EXHIBIT 10.2
Midland Federal Savings and Loan Association
1993 Stock Option and Incentive Plan
1. Plan Purpose. The purpose of the Plan is to promote the long-term
interests of the Association and its stockholders by providing a means for
attracting and retaining directors, officers and employees of the Association
and its Affiliates. It is intended that designated Options granted pursuant to
the provisions of this Plan to persons employed by the Association or any of its
subsidiaries will qualify as Incentive Stock Options. Options granted to persons
who are not employees will be Non-Qualified Stock Options.
2. Definitions. The following definitions are applicable to the Plan:
"Affiliate" - means any "parent corporation" or "subsidiary
corporation" of the Association, as such terms are defined in Section 424(e) and
(f), respectively, of the Code.
"Award" - means the grant of an Incentive Stock Option, a
Non-Qualified Stock Option, a Stock Appreciation Right, a Limited Stock
Appreciation Right or any combination thereof, as provided in the Plan.
"Association" - means Midland Federal Savings and Loan
Association, and its predecessors and successors.
"Code" - means the Internal Revenue Code of 1986, as amended.
"Committee" - means the Committee referred to in Section 3
hereof.
"Continuous Service" - means the absence of any interruption
or termination of service as a director, director emeritus, advisory director,
officer or employee of the Association or an Affiliate, except that when used
with respect to options which at the time of exercise are intended to be
Incentive Stock Options, continuous service means the absence of any
interruption or termination of service as an employee of the Association or an
Affiliate. With respect to any director emeritus or advisory director,
continuous service shall mean availability to perform such functions as may be
required of the Association's directors emeritus or advisory directors, as the
case may be. Service shall not be considered interrupted in the case of sick
leave, military leave or any other leave of absence approved by the Association
or in the case of transfers between payroll locations of the Association or
between the Association, its parent, its subsidiaries or its successor.
"Disinterested Person" - means any member of the Board of
Directors of the Association who within the prior year has not been, and is not
being, granted any awards related to the Shares under this Plan or any other
plan of the Association or any of its Affiliates except for awards which (i) are
calculated in accordance with a formula as contemplated in paragraph (c)(ii) of
Rule 16b-3 ("Rule 16b-3") under the Securities Exchange Act of 1934; (ii) result
from participation in an ongoing securities acquisition plan meeting the
conditions of paragraph (d)(2) of Rule 16b-3; or, (iii) arise from an election
by a director to receive all or part of his board fees in securities. No
recipient of a stock award granted pursuant to Section 20 hereof shall be deemed
not to be a Disinterested Person solely by reason of such grant.
"Employee" - means any person, including an officer or
director, who is employed by the Association or any Affiliate.
"ERISA" - means the Employee Retirement Income Security Act of
1974, as amended.
"Exercise Price" - means (i) in the case of an Option, the
price per Share at which the Shares subject to such Option may be purchased upon
exercise of such Option and (ii) in the case of a Right, the price per Share
(other than the Market Value per Share on the date of exercise and the Offer
Price per Share as defined in Section 10 hereof) which, upon grant, the
Committee determines shall be utilized in calculating the aggregate value which
a Participant shall be entitled to receive pursuant to Sections 9, 10 or 12
hereof upon exercise of such Right.
"Incentive Stock Option" - means an option to purchase Shares
granted by the Committee pursuant to Section 6 hereof which is subject to the
limitations and restrictions of Section 8 hereof and is intended to qualify
under Section 422 of the Code.
"Limited Stock Appreciation Right" - means a stock
appreciation right with respect to Shares granted by the Committee pursuant to
Sections 6 and 10 hereof.
"Market Value" - means the average of the high and low quoted
sales price on the date in question (or, if there is no reported sale on such
date, on the last preceding date on which any reported sale occurred) of a Share
on the Composite Tape for the New York Stock Exchange-Listed Stocks, or, if on
such date the Shares are not quoted on the Composite Tape, on the New York Stock
Exchange, or, if the Shares are not listed or admitted to trading on such
Exchange, on the principal United States securities exchange registered under
the Securities Exchange Act of 1934 on which the Shares are listed or admitted
to trading, or, if the Shares are not listed or admitted to trading on any such
exchange, the mean between the closing high bid and low asked quotations with
respect to a Share on such date on the National Association of Securities
Dealers, Inc., Automated Quotations System, or any similar system then in use,
or, if no such quotations are available, the fair market value on such date of a
Share as the Committee shall determine.
"Non-Qualified Stock Option" - means an option to purchase
Shares granted by the Committee pursuant to Section 6 hereof, which option is
not intended to qualify under Section 422 of the Code.
"Option" - means an Incentive Stock Option or a NonQualified
Stock Option.
"Participant" - means any officer or employee of the
Association or any Affiliate who is selected by the Committee to receive an
Award and any director, director emeritus or advisory director of the
Association who is granted an Award pursuant to Section 20 hereof.
"Plan" - means the 1993 Stock Option and Incentive Plan of the
Association.
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"Related" - means (i) in the case of a Right, a Right which is
granted in connection with, and to the extent exercisable, in whole or in part,
in lieu of, an Option or another Right and (ii) in the case of an Option, an
Option with respect to which and to the extent a Right is exercisable, in whole
or in part, in lieu thereof has been granted.
"Right" - means a Limited Stock Appreciation Right or a Stock
Appreciation Right.
"Shares" - means the shares of common stock of the
Association.
"Senior Officer" - means the Association's president,
principal financial officer, or principal accounting officer, any vice president
of the Association in charge of a principal business unit, division or function
(such as lending, savings, administration or finance), any other officer who
performs a policy-making function, or any other person who performs similar
policy-making functions for the Association. Officers of the Association's
Affiliates shall be deemed senior officers of the Association if they perform
such policy-making functions for the Association.
"Stock Appreciation Right" - means a stock appreciation right
with respect to Shares granted by the Committee pursuant to Sections 6 and 9
hereof.
"Ten Percent Beneficial Owner" - means the beneficial owner of
more than ten percent of any class of the Association's equity securities
registered pursuant to Section 12 of the Securities Exchange Act of 1934.
3. Administration. The Plan shall be administered by a Committee
consisting of two or more members, each of whom shall be a Disinterested Person.
The members of the Committee shall be appointed by the Board of Directors of the
Association. Except as limited by the express provisions of the Plan, the
Committee shall have sole and complete authority and discretion to (i) select
Participants and grant Awards; (ii) determine the number of Shares to be subject
to types of Awards generally, as well as to individual Awards granted under the
Plan; (iii) determine the terms and conditions upon which Awards shall be
granted under the Plan; (iv) prescribe the form and terms of instruments
evidencing such grants; and (v) establish from time to time regulations for the
administration of the Plan, interpret the Plan, and make all determinations
deemed necessary or advisable for the administration of the Plan. The Committee
may maintain, and update from time to time as appropriate, a list designating
selected directors as Disinterested Persons. The purpose of such list shall be
to evidence the status of such individuals as Disinterested Persons, and the
Board of Directors may appoint to the Committee any individual actually
qualifying as a Disinterested Person, regardless of whether identified as such
on said list.
A majority of the Committee shall constitute a quorum, and the acts of
a majority of the members present at any meeting at which a quorum is present,
or acts approved in writing by a majority of the Committee without a meeting,
shall be acts of the Committee.
4. Participation in Committee Awards. The Committee may select from
time to time Participants in the Plan from those directors, officers and
employees (other than Disinterested Persons), of the Association or its
Affiliates who, in the opinion of the Committee, have the capacity for
contributing to the successful per formance of the Association or its
Affiliates.
5. Shares Subject to Plan. Subject to adjustment by the operation of
Section 11 hereof, the maximum number of Shares with respect to which Awards may
be made under the Plan is 10% of the total Shares issued in the Association's
conversion to the capital stock form. The Shares with respect to which Awards
may be made under the Plan may be either authorized and unissued shares or
issued shares heretofore
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or hereafter reacquired and held as treasury shares. Shares which are subject to
Related Rights and Related Options shall be counted only once in determining
whether the maximum number of Shares with respect to which Awards may be granted
under the Plan has been exceeded. An Award shall not be considered to have been
made under the Plan with respect to any Option or Right which terminates and new
Awards may be granted under the Plan with respect to the number of Shares as to
which such termination or forfeiture has occurred.
6. General Terms and Conditions of Options and Rights. The Committee
shall have full and complete authority and discretion, except as expressly
limited by the Plan, to grant Options and/or Rights and to provide the terms and
conditions (which need not be identical among Participants) thereof. In
particular, the Committee shall prescribe the following terms and conditions:
(i) the Exercise Price of any Option or Right, which shall not be less than the
Market Value per Share at the date of grant of such Option or Right, except as
set forth in Section 20 hereof, (ii) the number of Shares subject to, and the
expiration date of, any Option or Right, which expiration date shall not exceed
ten years from the date of grant, (iii) the manner, time and rate (cumulative or
otherwise) of exercise of such Option or Right, and (iv) the restrictions, if
any, to be placed upon such Option or Right or upon Shares which may be issued
upon exercise of such Option or Right. The Committee may, as a condition of
granting any Option or Right, require that a Participant agree not to thereafter
exercise one or more Options or Rights previously granted to such Participant.
No Employee may be granted an Option by the Committee which, in the aggregate,
exceeds 25% of the Options allocated by the Plan.
7. Exercise of Options or Rights.
(a) An Option or Right granted under the Plan shall be
exercisable during the lifetime of the Participant to whom such Option or Right
was granted only by such Participant and, except as provided in paragraphs (c)
and (d) of this Section 7, no such Option or Right may be exercised unless at
the time such Participant exercises such Option or Right, such Participant has
maintained Continuous Service since the date of grant of such Option or Right.
Cash settlements of Rights may be made only in accordance with any applicable
restrictions pursuant to Rule 16b-3(e) under the Securities Exchange Act of 1934
or any similar or successor provision.
(b) To exercise an Option or Right under the Plan, the
Participant to whom such Option or Right was granted shall give written notice
to the Association in form satisfactory to the Committee (and, if partial
exercises have been permitted by the Committee, by specifying the number of
Shares with respect to which such Participant elects to exercise such Option or
Right) together with full payment of the Exercise Price, if any and to the
extent required. The date of exercise shall be the date on which such notice is
received by the Association. Payment, if any is required, shall be made either
(i) in cash (including check, bank draft or money order) or (ii) if permitted by
the Committee, by delivering (A) Shares already owned by the Participant and
having a fair market value equal to the applicable exercise price, such fair
market value to be determined in such appropriate manner as may be provided by
the Committee or as may be required in order to comply with or to conform to
requirements of any applicable laws or regulations, or (B) a combination of cash
and such Shares.
(c) If a Participant to whom an Option or Right was granted
shall cease to maintain Continuous Service for any reason (including total or
partial disability and normal or early retirement, but excluding death and
termination of employment by the Association or any Affiliate for cause), such
Participant may, but only within the period of three months immediately
succeeding such cessation of Continuous Service and in no event after the
expiration date of such Option or Right, exercise such Option or Right to the
extent that such Participant was entitled to exercise such Option or Right at
the date of such cessation, provided, however, that such right of exercise after
cessation of Continuous Service shall not be available to a Participant if the
Committee otherwise determines and so provides in the applicable instrument or
instruments evidencing the
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grant of such Option or Right. Notwithstanding the foregoing, if a Participant
to whom an Option or Right was granted shall cease to maintain Continuous
Service due to normal retirement, and such Participant has served the
Association for at least ten years, such Option or Right granted to such
Participant shall become immediately exercisable, and the Participant may
exercise such Option or Right, but only during the shortest of the following
periods (i) the one year period immediately succeeding such cessation of
Continuous Service, (ii) the period remaining until the expiration of such
Option or Right or (iii), if the Participant does not assume a position with a
competitor of the Association's, the period, not to exceed three years, after
the Participant ceases to maintain continuous service during which he remains
available for at least one day per month to consult and advise with the
Association for an appropriate fee. If the Continuous Service of a Participant
to whom an Option or Right was granted by the Association is terminated for
cause, all rights under any Option or Right of such Participant shall expire
immediately upon the giving to the Participant of notice of such termination.
(d) In the event of the death of a Participant while in the
Continuous Service of the Association or an Affiliate or within the three month
and one year periods referred to in paragraph (c) of this Section 7, the person
to whom any Option or Right held by the Participant at the time of his death is
transferred by will or the laws of descent and distribution may, but only to the
extent such Participant was entitled to exercise such Option or Right
immediately prior to his death, exercise such Option or Right at any time within
a period of one year succeeding the date of death of such Participant, but in no
event later than ten years from the date of grant of such Option or Right.
Following the death of any Participant to whom an Option was granted under the
Plan, irrespective of whether any Related Right shall have theretofore been
granted to the Participant or whether the person entitled to exercise such
Related Right desires to do so, the Committee may, as an alterna tive means of
settlement of such Option, elect to pay to the person to whom such Option is
transferred by will or by the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined in the Code or Title I of the
ERISA or the rules thereunder, the amount by which the Market Value per Share on
the date of exercise of such Option shall exceed the Exercise Price of such
Option, multiplied by the number of Shares with respect to which such Option is
properly exercised. Any such settlement of an Option shall be considered an
exercise of such Option for all purposes of the Plan.
8. Incentive Stock Options. Incentive Stock Options may be granted only
to Participants who are Employees. Any provision of the Plan to the contrary
notwithstanding, (i) no Incentive Stock Option shall be granted more than ten
years from the date the Plan is adopted by the Board of Directors of the
Association and no Incentive Stock Option shall be exercisable more than ten
years from the date such Incentive Stock Option is granted, (ii) the Exercise
Price of any Incentive Stock Option shall not be less than the Market Value per
Share on the date such Incentive Stock Option is granted, (iii) any Incentive
Stock Option shall not be transferable by the Participant to whom such Incentive
Stock Option is granted other than by will or the laws of descent and
distribution and shall be exercisable during such Participant's lifetime only by
such Participant, (iv) no Incentive Stock Option shall be granted to any
individual who, at the time such Incentive Stock Option is granted, owns stock
possessing more than ten percent of the total combined voting power of all
classes of stock of the Association or any Affiliate unless the Exercise Price
of such Incentive Stock Option is at least 110 percent of the Market Value per
Share at the date of grant and such Incentive Stock Option is not exercisable
after the expiration of five years from the date such Incentive Stock Option is
granted, and (v) the aggregate Market Value (determined as of the time any
Incentive Stock Option is granted) of the Shares with respect to which Incentive
Stock Options are exercisable for the first time by a Participant in any
calendar year shall not exceed $100,000.
9. Stock Appreciation Rights. A Stock Appreciation Right shall, upon
its exercise, entitle the Participant to whom such Stock Appreciation Right was
granted to receive a number of Shares or cash or combination thereof, as the
Committee in its discretion shall determine, the aggregate value of which (i.e.,
the sum of the amount of cash and/or Market Value of such Shares on date of
exercise) shall equal (as nearly as
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possible, it being understood that the Association shall not issue any
fractional shares) the amount by which the Market Value per Share on the date of
such exercise shall exceed the Exercise Price of such Stock Appreciation Right,
multiplied by the number of Shares with respect to which such Stock Appreciation
Right shall have been exercised. A Stock Appreciation Right may be Related to an
Option or may be granted independently of any Option as the Committee shall from
time to time in each case determine. At the time of grant of an Option the
Committee shall determine whether and to what extent a Related Stock
Appreciation Right shall be granted with respect thereto; provided, however, and
notwithstanding any other provision of the Plan, that if the Related Option is
an Incentive Stock Option, the Related Stock Appreciation Right shall satisfy
all the restrictions and limitations of Section 8 hereof as if such Related
Stock Appreciation Right were an Incentive Stock Option and as if other rights
which are Related to Incentive Stock Options were Incentive Stock Options. In
the case of a Related Option, such Related Option shall cease to be exercisable
to the extent of the Shares with respect to which the Related Stock Appreciation
Right was exercised. Upon the exercise or termination of a Related Option, any
Related Stock Appreciation Right shall terminate to the extent of the Shares
with respect to which the Related Option was exercised or terminated.
Notwithstanding the foregoing, no Stock Appreciation Right shall be exercisable
by a Ten Percent Beneficial Owner, director or Senior Officer of the Association
within six months of the date of its grant.
10. Limited Stock Appreciation Rights. At the time of grant of an
Option or Stock Appreciation Right to any Participant, the Committee shall have
full and complete authority and discretion to also grant to such Participant a
Limited Stock Appreciation Right which is Related to such Option or Stock
Appreciation Right; provided, however and notwithstanding any other provision of
the Plan, that if the Related Option is an Incentive Stock Option, the Related
Limited Stock Appreciation Right shall satisfy all the restrictions and
limitations of Section 8 hereof as if such Related Limited Stock Appreciation
Right were an Incentive Stock Option and as if all other Rights which are
Related to Incentive Stock Options were Incentive Stock Options. Notwithstanding
any other provision of the Plan, a Limited Stock Appreciation Right shall be
exercisable only during the period beginning on the first day following the date
of expiration of any "offer" (as such term is hereinafter defined) and ending on
the forty-fifth day following such date, provided, however, that no Limited
Stock Appreciation Right shall be exercisable by a Ten Percent Beneficial Owner,
director or Senior Officer of the Association within six months of the date of
its grant.
A Limited Stock Appreciation Right shall, upon its exercise, entitle
the Participant to whom such Limited Stock Appreciation Right was granted to
receive an amount of cash equal to the amount by which the "Offer Price per
Share" (as such term is hereinafter defined) or the Market Value on the date of
such exercise, as shall have been provided by the Committee in its discretion at
the time of grant, shall exceed the Exercise Price of such Limited Stock
Appreciation Right, multiplied by the number of Shares with respect to which
such Limited Stock Appreciation Right shall have been exercised. Upon the
exercise of a Limited Stock Appreciation Right, any Related Option and/or
Related Stock Appreciation Right shall cease to be exercisable to the extent of
the Shares with respect to which such Limited Stock Appreciation Right was
exercised. Upon the exercise or termination of a Related Option or Related Stock
Appreciation Right, any Related Limited Stock Appreciation Right shall terminate
to the extent of the Shares with respect to which such Related Option or Related
Stock Appreciation Right was exercised or terminated.
For the purposes of this Section 10, the term "Offer" shall mean any
tender offer or exchange offer for Shares other than one made by the
Association, provided that the corporation, person or other entity making the
offer acquires pursuant to such offer either (i) 25% of the Shares outstanding
immediately prior to the commencement of such offer or (ii) a number of Shares
which, together with all other Shares acquired in any tender offer or exchange
offer (other than one made by the Association) which expired within sixty days
of the expiration date of the offer in question, equals 25% of the Shares
outstanding immediately prior to the commencement of the offer in question. The
term "Offer Price per Share" as used in this Section 10 shall mean the highest
price per Share paid in any Offer which Offer is in effect any time during the
period beginning on
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the sixtieth day prior to the date on which a Limited Stock Appreciation Right
is exercised and ending on the date on which such Limited Stock Appreciation
Right is exercised. Any securities or property which are part or all of the
consideration paid for Shares in the Offer shall be valued in determining the
Offer Price per Share at the higher of (A) the valuation placed on such
securities or property by the corporation, person or other entity making such
Offer or (B) the valuation placed on such securities or property by the
Committee.
11. Adjustments Upon Changes in Capitalization. In the event of any
change in the outstanding Shares subsequent to the effective date of the Plan by
reason of any reorganization, recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, consolidation or any change in the
corporate structure or Shares of the Association, the maximum aggregate number
and class of shares as to which Awards may be granted under the Plan and the
number and class of shares with respect to which Awards theretofore have been
granted under the Plan shall be appropriately adjusted by the Committee, whose
determination shall be conclusive.
12. Effect of Merger on Options or Rights. In the event of any merger
or consolidation of the Association (other than a merger or consolidation in
which the Association is the continuing entity and which does not result in the
outstanding Shares being converted into or exchanged for different securities,
cash or other property, or any combination thereof) pursuant to a plan or
agreement the terms of which are binding upon all stockholders of the
Association (except to the extent that dissenting stockholders may be entitled,
under statutory provisions or provisions contained in the charter, to receive
the appraised or fair value of their holdings), any Participant to whom an
Option or Right has been granted at least 6 months prior to such event shall
have the right (subject to the provisions of the Plan and any limitation
applicable to such Option or Right), thereafter and during the term of each such
Option or Right, to receive upon exercise of any such Option or Right an amount
equal to the excess of the fair market value on the date of such exercise of the
securities, cash or other property, or combination thereof, receivable upon such
merger, consolidation or combination in respect of a Share over the Exercise
Price of such Right or Option, multiplied by the number of Shares with respect
to which such Option or Right shall have been exercised. Such amount may be
payable fully in cash, fully in one or more of the kind or kinds of property
payable in such merger, consolidation or combination, or partly in cash and
partly in one or more of such kind or kinds of property, all in the discretion
of the Committee.
13. Effect of Change in Control. Each of the events specified in the
following clauses (i) through (iii) of this Section 13 shall be deemed a "change
of control": (i) any third person, including a "group" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, shall become the beneficial
owner of shares of the Association with respect to which 25% or more of the
total number of votes for the election of the Board of Directors of the
Association may be cast, (ii) as a result of, or in connection with, any cash
merger or other business combination, sale of assets or contested election, or
combination of the foregoing, the persons who were directors of the Association
immediately prior thereto shall cease to constitute a majority of the Board of
Directors of the Association or (iii) the shareholders of the Association shall
approve an agreement providing either for a transaction in which the Association
will cease to be an independent publicly owned entity or for a sale or other
disposition of all or substantially all the assets of the Association; provided,
however, that the occurrence of any such events shall not be deemed a "change in
control" if, prior to such occurrence, a res olution specifically approving such
occurrence shall have been adopted by at least a majority of the Board of
Directors of the Association. If a tender offer or exchange offer for Shares
(other than such an offer by the Association) is commenced and an appropriate
filing is made with the Office of Thrift Supervision and the Association has
received an indication that such filing will be approved, or if the event
specified in clause (iii) above shall occur, unless the Committee shall have
otherwise provided in the instrument evidencing the grant of an Option or Stock
Appreciation Right, all Options and Stock Appreciation Rights theretofore
granted and not fully exercisable shall become exercisable in full upon the
happening of such event and shall remain so exercisable for a period of sixty
days following such date, after which they shall revert to being exercisable in
accordance with their terms; provided, however, that no Option or Stock
Appreciation Right shall be ex
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ercisable by a Ten Percent Beneficial Owner, director or Senior Officer of the
Association within six months of the date of grant of such Option or Stock
Appreciation Right and no Option or Stock Appreciation Right which has
previously been exercised or otherwise terminated shall become exercisable.
14. Assignments and Transfers. No Award nor any right or interest of a
Participant under the Plan in any instrument evidencing any Award under the Plan
may be assigned, encumbered or transferred except, in the event of the death of
a Participant, by will or the laws of descent and distribution or in the case of
an Award other than an Incentive Stock Option, pursuant to a qualified domestic
relations order as defined in the Code or Title I of the ERISA or the rules
thereunder.
15. Employee Rights Under the Plan. No director, officer or employee
shall have a right to be selected as a Participant nor, having been so selected,
to be selected again as a Participant and no director, officer, employee or
other person shall have any claim or right to be granted an Award under the Plan
or under any other incentive or similar plan of the Association or any
Affiliate. Neither the Plan nor any action taken thereunder shall be construed
as giving any employee any right to be retained in the employ of the Association
or any Affiliate.
16. Delivery and Registration of Stock. The Association's obligation to
deliver Shares with respect to an Award shall, if the Committee so requests, be
conditioned upon the receipt of a representation as to the investment intention
of the Participant to whom such Shares are to be delivered, in such form as the
Committee shall determine to be necessary or advisable to comply with the
provisions of the Securities Act of 1933 or any other Federal, state or local
securities legislation or regulation. It may be provided that any representation
requirement shall become inoperative upon a registration of the Shares or other
action eliminating the necessity of such representation under such Securities
Act or other securities legislation. The Association shall not be required to
deliver any Shares under the Plan prior to (i) the admission of such shares to
listing on any stock exchange on which Shares may then be listed, and (ii) the
completion of such registration or other qualification of such Shares under any
state or Federal law, rule or regulation, as the Committee shall determine to be
necessary or advisable.
This Plan is intended to comply with Rule 16b-3 under the Securities
Exchange Act of 1934. Any provision of the Plan which is inconsistent with said
Rule shall, to the extent of such inconsistency, be inoperative and shall not
affect the validity of the remaining provisions of the Plan.
17. Withholding Tax. The Association shall have the right to deduct
from all amounts paid in cash with respect to the exercise of a Right under the
Plan any taxes required by law to be withheld with respect to such cash
payments. Where a Participant or other person is entitled to receive Shares
pursuant to the exercise of an Option or Right pursuant to the Plan, the
Association shall have the right to require the Participant or such other person
to pay the Association the amount of any taxes which the Association is required
to withhold with respect to such Shares, or, in lieu thereof, to retain, or sell
without notice, a number of such Shares sufficient to cover the amount required
to be withheld.
18. Amendment or Termination. The Board of Directors of the Association
may amend, suspend or terminate the Plan or any portion thereof at any time, but
(except as provided in Section 11 hereof) no amendment shall be made without
approval of the stockholders of the Association which shall (i) materially
increase the aggregate number of Shares with respect to which Awards may be made
under the Plan, (ii) materially increase the aggregate number of Shares which
may be subject to Awards to Participants who are not Employees or (iii) change
the class of persons eligible to participate in the Plan; provided, however,
that no such amendment, suspension or termination shall impair the rights of any
Participant, without his consent, in any Award theretofore made pursuant to the
Plan.
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Notwithstanding anything in this Plan to the contrary, to the extent
that the Plan provides for formula awards, as defined in Rule 16b-3(c)(2)(ii)
under the Securities Exchange Act of 1934, such provisions may not be amended
more than once every six months, other than to comport with changes in the Code,
ERISA or the rules thereunder.
19. Effective Date and Term of Plan. The Plan shall become effective
upon its adoption by the Board of Directors of the Association, subject to the
Association converting to a stock institution and approval of the Plan by vote
of the Association's shareholders. It shall continue in effect for a term of ten
years unless sooner terminated under Section 18 hereof.
20. Director Grants. By, and simultaneously with the adoption of this
Plan, each member of the Board of Directors of the Association at the time of
the Association's conversion to stock form who is not a Employee, is hereby
granted Options to purchase an amount of shares equal to 1/2% of the shares
issued in the mutual to stock conversion of the Association. In addition, each
non-employee director of the Association elected after the completion of the
Association's conversion to stock form is hereby granted (as of the date he or
she is elected and qualified) options on an equal number of shares at the then
applicable market price, subject to availability. Each such Option shall be
evidenced by a Non-Qualified Stock Option Agreement in a form approved by the
Board of Directors and shall be subject in all respects to the terms and
conditions of this Plan, which are controlling. All Options granted pursuant to
this Section 20 shall be rounded down to the nearest whole share to the extent
necessary to ensure that no Options to purchase representing fractional shares
are issued.
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