphs (c) and (d) of this Section 7, no
such Option or Right may be exercised unless
at the time such Participant exercises such
Option or Right, such Participant has
maintained Continuous Service since the date
of grant of such Option or Right.
(b) To exercise an Option or Right under the Plan,
the Participant to whom such Option or Right
was granted shall give written notice to the
Corporation in form
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satisfactory to the Committee (and, if partial
exercises have been permitted by the Committee,
by specifying the number of Shares with respect
to which such Participant elects to exercise such
Option or Right) together with full payment of
the Exercise Price, if any and to the extent
required. The date of exercise shall be the
date on which such notice is received by the
Corporation. Payment, if any is required,
shall be made either (i) in cash (including
check, bank draft or money order) or (ii) if
permitted by the Committee, by delivering (A)
Shares already owned by the Participant and
having a fair market value equal to the
applicable exercise price, such fair market
value to be determined in such appropriate
manner as may be provided by the Committee or
as may be required in order to comply with or
to conform to requirements of any applicable
laws or regulations, or (B) combination of
cash and such Shares.
(c) If a Participant to whom an Option or Right
was granted shall cease to maintain Continuous
Service for any reason (including total or
partial disability and normal or early
retirement at age 59 or later or termination
for any reason other than cause, but excluding
death and termination of employment by the
Corporation or any Affiliate for cause), such
Participant may, but only within the period of
three years immediately succeeding such
cessation of Continuous Service and in no
event after the expiration date of such Option
or Right, exercise such Option or Right to the
extent that such Participant was entitled to
exercise such Option or Right at the date of
such cessation, provided, however, that such
right of exercise after cessation of
Continuous Service shall not be available to a
Participant if the Committee otherwise
determines and so provides in the applicable
instrument or instruments evidencing the grant
of such Option or Right. If a Participant to
whom an Option or Right was granted shall
cease to maintain Continuous Service by reason
of death or disability then, unless the
Committee shall have otherwise provided in the
instrument evidencing the grant of an Option
or Stock Appreciation Right, all Options and
Rights granted and not fully exercisable shall
become exercisable in full upon the happening
of such event and shall remain so exercisable
(i) in the event of death for the period
described in paragraph (d) of this Section 7
and (ii) in the event of disability,
termination for any reason other than cause or
normal or early retirement, for a period of
three years following such date. If the
Continuous Service of a Participant to whom an
Option or Right was granted by the Corporation
is terminated for cause, all rights under any
Option or Right of such Participant shall
expire immediately upon the giving to the
Participant of notice of such termination.
(d) In the event of the death of a Participant
while in the Continuous Service of the
Corporation or an Affiliate or within the
three year period referred to in paragraph (c)
of this Section 7, the person to whom any
Option or Right held by the Participant at the
time of his death is transferred, by will or
the laws of descent and distribution, or in
the case of an Award other than an Incentive
Stock Option, pursuant to a qualified domestic
relations order, as defined in the Code or
Title 1 of ERISA or the
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rules thereunder may, but only to the extent such
Participant was entitled to exercise such Option
or Right as set forth in paragraph (c) of this
Section 7, exercise such Option or Right at any
time within a period of one year succeeding the
date of death of such Participant, but in no
event later than ten years from the date of
grant of such Option or Right. Following the
death of any Participant to whom an Option was
granted under the Plan, irrespective of
whether any Related Right shall have
theretofore been granted to the Participant or
whether the person entitled to exercise such
Related Right desires to do so, the Committee
may, as an alternative means of settlement of
such Option, elect to pay to the person to
whom such Option is transferred by will or by
the laws of descent and distribution, or in
the case of an Option other than an Incentive
Stock Option, pursuant to a qualified domestic
relations order, as defined in the Code or
Title I of ERISA or the rules thereunder, the
amount by which the Market Value per Share on
the date of exercise of such Option shall
exceed the Exercise Price of such Option,
multiplied by the number of Shares with
respect to which such Option is properly
exercised. Any such settlement of an Option
shall be considered an exercise of such Option
for all purposes of the Plan.
8. Incentive Stock Options. Incentive Stock Options may be
granted only to Participants who are Employees. Any
provision of the Plan to the contrary notwithstanding, (i)
no Incentive Stock Option shall be granted more than ten
years from the date the Plan is adopted by the Board of
Directors of the Corporation and no Incentive Stock Option
shall be exercisable more than ten years from the date
such Incentive Stock Option is granted, (ii) the Exercise
Price of any Incentive Stock Option shall not be less than
the Market Value per Share on the date such Incentive
Stock Option is granted, (iii) any Incentive Stock Option
shall not be transferable by the Participant to whom such
Incentive Stock Option is granted other than by will or
the laws of descent and distribution, and shall be
exercisable during such Participant's lifetime only by
such Participant, (iv) no Incentive Stock Option shall be
granted to any individual who, at the time such Incentive
Stock Option is granted, owns stock possessing more than
ten percent of the total combined voting power of all
classes of stock of the Corporation or any Affiliate
unless the Exercise Price of such Incentive Stock Option
is at least 110 percent of the Market Value per Share at
the date of grant and such Incentive Stock Option is not
exercisable after the expiration of five years from the
date such Incentive Stock Option is granted, and (v) the
aggregate Market Value (determined as of the time any
Incentive Stock Option is granted) of the Shares with
respect to which Incentive Stock Options are exercisable
for the first time by a Participant in any calendar year
shall not exceed $100,000.
9. Stock Appreciation Rights. A Stock Appreciation Right
shall, upon its exercise, entitle the Participant to whom
such Stock Appreciation Right was granted to receive a
number of Shares or cash or combination thereof, as the
Committee in its discretion shall determine, the aggregate
value of which (i.e., the sum of the amount of cash and/or
Market Value of such Shares on date of exercise) shall
equal (as nearly possible, it being understood that the
Corporation shall not issue any fractional shares) the
amount by which the Market Value per
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Share on the date of such exercise shall exceed the
Exercise Price of such Stock Appreciation Right, multiplied
by the number of Shares with respect of which such Stock
Appreciation Right shall have been exercised. A Stock
Appreciation Right may be Related to an Option or may be
granted independently of any Option as the Committee shall
from time to time in each case determine. At the time of
grant of an Option the Committee shall determine whether
and to what extent a Related Stock Appreciation Right shall
be granted with respect thereto; provided, however, and
notwithstanding any other provision of the Plan, that if
the Related Option is an Incentive Stock Option, the
Related Stock Appreciation Right shall satisfy all the
restrictions and limitations of Section 8 hereof as if such
Related Stock Appreciation Right were an Incentive Stock
Option and as if other rights which are Related to
Incentive Stock Options were Incentive Stock Options. In
the case of a Related Option, such Related Option shall
cease to be exercisable to the extent of the Shares with
respect to which the Related Stock Appreciation Right was
exercised. Upon the exercise or termination of a Related
Stock Appreciation Right shall terminate to the extent of
the Shares with respect to which the Related Option, any
Related Option was exercised or terminated.
10. Limited Stock Appreciation Rights. At the time of grant
of an Option or Stock Appreciation Right to any
Participant, the Committee shall have full and complete
authority and discretion to also grant to such Participant
a Limited Stock Appreciation Right which is Related to
such Option or Stock Appreciation Right; provided, however
and notwithstanding any other provision of the Plan, that
if the Related Option is an Incentive Stock Option, the
Related Limited Stock Appreciation Right shall satisfy all
the restrictions and limitations of Section 8 hereof as if
such Related Limited Stock Appreciation Right were an
Incentive Stock Option and as if all other Rights which
are Related to Incentive Stock Options were Incentive
Stock Options. Notwithstanding any other provision of the
Plan, a Limited Stock Appreciation Right shall be
exercisable only during the period beginning on the first
day following the date of expiration of any "offer" (as
such term is hereinafter defined) and ending on the forty-
fifth day following such date.
A Limited Stock Appreciation Right shall, upon its
exercise, entitle the Participant to whom such Limited
Stock Appreciation Right was granted to receive an amount
of cash equal to the amount by which the "Offer Price per
Share" (as such term is hereinafter defined) or the Market
Value on the date of such exercise, as shall have been
provided by the Committee in its discretion at the time of
grant, shall exceed the Exercise Price of such Limited
Stock Appreciation Right, multiplied by the number of
Shares with respect to which such Limited Stock
Appreciation Right shall have been exercised. Upon the
exercise of a Limited Stock Appreciation Right, any
Related Option and/or Related Stock Appreciation Right
shall cease to be exercisable to the extent of the Shares
with respect to which such Limited Stock Appreciation
Right was exercised. Upon the exercise or termination of
a Related Option or Related Stock Appreciation Right, any
Related Limited Stock Appreciation Right shall terminate
to the extent of the Shares with respect to which such
Related Option or Related Stock Appreciation Right was
exercised or terminated.
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For the purposes of this Section 10, the term "Offer" shall
mean any tender offer or exchange offer for Shares other
than one made by the Corporation, provided that the
corporation, person or other entity making the offer
acquires pursuant to such offer either (i) 25% of the
Shares outstanding immediately prior to the commencement
of such offer or (ii) a number of Shares which, together
with all other Shares acquired in any tender offer or
exchange offer (other than one made by the Corporation)
which expired within sixty days of the expiration date of
the offer in question, equals 25% of the Shares
outstanding immediately prior to the commencement of the
offer in question. The term "Offer Price per Share" as
used in this Section 10 shall mean the highest price per
Share paid in any Offer which Offer is in effect any time
during the period beginning on the sixtieth day prior to
the date on which a Limited Stock Appreciation Right is
exercised and ending on the date on which such Limited
Stock Appreciation Right is exercised. Any securities or
property which are part or all of the consideration paid
for Shares in the Offer shall be valued in determining the
Offer Price per Share at the higher of (A) the valuation
placed on such securities or property by the corporation,
person or other entity making such Offer or (B) the
valuation placed on such securities or property by the
Committee.
11. Terms and Conditions of Restricted Stock. The Committee
shall have full and complete authority, subject to the
limitations of the Plan, to grant awards of Restricted
Stock and, in addition to the terms and conditions
contained in paragraphs (a) through (f) of this Section
11, to provide such other terms and conditions (which need
not be identical among Participants) in respect of such
Awards, and the vesting thereof, as the Committee shall
determine and provide in the agreement referred to in
paragraph (d) of this Section 11.
(a) At the time of an award of Restricted Stock,
the Committee shall establish for each
Participant a Restricted Period of not less
than six months during which or at the
expiration of which, as the Committee shall
determine and provide in the agreement
referred to in paragraph (d) of this Section
11, the Shares awarded as Restricted Stock
shall vest. Subject to any such other terms
and conditions as the Committee shall provide,
shares of Restricted Stock may not be sold,
assigned, transferred, pledged or otherwise
encumbered by the Participant, except as
hereinafter provided, during the Restricted
Period. Except for such restrictions, and
subject to paragraphs (c), (d) and (e) of this
Section 11 and Section 12 hereof, the
Participant as owner of such shares shall have
all the rights of a stockholder, including but
not limited to the right to receive all
dividends paid on such shares and the right to
vote such shares. The Committee shall have
the authority, in its discretion, to
accelerate the time at which any or all of the
restrictions shall lapse with respect to any
shares of Restricted Stock prior to the
expiration of the Restricted Period with
respect thereto, or to remove any or all of
such restrictions, whenever it may determine
that such action is appropriate by reason of
changes in applicable tax or other laws or
other changes in circumstances occurring after
the commencement of such Restricted Period.
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(b) Except as provided in Section 14 hereof, if a
Participant ceases to maintain Continuous
Service for any reason (other than death,
total or partial disability or normal or early
retirement) unless the Committee shall
otherwise determine, all shares of Restricted
Stock theretofore awarded to such Participant
and which at the time of such termination of
Continuous Service are subject to the
restrictions imposed by paragraph (a) of this
Section 11 shall upon such termination of
Continuous Service be forfeited and returned
to the Corporation. Unless the Committee
shall have provided in the agreement referred
to in paragraph (d) of this Section 11 for a
ratable lapse of restrictions with respect to
an award of shares of Restricted Stock during
the Restricted Period, if a Participant ceases
to maintain Continuous Service by reason of
death, total or partial disability or normal
or early retirement, such portion of such
shares of Restricted Stock awarded to such
Participant which at the time of such
termination of Continuous Service are subject
to the restrictions imposed by paragraph (a)
of this Section 11 as shall be equal to the
portion of the Restricted Period with respect
to such shares which have elapsed at the time
of such termination of Continuous Service
shall be free of restrictions and shall not be
forfeited.
(c) Each certificate in respect of shares of
Restricted Stock awarded under the Plan shall
be registered in the name of the Participant
and deposited by the Participant, together
with a stock power endorsed in blank, with the
Corporation and shall bear the following (or a
similar) legend:
"The transferability of this certificate
and the shares of stock represented
hereby are subject to the terms and
conditions (including forfeiture)
contained in the 1993 Stock Option and
Incentive Plan of Perpetual Midwest
Financial, Inc. and an Agreement entered
into between the registered owner and
Perpetual Midwest Financial, Inc.
Copies of such Plan and Agreement are on
file in the offices of the Secretary of
Perpetual Midwest Financial, Inc., 700
First Avenue, N.E., Cedar Rapids, Iowa,
52407."
(d) At the time of an award of shares of
Restricted Stock, the Participant shall enter
into an Agreement with the Corporation in a
form specified by the Committee, agreeing to
the terms and conditions of the award and such
other matters as the Committee shall in its
sole discretion determine.
(e) At the time of an award of shares of
Restricted Stock, the Committee may, in its
discretion, determine that the payment to the
Participant of dividends declared or paid on
such shares, or specified portion thereof, by
the Corporation shall be deferred until the
earlier to occur of (i) the lapsing of the
restrictions imposed under paragraph (a) of
this Section 11 or (ii) the forfeiture of such
shares under paragraph (b) of this Section 11,
and shall be held by the Corporation for the
account of the Participant until such time.
In the event of such deferral, there shall be
credited at the end of
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each year (or portion thereof) interest on the
amount of the account at the beginning of the
year at a rate per annum as the Committee, in its
discretion, may determine. Payment of deferred
dividends, together with interest accrued as
aforesaid, shall be made upon the earlier to
occur of the events specified in (i) and (ii) of
the immediately preceding sentence.
(f) At the expiration or lapse of the restrictions
imposed by paragraph (a) of this Section 11,
the Corporation shall redeliver to the
Participant (or where the relevant provision
of paragraph (b) of this Section 11 applies in
the case of a deceased Participant, to his
legal representative, beneficiary or heir) the
certificate(s) and stock power deposited with
it pursuant to paragraph (c) of this Section
11 and the Shares represented by such
certificate(s) shall be free of the
restrictions referred to in paragraph (a) of
this Section 11.
12. Adjustments Upon Changes in Capitalization. In the event
of any change in the outstanding Shares subsequent to the
effective date of the Plan by reason of any
reorganization, recapitalization, stock split, stock
dividend, combination or exchange of shares, merger,
consolidation or any change in the corporate structure or
Shares of the Corporation, the maximum aggregate number,
class and exercise price of shares as to which Awards may
be granted under the Plan and the number and class of
shares with respect to which Awards theretofore have been
granted under the Plan shall be appropriately adjusted by
the Committee, whose determination shall be conclusive.
Any shares of stock or other securities received, as a
result of any of the foregoing, by a Participant with
respect to Restricted Stock shall be subject to the same
restrictions and the certificate(s) or other instruments
representing or evidencing such shares or securities shall
be legended and deposited with the Corporation in the
manner provided in Section 11 hereof.
13. Effect of Merger. In the event of any merger,
consolidation or combination of the Corporation (other
than a merger, consolidation or combination in which the
Corporation is the continuing entity and which does not
result in the outstanding Shares being converted into or
exchanged for different securities, cash or other
property, or any combination thereof) pursuant to a plan
or agreement the terms of which are binding upon all
stockholders of the Corporation (except to the extent that
dissenting stockholders may be entitled, under statutory
provisions or provisions contained in the certificate of
incorporation, to receive the appraised or fair value of
their holdings), any Participant to whom an Option or
Right has been granted at least 6 months prior to such
event shall have the right (subject to the provisions of
the Plan and any limitation applicable to such Option or
Right), thereafter and during the term of each such Option
or Right, to receive upon exercise of any such Option or
Right an amount equal to the excess of the fair market
value on the date of such exercise of the securities, cash
or other property, or combination thereof, receivable
upon such merger, consolidation or combination in respect
of a Share over the Exercise Price of such Right or
Option, multiplied by the number of Shares with respect to
which such Option or Right shall have been exercised.
Such amount may be payable fully in cash, fully in one or
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more of the kind or kinds of property payable in such
merger, consolidation or combination, or partly in cash
and partly in one or more of such kind or kinds of
property, all in the discretion of the Committee. Unless
the Committee shall have provided otherwise in the
agreement referred to in paragraph (d) of Section 11
hereof, in the event of any such merger, consolidation or
combination any Restricted Period shall lapse with respect
to Shares of Restricted Stock awarded at least six months
prior to such event, all such Shares shall be fully vested
in the Participants to whom such Shares were awarded, and
the holders of such Shares shall be eligible to receive in
respect thereof the full amount receivable per Share in
such merger, consolidation or combination.
14. Effect of Change in Control. Each of the events specified
in the following clauses (i) through (iii) of this Section
14 shall be deemed a "change of control": (1) any third
person, including a "group" as defined in Section 13(d)(3)
of the Securities Exchange Act of 1934, shall become the
beneficial owner of shares of the Corporation with respect
to which 25% or more of the total number of votes for the
election of the Board of Directors of the Corporation may
be cast, (ii) as a result of, or in connection with, any
cash tender offer, exchange offer, merger or other
business combination, sale of assets or contested
election, or combination of the foregoing, the persons who
were directors of the Corporation shall cease to
constitute a majority of the Board of Directors of the
Corporation or (iii) the shareholders of the Corporation
shall approve an agreement providing either for a
transaction in which the Corporation will cease to be an
independent publicly owned entity or for a sale or other
disposition of all or substantially all the assets of the
Corporation. If the Continuous Service of any Participant
of the Corporation or any Affiliate is involuntarily
terminated for whatever reason, after a change in control,
unless the Committee shall have otherwise provided in the
agreement referred to in paragraph (d) of Section 11
hereof, any Restricted Period with respect to Restricted
Stock theretofore awarded to such Participant shall lapse
upon such termination and all Shares awarded as Restricted
Stock shall become fully vested in the Participant to whom
such Shares were awarded. If a tender offer or exchange
offer for Shares (other than such an offer by the
Corporation) is commenced, or if the event specified in
clause (iii) above shall occur, unless the Committee shall
have otherwise provided in the instrument evidencing the
grant of an Option or Stock Appreciation Right, all
Options and Stock Appreciation Rights theretofore granted
and not fully exercisable shall become exercisable in full
upon the happening of such event and shall remain so
exercisable for a period of sixty days following such
date, after which they shall revert to being exercisable
in accordance with their terms; provided, however, that no
Option or Stock Appreciation Right which has previously
been exercised or otherwise terminated shall become
exercisable.
15. Assignments and Transfers. No Award nor any right or
interest of a Participant under the Plan in any instrument
evidencing any Award under the Plan may be assigned,
encumbered or transferred except, in the event of the
death of a Participant, by will or the laws of descent and
distribution or in the case of Awards other than Incentive
Stock Options pursuant to a qualified domestic relations
order, as defined in the Code or Title I of ERISA or the
rules thereunder.
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16. Employee Rights Under the Plan. No director, officer or
employee shall have a right to be selected as a
Participant nor, having been so selected, to be selected
again as a Participant and no director, officer, employee
or other person shall have any claim or right to be
granted to an Award under the Plan or under any other
incentive or similar plan of the Corporation or any
Affiliate. Neither the Plan nor any action taken
thereunder shall be construed as giving any employee any
right to be retained in the employ of the Corporation or
any Affiliate.
17. Delivery and Registration of Stock. The Corporation's
obligation to deliver Shares with respect to an Award
shall, if the Committee so requests, be conditioned upon
the receipt of a representation as to the investment
intention of the Participant to whom such Shares are to be
delivered, in such form as the Committee shall determine
to be necessary of advisable to comply with the provisions
of the Securities Act of 1933 or any other Federal, state
or local securities legislation or regulation. It may be
provided that any representation requirement shall become
inoperative upon a registration of the Shares or other
action eliminating the necessity of such representation
under such Securities Act or other securities legislation.
The Corporation 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, and (ii) the completion of such
registration or other qualification of such Shares under
any state or Federal law, rule or regulation, as the
Committee shall determine to be necessary or advisable.
18. Withholding Tax. Upon the termination of the Restricted
Period with respect to any shares of Restricted Stock (or
any such earlier time, if any, that an election is made by
the Participant under Section 83(b) of the Code, or any
successor provision thereto, to include the value of such
shares in taxable income), the Corporation may, in its
sole discretion, retain a sufficient number of shares held
by it to cover the amount required to be withheld. The
Corporation may, in its sole discretion, have the right to
deduct from all dividends paid with respect to shares of
Restricted Stock the amount of any taxes which the
Corporation is required to withhold with respect to such
dividend payments.
The Corporation may, in its sole discretion, have the
right to deduct from all amounts paid in cash with respect
to the exercise of a Right under the Plan any taxes
required by law to be withheld with respect to such cash
payments. Where a Participant or other person is entitled
to receive Shares pursuant to the exercise of an Option or
Right pursuant to the Plan, the Corporation may, in its
sole discretion, shall have the right to require the
Participant or such other person to pay the Corporation
the amount of any taxes which the Corporation is required
to withhold with respect to such Shares.
19. Amendment or Termination. The Board of Directors of the
Corporation may amend, suspend or terminate the Plan or
any portion thereof at any time, but (except as provided
in Section 12 hereof) no amendment shall be made without
approval of the stockholders of the Corporation which
shall (i) materially increase the aggregate number of
Shares with respect to which Awards may be made under the
Plan, (ii) materially increase the aggregate number
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of Shares which may be subject to Awards to Participants
who are not Employees or (iii) change the class of persons
eligible to participate in the Plan; provided, however,
that no such amendment, suspension or termination shall
impair the rights of any Participant, without his consent,
in any Award therefore made pursuant to the Plan.
20. Effective Date and Term of Plan. The Plan shall become
effective upon its adoption by the Board of Directors of
the Corporation, subject to the Bank converting to a stock
institution and approval of the Plan by stockholders of
the Corporation. It shall continue in effect for a term
of ten years unless sooner terminated under Section 19
hereof.
21. Initial Grant. By, and simultaneously with, the adoption
of this Plan, each member of the Board of Directors of the
Corporation at the time of the Bank's conversion to stock
form who is not an Employee, is hereby granted a ten year,
Non-Qualified Stock Option to purchase a number of shares
equal to the sum of .40% and .026% multiplied by each year
of service as a member of the Board of Directors, of the
shares issued in the mutual to stock conversion of the
Bank provided, however, that any director elected in 1993
shall receive an award equal to .40% of the shares issued
in the mutual to stock conversion of the Bank, all at an
Exercise Price per share equal to the per share price at
which Shares are sold in conversion. In addition, each
non-employee director of the Corporation elected after
completion of the Bank's conversion to stock form is
hereby granted as of the date he or she is elected and
qualified ("election date") a ten year Non-Qualified Stock
Option to Purchase a number of shares equal to .40% of the
shares issued in the conversion at the applicable market
price on the election date. Each such Option shall be
evidenced by a Non-Qualified Stock Option Agreement in a
form approved by the Board of Directors and shall be
subject in all respects to the terms and conditions of
this Plan, which are controlling. All options granted
pursuant to this Section 21 shall be rounded down to the
nearest whole share to the extent necessary to ensure that
no options to purchase stock representing fractional
shares are granted.
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