EXHIBIT 10.5
SIS BANCORP, INC.
DIRECTOR RESTRICTED STOCK PLAN
AND
MANAGEMENT RESTRICTED STOCK PLAN
(Amended and restated as of July 31, 1996)
1. PURPOSE
The purpose of the SIS Bancorp, Inc. Director Restricted Stock Plan
(the "Director Plan") and Management Restricted Stock Plan (the "Management
Plan") (together, the "Plans") is to attract directors and key employees of SIS
Bancorp, Inc. (the "Company") and its Subsidiaries (as hereinafter defined) and
to encourage them to continue their association with the Company, by providing
favorable opportunities for them to participate in the ownership of the Company
and in its future growth through the granting of shares of the Company's stock.
The term "Subsidiary" as used in the Plans means a corporation, including,
without limitation, any banking or thrift institution, of which the Company
owns, directly or indirectly through an unbroken chain of ownership, fifty
percent (50%) or more of the total combined voting power of all classes of
stock. The term "Grantee," as used in the Plans refers to any individual to whom
Restricted Stock has been granted.
2. ADMINISTRATION OF THE PLANS
The Plans shall be administered by the Compensation Committee (the
"Committee") composed of at least three members of the Board of Directors of the
Company (the "Board"), and may include those members serving at any time and
from time to time as the Compensation Committee of the Board; provided, however,
that during the period of one year immediately preceding any action by the
Committee under the Plans, no member of the Committee may have been granted an
option, or stock, or stock appreciation right or similar right under any plan of
the Company under which any person exercises discretion to determine the
recipients or terms or conditions of such grants. In the event that a vacancy
occurs on account of the resignation of a member or the removal of a member by
vote of the Board, a successor member shall be appointed by vote of the Board.
The Committee shall from time to time determine to whom stock shall be
granted under the Management Plan, and the number of shares which may be
granted, and the terms upon and restrictions under which such shares shall be
granted. The Committee shall report to the Board the names of individuals to
whom shares of stock are to be granted, the number of shares covered and the
terms and conditions of each grant.
The Committee shall select one of its members as Chairman and shall
hold meetings at such times and places as it may determine. A majority of the
Committee shall constitute a quorum, and acts of the Committee at which a quorum
is present, or acts reduced to or approved in writing by all the members of the
Committee, shall be the valid acts of the Committee. The Committee shall have
the authority to adopt, amend and rescind such rules and regulations, as in its
opinion, may be advisable in the administration of the Plans. All questions of
interpretation and application of such rules and regulations, of the Plans and
of the Common Stock transferred subject to restrictions under the Plans
("Restricted Stock") shall be subject to the determination of the Committee,
which shall be final and binding. Notwithstanding the foregoing, the Committee
shall have no discretionary or interpretative power or authority with respect to
any award under the Director Plan which would cause any non-employee director to
fail to be a "disinterested person" as defined in Rule 16b-3 of the Securities
Exchange Commission, as in effect prior to August 15, 1996. All decisions and
determinations by the Committee in the exercise of its power shall be final and
binding upon the Company and Grantees.
3. STOCK SUBJECT TO THE PLANS
(a) Director Plan. The total number of shares of stock which may be
subject to the grant under the Director Plan shall be 55,625 of the Company's
common stock, $.01 par value per share (the "Common Stock"), provided that the
number of shares stated in this sentence shall be subject to adjustment in
accordance with the provisions of Section 10(a). Shares of Restricted Stock
granted under the Director Plan that fail to vest shall again become available
for grant under the terms of the Director Plan.
(b) Management Plan. The total number of shares of stock which may be
subject to grant under the Management Plan shall be 166,875 shares of the
Company's Common Stock and the total number of shares that may be so granted to
any single employee under the Management Plan shall not exceed an aggregate of
fifty-percent (50%) of the allocated shares of Common Stock, provided that the
number of shares stated in this sentence shall be subject to adjustment in
accordance with the provisions of Section 10(a). Shares of Restricted Stock
granted under the Management Plan that fail to vest shall again become available
for grant under the terms of the Management Plan.
The shares of Common Stock which may be subject to Restricted Stock
grants under the Plans may be authorized but unissued shares or treasury shares.
4. DIRECTOR PLAN
Restricted Stock shall be granted under the Director Plan only to
members of the Board who are not officers or full-time employees of the Company
or any of its Subsidiaries (each, an "Eligible Director").
(a) Amount of Award. An aggregate of 32,100 shares of Restricted Stock
have been granted by the Company's predecessor in interest under the Plans,
Springfield Institution for Savings (the "Bank") to eligible members of the
Board of Directors of the Bank. Each Eligible Director who is first elected to
serve after June 21, 1996 shall be granted 2,200 shares of Restricted Stock
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on the day following his or her election to office. In the event the aggregate
number of shares of Common Stock authorized to be awarded under this Section 4
is insufficient to make such awards in full, each Eligible Director shall be
awarded a pro-rata portion of the available shares as Restricted Stock.
(b) Limitations on Awards. Notwithstanding the foregoing provisions of
this Section 4, no Eligible Director shall be eligible to receive any grant of
Restricted Stock under this Section 4, if at the date of the grant such person
beneficially owns in excess of ten percent (10%) of the outstanding Common Stock
of the Company. No Eligible Director shall receive any award under the Plans
except as provided under this Section 4.
(c) Vesting of Restricted Stock. An Eligible Director shall be vested
in the shares of Restricted Stock awarded to him or her pursuant to the Director
Plan in accordance with the following schedule:
(i) Upon Completion of the following period of service as a
Director of the Company and/or the Bank from the date of grant of
Restricted Stock:
Vested Portion
--------------------------
Incremental Cumulative
Date Amount Amount
- ---- -------- -------
On or after First Anniversary.................... 20% 20%
On or after Second Anniversary................... 20% 40%
On or after Third Anniversary.................... 20% 60%
On or after Fourth Anniversary................... 20% 80%
On or after Fifth Anniversary.................... 20% 100%
Notwithstanding the foregoing schedule, in the event of an Eligible
Director's retirement on account of attainment of maximum age,
permanent disability or death, all Restricted Stock then outstanding
shall become immediately fully vested.
(ii) In the event of a Change of Control of the Company (as
defined in Section 10(b) below), all Restricted Stock outstanding as of
the date of such Change in Control shall become immediately fully
vested.
5. MANAGEMENT PLAN: ELIGIBILITY FOR DISCRETIONARY AWARDS;
TERMS AND CONDITIONS OF AWARDS
The individuals who shall be eligible for grants of Restricted Stock
under the Management Plan shall be key employees who have contributed or may be
expected to contribute materially to the success of the Company or a Subsidiary.
The Committee may grant or award shares of Restricted Stock in respect
of such number of shares of Common Stock, and subject to such terms or
conditions (including, without limitation, conditioning the vesting of the
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Restricted Stock in the Grantee upon satisfaction of specified performance goals
or completion of a period of employment with the Company or its Subsidiaries),
as it shall determine and specify in a Restricted Stock Agreement.
A holder of Restricted Stock shall have all the rights of a stockholder
of the Company, including the right to vote the shares and the right to receive
any cash dividends, unless the Committee shall otherwise determine. Certificates
representing Restricted Stock shall be imprinted with a legend to the effect
that the shares represented may not be sold, exchanged, transferred, pledged,
hypothecated or otherwise disposed of except in accordance with the terms of the
Restricted Stock Agreement, and if the Committee so determines, the Grantee may
be required to deposit the certificates with an escrow agent designated by the
Committee, together with the stock power or other instrument of transfer
appropriately endorsed in blank.
6. MANAGEMENT PLAN: METHOD OF GRANTING RESTRICTED STOCK
The grant of Restricted Stock shall be made by action of the Board at a
meeting at which a quorum of its members is present, or by unanimous written
consent of all its members; provided, however, that if an individual to whom a
grant has been made fails to execute and deliver to the Committee a Restricted
Stock Agreement within ten (10) days after it is submitted to him or her, the
Restricted Stock granted under the agreement shall be voidable by the Company at
its election, without further notice to the Grantee.
7. REQUIREMENTS OF LAW AND REGULATIONS; GOVERNING LAW
(a) The Company shall not be required to transfer any Restricted Stock
if the issuance of such shares will result in a violation by the Grantee or the
Company of any provisions of any law, statute or regulation of any governmental
authority, and the obligation of the Company to issue Restricted Stock hereunder
shall be subject to the obtaining of all approvals by governmental agencies as
may be deemed necessary or appropriate by the Committee. Specifically, in
connection with the Securities Act of 1933, as amended (the "Securities Act"),
upon the grant of a Restricted Stock award the Company shall not be required to
issue shares unless the Board has received evidence satisfactory to it to the
effect that the Grantee will not transfer such shares except pursuant to a
registration statement in effect under the Securities Act or unless an opinion
of counsel satisfactory to the Company has been received by the Company to the
effect that such registration is not required. Any determination in this
connection by the Board shall be conclusive. The Company shall not be obligated
to take any other affirmative action in order to cause the transfer of
Restricted Stock to comply with any law or regulations of any governmental
authority, including, without limitation, the Securities Act or applicable state
securities laws.
(b) The Plans shall be governed by Massachusetts law, except to the
extent that such law is preempted by federal law.
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8. MISCELLANEOUS
(a) No Guarantee of Continuation in Office or Employment. The Director
Plan shall not give any Eligible Director the right to continue in office as a
director or to be nominated for reelection to office as a director, or give the
Company the right to require an Eligible Director to continue in office. Neither
the Management Plan nor any Restricted Stock Agreement shall give an employee
the right to continue in the employment of the Company or any of its
Subsidiaries, or give the Company or its Subsidiary the right to require an
employee to continue in employment.
(b) Tax Withholding. To the extent required by law, the Company or its
Subsidiary shall withhold or cause to be withheld income and other taxes with
respect to any income recognized by a Grantee by reason of the grant or vesting
of Restricted Stock, and as a condition to the receipt of any Restricted Stock
the Grantee shall agree that if the amount payable to him or her by the Company
and its Subsidiary in the ordinary course is insufficient to pay such taxes,
then he or she shall upon the request of the Company pay to the Company or its
Subsidiary an amount sufficient to satisfy its tax withholding obligations.
Without limiting the foregoing, the Committee may in its discretion
permit any Grantee's withholding obligation to be paid in whole or in part in
the form of shares of Common Stock, by withholding from the shares to be issued
or by accepting delivery from the Grantee of shares already owned by him. The
fair market value of the shares for such purposes shall be determined as set
forth in Section 10(c). A Grantee may not make any such payment in the form of
shares of Common Stock acquired upon the exercise of an incentive stock option
(an "ISO") within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code") until the shares have been held by him or her for
at least two (2) years after the date the ISO was granted and at least one (1)
year after the date the ISO was exercised. If payment of the withholding taxes
is made in whole or in part in shares of Common Stock, the Grantee shall deliver
to the Company certificates registered in his or her name representing shares of
Common Stock legally and beneficially owned by him, fully vested and free of all
liens, claims and encumbrances of every kind, duly endorsed or accompanied by
stock powers duly endorsed by the record holder of the shares represented by
such certificates.
9. DURATION, AMENDMENT AND TERMINATION OF PLANS
The Committee may grant Restricted Stock under the Management Plan from
time to time until the close of business on the day prior to June 1, 2005.
Unless earlier terminated by action of the Board of Directors, the Plans shall
expire on the day prior to June 1, 2005.
The Board of Directors may amend the Plans at any time, and from time
to time, subject to any required regulatory approval and to the limitation that
no amendment shall be effective unless approved by the stockholders of the
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Company in accordance with applicable law and regulations at an annual or
special meeting held within twelve months before or after the date of adoption
of such amendment, where such amendment will:
(a) increase the number of shares of Common Stock as to which
Restricted Stock grants may be made under the Plans;
(b) change in substance any provision relating to eligibility to
participate in, or price, amount, timing or vesting of awards under the Director
Plan; or
(c) change in substance Section 5 hereof relating to eligibility to
participate in awards under the Management Plan.
Except as required to comply with the requirements of the Code or the
Employee Retirement Income Security Act of 1974, as amended, no amendment to the
provisions of the Director Plan relating to the amount, price and timing of
awards under the Director Plan shall be made unless at least six months have
elapsed since the adoption of the Director Plan or any subsequent amendment
affecting such provisions.
The Plans may be amended or terminated at any time by action of the
Board, but any such amendment or termination will not adversely affect
Restricted Stock then outstanding, without the consent of the Grantee.
10. CHANGE IN CAPITAL STRUCTURE; CHANGE IN CONTROL;
DETERMINATION OF FAIR MARKET VALUE
(a) In the event that the outstanding shares of Common Stock are
hereafter changed into or exchanged for a different number or kind of shares or
other securities of the Company, by reason of reorganization, recapitalization,
exchange of shares, stock split, combination of shares or dividend payable in
shares or other securities, a corresponding adjustment shall be made by the
Committee in the number and kind of shares of outstanding Restricted Stock and
for which Restricted Stock may be granted under the Plans. Any such adjustment
made by the Committee shall be conclusive and binding upon all affected persons,
including the Company and all Grantees.
(b) "Change in Control" means
(i) a change in control of the Company of a nature that would
be required to be reported in response to Item 1 of the current report
Form 8-K as in effect on the date hereof, pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act");
(ii) any acquisition of control of the Company by any company
within the meaning of 12 U.S.C. ss. 1841(a)(2), the Bank Holding
Company Act of 1956, as amended, or by any person within the meaning of
12 U.S.C. ss. 1817(j), the Change in Bank Control Act of 1978, as
amended;
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(iii) individuals who constitute the Board as of June 21, 1996
(the "Incumbent Board") cease for any reason to constitute at least a
majority thereof, provided that any person becoming a director
subsequent to June 21, 1996 whose election was approved by a vote of at
least three-quarters of the directors then comprising the Incumbent
Board, or whose nomination for election by the Company's shareholders
was approved by the Company's Nominating Committee then serving under
the Board, shall be, for purposes of this clause (iii), considered as
though he or she was a member of the Incumbent Board but excluding, for
this purpose, any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election contest
(as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) or other actual or threatened solicitation of
proxies or consents;
(iv) approval by the shareholders of the Company of a
reorganization, merger or consolidation, or the consummation of any
such reorganization, merger or consolidation, other than a
reorganization, merger or consolidation with respect to which all or
substantially all of the individuals and entities who were the
beneficial owners, immediately prior to such reorganization, merger or
consolidation, of the Voting Interest in the Company beneficially own,
directly or indirectly, immediately after such reorganization, merger
or consolidation more than eighty percent (80%) of the Voting Interest
of the Company or other entity resulting from such reorganization,
merger or consolidation in substantially the same proportions as their
respective ownership, immediately prior to such reorganization, merger
or consolidation, of the Voting Interest in the Company;
(v) approval by the shareholders of the Company of (1) a
complete liquidation or dissolution of the Company, or (2) the sale or
other disposition of all or substantially all of the assets of the
Company, or the occurrence of any such liquidation, dissolution, sale
or other disposition, other than, in any case, to a Subsidiary,
directly or indirectly, of the Company, or any affiliate; and/or
(vi) the solicitation of proxies from shareholders of the
Company, by someone other than the current Management of the Company
and without the approval of the Board, seeking shareholder approval of
a plan of reorganization, merger or consolidation of the Company with
one or more corporations as a result of which the shareholders'
interest in the Company are actually exchanged for or converted into
securities not issued by the Company. "Voting Interest" means
securities of any class or classes or other ownership interests having
general voting power under ordinary circumstances to elect members of
the board of directors or trustees of any entity.
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(c) For purposes of the Plans, except as may be otherwise explicitly
provided in the Plans or in any Restricted Stock Agreement or similar document,
the "fair market value" of a share of Common Stock at any particular date shall
be determined according to the following rules:
(i) if the Common Stock is at the time listed or admitted to
trading on any stock exchange or NASDAQ, then the fair market value
shall be the reported closing price of the Common Stock on such date on
the principal exchange or NASDAQ, as the case may be; or
(ii) if the Common Stock is not at the time listed or admitted
to trading on a stock exchange or NASDAQ, the fair market value shall
be the closing price of the Common Stock on the date in question in the
over-the-counter market, as such price is reported in a publication of
general circulation selected by the Board and regularly reporting the
price of the Common Stock in such market; provided, however, that if
the price of the Common Stock is not so reported, the fair market value
shall be determined in good faith by the Board, which may take into
consideration (1) the price paid for the Common Stock in the most
recent trade of a substantial number of shares known to the Board to
have occurred at arm's length between willing and knowledgeable
investors, or (2) an appraisal by an independent party, or (3) any
other method of valuation undertaken in good faith by the Board, or
some or all of the above as the Board shall in its discretion elect.
11. EFFECTIVE DATE OF PLANS; STOCKHOLDER APPROVAL
The Plans became effective, as Plans of the Bank, on June 1, 1995 and
were approved by the Bank's stockholders on May 31, 1995. The Plans were assumed
by the Company upon consummation of the reorganization contemplated by an
Agreement and Plan of Reorganization between the Company and the Bank on June
21, 1996. No Restricted Stock may be granted under the Plans on or after the
tenth anniversary of the effective date of the Plans.
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