EXHIBIT 4
INDUSTRIAL BANCORP, INC.
1996 STOCK OPTION AND INCENTIVE PLAN
Purpose. The purpose of the Industrial Bancorp, Inc. 1996 Stock
Option and Incentive Plan (this "Plan") is to promote and advance the
interests of Industrial Bancorp, Inc. (the "Company"), and its shareholders
by enabling the Company to attract, retain and reward directors, managerial
and other key employees of the Company and any Subsidiary (hereinafter
defined), and to strengthen the mutuality of interests between such
directors and employees and the Company's shareholders by providing such
persons with a proprietary interest in pursuing the long-term growth,
profitability and financial success of the Company.
Definitions. For purposes of this Plan, the following terms shall
have the meanings set forth below:
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended, or
any successor thereto, together with rules, regulations and
interpretations promulgated thereunder.
"Committee" means the Committee of the Board constituted as
provided in Section 3 of this Plan.
"Common Shares" means the common shares, without par value, of
the Company or any security of the Company issued in substitution, in
exchange or in lieu thereof.
"Company" means Industrial Bancorp, Inc., an Ohio corporation,
or any successor corporation.
"Employment" means regular employment with the Company or a
Subsidiary and does not include service as a director only.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute.
"Fair Market Value" shall be determined as follows:
(i) If the Common Shares are traded on a national
securities exchange at the time of grant of the Stock Option,
then the Fair Market Value shall be the average of the highest
and the lowest selling price on such exchange on the date such
Stock Option is granted or, if there were no sales on such
date, then on the next prior business day on which there was a
sale.
(ii) If the Common Shares are quoted on The Nasdaq Stock
Market at the time of the grant of the Stock Option, then the
Fair Market Value shall be the mean between the closing high bid
and low asked quotation with respect to a Common Share on such
date on The Nasdaq Stock Market.
(iii) If the Common Shares are not traded on a national
securities exchange or quoted on The Nasdaq Stock Market, then
the Fair Market Value shall be as determined by the Committee.
"Incentive Stock Option" means any Stock Option granted pursuant
to the provisions of Section 6 of this Plan that is intended to be and
is specifically designated as an "incentive stock option" within the
meaning of Section 422 of the Code.
"Non-Qualified Stock Option" means any Stock Option granted
pursuant to the provisions of Section 6 of this Plan that is not an
Incentive Stock Option.
"OTS" means the Office of Thrift Supervision, Department of the
Treasury.
"Participant" means an employee or director of the Company or a
Subsidiary who is granted an Award under this Plan. Notwithstanding
the foregoing, for the purposes of the granting of any Incentive Stock
Option under this Plan, the term "Participant" shall include only
employees of the Company or a Subsidiary.
"Plan" means the Industrial Bancorp, Inc. 1996 Stock Option and
Incentive Plan, as set forth herein and as it may be hereafter
amended from time to time.
"Stock Option" means an award to purchase Common Shares granted
pursuant to the provisions of Section 6 of this Plan.
"Subsidiary" means any corporation or entity in which the
Company directly or indirectly controls 50% or more of the total
voting power of all classes of its stock having voting power and
includes, without limitation, The Industrial Savings and Loan
Association.
"Terminated for Cause" means any removal of a director or
discharge of an employee for the personal dishonesty, incompetence,
willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful
violation of a material provision of any law, rule or regulation
(other than traffic violations or similar offenses), a material
violation of a final cease-and-desist order or any other action of a
director or employee which results in a substantial financial loss to
the Company or a Subsidiary.
Administration. This Plan shall be administered by the Committee to
be comprised of not less than three of the members of the Board who are not
employees of the Company. The members of the Committee shall be appointed
from time to time by the Board. Members of the Committee shall serve at the
pleasure of the Board, and the Board may from time to time remove members
from, or add members to, the Committee. A majority of the members of the
Committee shall constitute a quorum for the transaction of business. Action
approved in writing by a majority of the members of the Committee then
serving shall be fully as effective as if the action had been taken by
unanimous vote at a meeting duly called and held.
The Committee is authorized to construe and interpret this Plan and to
make all other determinations necessary or advisable for the administration
of this Plan. The Committee may designate persons other than members of the
Committee to carry out its responsibilities under such conditions and
limitations as it may prescribe. Any determination, decision or action of
the Committee in connection with the construction, interpretation,
administration, or application of this Plan shall be final, conclusive and
binding upon all persons participating in this Plan and any person validly
claiming under or through persons participating in this Plan. The Company
shall effect the granting of Stock Options under this Plan in accordance
with the determinations made by the Committee, by execution of instruments
in writing in such form as approved by the Committee.
Duration of, and Common Shares Subject to, this Plan.
Term. This Plan shall terminate on the date which is ten (10) years
from the date on which this Plan is adopted by the Board, except with
respect to Stock Options then outstanding. Notwithstanding the foregoing,
no Incentive Stock Option may be granted under this Plan after the date
which is ten (10) years from the date on which this Plan is adopted by the
Board or the date on which this Plan is approved by the shareholders of the
Company, whichever is earlier.
Common Shares Subject to Plan. The maximum number of Common Shares in
respect of which Stock Options may be granted under this Plan, subject to
adjustment as provided in Section 9 of this Plan, shall be ten percent of
the total Common Shares sold in connection with the conversion of The
Industrial Savings and Loan Association from mutual to stock form.
For the purpose of computing the total number of Common Shares
available for Stock Options under this Plan, there shall be counted against
the foregoing limitations the number of Common Shares subject to issuance
upon exercise or settlement of Stock Options as of the dates on which such
Stock Options are granted. If any Stock Options are forfeited, terminated
or exchanged for other Stock Options, or expire unexercised, the Common
Shares which were theretofore subject to such Stock Options shall again be
available for Stock Options under this Plan to the extent of such
forfeiture, termination or expiration of such Stock Options.
Common Shares which may be issued under this Plan may be either
authorized and unissued shares or issued shares which have been reacquired
by the Company. No fractional shares shall be issued under this Plan.
Eligibility and Grants. Persons eligible for Stock Options under this
Plan shall consist of directors and managerial and other key employees of
the Company or a Subsidiary who hold positions with significant
responsibilities or whose performance or potential contribution, in the
judgment of the Committee, will benefit the future success of the Company or
a Subsidiary. In selecting the directors and employees to whom Stock
Options will be awarded and the number of shares subject to such Stock
Options, the Committee shall consider the position, duties and
responsibilities of the eligible directors and employees, the value of their
services to the Company and the Subsidiaries and any other factors the
Committee may deem relevant.
Stock Options. Stock Options granted under this Plan may be in the
form of Incentive Stock Options or Non-Qualified Stock Options, and such
Stock Options shall be subject to the following terms and conditions as the
Committee shall deem desirable:
Grant. Stock Options may be granted under this Plan on terms and
conditions not inconsistent with the provisions of this Plan and in such
form as the Committee may from time to time approve and shall contain such
additional terms and conditions, not inconsistent with the express
provisions of this Plan; provided, however, that no more than 25% of the
shares subject to Stock Options may be awarded to any individual who is an
employee of the Company or a Subsidiary, no more than 5% of such shares may
be awarded to any director who is not an employee of the Company or a
Subsidiary and no more than 30% of such shares may be awarded to non-
employee directors in the aggregate.
Stock Option Price. The option exercise price per Common Share
purchasable under a Stock Option shall be determined by the Committee at the
time of grant; provided, however, that in no event shall the exercise price
of a Stock Option be less than 100% of the Fair Market Value of the Common
Shares on the date of the grant of such Stock Option. Notwithstanding the
foregoing, in the case of a Participant who owns Common Shares representing
more than 10% of the outstanding Common Shares at the time an Incentive
Stock Option is granted, the option exercise price shall in no event be less
than 110% of the Fair Market Value of the Common Shares at the time the
Incentive Stock Option is granted.
Stock Option Terms. Subject to the right of the Company to provide
for earlier termination in the event of any merger, acquisition or
consolidation involving the Company, the term of each Stock Option shall be
fixed by the Committee, except that the term of an Incentive Stock Option
will not exceed ten years after the date the Incentive Stock Option is
granted; provided, however, that in the case of a Participant who owns a
number of Common Shares representing more than 10% of the Common Shares
outstanding at the time an Incentive Stock Option is granted, the term of
such Incentive Stock Option shall not exceed five years.
Exercisability. Except as set forth in Section 6(f) and Section 7 of
this Plan, Stock Options awarded under this Plan shall become exercisable at
the rate of one-fifth per year commencing on the date that is one year after
the date of the grant of the Stock Option and shall be subject to such other
terms and conditions as shall be determined by the Committee at the date of
grant.
Method of Exercise. A Stock Option may be exercised, in whole or in
part, by giving written notice of exercise to the Company specifying the
number of Common Shares to be purchased. Such notice shall be accompanied
by payment in full of the purchase price in cash or, if acceptable to the
Committee in its sole discretion, in Common Shares already owned by the
Participant, or by surrendering outstanding Stock Options. The Committee
may also permit Participants, either on a selective or aggregate basis, to
simultaneously exercise Options and sell Common Shares thereby acquired,
pursuant to a brokerage or similar arrangement, approved in advance by the
Committee, and use the proceeds from such sale as payment of the purchase
price of such shares.
Special Rule for Incentive Stock Options. With respect to Incentive
Stock Options granted under this Plan, to the extent the aggregate Fair
Market Value (determined as of the date the Incentive Stock Option is
granted) of the number of shares with respect to which Incentive Stock
Options are exercisable under all plans of the Company or a Subsidiary for
the first time by a Participant during any calendar year exceeds $100,000,
or such other limit as may be required by the Code, such Stock Options shall
be Non-Qualified Stock Options to the extent of such excess.
Termination of Employment or Directorship. Except in the event of the
death or disability of a Participant, upon the resignation, removal or
retirement from the board of directors of any Participant who is a director
of the Company or a Subsidiary or upon the termination of Employment of a
Participant who is not a director of the Company or a Subsidiary, any Stock
Option which has not yet become exercisable shall thereupon terminate and be
of no further force or effect, and any Stock Option which has become
exercisable shall terminate if it is not exercised within 12 months of such
resignation, removal or retirement.
Unless the Committee shall specifically state otherwise at the time an
Option is granted, all Options granted under this Plan shall become
exercisable in full on the date of termination of a Participant's employment
or directorship with the Company or a Subsidiary because of his death or
disability, and, subject to extension by the Committee, all Options shall
terminate if not exercised within 12 months of the Participant's death or
disability.
In the event the Employment or the directorship of a Participant is
Terminated for Cause, any Option which has not been exercised shall
terminate as of the date of such termination for cause.
Non-transferability of Stock Options. No Stock Option under this
Plan, and no rights or interests therein, shall be assignable or
transferable by a Participant except by will or the laws of descent and
distribution. During the lifetime of a Participant, Stock Options are
exercisable only by, and payments in settlement of Stock Options will be
payable only to, the Participant or his or her legal representative.
Adjustments Upon Changes in Capitalization. The existence of this
Plan and the Stock Options granted hereunder shall not affect or restrict in
any way the right or power of the Board or the shareholders of the Company
to make or authorize any adjustment, recapitalization, reorganization or
other change in the Company's capital structure or its business, any merger,
acquisition or consolidation of the Company, any issuance of bonds,
debentures, preferred or prior preference stocks ahead of or affecting the
Company's capital stock or the rights thereof, the dissolution or
liquidation of the Company or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, including any
merger or acquisition which would result in the exchange of cash, stock of
another company or options to purchase the stock of another company for any
Stock Option outstanding at the time of such corporate transaction or which
would involve the termination of all Stock Options outstanding at the time
of such corporate transaction.
In the event of any change in capitalization affecting the Common
Shares of the Company, such as a stock dividend, stock split,
recapitalization, merger, consolidation, split-up, combination or exchange
of shares or other form of reorganization, or any other change affecting the
Common Shares, such proportionate adjustments, if any, as the Board in its
discretion may deem appropriate to reflect such change shall be made with
respect to the aggregate number of Common Shares for which Stock Options in
respect thereof may be granted under this Plan, the maximum number of Common
Shares which may be sold or awarded to any Participant, the number of Common
Shares covered by each outstanding Stock Option, and the exercise price per
share in respect of outstanding Stock Options.
The Committee may also make such adjustments in the number of shares
covered by, and the exercise price or other value of, any outstanding Stock
Options in the event of a spin-off or other distribution (other than normal
cash dividends) of Company assets to shareholders. In the event that
another corporation or business entity is being acquired by the Company, and
the Company agrees to assume outstanding employee stock options and/or the
obligation to make future grants of options or rights to employees of the
acquired entity, the aggregate number of Common Shares available for Stock
Options under Section 4 of this Plan may be increased accordingly.
Amendment and Termination of this Plan. Without further approval of
the shareholders, the Board may at any time terminate this Plan, or may
amend it from time to time in such respects as the Board may deem advisable,
except that the Board may not, without approval of the shareholders, make
any amendment which would (a) increase the aggregate number of Common Shares
which may be issued under this Plan (except for adjustments pursuant to
Section 9 of this Plan), (b) materially modify the requirements as to
eligibility for participation in this Plan, or (c) materially increase the
benefits accruing to Participants under this Plan. The above
notwithstanding, the Board may amend this Plan to take into account changes
in applicable securities, federal income tax and other applicable laws.
Modification of Options. The Board may authorize the Committee to
direct the execution of an instrument providing for the modification of any
outstanding Stock Option which the Board believes to be in the best
interests of the Company; provided, however, that no such modification,
extension or renewal shall reduce the exercise price or confer on the holder
of such Stock Option any right or benefit which could not be conferred on
him by the grant of a new Stock Option at such time and shall not materially
decrease the Participant's benefits under the Stock Option without the
consent of the holder of the Stock Option, except as otherwise permitted
under this Plan.
Miscellaneous.
Tax Withholding. The Company shall have the right to deduct from any
settlement, including the delivery or vesting of Common Shares, made under
this Plan any federal, state or local taxes of any kind required by law to
be withheld with respect to such payments or to take such other action as
may be necessary in the opinion of the Company to satisfy all obligation for
the payment of such taxes. If Common Shares are used to satisfy tax
withholding, such shares shall be valued based on the Fair Market Value when
the tax withholding is required to be made.
No Right to Employment. Neither the adoption of this Plan nor the
granting of any Stock Option shall confer upon any employee of the Company
or a Subsidiary any right to continued Employment with the Company or a
Subsidiary, as the case may be, nor shall it interfere in a any way with the
right of the Company or a Subsidiary to terminate the Employment of any of
its employees at any time, with or without cause.
Annulment of Stock Options. The grant of any Stock Option under this
Plan payable in cash is provisional until cash is paid in settlement
thereof. The grant of any Stock Option payable in Common Shares is
provisional until the Participant becomes entitled to the certificate in
settlement thereof. In the event the Employment or the directorship of a
Participant is Terminated for Cause, any Stock Option which is provisional
shall be annulled as of the date of such termination.
Other Company Benefit and Compensation Programs. Payments and other
benefits received by a Participant under a Stock Option made pursuant to
this Plan shall not be deemed a part of a Participant's regular, recurring
compensation for purposes of the termination indemnity or severance pay law
of any country and shall not be included in, nor have any effect on, the
determination of benefits under any other employee benefit plan or similar
arrangement provided by the Company or a Subsidiary unless expressly so
provided by such other plan or arrangement, or except where the Committee
expressly determines that a Stock Option or portion of a Stock Option should
be included to accurately reflect competitive compensation practices or to
recognize that a Stock Option has been made in lieu of a portion of
competitive annual cash compensation. Stock Options under this Plan may be
made in combination with or in tandem with, or as alternatives to, grants,
stock options or payments under any other plans of the Company or a
Subsidiary. This Plan notwithstanding, the Company or any Subsidiary may
adopt such other compensation programs and additional compensation
arrangements as it deems necessary to attract, retain and reward directors
and employees for their service with the Company and its Subsidiaries.
Securities Law Restrictions. No Common Shares shall be issued under
this Plan unless counsel for the Company shall be satisfied that such
issuance will be in compliance with applicable federal and state securities
laws. Certificates for Common Shares delivered under this Plan may be
subject to such stock-transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange
upon which the Common Shares are then listed, and any applicable federal or
state securities law. The Committee may cause a legend or legends to be put
on any such certificates to make appropriate reference to such restrictions.
Stock Option Agreement. Each Participant receiving a Stock Option
under this Plan shall enter into an agreement with the Company in a form
specified by the Committee agreeing to the terms and conditions of the Stock
Option and such related matters as the Committee shall, in its sole
discretion, determine.
Cost of Plan. The costs and expenses of administering this Plan shall
be borne by the Company.
Governing Law. This Plan and all actions taken hereunder shall be
governed by and construed in accordance with the laws of the State of Ohio,
except to the extent that federal law shall be deemed applicable.
Effective Date. This Plan shall be effective upon the later of
adoption by the Board and approval by the Company's shareholders. This Plan
shall be submitted to the shareholders of the Company for approval at an
annual or special meeting of shareholders to be held no sooner than six
months after the effective date of the conversion of The Industrial Savings
and Loan Association from mutual to stock form.
Exhibit 23(a)