FFD FINANCIAL CORPORATION
2002 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
1. Purpose. The purpose of the FFD Financial Corporation 2002 Stock Option
Plan for Non-Employee Directors (this "Plan") is to promote and advance the
interests of FFD Financial Corporation (the "Company") and its shareholders by
enabling the Company to attract, retain and reward qualified and experienced
persons to serve as directors of the Company and any Subsidiary (hereinafter
defined), and to strengthen the mutuality of interests between such directors
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.
2. Definitions. For purposes of this Plan, the following terms shall have
the meanings set forth below:
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as amended, or any
successor thereto, together with rules, regulations and interpretations
promulgated thereunder.
(c) "Common Shares" means the common shares, no par value per share,
of the Company or any security of the Company issued in substitution, in
exchange or in lieu thereof.
(d) "Company" means FFD Financial Corporation, an Ohio corporation, or
any successor corporation.
(e) "Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute.
(f) "Fair Market Value" shall be determined as follows:
(i) 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.
(ii) If the Common Shares are not quoted on The Nasdaq Stock
Market, then the Fair Market Value shall be as determined by the
Board.
(g) "Participant" means a director of the Company or a Subsidiary who
is granted an Award under this Plan.
(h) "Plan" means the FFD Financial Corporation 2002 Stock Option Plan
for Non-Employee Directors, as set forth herein and as it may be hereafter
amended from time to time.
(i) "Stock Option" means an award to purchase Common Shares granted
pursuant to the provisions of this Plan.
(j) "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, First Federal Community Bank.
(k) "Terminated for Cause" means any removal of a director for
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 which results in a substantial financial loss to the Company or a
Subsidiary.
3. Administration.
(a) This Plan shall be administered by the Board, which is authorized
to construe and interpret this Plan and to make all other determinations
necessary or advisable for the administration of this Plan. Any
determination, decision or action of the Board in connection with the
construction, interpretation, administration, or application of this Plan
shall be final, conclusive and binding upon all Participants in this Plan
and any person validly claiming under or through a Participant in this
Plan. The Company shall effect the granting of Stock Options under this
Plan in accordance with the determinations made by the Board, by execution
of instruments in writing in such form as approved by the Board.
4. Duration of, and Common Shares Subject to, this Plan.
(a) Term. This Plan shall terminate on October 15, 2012, except with
respect to Stock Options then outstanding.
(b) Common Shares Subject to Plan. The maximum number of Common Shares
in respect of which Stock Options may be granted under this Plan is Twelve
Thousand Two Hundred and Fifty (12,250), subject to adjustment as provided
in Section 9 of this Plan.
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 the 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
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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.
5. Eligibility and Grants. Persons eligible for Stock Options under this
Plan shall consist of directors of the Company or a Subsidiary whose performance
or potential contribution, in the judgment of the Board, will benefit the future
success of the Company or a Subsidiary. In selecting the directors to whom Stock
Options will be awarded and the number of shares subject to such Stock Options,
the Board shall consider the position, duties and responsibilities of the
eligible directors, the value of their services to the Company and the
Subsidiaries and any other factors the Board may deem relevant.
6. Stock Options. Stock Options granted under this Plan shall be subject to
the following terms and conditions as the Board shall deem desirable:
(a) 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 Board may from time to time approve and shall contain such
additional terms and conditions not inconsistent with the express
provisions of this Plan.
(b) Stock Option Price. The option exercise price per Common Share
purchasable under a Stock Option shall be determined by the Board 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.
(c) 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 Board.
(d) Exercisability. Except as set forth in 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 Board at the date of
grant.
(e) 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
Board in its sole discretion, in Common Shares already owned by the
Participant, or by surrendering outstanding Stock
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Options. The Board may also permit Participants, either on a selective or
aggregate basis, to simultaneously exercise Stock Options and sell Common
Shares thereby acquired, pursuant to a brokerage or similar arrangement,
approved in advance by the Board, and use the proceeds from such sale as
payment of the purchase price of such shares. 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.
7. Termination of Directorship.
(a) Except in the event of the death or disability of a Participant,
upon the resignation, removal or retirement from the board of directors of
the Company or any Subsidiary of any Participant, any Stock Option which
has not yet become exercisable shall thereupon terminate and be of no
further force or effect, and, subject to extension by the Board, any Stock
Option which has become exercisable shall terminate if it is not exercised
within 12 months of such resignation, removal or retirement.
(b) Unless the Board shall specifically state otherwise at the time an
Stock Option is granted, all Stock Options granted under this Plan shall
become exercisable in full on the date of termination of a Participant's
directorship with the Company or a Subsidiary because of his death or
disability, and, subject to extension by the Board, all Stock Options shall
terminate if not exercised within 12 months of the Participant's death or
disability.
(c) In the event the directorship of a Participant is Terminated for
Cause, any Stock Option which has not been exercised shall terminate as of
the date of such termination for cause.
8. 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.
9. Adjustments Upon Changes in Capitalization.
(a) 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 the following: 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
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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.
(b) 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.
(c) The Board 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.
10. Amendment and Termination of this Plan. 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; provided, however, that no such action shall affect or
in any way impair the rights of a Participant under any Stock Option previously
granted under this Plan without the consent of the affected Participant. The
above notwithstanding, the Board may amend this Plan to take into account
changes in applicable securities, federal income tax and other applicable laws.
11. Modification of Stock Options. The Board may approve 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.
12. Miscellaneous.
(a) 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.
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(b) 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 Board
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 Board may cause a legend or legends to be put on any
such certificates to make appropriate reference to such restrictions.
(c) 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 Board agreeing to the terms and conditions of the Stock
Option and such related matters as the Board shall, in its sole discretion,
determine.
(d) Cost of Plan. The costs and expenses of administering this Plan
shall be borne by the Company.
(e) 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.
(f) Effective Date. This Plan shall be effective as of October 15,
2002.
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