PEOPLES-SIDNEY FINANCIAL CORPORATION
1998 MANAGEMENT RECOGNITION PLAN
1. Plan Purpose. The purpose of the Plan is to promote the long-term
interests of the Corporation and its stockholders by providing a means for
attracting and retaining directors, executive officers and employees of the
Corporation and its Affiliates.
2. Definitions. The following definitions are applicable to the Plan:
"Award" - means the grant of Restricted Stock pursuant to the terms of
Section 12 of the Plan or by the Committee, as provided in the Plan.
"Affiliate" - means any "parent corporation" or "subsidiary corporation"
of the Corporation, as such terms are defined in Section 424(e) and (f),
respectively, of the Code.
"Association" - means Peoples Federal Savings & Loan Association of
Sidney, a savings institution and its successors.
"Beneficiary" - means the person or persons designated by a Participant
to receive any benefits payable under the Plan in the event of such
Participant's death. Such person or persons shall be designated in writing on
forms provided for this purpose by the Committee and may be changed from time to
time by similar written notice to the Committee. In the absence of a written
designation, the Beneficiary shall be the Participant's surviving spouse, if
any, or if none, his estate.
"Code" - means the Internal Revenue Code of 1986, as amended.
"Committee" - means the Committee of the Board of Directors of the
Corporation referred to in Section 6 hereof.
"Continuous Service" - means the absence of any interruption or
termination of service as a director, director emeritus, advisory director,
executive officer or employee of the Corporation or any Affiliate. Service shall
not be considered interrupted in the case of sick leave, military leave or any
other leave of absence approved by the Corporation or any Affiliate or in the
case of transfers between payroll locations of the Corporation or between the
Corporation, its Affiliates or its successor. With respect to any director
emeritus or advisory director, continuous service shall mean the availability to
perform such functions as may be required of such individuals.
"Corporation" - means Peoples-Sidney Financial Corporation, a Delaware
corporation.
"Disability" - means any physical or mental impairment which qualifies
an employee, director, director emeritus or advisor director for disability
benefits under any applicable long-term disability plan maintained by the
Association or an Affiliate, or, if no such plan applies, which renders such
employee or director, in the judgment of the Committee, unable to perform his
customary duties and responsibilities.
"ERISA" - means the Employee Retirement Income Security Act of 1974, as
amended.
"Participant" - means any director, director emeritus, advisory
director, executive officer or employee of the Corporation or any Affiliate who
is selected by the Committee to receive an Award or is granted an Award pursuant
to Section 12.
"Non-Employee Director" - means a director who (a) is not currently an
officer or employee of the Corporation; (b) is not a former employee of the
Corporation who receives compensation for prior services (other than from a
tax-qualified retirement plan); (c) has not been an officer of the Corporation;
(d) does not receive renumeration from the Corporation in any capacity other
than as a director; and (e) does not possess an interest in any other
transactions or is not engaged in a business relationship for which disclosure
would be required under Item 404(a) or (b) of Regulation S-K.
"Plan" - means the 1998 Management Recognition Plan of the Corporation.
"Restricted Period" - means the period of time selected by the Committee
for the purpose of determining when restrictions are in effect under Section 3
hereof with respect to Restricted Stock awarded under the Plan.
"Restricted Stock" - means Shares which have been contingently awarded
to a Participant by the Committee subject to the restrictions referred to in
Section 3 hereof, so long as such restrictions are in effect.
"Shares" - means the common stock, par value $0.01 per share,
of the Corporation.
3. Terms and Conditions of Restricted Stock. The Committee shall have
full and complete authority, subject to the limitations of the Plan, to grant
Awards and, in addition to the terms and conditions contained in paragraphs (a)
through (f) of this Section 3, to provide such other terms and conditions (which
need not be identical among Participants) in respect of such Awards, and the
vesting thereof, as the Committee shall determine, subject to OTS regulations.
(a) At the time of an Award, the Committee shall establish for each
Participant a Restricted Period which shall not be less than five
years, during which or at the expiration of which, as the Committee
shall determine and provide in the agreement referred to in paragraph
(d) of this Section 3, the Shares awarded as Restricted Stock shall
vest, and subject to any such other terms and conditions as the
Committee shall provide, Shares of Restricted Stock may not be sold,
assigned, transferred, pledged, voted or otherwise encumbered by the
Participant, except as hereinafter provided, during the Restricted
Period. During the restricted period, MRP Shares will be voted by an
independent trustee and not by the holder of such shares. Except for
such restrictions, and subject to paragraphs (c) and (e) of this
Section 3 and Section 4 hereof, the Participant as owner of such
shares shall have all the rights of a stockholder. The Committee shall
have the authority, in its discretion, subject to compliance with OTS
regulations, to accelerate the time at which any or all of the
restrictions shall lapse with respect to an Award, or to remove any or
all of such restrictions, whenever it may determine that such action
is appropriate by reason of changes in applicable tax or other laws or
other changes in circumstances occurring after the commencement of
such Restricted Period.
No director who is not an employee of the Corporation shall be granted
Awards with respect to more than 5% of the total shares subject to the
Plan. All non-employee directors of the Corporation, in the aggregate,
may not be granted Awards with respect to more than 30% of the total
shares subject to the Plan and no individual shall be granted Awards
with respect to more than 25% of the total shares subject to the Plan.
Any Award made pursuant to this Plan, which Award is subject to the
requirements of Office of Thrift Supervision Regulations, shall vest in
not less than five equal annual installments with the first installment
vesting on the one-year anniversary of the date of grant, except in the
event of death or disability in which case all unvested shares shall
rest immediately.
In the event that Office of Thrift Supervision Regulations are amended
(the "Amended Regulations") to permit shorter vesting periods, any Award
made pursuant to this Plan, which Award is subject to the requirements
of such Amended Regulations, may vest, at the sole discretion of the
Committee, in accordance with such Amended Regulations.
(b) Except as provided in Section 5 hereof, if a Participant ceases to
maintain Continuous Service for any reason (other than death or
disability), unless the Committee shall otherwise determine, all Shares
of Restricted Stock theretofore awarded to such Participant and which at
the time of such termination of Continuous Service are subject to the
restrictions imposed by paragraph (a) of this Section 3 shall upon such
termination of Continuous Service be forfeited and returned to the
Corporation. If a Participant ceases to maintain Continuous Service by
reason of death or disability, Restricted Stock then still subject to
restrictions imposed by paragraph (a) of this Section 3 will be free of
those restrictions.
(c) Each certificate in respect of Shares of Restricted Stock awarded under
the Plan shall be registered in the name of the Participant and
deposited by the Participant, together with a stock power endorsed in
blank, with the Corporation and shall bear the following (or a similar)
legend:
The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) contained in the 1998 Management Recognition Plan of
Peoples-Sidney Financial Corporation. Copies of such Plan are on file
in the offices of the Secretary of Peoples-Sidney Financial
Corporation, 101 East Court Street, Sidney, Ohio 45365.
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(d) At the time of the granting of any Award, the Participant shall enter
into an Agreement with the Corporation in a form specified by the
Committee, agreeing to the terms and conditions of the Award and such
other matters as the Committee, in its sole discretion, shall determine
(the "Restricted Stock Agreement").
(e) The payment to the Participant of any dividends declared or paid
by the Corporation on any Restricted Stock shall be deferred and held
by the Corporation for the account of the Participant until the
earlier to occur of (i) the lapsing of the restrictions imposed under
paragraph (a) of this Section 3 or (ii) the forfeiture of such shares
under paragraph (b) of this Section 3. There shall be credited at the
end of each year (or portion thereof) interest on the amount of the
Participant's account at a rate per annum as the Committee, in its
discretion, may determine. Payment of deferred dividends to the
Participant, together with interest accrued thereon, shall be made
upon the lapsing of the restrictions imposed under paragraph (a) of
this Section 3, Shares of Restricted Stock shall not be voted by the
Participant during the Restricted Period. Shares of Restricted Stock
still subject to restriction shall be voted by an independent party to
be named in the Restricted Stock Agreement.
(f) At the lapsing of the restrictions imposed by paragraph (a) of this
Section 3, the Corporation shall deliver to the Participant (or where
the relevant provision of paragraph (b) of this Section 3 applies in the
case of a deceased Participant, to his legal representative, beneficiary
or heir) the certificate(s) and stock power deposited with it pursuant
to paragraph (c) of this Section 3 and the Shares represented by such
certificate(s) shall be free of the restrictions referred to in
paragraph (a) of this Section 3.
4. 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 Corporation, 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. Any shares of stock or other securities
received, as a result of any of the foregoing, by a Participant with respect to
Restricted Stock shall be subject to the same restrictions and the
certificate(s) or other instruments representing or evidencing such shares or
securities shall be legended and deposited with the Corporation in the manner
provided in Section 3 hereof.
5. Assignments and Transfers. During the Restricted Period, 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 (i) in the event of the death of a Participant, by will or the laws of
descent and distribution, or (ii) pursuant to a qualified domestic relations
order as defined in the Code or Title I of ERISA or the rules thereunder.
6. Administration. The Plan shall be administered by a Committee
consisting of two or more members, each of whom shall be a Non-Employee
Director. The members of the Committee shall be appointed by the Board of
Directors of the Corporation. Except as limited by the express provisions of the
Plan, the Committee shall have sole and complete authority and discretion,
subject to OTS regulations, to: (i) select Participants and grant Awards; (ii)
determine the number of Shares to be subject to types of Awards generally, as
well as 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.
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.
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7. Shares Subject to Plan. Subject to adjustment by the operation of
Section 4 hereof, the maximum number of Shares with respect to which Awards may
be made under the Plan is 71,415 Shares. The Shares with respect to which Awards
may be made under the Plan may be either authorized and unissued Shares or
issued Shares heretofore or hereafter reacquired and held as treasury Shares. An
Award shall not be considered to have been made under the Planwith respect to
Restricted Stock which is forfeited and new Awards may be granted under the Plan
with respect to the number of Shares as to which such forfeiture has occurred.
The Corporation'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 Corporation 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.
8. Employee Rights Under the Plan. No director, director emeritus,
advisory 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 Corporation or any Affiliate. Neither the Plan nor any action taken
thereunder shall be construed as giving any officer or employee any right to be
retained in the employ of the Corporation, the Association or any Affiliate.
9. Withholding Tax. Upon the termination of the Restricted Period with
respect to any shares of Restricted Stock (or at such earlier time, if any, that
an election is made by the Participant under Section 83(b) of the Code, or any
successor provision thereto, to include the value of such shares in taxable
income), the Corporation may, in its sole discretion, withhold from any payment
or distribution made under this Plan sufficient Shares or withhold sufficient
cash to cover any applicable withholding and employment taxes. The Corporation
shall have the right to deduct from all dividends paid with respect to shares of
Restricted Stock the amount of any taxes which the Corporation is required to
withhold with respect to such dividend payments. No discretion or choice shall
be conferred upon any Participant with respect to the form, timing or method of
any such tax withholding.
10. Amendment or Termination. The Board of Directors of the Corporation
may amend, suspend or terminate the Plan or any portion thereof at any time,
subject to OTS regulations; 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.
11. Term of Plan. The Plan shall become effective upon its ratification by
the stockholders of the Corporation. It shall continue in effect for a term of
ten years unless sooner terminated under Section 11 hereof.
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.
12. Director Awards. By, and simultaneously with, the ratification of this
Plan by the stockholders of the Corporation, each non-employee member of the
Board of Directors of the Corporation is hereby granted an Award equal to 3,570
Shares. Each such Award shall be evidenced by a Restricted Stock Agreement in a
form approved by the Corporation and shall be subject in all respects to the
terms and conditions of this Plan, which are controlling. All Awards granted
pursuant to this Section 12 shall be earned in five equal annual installments,
with the first installment vesting on the one-year anniversary of the date of
grant, as long as the director maintains Continuous Service with the Corporation
or its Affiliates, provided, however, no Award shall be earned in any fiscal
year in which the Association fails to meet its capital requirements.
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