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EXHIBIT 10.3
ROSLYN BANCORP, INC.
2001 STOCK-BASED INCENTIVE PLAN
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ROSYLN BANCORP, INC.
2001 STOCK-BASED INCENTIVE PLAN
1. DEFINITIONS.
(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) "Bank" means Roslyn Savings Bank.
(c) "Board of Directors" means the board of directors of the Holding
Company.
(d) "Change in Control" means a change in control of the Bank or Holding
Company of a nature that (i) would be required to be reported in
response to Item 1 of the Current Report on Form 8-K, as in effect on
the date hereof, pursuant to Sections 13 or 15(d) of the Exchange Act;
(ii) results in a "change of control" or "acquisition of control"
within the meaning of the regulations promulgated by the Office of
Thrift Supervision ("OTS") (or its predecessor agency) found at 12
C.F.R. Part 574, as in effect on the date hereof; PROVIDED, HOWEVER,
that in applying the definition of change in control as set forth under
such regulations the Board of Directors shall substitute its judgment
for that of the OTS; or (iii) without limitation 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 securities of the Bank or the
Holding Company representing 20% or more of the Bank's or the Holding
Company's outstanding securities except for any securities of the Bank
purchased by the Holding Company and any securities purchased by any
tax-qualified employee benefit plan of the Bank; or (B) individuals who
constitute the Board of Directors 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 Holding Company's stockholders was approved by a
nominating committee serving under the Incumbent Board, shall be, for
purposes of this clause (B), considered as though he or she 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 Bank
or the Holding Company or similar transaction occurs in which the Bank
or Holding Company is not the resulting entity; or (D) a solicitation
of shareholders 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 Bank or similar transaction with one or more corporations,
as a result of which the outstanding shares of the class of securities
then subject to the plan are exchanged for or converted into cash or
property or securities not issued by the Bank or the Holding Company;
or (E) a tender offer is made for 20% or more of the voting securities
of the Bank or the Holding Company.
(e) "Code" means the Internal Revenue Code of 1986, as amended.
(f) "Committee" means the committee designated, pursuant to Section 2 of
the Plan, to administer the Plan.
(g) "Common Stock" means the common stock of the Holding Company, par value
$.01 per share.
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(h) "Disability" means any mental or physical condition, with respect to
which an individual qualifies for and receives benefits 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 individual from
fulfilling his duties or responsibilities to the Holding Company or an
Affiliate.
(i) "Employee" means any person employed by the Holding Company or an
affiliate. Directors who are also employed by the Holding Company or an
Affiliate shall be considered Employees under the Plan.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(k) "Exercise Price" means the price at which an individual may purchase a
share of Common Stock pursuant to an Option.
(l) "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 for 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.
(m) "Holding Company" means Roslyn Bancorp, Inc.
(n) "Incentive Stock Option" means a stock option granted under the Plan,
that is intended to meet the requirements of Section 422 of the Code.
(o) "Non-Statutory Stock Option" means a stock option granted to an
individual pursuant under the Plan that is not intended to be and is
not identified as an Incentive Stock Option, or a stock option granted
under the Plan that is intended to be and is identified as an Incentive
Stock Option, but that does not meet the requirements of Section 422 of
the Code.
(p) "Option" means an Incentive Stock Option or a Non-Statutory Stock
Option.
(q) "Outside Director" means a member of the board(s) of directors of the
Holding Company or an Affiliate, who is not also an Employee.
(r) "Plan" means this Roslyn Bancorp, Inc. 2001 Stock-Based Incentive Plan.
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(s) "Restricted Stock Award" means an award of restricted stock granted to
an individual pursuant to Section 6 of the Plan.
(t) "Retirement" means a termination of employment (i) from the Holding
Company or an Affiliate at an age and with employment service that
would entitle the individual to a pension under The Retirement Plan of
The Roslyn Savings Bank in RSI Retirement Trust if the individual were
a participant in such pension plan or (ii) under circumstances
designated as a Retirement by the Committee. "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 the board(s) of directors of the Outside
Director's intention to retire.
(u) "Termination for Cause" means termination because of an individual'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 affiliate of the Holding Company and any individual.
2. PURPOSE.
This Plan is intended to provide the Holding Company and its Affiliates, a means
to continue using stock as a form of compensation. Pursuant to the terms of the
Plan, the Committee may grant stock options and restricted stock to Employees,
Outside Directors and independent contractors or Consultants of the Holding
Company and its affiliates.
3. ADMINISTRATION.
(a) The Committee shall administer the Plan. The Committee shall consist
of two (2) 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 "disinterested" only if he or she 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 individuals
who are not considered officers or directors of the Holding Company
under Section 16 of the Exchange Act.
(b) The Committee shall:
(i) select the individuals who are to receive grants of awards
under the Plan;
(ii) determine the type, number, vesting requirements and other
features and conditions of such awards made under the Plan;
(iii) interpret the Plan and Award Notices (as defined below); and
(iv) make all other decisions related to the operation of the Plan.
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The Committee shall adopt any rules or guidelines that it deems
appropriate to implement and administer the Plan. The Committee's
determinations under the Plan shall be final and binding on all
persons.
(c) Each award granted under the Plan shall be evidenced by a written
notice ("Award Notice"). Each Award Notice shall constitute a binding
contract between the Holding Company or an Affiliate and the award
holder, and every award holder, upon acceptance of an Award Notice,
shall be bound by the terms and restrictions of the Plan and the Award
Notice. The terms of each Award Notice shall be set in accordance with
the Plan, but each Award Notice may also include any additional
provisions and restrictions determined by the Committee. In particular,
and at a minimum, the Committee shall set forth in each Award Notice:
(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 the award; and
(vi) the restrictions, if any, placed on the award, or upon shares
which may be issued upon the exercise or vesting of the award.
The Chairman of the Committee and such other directors and officers as
shall be designated by the Committee are hereby authorized to execute
Award Notices on behalf of the Holding Company or an Affiliate and to
cause them to be delivered to the recipients of awards granted under
the Plan.
(d) The Committee may delegate all authority for the determination of forms
of payment to be made or received by the Plan and for the execution of
any Award Notice. 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.
4. STOCK SUBJECT TO THE PLAN.
Subject to adjustment as provided in Section 11 of the Plan, the number of
shares reserved for awards under the Plan is 2,500,000, including for purchase
pursuant to the exercise of Options (Incentive Stock Options and Non-Statutory
Stock Options); provided, however, that no more than 500,000 may be used for
grants of Restricted Stock Awards. 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 Holding Company. Shares
underlying outstanding awards will be unavailable for any other use, including
future grants under the Plan, except that, to the extent the awards terminate,
expire or are forfeited without vesting or having been exercised, new awards may
be granted with respect to these shares subject to the limitations set forth in
this Section 4. Notwithstanding these overall limitations, no individual may
receive grants of awards under the Plan that, in the aggregate, cover more than
25% of the total shares reserved for awards under the Plan.
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5. OPTIONS.
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 Options to eligible individuals, subject to terms and conditions as it may
determine, to the extent that such terms and conditions are consistent with the
following provisions:
(a) EXERCISE PRICE. The Exercise Price shall not be less than one hundred
percent (100%) of the Fair Market Value of the Common Stock on the date
of grant.
(b) TERMS OF OPTIONS. In no event may an individual exercise an Option, in
whole or in part, more than ten (10) years from the date of grant.
(c) NON-TRANSFERABILITY. Unless otherwise determined by the Committee in
accordance with this Section 5(c), an individual may not transfer,
assign, hypothecate, or dispose of an Option in any manner, other than
by will or the laws of intestate succession. The Committee may,
however, in its sole discretion, permit transfer or assignment of a
Non-Statutory Stock Option, if it determines that the transfer or
assignment is for valid estate planning purposes and is permitted under
the Code and Rule 16b-3 of the Exchange Act. For purposes of this
Section 5(c), a transfer for valid estate planning purposes includes,
but is not limited to, transfers:
(i) to a revocable inter vivos trust, as to which an individual
is both settlor and trustee;
(ii) for no consideration to: (1) any member of the individual's
Immediate Family; (2) a trust solely for the benefit of
members of the individual's Immediate Family; (3) any
partnership whose only partners are members of the
individual's Immediate Family; or (4) any limited liability
corporation or other corporate entity whose only members or
equity owners are members of the individual's Immediate
Family; or
(iii) a transfer to the Roslyn Savings Foundation.
For purposes of this Section 5(c), "Immediate Family" includes, but is
not necessarily limited to, an individual's parents, grandparents,
spouse, children, grandchildren, siblings (including half brothers and
sisters), and individuals who are family members by adoption. Nothing
contained in this Section 5(c) shall be construed to require the
Committee to approve the transfer or assignment of any Non-Statutory
Stock Option, in whole or in part. Receipt of the Committee's approval
to transfer or assign a Non-Statutory Stock Option, in whole or in
part, does not mean that the Committee must approve a transfer or
assignment of any other Non-Statutory Stock Option, or portion thereof.
The transferee or assignee of any Non-Statutory Stock Option shall be
subject to all terms and conditions applicable to the Option
immediately prior to transfer or assignment, and shall remain subject
to any other conditions proscribed by the Committee with respect to the
Option.
(d) SPECIAL RULES FOR INCENTIVE STOCK OPTIONS. Notwithstanding foregoing
provisions, the following rules apply to the grant of Incentive Stock
Options:
(i) If an Employee owns or is treated as owning, for purposes of
Section 422 of the Code, Common Stock representing more than
ten percent (10%) of the total combined voting securities of
the Holding Company at the time the Committee grants the
Incentive Stock
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Option (a "10% Owner"), the Exercise Price shall not be less
than one hundred and ten percent (110%) of the Fair Market
Value of the Common Stock on the date of grant.
(ii) An Incentive Stock Option granted to a 10% Owner shall not be
exercisable more than five (5) years from the date of grant.
(iii) To the extent the aggregate Fair Market Value of shares of
Common Stock with respect to which Incentive Stock Options are
exercisable for the first time by an Employee during any
calendar year, under the Plan or any other stock option plan
of the Holding Company, exceeds $100,000, or such higher value
as may be permitted under Section 422 of the Code, Options in
excess of the limit shall be treated as Non-Statutory Stock
Options. Fair Market Value shall be determined as of the date
of grant for each Incentive Stock Option.
(iv) Each Award Notice for an Incentive Stock Option shall require
the individual to notify the Committee within ten (10) days of
any disposition of shares of Common Stock under the
circumstances described in Section 421(b) of the Code
(relating to certain disqualifying dispositions).
(e) ACCELERATION UPON A CHANGE IN CONTROL. Upon a Change in Control, all
Options held by an individual as of the date of the Change in Control
shall immediately become exercisable and shall remain exercisable until
the expiration of the Option term.
(f) TERMINATION OF EMPLOYMENT OR SERVICE. The following rules apply upon
the termination of an individual's employment or other service:
(i) IN GENERAL. Unless the Committee determines otherwise, upon
termination of employment or service for any reason other than
Retirement, Disability or death, or Termination for Cause, the
individual may exercise only those Non-Statutory Stock Options
that were immediately exercisable by the individual at the
date of termination, and only for a period of three (3) months
from the date of termination, or, if sooner, until the
expiration of the Option term.
(ii) RETIREMENT. Unless the Committee determines otherwise, upon an
individual's Retirement, the individual may exercise only
those Options that were immediately exercisable by the
individual at the date of Retirement, and only for a period of
three (3) years from the date of Retirement, or, if sooner,
until the expiration of the Option term.
(iii) DISABILITY OR DEATH. Unless the Committee determines
otherwise, upon termination of an individual's employment or
service due to Disability or death, all Non-Statutory Stock
Options shall become immediately exercisable and shall remain
exercisable for a period of three (3) years from the date of
termination, or, if sooner, until the expiration of the Option
term.
(iv) TERMINATION FOR CAUSE. Unless the Committee determines
otherwise, upon Termination for Cause, all rights of an
individual to Options shall expire immediately upon the
effective date of Termination for Cause.
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6. RESTRICTED STOCK AWARDS.
The Committee may make grants of Restricted Stock Awards, which shall consist of
the grant of some number of shares of Common Stock to an individual upon such
terms and conditions as it may determine to the extent such terms and conditions
are consistent with the following provisions:
(a) GRANTS OF STOCK. Restricted Stock Awards may only be granted in whole
shares of Common Stock.
(b) NON-TRANSFERABILITY. Except to the extent permitted by the Code, the
rules promulgated under Section 16(b) of the Exchange Act or any
successor statutes or rules:
(i) The recipient of a Restricted Stock Award grant shall not
sell, transfer, assign, pledge, or otherwise encumber shares
subject to the grant until full vesting of such shares has
occurred. For purposes of this section, the separation of
beneficial ownership and legal title through the use of any
"swap" transaction is deemed to be a prohibited encumbrance.
(ii) Unless determined otherwise by the Committee and except in the
event of the Participant's death or pursuant to a domestic
relations order, a Restricted Stock Award grant is not
transferable and may be earned in his or her lifetime only by
the individual to whom it is granted. Upon the death of an
individual, a Restricted Stock Award grant is transferable by
will or the laws of descent and distribution. The designation
of a beneficiary shall not constitute a transfer.
(iii) If the recipient of a Restricted Stock Award is subject to the
provisions of Section 16 of the Exchange Act, shares of Common
Stock subject to the grant may not, without the written
consent of the Committee (which consent may be given in the
Award Notice), be sold or otherwise disposed of within six (6)
months following the date of grant.
(c) ACCELERATION OF VESTING UPON A CHANGE IN CONTROL. Upon a Change in
Control, all Restricted Stock Awards held by an individual as of the
date of the Change in Control shall immediately become vested and any
further restrictions shall lapse.
(d) TERMINATION OF EMPLOYMENT OR SERVICE. The following rules will govern
the treatment of a Restricted Stock Award upon the termination of an
individual's termination of employment or other service:
(i) IN GENERAL. Unless the Committee determines otherwise, upon
the termination of an individual's employment or service for
any reason other than Retirement, Disability or death, or
Termination for Cause, any Restricted Stock Award in which the
individual has not become vested as of the date of such
termination shall be forfeited and any rights the individual
had to such Restricted Stock Award shall become null and void.
(ii) RETIREMENT. Unless the Committee determines otherwise, upon an
individual's Retirement, any Restricted Stock Award in which
the Participant has not become vested as of the date of
Retirement shall be forfeited and any rights the individual
had to such unvested Restricted Stock Awards shall become null
and void.
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(iii) DISABILITY OR DEATH. Unless otherwise determined by the
Committee, in the event of a termination of the individual's
service due to Disability or death all unvested Restricted
Stock Awards held by such Participant shall immediately vest
as of the date of such termination.
(iv) TERMINATION FOR CAUSE. Unless otherwise determined by the
Committee, in the event of the individual's Termination for
Cause, all Restricted Stock Awards in which the individual had
not become vested as of the effective date of such termination
shall be forfeited and any rights such individual had to such
unvested Restricted Stock Awards shall become null and void.
(e) ISSUANCE OF CERTIFICATES. Unless otherwise held in trust and registered
in the name of the trustee of the trust, reasonably promptly after the
date of grant with respect to shares of Common Stock pursuant to a
Restricted Stock Award, the Holding Company shall cause to be issued a
stock certificate, registered in the name of the individual to whom the
Restricted Stock Award was granted, evidencing such shares; PROVIDED,
HOWEVER, that the Holding Company shall not cause a stock certificate
to be issued unless it has received a stock power duly endorsed in
blank with respect to such shares. Each such stock certificate shall
bear the following legend:
"The transferability of this certificate and the shares of
stock represented hereby are subject to the restrictions,
terms and conditions (including forfeiture provisions and
restrictions against transfer) contained in the Roslyn
Bancorp, Inc. 2001 Stock-Based Incentive Plan and Award Notice
entered into between the registered owner of such shares and
Roslyn Bancorp, Inc. or its Affiliates. A copy of the Plan and
Award Notice is on file in the office of the Corporate
Secretary of Roslyn Bancorp, Inc., One Jericho Plaza, New
York, New York 11753-8905."
This legend shall not be removed until the individual becomes vested in
such shares pursuant to the terms of the Plan and Award Notice. Each
certificate issued pursuant to this Section 6(e) shall be held by the
Holding Company or its Affiliates, unless the Committee determines
otherwise.
(f) TREATMENT OF DIVIDENDS. Whenever shares of Common Stock underlying
a Restricted Stock Award are distributed to an individual or
beneficiary thereof under the Plan (or at such other time as the
Committee may determine with respect to an individual), the recipient
or beneficiary shall also be entitled to receive, with respect to each
such share distributed, a payment equal to any cash dividends or other
distributions and the number of shares of Common Stock equal to any
stock dividends, declared and paid with respect to a share of the
Common Stock if the record date for determining shareholders entitled
to receive such dividends or other distributions falls between the date
the relevant Restricted Stock Award was granted and the date the
relevant Restricted Stock Award or installment thereof is issued. There
shall also be distributed an appropriate amount of net earnings, if
any, of the trust with respect to any dividends paid out on the shares
related to the Restricted Stock Award.
(g) VOTING OF RESTRICTED STOCK AWARDS. After a Restricted Stock Award has
been granted but for which the shares covered by such Restricted Stock
Award have not yet been vested, earned and distributed to the
individual pursuant to the Plan, the individual shall be entitled to
vote or to direct the trustee to vote, as the case may be, such shares
of Common Stock which the Restricted Stock Award covers subject to the
rules and procedures adopted by the Committee for this purpose and in a
manner consistent with the trust agreement.
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7. DEFERRED PAYMENTS.
The Committee, in its discretion, may permit an individual to elect to defer the
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 individuals, of all or a
portion of any payment. The Committee shall determine the terms and conditions
of any permitted deferral, including the period of deferral, the manner of
deferral and the method used to measure appreciation on deferred amounts until
paid.
8. METHOD OF EXERCISING OPTIONS.
Subject to any applicable Award Notice, an individual may exercise any Option,
in whole or in part, at such time or times as the Committee specifies in the
Award Notice. The individual may make payment of the Exercise Price in such form
or forms as the Committee specifies in the Award Notice, including, without
limitation, payment by delivery of cash, Common Stock or other consideration
(including, where permitted by law and the Committee, Options) having a Fair
Market Value equal to the total Exercise Price on the day immediately preceding
the exercise date. The Committee may also allow payment by any combination of
cash, shares of Common Stock and other consideration, including exercise by
means of a cashless exercise arrangement with a qualified broker-dealer.
9. RIGHTS OF INDIVIDUALS.
No individual shall have any rights as a shareholder with respect to any shares
of Common Stock covered by a grant under this Plan until the date of issuance of
a stock certificate for such Common Stock. Nothing contained in this Plan or in
any Award Notice confers on any person the 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 an individual's
services.
10. DESIGNATION OF BENEFICIARY.
With the Committee's consent, an individual may designate a person or persons to
receive, upon the individual's death, any award to which the individual would
then be entitled. This designation shall be made upon forms supplied by and
delivered to the Holding Company and it may be revoked in writing. If an
individual fails to effectively designate a beneficiary, the individual's estate
shall be deemed to be the beneficiary for purposes of the Plan.
11. DILUTION AND OTHER ADJUSTMENTS.
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 any 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 adjustments
to previously granted awards, to prevent dilution, diminution, or enlargement of
the rights of individuals, 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 that underlie awards already made under the Plan;
and
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(c) adjustments in the Exercise Price of outstanding Options.
The Committee, however, shall not make adjustments that materially change the
value of benefits available to an individual under a previously granted award.
All awards under this Plan shall be binding upon any successors or assigns of
the Holding Company.
12. TAXES.
(a) Under this Plan, whenever cash or shares of Common Stock are to be
delivered, the Committee is entitled to require as a condition of
delivery that:
(i) the individual remit an amount sufficient to satisfy all
related federal, state, and local withholding tax
requirements;
(ii) the withholding of such sums may come from compensation
otherwise due to the individual or from shares of Common Stock
due to the individual under this Plan; or
(iii) any combination of (i) and (ii), above; PROVIDED, HOWEVER,
that no amount shall be withheld from any cash payment or
shares of Common Stock related to an Option transferred by the
individual in accordance with this Plan.
(b) If any disqualifying disposition, as described in Section 5(d)(iv), is
made with respect to shares of Common Stock acquired under an Incentive
Stock Option granted in accordance with this Plan, or any transfer
described in Section 5(c) is made, or any election described in Section
13 is made, the person making such disqualifying disposition, transfer,
or election shall remit to the Holding Company or its Affiliates an
amount sufficient to satisfy any federal, state, and local tax
withholding requirements. In lieu of or in addition to the foregoing,
however, the Holding Company or its Affiliates shall have the right to
withhold such sums from compensation otherwise due to the individual,
or, except in the case of any transfer pursuant to Section 5(c), from
any shares of Common Stock due to the individual under this Plan.
13. NOTIFICATION UNDER SECTION 83(B).
The Committee may, on the date of grant or at a later date, prohibit an
individual from making the election described below. If the Committee has not
prohibited an individual from making this election, and the individual shall, in
connection with the exercise of any award, make the election permitted under
Section 83(b) of the Code, the individual shall notify the Committee of the
election within ten (10) days of filing notice of the election with the Internal
Revenue Service. This requirement is in addition to any filing and notification
required under the regulations issued under the authority of Section 83(b) of
the Code.
14. AMENDMENT OF THE PLAN AND AWARD GRANTS.
(a) Except as provided in paragraph (c) of this Section 14 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 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 shareholder ratification
or approval. Other provisions of this Plan shall remain in full force
and effect. No termination, modification,
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or amendment of this Plan may adversely affect the rights of an
individual under an outstanding award without the written permission of
the affected individual.
(b) Except as provided in paragraph (c) of this Section 14 the Committee
may amend any Award Notice, prospectively or retroactively; PROVIDED,
HOWEVER, that no amendment shall adversely affect the rights of an
individual under an outstanding Award Notice without the written
consent of the affected individual.
(c) In no event shall the Board of Directors without shareholder approval
amend the Plan or shall the Committee amend an Award Notice in any
manner that effectively:
(i) Allows any Option to be granted with an Exercise Price below
the Fair Market Value of the Common Stock on the date of
grant; or
(ii) Allows the repricing of any Option previously granted under
the Plan either through a reduction in the Exercise Price or
through the cancellation and regrant of a new Option in
exchange for the cancelled Option.
(d) Notwithstanding anything in this Plan or any Award Notice to the
contrary, if any award or right under this Plan would, in the opinion
of the Holding Company's accountants, cause a transaction to be
ineligible for pooling of interest accounting that would, but for such
award or right, be eligible for such accounting treatment, the
Committee may, in its discretion, modify, adjust, eliminate or
terminate the award or right, to preserve the availability of pooling
of interest accounting.
15. EFFECTIVE DATE AND TERMINATION OF THE PLAN.
The Plan shall become effective upon approval by the Holding Company's
shareholders. The right to grant awards under the Plan will terminate upon the
earlier of: (i) ten (10) years after the effective date; or (ii) the issuance of
a number of shares of Common Stock pursuant to the exercise of Options and
vesting of Restricted Stock Awards equal to the maximum number of shares
reserved under the Plan, as set forth in Section 4. The Board of Directors may
suspend or terminate the Plan at any time; PROVIDED, HOWEVER, that no such
action will adversely affect an individual's vested rights under a previously
granted award, without the consent of the affected individual.
16. APPLICABLE LAW.
The Plan will be administered in accordance with the laws of the state of
Delaware, except to the extent that Federal law is deemed to apply.