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EXHIBIT 10.4 SOUTH JERSEY FINANCIAL CORPORATION, INC.
2000 STOCK OPTION PLAN
(AS ASSUMED BY RICHMOND COUNTY FINANCIAL CORP.)
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SOUTH JERSEY FINANCIAL CORPORATION, INC.
2000 STOCK OPTION PLAN
(AS ASSUMED BY RICHMOND COUNTY FINANCIAL CORP.)
1. DEFINITIONS.
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(a) "Affiliate" means any "parent corporation" or "subsidiary corporation"
of the Holding Company, as such terms are defined in Sections 424(e) and 424(f)
of the Code.
(b) "Association" means South Jersey Savings and Loan Association,
Turnersville, New Jersey.
(c) "Award" means, individually or collectively, a grant under the Plan of
Non-Statutory Stock Options and Incentive Stock Options.
(d) "Award Agreement" means an agreement evidencing and setting forth the
terms of an Award.
(e) "Board of Directors" means the board of directors of the Holding
Company.
(f) "Change in Control" of the Holding Company or the Association shall
mean an event of a nature that (i) would be required to be reported in response
to Item 1(a) of the current report on Form 8-K, as in effect on the date hereof,
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act"); or (ii) results in a Change in Control of the Association or
the Holding Company within the meaning of the Home Owners' Loan Act of 1933, as
amended, the Federal Deposit Insurance Act, and the Rules and Regulations
promulgated by the Office of Thrift Supervision (or its predecessor agency), as
in effect on the date hereof (provided, that in applying the definition of
change in control as set forth under the rules and regulations of the OTS, the
Board shall substitute its judgment for that of the OTS); or (iii) without
limitation such a Change in Control shall be deemed to have occurred at such
time as (A) any "person" (as the term is used in Sections 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 voting securities of the
Association or the Holding Company representing 20% or more of the Association's
or the Holding Company's outstanding voting securities or right to acquire such
securities except for any voting securities of the Association purchased by the
Holding Company and any voting securities purchased by any employee benefit plan
of the Holding Company or its Subsidiaries, or (B) individuals who constitute
the Board on the date hereof (the "Incumbent Board") cease for any reason to
constitute at least a majority thereof, provided that any person 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 the Company's stockholders was approved by a
Nominating Committee solely composed of members which are Incumbent Board
members, shall be, for purposes of this clause (B), considered as though he were
a member of the Incumbent Board, or (C) a plan of reorganization, merger,
consolidation, sale of all or substantially all the assets of the Association or
the Holding Company or similar transaction occurs or is effectuated in which the
Association or Holding Company is not the resulting entity; provided, however,
that such an event listed above will be deemed to have occurred or to have been
effectuated upon the receipt of all required federal regulatory approvals not
including the lapse of any statutory waiting periods, or (D) a proxy statement
has been distributed soliciting proxies from stockholders of the Holding
Company, by someone other than the current management of the Holding Company,
seeking stockholder approval of a plan of reorganization, merger or
consolidation of the Holding Company or Association with one or more
corporations as a result of which the outstanding shares of the class of
securities then subject to such plan or transaction are exchanged for or
converted into cash or property or securities not issued by the Association or
the Holding Company shall be distributed, or (E) a tender offer is made for 20%
or more of the voting securities of the Institution or Holding Company then
outstanding.
(g) "Code" means the Internal Revenue Code of 1986, as amended.
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(h) "Committee" means the committee designated by the Board of Directors,
pursuant to Section 2 of the Plan, to administer the Plan.
(i) "Common Stock" means the Common Stock of the Holding Company, par
value, $.01 per share.
(j) "Date of Grant" means the effective date of an Award.
(k) "Disability" means any mental or physical condition with respect to
which the Participant qualifies for and receives benefits for under a long-term
disability plan of the Holding Company or an Affiliate, or in the absence of
such a long-term disability plan or coverage under such a plan, "Disability"
shall mean a physical or mental condition which, in the sole discretion of the
Committee, is reasonably expected to be of indefinite duration and to
substantially prevent the Participant from fulfilling his duties or
responsibilities to the Holding Company or an Affiliate.
(l) "Effective Date" means the date the Plan is approved by shareholders
of the Holding Company.
(m) "Employee" means any person employed by the Holding Company or an
Affiliate. Directors who are employed by the Holding Company or an Affiliate
shall be considered Employees under the Plan.
(n) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(o) "Exercise Price" means the price at which a Participant may purchase a
share of Common Stock pursuant to an Option.
(p) "Fair Market Value" means the market price of Common Stock, determined
by the Committee as follows:
(i) If the Common Stock was traded on the date in question on The
Nasdaq Stock Market then the Fair Market Value shall be equal
to the closing price reported for such date;
(ii) If the Common Stock was traded on a stock exchange on the date
in question, then the Fair Market Value shall be equal to the
closing price reported by the applicable composite
transactions report for such date; and
(iii) If neither of the foregoing provisions is applicable, then the
Fair Market Value shall be determined by the Committee in good
faith on such basis as it deems appropriate.
Whenever possible, the determination of Fair Market Value by the Committee
shall be based on the prices reported in The Wall Street Journal. The
Committee's determination of Fair Market Value shall be conclusive and binding
on all persons.
(q) "Holding Company" means South Jersey Financial Corporation, Inc.
(r) "Incentive Stock Option" means a stock option granted to a
Participant, pursuant to Section 7 of the Plan, that is intended to meet the
requirements of Section 422 of the Code.
(s) "Non-Statutory Stock Option" means a stock option granted to a
Participant pursuant to the terms of the Plan but which is not intended to be
and is not identified as an Incentive Stock Option or a stock option granted
under the Plan which is intended to be and is identified as an Incentive Stock
Option but which does not meet the requirements of Section 422 of the Code.
(t) "Option" means an Incentive Stock Option or Non-Statutory Stock
Option.
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(u) "Outside Director" means a member of the board(s) of directors of the
Holding Company or an Affiliate who is not also an Employee of the Holding
Company or an Affiliate.
(v) "Participant" means any person who holds an outstanding Award.
(w) "Performance Award" means an Award granted to a Participant pursuant
to Section 8 of the Plan.
(x) "Plan" means this South Jersey Financial Corporation, Inc. 2000
Stock-Option Plan.
(y) "Retirement" means retirement from employment with the Holding Company
or an Affiliate in accordance with the then current retirement policies of the
Holding Company or Affiliate, as applicable. Notwithstanding the foregoing
"Retirement" shall include termination of employment (other than Termination for
Cause) under which the Participant would qualify for normal or early retirement
under the money purchase pension plan sponsored by the Association, as in effect
on the Effective Date. "Retirement" with respect to an Outside Director means
the termination of service from the board(s) of directors of the Holding Company
and any Affiliate following written notice to such board(s) of directors of the
Outside Director's intention to retire.
(z) "Termination for Cause" shall mean termination because of a
Participant's personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule or regulation (other than traffic
violations or similar offenses) or material breach of any provision of any
employment agreement between the Holding Company and/or any subsidiary of the
Holding Company and a Participant.
(aa) "Trust" means a trust established by the Board of Directors in
connection with this Plan to hold Common Stock or other property for the
purposes set forth in the Plan.
(bb) "Trustee" means any person or entity approved by the Board of
Directors or its designee(s) to hold any of the Trust assets.
2. ADMINISTRATION.
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(a) The Committee shall administer the Plan. The Committee shall consist
of two or more disinterested directors of the Holding Company, who shall be
appointed by the Board of Directors. A member of the Board of Directors shall be
deemed to be "disinterested" only if he satisfies (i) such requirements as the
Securities and Exchange Commission may establish for non-employee directors
administering plans intended to qualify for exemption under Rule 16b-3 (or its
successor) under the Exchange Act and (ii) such requirements as the Internal
Revenue Service may establish for outside directors acting under plans intended
to qualify for exemption under Section 162(m)(4)(C) of the Code. The Board of
Directors may also appoint one or more separate committees of the Board of
Directors, each composed of one or more directors of the Holding Company or an
Affiliate who need not be disinterested, that may grant Awards and administer
the Plan with respect to Employees and Outside Directors who are not considered
officers or directors of the Holding Company under Section 16 of the Exchange
Act or for whom Awards are not intended to satisfy the provisions of Section
162(m) of the Code.
(b) The Committee shall (i) select the Employees and Outside Directors who
are to receive Awards under the Plan, (ii) determine the type, number, vesting
requirements and other features and conditions of such Awards, (iii) interpret
the Plan and Award Agreements in all respects and (iv) make all other decisions
relating to the operation of the Plan. The Committee may adopt such rules or
guidelines as it deems appropriate to implement the Plan. The Committee's
determinations under the Plan shall be final and binding on all persons.
(c) Each Award shall be evidenced by a written agreement ("Award
Agreement") containing such provisions as may be required by the Plan and
otherwise approved by the Committee. Each Award Agreement shall
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constitute a binding contract between the Holding Company or an Affiliate and
the Participant, and every Participant, upon acceptance of an Award Agreement,
shall be bound by the terms and restrictions of the Plan and the Award
Agreement. The terms of each Award Agreement shall be in accordance with the
Plan, but each Award Agreement may include any additional provisions and
restrictions determined by the Committee, in its discretion, provided that such
additional provisions and restrictions are not inconsistent with the terms of
the Plan. In particular and at a minimum, the Committee shall set forth in each
Award Agreement: (i) the type of Award granted; (ii) the Exercise Price of any
Option; (iii) the number of shares subject to the Award; (iv) the expiration
date of the Award; (v) the manner, time, and rate (cumulative or otherwise) of
exercise or vesting of such Award; and (vi) the restrictions, if any, placed
upon such Award, or upon shares which may be issued upon exercise of such Award.
The Chairman of the Committee and such other directors and officers as shall be
designated by the Committee is hereby authorized to execute Award Agreements on
behalf of the Company or an Affiliate and to cause them to be delivered to the
recipients of Awards.
(d) The Committee may delegate all authority for: (i) the determination of
forms of payment to be made by or received by the Plan and (ii) the execution of
any Award Agreement. The Committee may rely on the descriptions,
representations, reports and estimates provided to it by the management of the
Holding Company or an Affiliate for determinations to be made pursuant to the
Plan, including the satisfaction of any conditions of a Performance Award.
However, only the Committee or a portion of the Committee may certify the
attainment of any conditions of a Performance Award intended to satisfy the
requirements of Section 162(m) of the Code.
3. TYPES OF AWARDS AND RELATED RIGHTS.
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The following Awards may be granted under the Plan:
(a) Non-Statutory Stock Options.
(b) Incentive Stock Options.
4. STOCK SUBJECT TO THE PLAN.
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Subject to adjustment as provided in Section 13 of the Plan, the number of
shares reserved for Options under the Plan is 379,343. The shares of Common
Stock issued under the Plan may be either authorized but unissued shares or
authorized shares previously issued and acquired or reacquired by the Trustee or
the Holding Company, respectively. To the extent that Options are granted under
the Plan, the shares underlying such Awards will be unavailable for any other
use including future grants under the Plan except that, to the extent that
Options terminate, expire or are forfeited without having vested or without
having been exercised, new Awards may be made with respect to these shares. No
Employee may be granted an Option under this Plan to purchase more than 25% of
all shares of Common Stock available under this Plan. No outside Director may be
granted an Option under this Plan to purchase more than 5% of all shares of
Common Stock available under this Plan.
5. ELIGIBILITY.
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Subject to the terms of the Plan, all Employees and Outside Directors
shall be eligible to receive Awards under the Plan.
6. NON-STATUTORY STOCK OPTIONS.
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The Committee may, subject to the limitations of this Plan and the
availability of shares of Common Stock reserved but not previously awarded under
the Plan, grant Non-Statutory Stock Options to eligible individuals upon such
terms and conditions as it may determine to the extent such terms and conditions
are consistent with the following provisions:
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(a) Exercise Price. The Committee shall determine the Exercise Price of
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each Non-Statutory Stock Option. However, the Exercise Price shall not be less
than 100% of the Fair Market Value of the Common Stock on the Date of Grant.
(b) Terms of Non-statutory Stock Options. The Committee shall determine
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the term during which a Participant may exercise a Non-Statutory Stock Option,
but in no event may a Participant exercise a Non-Statutory Stock Option, in
whole or in part, more than ten (10) years from the Date of Grant. The Committee
shall also determine the date on which each Non-Statutory Stock Option, or any
part thereof, first becomes exercisable and any terms or conditions a
Participant must satisfy in order to exercise each Non-Statutory Stock Option.
The shares of Common Stock underlying each Non-Statutory Stock Option may be
purchased in whole or in part by the Participant at any time during the term of
such Non-Statutory Stock Option, or any portion thereof, once the Non-Statutory
Stock Option becomes exercisable.
(c) Non-Transferability. Unless otherwise determined by the Committee in
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accordance with this Section 6(c), a Participant may not transfer, assign,
hypothecate, or dispose of in any manner, other than by will or the laws of
intestate succession, a Non-Statutory Stock Option. The Committee may, however,
in its sole discretion, permit transferability or assignment of a Non-Statutory
Stock Option if such transfer or assignment is, in its sole determination, for
valid estate planning purposes and such transfer or assignment is permitted
under the Code and Rule 16b-3 under the Exchange Act. For purposes of this
Section 6(c), a transfer for valid estate planning purposes includes, but is not
limited to: (a) a transfer to a revocable intervivos trust as to which the
Participant is both the settlor and trustee, (b) a transfer for no consideration
to: (i) any member of the Participant's Immediate Family, (ii) any trust solely
for the benefit of members of the Participant's Immediate Family, (iii) any
partnership whose only partners are members of the Participant's Immediate
Family, and (iv) any limited liability corporation or corporate entity whose
only members or equity owners are members of the Participant's Immediate Family,
or (c) a transfer to the South Jersey Savings Charitable Foundation. For
purposes of this Section 6(c), "Immediate Family" includes, but is not
necessarily limited to, a Participant's parents, grandparents, spouse, children,
grandchildren, siblings (including half bothers and sisters), and individuals
who are family members by adoption. Nothing contained in this Section 6(c) shall
be construed to require the Committee to give its approval to any transfer or
assignment of any Non-Statutory Stock Option or portion thereof, and approval to
transfer or assign any Non-Statutory Stock Option or portion thereof does not
mean that such approval will be given with respect to any other Non-Statutory
Stock Option or portion thereof. The transferee or assignee of any Non-Statutory
Stock Option shall be subject to all of the terms and conditions applicable to
such Non- Statutory Stock Option immediately prior to the transfer or assignment
and shall be subject to any other conditions proscribed by the Committee with
respect to such Non-Statutory Stock Option.
(d) Termination of Employment or Service (General). Unless otherwise
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determined by the Committee, upon the termination of a Participant's employment
or other service for any reason other than Retirement, Disability, death, or as
a result of a Termination for Cause, the Participant may exercise only those
Non-Statutory Stock Options that were immediately exercisable by the Participant
at the date of such termination and only for a period of three (3) months
following the date of such termination.
(e) Termination of Employment or Service (Retirement). In the event of a
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Participant's Retirement, all Non-Statutory Stock Options held by the
Participant at the date of Retirement shall immediately become exercisable and
remain exercisable for a period of five (5) years following the date of
Retirement.
(f) Termination of Employment or Service (Disability or death). In the
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event of the termination of a Participant's employment or other service due to
Disability or death, all Non-Statutory Stock Options held by such Participant
shall immediately become exercisable and remain exercisable for a period one (1)
year following the date of such termination.
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(g) Termination of Employment or Service (Termination for Cause). Unless
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otherwise determined by the Committee, in the event of a Participant's
Termination for Cause, all rights with respect to the Participant's Non-
Statutory Stock Options shall expire immediately upon the effective date of such
Termination for Cause.
(h) Termination of Employment or Service (Change in Control). In the event
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of a Change in Control, all Non-Statutory Stock Options held by a Participant as
of the date of the Change in Control shall immediately become exercisable and
shall remain exercisable until the expiration of the term of the Non-Statutory
Stock Option, regardless of whether or when the Option holder terminates
employment or service.
(i) Payment. Payment due to a Participant upon the exercise of a
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Non-Statutory Stock Option shall be made in the form of shares of Common Stock.
7. INCENTIVE STOCK OPTIONS.
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The Committee may, subject to the limitations of the Plan and the
availability of shares of Common Stock reserved but unawarded under this Plan,
grant Incentive Stock Options to an Employee upon such terms and conditions as
it may determine to the extent such terms and conditions are consistent with the
following provisions:
(a) Exercise Price. The Committee shall determine the Exercise Price of
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each Incentive Stock Option. However, the Exercise Price shall not be less than
100% of the Fair Market Value of the Common Stock on the Date of Grant;
PROVIDED, HOWEVER, that if at the time an Incentive Stock Option is granted, the
Employee owns or is treated as owning, for purposes of Section 422 of the Code,
Common Stock representing more than 10% of the total combined voting securities
of the Holding Company ("10% Owner"), the Exercise Price shall not be less than
110% of the Fair Market Value of the Common Stock on the Date of Grant.
(b) Amounts of Incentive Stock Options. To the extent the aggregate Fair
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Market Value of shares of Common Stock with respect to which Incentive Stock
Options that are exercisable for the first time by an Employee during any
calendar year under the Plan and any other stock option plan of the Holding
Company or an Affiliate exceeds $100,000, or such higher value as may be
permitted under Section 422 of the Code, such Options in excess of such limit
shall be treated as Non-Statutory Stock Options. Fair Market Value shall be
determined as of the Date of Grant with respect to each such Incentive Stock
Option.
(c) Terms of Incentive Stock Options. The Committee shall determine the
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term during which a Participant may exercise an Incentive Stock Option, but in
no event may a Participant exercise an Incentive Stock Option, in whole or in
part, more than ten (10) years from the Date of Grant; PROVIDED, HOWEVER, that
if at the time an Incentive Stock Option is granted to an Employee who is a 10%
Owner, the Incentive Stock Option granted to such Employee shall not be
exercisable after the expiration of five (5) years from the Date of Grant. The
Committee shall also determine the date on which each Incentive Stock Option, or
any part thereof, first becomes exercisable and any terms or conditions a
Participant must satisfy in order to exercise each Incentive Stock Option. The
shares of Common Stock underlying each Incentive Stock Option may be purchased
in whole or in part at any time during the term of such Incentive Stock Option
after such Option becomes exercisable.
(d) Non-Transferability. No Incentive Stock Option shall be transferable
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except by will or the laws of descent and distribution and is exercisable,
during his lifetime, only by the Employee to whom the Committee grants the
Incentive Stock Option. The designation of a beneficiary does not constitute a
transfer of an Incentive Stock Option.
(e) Termination of Employment (General). Unless otherwise determined by
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the Committee, upon the termination of a Participant's employment or other
service for any reason other than Retirement, Disability, death, or as a result
of a Termination for Cause, the Participant may exercise only those Incentive
Stock Options that were immediately exercisable by the Participant at the date
of such termination and only for a period of three (3) months following the date
of such termination.
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(f) Termination of Employment (Retirement). In the event of a
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Participant's Retirement, all Incentive Stock Options held by the Participant at
the date of Retirement shall immediately become exercisable and shall remain
exercisable for a period of five (5) years following the date of Retirement. Any
Option originally designated as an Incentive Stock Option shall be treated as a
Non-Statutory Stock Option to the extent the Participant exercises such Option
more than three (3) months following the Date of the Participant's Retirement.
(g) Termination of Employment (Disability or Death). In the event of the
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termination of a Participant's employment or other service due to Disability or
death, all Incentive Stock Options held by such Participant shall immediately
become exercisable and remain exercisable for a period one (1) year following
the date of such termination.
(h) Termination of Employment (Termination for Cause). Unless otherwise
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determined by the Committee, in the event of an Employee's Termination for
Cause, all rights under such Employee's Incentive Stock Options shall expire
immediately upon the effective date of such Termination for Cause.
(i) Change in Control. In the event of a Change in Control, all Incentive
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Stock Options held by a Participant as of the date of the Change in Control
shall immediately become exercisable and shall remain exercisable until the
expiration of the term of the Incentive Stock Option, regardless of whether or
when the Option holder terminates employment or service. Any Option originally
designated as an Incentive Stock Option shall be treated as a Non-Statutory
Stock Options to the extent the Participant exercises such Option more than
three (3) months following the Date of the Participant's Retirement.
(j) Payment. Payment due to a Participant upon the exercise of an
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Incentive Stock Option shall be made in the form of shares of Common Stock.
(k) Disqualifying Dispositions. Each Award Agreement with respect to an
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Incentive Stock Option shall require the Participant to notify the Committee of
any disposition of shares of Common Stock issued pursuant to the exercise of
such Option under the circumstances described in Section 421(b) of the Code
(relating to certain disqualifying dispositions), within 10 days of such
disposition.
8. PERFORMANCE AWARDS.
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The Committee may determine to make any Award under the Plan contingent
upon the satisfaction of any conditions related to the performance of the
Holding Company, an Affiliate or the Participant. Each Performance Award shall
be evidenced in the Award Agreement, which shall set forth the applicable
conditions, the maximum amounts payable and such other terms and conditions as
are applicable to the Performance Award.
9. DEFERRED PAYMENTS.
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The Committee, in its discretion, may permit a Participant to elect to
defer receipt of all or any part of any cash or stock payment under the Plan, or
the Committee may determine to defer receipt by some or all Participants, of all
or part of any such payment. The Committee shall determine the terms and
conditions of any such deferral, including the period of deferral, the manner of
deferral, and the method for measuring appreciation on deferred amounts until
their payout.
10. METHOD OF EXERCISE OF OPTIONS.
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Subject to any applicable Award Agreement, any Option may be exercised by
the Participant in whole or in part at such time or times, and the Participant
may make payment of the Exercise Price in such form or forms permitted by the
Committee, including, without limitation, payment by delivery of cash, Common
Stock or other consideration
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(including, where permitted by law and the Committee, Awards) having a Fair
Market Value on the day immediately preceding the exercise date equal to the
total Exercise Price, or by any combination of cash, shares of Common Stock and
other consideration, including exercise by means of a cashless exercise
arrangement with a qualifying broker-dealer, as the Committee may specify in the
applicable Award Agreement.
11. RIGHTS OF PARTICIPANTS.
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No Participant shall have any rights as a shareholder with respect to any
shares of Common Stock covered by an Option until the date of issuance of a
stock certificate for such Common Stock. Nothing contained in this Plan or in
any Award Agreement confers on any person any right to continue in the employ or
service of the Holding Company or an Affiliate or interferes in any way with the
right of the Holding Company or an Affiliate to terminate a Participant's
services.
12. DESIGNATION OF BENEFICIARY.
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A Participant may, with the consent of the Committee, designate a person
or persons to receive, in the event of death, any Award to which the Participant
would then be entitled. Such designation will be made upon forms supplied by and
delivered to the Committee and may be revoked in writing. If a Participant fails
effectively to designate a beneficiary, then the Participant's estate will be
deemed to be the beneficiary.
13. DILUTION AND OTHER ADJUSTMENTS.
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In the event of any change in the outstanding shares of Common Stock by
reason of any stock dividend or split, recapitalization, merger, consolidation,
spin-off, reorganization, combination or exchange of shares, or other similar
corporate change, or other increase or decrease in such shares without receipt
or payment of consideration by the Holding Company, or in the event an
extraordinary capital distribution is made, the Committee may make such
adjustments to previously granted Awards, to prevent dilution, diminution, or
enlargement of the rights of the Participant, including any or all of the
following:
(a) adjustments in the aggregate number or kind of shares of Common
Stock or other securities that may underlie future Awards under the
Plan;
(b) adjustments in the aggregate number or kind of shares of Common
Stock or other securities underlying Awards already made under the
Plan;
(c) adjustments in the Exercise Price of outstanding Incentive and/or
Non-Statutory Stock Options.
No such adjustments may, however, materially change the value of benefits
available to a Participant under a previously granted Award. All Awards under
this Plan shall be binding upon any successors or assigns of the Holding
Company.
14. TAXES.
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(a) Whenever under this Plan, cash or shares of Common Stock are to be
delivered upon exercise or payment of an Award or any other event with respect
to rights and benefits hereunder, the Committee shall be entitled to require as
a condition of delivery (i) that the Participant remit an amount sufficient to
satisfy all federal, state, and local tax withholding requirements related
thereto, (ii) that the withholding of such sums come from compensation otherwise
due to the Participant or from any shares of Common Stock due to the Participant
under this Plan or (iii) any combination of the foregoing PROVIDED, HOWEVER,
that no amount shall be withheld from any cash payment or shares of Common Stock
relating to an Award which was transferred by the Participant in accordance with
this Plan.
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Furthermore, Participants may direct the Committee to instruct the Trustee to
sell shares of Common Stock to be delivered upon the payment of an Award to
satisfy tax obligations.
(b) If any disqualifying disposition described in Section 7(l) is made
with respect to shares of Common Stock acquired under an Incentive Stock Option
granted pursuant to this Plan, or any transfer described in Section 6(c) is
made, or any election described in Section 16 is made, then the person making
such disqualifying disposition, transfer, or election shall remit to the Holding
Company or its Affiliates an amount sufficient to satisfy all federal, state,
and local withholding taxes thereby incurred; provided that, in lieu of or in
addition to the foregoing, the Holding Company or its Affiliates shall have the
right to withhold such sums from compensation otherwise due to the Participant,
or, except in the case of any transfer pursuant to Section 6(c), from any shares
of Common Stock due to the Participant under this Plan.
15. NOTIFICATION UNDER SECTION 83(b).
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The Committee may, on the Date of Grant or any later date, prohibit a
Participant from making the election described below. If the Committee has not
prohibited such Participant from making such election, and the Participant
shall, in connection with the exercise of any Option, or the grant of any Stock
Award, make the election permitted under Section 83(b) of the Code, such
Participant shall notify the Committee of such election within 10 days of filing
notice of the election with the Internal Revenue Service, in addition to any
filing and notification required pursuant to regulations issued under the
authority of Section 83(b) of the Code.
16. AMENDMENT OF THE PLAN AND AWARDS.
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(a) The Board of Directors may at any time, and from time to time, modify
or amend the Plan in any respect, prospectively or retroactively; provided
however, that provisions governing grants of Incentive Stock Options shall be
submitted for shareholder approval to the extent required by such law,
regulation or otherwise. Failure to ratify or approve amendments or
modifications by shareholders shall be effective only as to the specific
amendment or modification requiring such ratification. Other provisions of this
Plan will remain in full force and effect. No such termination, modification or
amendment may adversely affect the rights of a Participant under an outstanding
Award without the written permission of such Participant.
(b) The Committee may amend any Award Agreement, prospectively or
retroactively; PROVIDED, HOWEVER, that no such amendment shall adversely affect
the rights of any Participant under an outstanding Award without the written
consent of such Participant.
17. EFFECTIVE DATE OF PLAN.
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The Plan shall become effective upon approval by the Holding Company's
shareholders. The failure to obtain shareholder approval will not effect the
validity of the Plan and any Awards made under the Plan; PROVIDED, HOWEVER, that
if the Plan is not approved by stockholders in accordance with IRS regulations,
the Plan shall remain in full force and effect, and any Incentive Stock Options
granted under the Plan shall be deemed to be Non-Statutory Stock Options and any
Award intended to comply with Section 162(m) of the Code shall not comply with
Section 162(m) of the Code.
18. TERMINATION OF THE PLAN.
-----------------------
The right to grant Awards under the Plan will terminate upon the earlier
of: (i) ten (10) years after the Effective Date; (ii) the issuance of a number
of shares of Common Stock pursuant to the exercise of Options is equivalent to
the maximum number of shares reserved under the Plan as set forth in Section 4
of the Plan. The Board of Directors has the right to suspend or terminate the
Plan at any time, provided that no such action will, without the consent of a
Participant or except as provided for in Section 16(c) of the Plan, adversely
affect a Participant's vested rights under a previously granted Award.
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19. APPLICABLE LAW.
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The Plan will be administered in accordance with the laws of the state of
Delaware to the extent not pre-empted by applicable federal law.
20. TREATMENT OF AWARDS UPON A CHANGE IN CONTROL.
---------------------------------------------
In the event of a Change in Control where the Holding Company or the
Association is not the surviving entity, the Board of Directors of the Holding
Company and/or the Association, as applicable, shall require that the successor
entity take one of the following actions with respect to all Awards held by
Participants at the date of the Change in Control:
(i) Assume the Awards with the same terms and conditions as granted
to the Participant under this Plan; or
(ii) Replace the Awards with comparable Awards, subject to the same
or more favorable terms and conditions as the Award granted to the
Participant under this Plan, whereby the Participant will be granted
common stock or the option to purchase common stock of the successor
entity; or, only if the Committee determines that neither of the
alternatives set forth in clauses (i) or (ii) are legally available;
or
(iii) Replace the Awards with a cash payment under an incentive
plan, program, or other arrangement of the successor entity that
preserves the economic value of the Awards and makes any such cash
payment subject to the same vesting or exercisability schedule
applicable to such Awards.
(b) The determination of comparability of Awards offered by a successor
entity under clause (ii) of paragraph (a) above shall be made by the Committee,
and the Committee's determination shall be conclusive and binding.
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