Exhibit 10.3
Poughkeepsie Savings Bank, FSB
1993 Stock Incentive Plan, as amended
POUGHKEEPSIE SAVINGS BANK, F.S.B.
1993 STOCK INCENTIVE PLAN
ARTICLE I
ESTABLISHMENT OF THE PLAN
Poughkeepsie Savings Bank, FSB (the "Savings Bank") hereby establishes
this Stock Incentive Plan (the "Plan") upon the terms and conditions
hereinafter stated.
ARTICLE II
PURPOSE OF THE PLAN
The purpose of this Plan is to improve the growth and profitability of
the Savings Bank and its Subsidiary Companies by attracting and retaining
qualified personnel, providing such Employees with a proprietary interest in
the Savings Bank as an incentive to contribute to the success of the Savings
Bank and its Subsidiary Companies, and rewarding those Employees for
outstanding performance. All Incentive Stock Options issued under this Plan
are intended to comply with the requirements of Section 422 of the Code, and
the regulations thereunder, and all provisions hereunder shall be read,
interpreted and applied with that purpose in mind.
ARTICLE III
DEFINITIONS
3.01 "Award" means an Option or Stock Appreciation Right granted pursuant
to the terms of this Plan.
3.02 "Board" means the Board of Directors of the Savings Bank.
3.03 "Code" means the Internal Revenue Code of 1986, as amended.
3.04 "Committee" means a committee of not less than two directors
appointed by the Board pursuant to Article IV hereof, none of whom shall be
an Officer or Employee of the Savings Bank, and each of whom shall be a
"disinterested person" within the meaning of Rule 16b-3 under the Exchange
Act, or any successor thereto.
3.05 "Common Stock" means shares of the common stock, $0.01 par value per
share, of the Savings Bank.
3.06 "Director" means a member of the Board of Directors of the Savings
Bank or a Subsidiary Company.
3.07 "Disability" means any physical or mental impairment which qualifies
an Employee for disability benefits under the applicable long-term disability
plan maintained by the
Savings Bank or a Subsidiary Company, or, if no such plan applies, which
would qualify such Employee for disability benefits under the long-term
disability plan maintained by the Savings Bank, if such Employee were covered
by that plan.
3.08 "Effective Date" means March 22, 1993, the date on which this Plan
was adopted by the Board of Directors of the Savings Bank.
3.09 "Employee" means any person who is employed by the Savings Bank or a
Subsidiary Company, including Officers, but not including Directors who are
not also Officers of or otherwise employed by the Savings Bank or a
Subsidiary Company.
3.10 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
3.11 "Fair Market Value" shall be equal to the fair market value per
share of the Savings Bank's Common Stock on the date an Award is granted.
For purposes hereof, the Fair Market Value of a share of Common Stock shall
be the closing sale price of a share of Common Stock on the date in question
(or, if such day is not a trading day in the U.S. markets, on the nearest
preceding trading day), as reported with respect to the principal market (or
the composite of the markets, if more than one) in which such shares are then
traded, or if no such closing prices are reported, the mean between the high
bid and low asked prices that day on the principal market or national
quotation system then in use, or if no such quotations are available, the
price furnished by a professional securities dealer making a market in such
shares selected by the Committee.
3.12 "Incentive Stock Option" means any Option granted under this Plan
which the Board intends (at the time it is granted) to be an incentive stock
option within the meaning of Section 422 of the Code or any successor thereto.
3.13 "Non-Qualified Option" means any Option granted under this Plan
which is not an Incentive Stock Option.
3.14 "Officer" means an Employee whose position in the Savings Bank or
Subsidiary Company is that of a corporate officer, as determined by the Board.
3.15 "Option" means a right granted under this Plan to purchase Common
Stock.
3.16 "Optionee" means an Employee or former Employee to whom an Option is
granted under the Plan.
3.17 "Retirement" means a termination of employment which constitutes a
"retirement" under any qualified pension benefit plan maintained, or
previously maintained, by the Savings Bank or a Subsidiary Company, or if no
such plan is applicable, which would constitute "retirement" under any
qualified pension benefit plan maintained by the Savings Bank or a Subsidiary
Company, if such individual were a participant in such plan.
3.18 "Stock Appreciation Right" means a right to surrender an Option in
consideration for a payment by the Savings Bank in cash and/or Common Stock,
as provided in the discretion of the Committee, in accordance with Section
8.10.
-2-
3.19 "Stock Offering" means the Savings Bank's proposed rights offering,
which is anticipated to be undertaken within six months of the Effective
Date, whereby stockholders of the Savings Bank will receive subscription
rights to purchase Common Stock and any unsubscribed shares will be offered
to members of the general public or to standby purchasers.
3.20 "Subsidiary Companies" means those subsidiaries of the Savings Bank
which meet the definition of "subsidiary corporations" set forth in Section
425(f) of the Code, at the time of granting of the Option in question.
ARTICLE IV
ADMINISTRATION OF THE PLAN
4.01 Duties of the Committee. The Plan shall be administered and
interpreted by the Committee, as appointed from time to time by the Board
pursuant to Section 4.02. The Committee shall have the authority in its
absolute discretion to adopt, amend and rescind such rules, regulations and
procedures as, in its opinion, may be advisable in the administration of the
Plan, including, without limitation, rules, regulations and procedures which
(i) deal with satisfaction of an Employee's tax withholding obligation
pursuant to Section 12.02 hereof, (ii) include arrangements to facilitate the
Employee's ability to borrow funds for payment of the exercise or purchase
price of an Award, if applicable, from securities brokers and dealers, and
(iii) include arrangements which provide for the payment of some or all of
such exercise or purchase price by delivery of previously-owned shares of
Common Stock or other property and/or by withholding some of the shares of
Common Stock which are being acquired. The interpretation and construction
by the Committee of any provisions of the Plan, any rule, regulation or
procedure adopted by it pursuant thereto or of any Award shall be final and
binding.
4.02 Appointment and Operation of the Committee. The members of the
Committee shall be appointed by, and will serve at the pleasure of, the
Board. The Board from time to time may remove members from, or add members
to, the Committee, provided the Committee shall continue to consist of two or
more members of the Board, none of whom shall be an Officer or Employee of
the Savings Bank, and each of whom shall be a "disinterested person" within
the meaning of Rule 16b-3 under the Exchange Act. The Committee shall act by
vote or written consent of a majority of its members. Subject to the express
provisions and limitations of the Plan, the Committee may adopt such rules,
regulations and procedures as it deems appropriate for the conduct of its
affairs. It may appoint one of its members to be chairman and any person,
whether or not a member, to be its secretary or agent. The Committee shall
report its actions and decisions to the Board at appropriate times but in no
event less than one time per calendar year.
4.03 Revocation for Misconduct. The Committee may by resolution
immediately revoke, rescind and terminate any Option, or portion thereof, to
the extent not yet vested, or any Stock Appreciation Right, to the extent not
yet exercised, previously granted or awarded under this Plan to an Employee
who is discharged from the employ of the Savings Bank or a
-3-
Subsidiary Company for cause, which, for purposes hereof, shall mean
termination for: (1) conviction of a felony involving the misappropriation
of the Savings Bank's or any Subsidiary's assets or a conviction of a felony
which results in a substantial, demonstrable threat to the Savings Bank's or
any Subsidiary's reputation, or (ii) gross and willful failure to perform a
substantial portion of employee's duties and responsibilities as an employee,
upon written notice given to employee such notice to set forth in reasonable
detail the nature of such failure.
4.04 Limitation on Liability. No member of the Committee shall be liable
for any action or determination made in good faith with respect to the Plan,
any rule, regulation or procedure adopted by it pursuant thereto or any
Awards granted under it. If a member of the Committee is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
by reason of anything done or not done by him in such capacity under or with
respect to the Plan, the Savings Bank shall indemnify such member against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in the best interests of the Savings Bank and its
Subsidiary Companies and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful.
4.05 Compliance with Law and Regulations. All Awards granted hereunder
shall be subject to all applicable federal and state laws, rules and
regulations and to such approvals by any government or regulatory agency as
may be required for any reason whatsoever. The Savings Bank shall not be
required to issue or deliver any certificates for shares of Common Stock
prior to the completion of any registration or qualification of or obtaining
of consents or approvals with respect to such shares under any federal or
state law or any rule or regulation of any government body, which the Savings
Bank shall, in its sole discretion, determine to be necessary or advisable.
Moreover, no Option or Stock Appreciation Right may be exercised if such
exercise would be contrary to applicable laws and regulations.
4.06 Restrictions on Transfer. The Savings Bank may place a legend upon
any certificate representing shares acquired pursuant to an Award granted
hereunder noting that the transfer of such shares may be restricted by
applicable laws and regulations.
ARTICLE V
ELIGIBILITY
Awards may be granted to such Employees of the Savings Bank and its
Subsidiary Companies as may be designated from time to time by the Committee.
-4-
ARTICLE VI
COMMON STOCK COVERED BY THE PLAN
6.01 Option Shares. The aggregate number of shares of Common Stock
which may be issued pursuant to this Plan, subject to adjustment as provided
in Article IX, shall be 1,120,603 shares. None of such shares shall be the
subject of more than one Award at any time, but if an Option as to any shares
is surrendered before exercise (including surrender in connection with
exercise of a Stock Appreciation Right), or expires or terminates for any
reason without having been exercised in full, or for any other reason ceases
to be exercisable, the number of shares covered thereby shall again become
available for grant under the Plan as if no Awards had been previously
granted with respect to such shares.
6.02 Source of Shares. The shares of Common Stock issued under the Plan
may be authorized but unissued shares, treasury shares or shares purchased by
the Savings Bank on the open market or from private sources for use under the
Plan.
ARTICLE VII
DETERMINATION OF
AWARDS, NUMBER OF SHARES, ETC.
The Committee shall, in its discretion, determine from time to time which
Employees will be granted Awards under the Plan, the number of shares of
Common Stock subject to each Award, whether each Option will be an Incentive
Stock Option or a Non-Qualified Option, and the exercise price of an Option.
In making all such determinations there shall be taken into account the
duties, responsibilities and performance of each respective individual, his
present and potential contributions to the growth and success of the Savings
Bank, his salary and such other factors as the Committee shall deem relevant
to accomplishing the purposes of the Plan. However, no Awards shall be
granted to any person at such time as he is serving as a member of the
Committee or at any time which would deem him to not be a "disinterested
person" within the meaning of Rule 16b-3 under the Exchange Act, or any
successor thereto.
-5-
ARTICLE VIII
OPTIONS AND STOCK APPRECIATION RIGHTS
Each Option granted hereunder shall be on the following terms and
conditions:
8.01 Stock Option Agreement. The proper Officers of the Savings Bank and
each Optionee shall execute a Stock Option Agreement which shall set forth
the total number of shares of Common Stock to which it pertains, the exercise
price, whether it is a Non-Qualified Option or an Incentive Stock Option, and
such other terms, conditions, restrictions and privileges as the Committee in
each instance shall deem appropriate, provided they are not inconsistent with
the terms, conditions and provisions of this Plan. Each Optionee shall
receive a copy of his executed Stock Option Agreement.
8.02 Option Exercise Price.
(a) Incentive Stock Options. The per share price at which the subject
Common Stock may be purchased upon exercise of an Incentive Stock Option
shall be no less than one hundred percent (100%) of the Fair Market Value of
a share of Common Stock at the time such Incentive Stock Option is granted,
except as provided in Section 8.09(b).
(b) Non-Qualified Options. The per share price at which the subject
Common Stock may be purchased upon exercise of a Non-Qualified Option for
initial grants made prior to the closing of the sale of Common Stock in the
anticipated Stock Offering of the Savings Bank may be not less than the
actual purchase price of a share of Common Stock in the Stock Offering and
the per share price for future grants shall be no less than the greater of
(i) the par value of the Common Stock or (ii) eighty-five percent (85%) of
the Fair Market Value of a share of Common Stock at the time such
Non-Qualified Option is granted.
8.03 Vesting and Exercise of Options.
(a) General Rules. Incentive Stock Options and Non-Qualified Options
shall become vested and exercisable at the rate, to the extent and subject to
such limitations as may be specified by the Committee. Notwithstanding the
foregoing, no vesting shall occur on or after an Optionee's employment with
the Savings Bank and all Subsidiary Companies is terminated for any reason
other than his death, Disability or Retirement. In determining the number of
shares of Common Stock with respect to which Options are vested and/or
exercisable, fractional shares will be rounded up to the nearest whole number
if the fraction is 0.5 or higher, and down if it is less.
(b) Accelerated Vesting Upon Death, Disability or Retirement. Unless
the Committee shall specifically state otherwise at the time an Option is
granted, all Options granted under this Plan shall become vested and
exercisable in full on the date an Optionee terminates
-6-
his employment with the Savings Bank or a Subsidiary Company because of his
death, Disability or Retirement.
(c) Accelerated Vesting for Changes in Control. Notwithstanding the
general rule described in Section 8.03(a), all outstanding Options shall
become immediately vested and exercisable in the event there is an actual or
threatened change in control of the Savings Bank.
(1) Change in Control. A "change in control of the Savings Bank"
shall mean a change in control of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Exchange Act, whether or not the Savings Bank in fact
is required to comply with Regulation 14A thereunder; provided that, without
limitation, such a change in control shall be deemed to have occurred if (i)
any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than the Savings Bank, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Savings Bank representing 25% or more of the
combined voting power of the Savings Bank's then outstanding securities, or
(ii) during any period of twenty-four consecutive months during the term of
an Option, individuals who at the beginning of such period constitute the
Board of the Savings Bank cease for any reason to constitute at least a
majority thereof, unless the election, or the nomination for election by the
Savings Bank's stockholders, of each director who was not a director at the
date of grant has been approved in advance by directors representing at least
two-thirds of the directors then in office who were directors at the
beginning of the period; and, provided further that no "change in control of
the Savings Bank" shall be deemed to have occurred in the event that the
Savings Bank determines to reorganize into the holding company form of
organization.
(2) Threatened Change in Control. A "threatened change in control
of the Savings Bank" shall mean any set of circumstances which in the opinion
of the Board, as expressed through a resolution, poses a real, substantial
and immediate possibility of leading to a change in control of the Savings
Bank as defined in clause (1) above.
8.04 Duration of Options.
(a) General. Except as provided in Sections 8.04(b) and 8.09, each
Option or portion thereof shall be exercisable at any time on or after it
vests and becomes exercisable until the earlier of (i) ten (10) years after
its date of grant or (ii) three (3) months after the date on which the
Optionee ceases to be employed by the Savings Bank and all Subsidiary
Companies, unless the Committee in its discretion decides at the time of
grant or thereafter to extend such period of exercise from three (3) months
to a period not exceeding five (5) years. However, failure to exercise
Incentive Stock Options within three months after the date on which the
Optionee's employment terminates may result in adverse tax consequences to
the Optionee.
(b) Exception for Termination Due to Death, Disability or Retirement.
If an Optionee dies while in the employ of the Savings Bank or a Subsidiary
Company or terminates employment with the Savings Bank or a Subsidiary
Company as a result of Disability or
-7-
Retirement without having fully exercised his Options, the Optionee or the
executors, administrators, legatees or distributees of his estate shall have
the right, during the twelve-month period following the earlier of his death,
Disability or Retirement, to exercise such Options to the extent vested on
the date of such death, Disability or Retirement. In no event, however,
shall any Option be exercisable more than ten (10) years from the date it was
granted.
8.05 Nonassignability. Options shall not be transferable by an Optionee
except by will or the laws of descent or distribution, and during an
Optionee's lifetime shall be exercisable only by such Optionee or the
Optionee's guardian or legal representative.
8.06 Manner of Exercise. Options may be exercised in part or in whole
and at one time or from time to time. The procedures for exercise shall be
set forth in the written Stock Option Agreement provided for in Section 8.01
above.
8.07 Payment for Shares. Payment in full of the purchase price for
shares of Common Stock purchased pursuant to the exercise of any Option shall
be made to the Savings Bank upon exercise of the Option. All shares sold
under the Plan shall be fully paid and nonassessable. Payment for shares may
be made by the Optionee in cash or, at the discretion of the Committee, by
delivering shares of Common Stock (including shares acquired pursuant to the
exercise of an Option) or other property equal in Fair Market Value to the
purchase price of the shares to be acquired pursuant to the Option, by
withholding some of the shares of Common Stock which are being purchased upon
exercise of an Option, or any combination of the foregoing.
8.08 Voting and Dividend Rights. No Optionee shall have any voting or
dividend rights or other rights of a stockholder in respect of any shares of
Common Stock covered by an Option prior to the time that his name is recorded
on the Savings Bank's stockholder ledger as the holder of record of such
shares acquired pursuant to an exercise of an Option.
8.09 Additional Terms Applicable to Incentive Stock Options. All Options
issued under the Plan as Incentive Stock Options will be subject, in addition
to the terms detailed in Sections 8.01 to 8.08 above, to those contained in
this Section 8.09.
(a) Notwithstanding any contrary provisions contained elsewhere in this
Plan and as long as required by Section 422 of the Code, the aggregate Fair
Market Value, determined as of the time an Incentive Stock Option is granted,
of the Common Stock with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year under
this Plan and stock options that satisfy the requirements of Section 422 of
the Code under any other stock option plan or plans maintained by the Savings
Bank (or any parent or Subsidiary Company), shall not exceed $100,000.
(b) Limitation on Ten Percent Stockholders. The price at which shares
of Common Stock may be purchased upon exercise of an Incentive Stock Option
granted to an individual who, at the time such Incentive Stock Option is
granted, owns, directly or indirectly, more than
-8-
ten percent (10%) of the total combined voting power of all classes of stock
issued to stockholders of the Savings Bank or any Subsidiary Company, shall
be no less than one hundred and ten percent (110%) of the Fair Market Value
of a share of the Common Stock of the Savings Bank at the time of grant, and
such Incentive Stock Option shall by its terms not be exercisable after the
earlier of the date determined under Section 8.03 or the expiration of five
(5) years from the date such Incentive Stock Option is granted.
(c) Notice of Disposition; Withholding; Escrow. An Optionee shall
immediately notify the Savings Bank in writing of any sale, transfer,
assignment or other disposition (or action constituting a disqualifying
disposition within the meaning of Section 421 of the Code) of any shares of
Common Stock acquired through exercise of an Incentive Stock Option, within
two (2) years after the grant of such Incentive Stock Option or within one
(1) year after the acquisition of such shares, setting forth the date and
manner of disposition, the number of shares disposed of and the price at
which such shares were disposed of. The Savings Bank shall be entitled to
withhold from any compensation or other payments then or thereafter due to
the Optionee such amounts as may be necessary to satisfy any withholding
requirements of federal or state law or regulation and, further, to collect
from the Optionee any additional amounts which may be required for such
purpose. The Committee may, in its discretion, require shares of Common
Stock acquired by an Optionee upon exercise of an Incentive Stock Option to
be held in an escrow arrangement for the purpose of enabling compliance with
the provisions of this Section 8.09(c).
8.10 Stock Appreciation Rights.
(a) General Terms and Conditions. The Committee may, but shall not be
obligated to, authorize the Savings Bank, on such terms and conditions as it
deems appropriate in each case, to grant rights to Optionees to surrender an
exercisable Option, or any portion thereof, in consideration for the payment
by the Savings Bank of an amount equal to the excess of the Fair Market Value
of the shares of Common Stock subject to the Option, or portion thereof,
surrendered over the exercise price of the Option with respect to such shares
(any such authorized surrender and payment being hereinafter referred to as a
"Stock Appreciation Right"). Such payment, at the discretion of the
Committee, may be made in shares of Common Stock valued at the then Fair
Market Value thereof, or in cash, or partly in cash and partly in shares of
Common Stock.
The terms and conditions set with respect to a Stock Appreciation Right
may include (without limitation), subject to other provisions of this Section
8.10 and the Plan, the period during which, date by which or event upon which
the Stock Appreciation Right may be exercised; the method for valuing shares
of Common Stock for purposes of this Section 8.10; a ceiling on the amount of
consideration which the Savings Bank may pay in connection with exercise and
cancellation of the Stock Appreciation Right; and arrangements for income tax
withholding. The Committee shall have complete discretion to determine
whether, when and to whom Stock Appreciation Rights may be granted.
Notwithstanding the foregoing, the Savings Bank may not permit the exercise
of a Stock Appreciation Right issued pursuant to this Plan
-9-
until such Stock Appreciation Right has been outstanding for a period of at
least six months from the date of grant.
(b) Time and Other Limitations.
(i) Any election by an Optionee to exercise a Stock Appreciation
Right provided pursuant to this Section 8.10 shall be made only during the
period beginning on the third business day following the Savings Bank's
release for publication of quarterly or annual summary financial information
and ending on the twelfth business day following such date, unless, in the
discretion of the Committee, solely Common Stock is issued upon such exercise
or such election is pursuant to a date of exercise which is automatic or
fixed in advance under the Plan and is outside of the control of the
Optionee. The aforesaid release date shall be deemed to have occurred when
the specified financial data (A) appears on a wire service, (B) appears in a
financial news service, (C) appears in a newspaper of general circulation, or
(D) is otherwise made publicly available, for example, by press release to a
wire service, financial news service or newspapers of general circulation.
(ii) Any election by an Optionee to exercise a Stock Appreciation
Right provided pursuant to this Section 8.10, other than a Stock Appreciation
Right exercisable solely for Common Stock, shall be made during a quarterly
window period specified in Section 8.10(b)(i) hereof which commences at least
six months from the date of grant of such Stock Appreciation Right.
(iii) If a holder of a Stock Appreciation Right terminates service
with the Savings Bank as an Officer or Employee, the Stock Appreciation Right
may be exercised only within the period, if any, within which the Option to
which it relates may be exercised.
(c) Effects of Exercise of Stock Appreciation Rights or Options. Upon
the exercise of a Stock Appreciation Right, the number of shares of Common
Stock available under the Option to which it relates shall decrease by a
number equal to the number of shares for which the Stock Appreciation Right
was exercised. Upon the exercise of an Option, any related Stock Appreciation
Right shall terminate as to any number of shares of Common Stock subject to
the Stock Appreciation Right that exceeds the total number of shares for
which the Option remains unexercised.
(d) Time of Grant. A Stock Appreciation Right granted in connection
with an Incentive Stock Option must be granted concurrently with the Option
to which it relates while a Stock Appreciation Right granted in connection
with a Non-Qualified Option may be granted concurrently with the Option to
which it relates or at any time thereafter prior to the exercise or
expiration of such Option.
(e) Non-Transferable. The holder of a Stock Appreciation Right may not
transfer or assign the Stock Appreciation Right otherwise than by will or in
accordance with the laws of
-10-
descent and distribution, and during a holder's lifetime a Stock Appreciation
Right may be exercisable only by the holder.
ARTICLE IX
ADJUSTMENTS FOR CAPITAL CHANGES
The aggregate number of shares of Common Stock available for issuance
under this Plan, the number of shares to which any Award relates and the
exercise price per share of Common Stock under any Option shall be
proportionately adjusted for any increase or decrease in the total number of
outstanding shares of Common Stock issued subsequent to the Effective Date of
this Plan resulting from a split, subdivision or consolidation of shares or
any other capital adjustment, the payment of a stock dividend, or other
increase or decrease in such shares effected without receipt or payment of
consideration by the Savings Bank. If, upon a merger, consolidation,
reorganization, liquidation, recapitalization or the like of the Savings
Bank, the shares of the Savings Bank's Common Stock shall be exchanged for
other securities of the Savings Bank or of another corporation, each
recipient of an Award shall be entitled, subject to the conditions herein
stated, to purchase or acquire such number of shares of Common Stock or
amount of other securities of the Savings Bank or such other corporation as
were exchangeable for the number of shares of Common Stock of the Savings
Bank which such optionees would have been entitled to purchase or acquire
except for such action, and appropriate adjustments shall be made to the per
share exercise price of outstanding Options.
ARTICLE X
AMENDMENT AND TERMINATION OF THE PLAN
The Board may, by resolution, at any time terminate, amend or revise the
Plan with respect to any shares of Common Stock as to which Awards have not
been granted, provided, however, that no amendment which (a) changes the
maximum number of shares that may be sold or issued under the Plan (other
than in accordance with the provisions of Article IX) or (b) changes the
class of persons that may be granted Options, shall become effective until it
receives the approval of the stockholders of the Savings Bank, and further
provided that the Board may determine that stockholder approval for any other
amendment to this Plan may be advisable for any reason, such as for the
purpose of obtaining or retaining any statutory or regulatory benefits under
tax, securities or other laws or satisfying any applicable stock exchange
listing requirements. The Board may not, without the consent of the holder
of an Award, alter or impair any Award previously granted or awarded under
this Plan as specifically authorized herein. Notwithstanding anything
contained in this Plan to the contrary, the provisions of Articles V and VII
hereto may not be amended more than once every six months, other than to
comport with changes in the Code, the Employee Retirement Income Securities
Act of 1974, as amended, or the rules and regulations promulgated under such
statutes.
-11-
ARTICLE XI
CONTINUATION RIGHTS
Neither the Plan nor the grant of any Awards hereunder nor any action
taken by the Committee or the Board in connection with the Plan shall create
any right on the part of any Employee of the Savings Bank or a Subsidiary
Company to continue as such.
ARTICLE XII
WITHHOLDING
12.01 Tax Withholding. The Savings Bank may withhold from any cash
payment made under this Plan sufficient amounts to cover any applicable
withholding and employment taxes, and if the amount of such cash payment is
insufficient, the Savings Bank may require the Optionee to pay to the Savings
Bank the amount required to be withheld as a condition to delivering the
shares acquired pursuant to an Award. The Savings Bank also may withhold or
collect amounts with respect to a disqualifying disposition of shares of
Common Stock acquired pursuant to exercise of an Incentive Stock Option, as
provided in Section 8.09(c).
12.02 Methods of Tax Withholding. The Committee is authorized to adopt
rules, regulations or procedures which provide for the satisfaction of an
Optionee's tax withholding obligation by the retention of shares of Common
Stock to which the Optionee would otherwise be entitled pursuant to an Award
and/or by the Optionee's delivery of previously-owned shares of Common Stock
or other property.
ARTICLE XIII
EFFECTIVE DATE OF THE PLAN; TERM
13.01 Effective Date of the Plan. This Plan shall become effective
on the Effective Date, and Awards may be granted hereunder on or after the
Effective Date and prior to the termination of the Plan, provided that no
shares of Common Stock may be issued pursuant to this Plan unless this Plan
is approved by a vote of the holders of a majority of the outstanding voting
shares of the Savings Bank at a meeting of stockholders of the Savings Bank
held within twelve (12) months following the Effective Date. Provided
further, that the Effective Date of this Plan shall be subject to the receipt
of any requisite approval or non-objection from the Office of Thrift
Supervision ("OTS") (as well as the implementation of any change to the
provisions of this Plan which the OTS may require.) Provided further, in the
event that the sale of the Common Stock in the anticipated Stock Offering of
the Savings Bank is not consummated by December 31, 1993, this Plan and
Awards hereunder shall be terminated.
-12-
13.02 Term of Plan. Unless sooner terminated, this Plan shall remain
in effect for a period of ten (10) years ending on the tenth anniversary of
the Effective Date. Termination of the Plan shall not affect any Awards
previously granted and such Awards shall remain valid and in effect until
they have been fully exercised or earned, are surrendered or by their terms
expire or are forfeited.
ARTICLE XIV
MISCELLANEOUS
14.01 Governing Law. This Plan shall be construed under the laws of
the State of New York, except to the extent that Federal law governs.
14.02 Pronouns. Wherever appropriate, the masculine pronoun shall
include the feminine pronoun, and the singular shall include the plural.
-13-