Little Falls Bancorp, Inc.
1997 Directors Stock Compensation Plan
Article I
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ESTABLISHMENT OF THE PLAN
1.01 Little Falls Bancorp, Inc. ("Company") hereby establishes the 1997
Directors Stock Compensation Plan (the "Plan") upon the terms and conditions
hereinafter stated.
Article II
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PURPOSE OF THE PLAN
2.01 The purpose of the Plan is to reward and to retain personnel of
experience and ability as members of the Board of Directors of the Company by
providing such members of the Board with an additional equity interest in the
Company as compensation for their future professional contributions and service
to the Company and its subsidiaries.
Article III
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DEFINITIONS
The following words and phrases when used in this Plan with an initial
capital letter, unless the context clearly indicates otherwise, shall have the
meaning as set forth below. Wherever appropriate, the masculine pronoun shall
include the feminine pronoun and the singular shall include the plural.
3.01 "Beneficiary" means the person or persons designated by the
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, the Participant's estate.
3.02 "Board" means the Board of Directors of the Company, or any
successor corporation thereto.
3.03 "Cause" means the personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profits, intentional
failure to perform stated duties, willful violation of a material provision of
any law, rule or regulation (other than traffic violations and similar offense),
or a material violation of a final cease-and-desist order or any other action
which results in a substantial financial loss to the Company or its
Subsidiaries.
3.04 "Change in Control" shall mean: (i) the sale of all, or a material
portion, of the assets of the Company or its Subsidiaries; (ii) the merger or
recapitalization of the Company whereby the Company is not the surviving entity;
(iii) a change in control of the Company as otherwise defined or determined by
the Office of Thrift Supervision ("OTS") or regulations promulgated by it; or
(iv) the acquisition, directly or indirectly, of the beneficial ownership
(within the meaning of that term as it is used in Section 13(d) of the 1934 Act
and the rules and regulations promulgated thereunder) of twenty-five percent
(25%) or more of the outstanding voting securities of the Company by any person,
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trust, entity or group. This limitation shall not apply to the purchase of
shares of up to 25% of any class of securities of the Company by a tax-qualified
employee stock benefit plan sponsored by the Company or its subsidiaries which
is exempt from the approval requirements, set forth under 12 C.F.R.
ss.574.3(c)(1)(vi) as now in effect or as may hereafter be amended. The term
"person" refers to an individual or a corporation, partnership, trust,
association, joint venture, pool, syndicate, sole proprietorship, unincorporated
organization or any other form of entity not specifically listed herein. The
decision of the Committee as to whether a Change in Control has occurred shall
be conclusive and binding.
3.05 "Committee" means the Board of Directors as a whole or the
Executive Committee appointed by the Board from time to time, if such Executive
Committee shall exist.
3.06 "Common Stock" means shares of the common stock, $.10 par value
per share, of the Company or any successor thereto.
3.07 "Company" shall mean Little Falls Bancorp, Inc., the parent
corporation of the Company.
3.08 "Director" means a member of the Board of the Company.
3.09 "Director Emeritus" means a person serving as an director
emeritus, advisory director, consulting director, or other similar position as
may be appointed by the Board of Directors of the Company from time to time.
3.10 "Disability" means any physical or mental impairment which renders
the Participant incapable of continuing in the service of the Company in his
current capacity as determined by the Committee.
3.11 "Employee" means any person who is employed by the Company or a
Subsidiary. "Non- employee" shall refer to an individual that is not in the
employ of the Company or its subsidiaries within the meaning of the Internal
Revenue Code of 1986, as amended.
3.12 "Effective Date" shall mean the date of Board approval of the Plan
on April 17, 1997.
3.14 "Participant" means a Non-employee Director who receives a Plan
Share Award under the Plan.
3.15 "Plan Shares" means shares of Common Stock awarded to a
Participant pursuant to the Plan.
3.16 "Plan Share Award" or "Award" means a right granted to a
Participant under this Plan to earn or to receive Plan Shares.
3.17 "Plan Share Reserve" means the shares of Common Stock authorized
for issuance in accordance with the Plan.
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3.18 "Savings Bank" means Little Falls Bank, and any successor
corporation thereto.
3.19 "Subsidiary" means the subsidiaries of the Company.
Article IV
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ADMINISTRATION OF THE PLAN
4.01 Role of the Committee. The Plan shall be administered and
interpreted by the Board of Directors of the Company or a Committee appointed by
said Board, which shall consist of not less than two Non-employee members of the
Board, which shall have all of the powers allocated to it in this and other
sections of the Plan. All persons designated as members of the Committee shall
be "Non-Employee Directors" within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended ("1934 Act"). The interpretation and
construction by the Committee of any provisions of the Plan or of any Plan Share
Award granted hereunder shall be final and binding. 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. The Committee shall report its actions and decisions with respect to
the Plan to the Board at appropriate times, but in no event less than one time
per calendar year.
4.02 Role of the Board. The members of the Committee shall be appointed
or approved by, and will serve at the pleasure of the Board. The Board may in
its discretion from time to time remove members from, or add members to, the
Committee. The Board shall have all of the powers allocated to it in this and
other sections of the Plan, may take any action under or with respect to the
Plan which the Committee is authorized to take, and may reverse or override any
action taken or decision made by the Committee under or with respect to the
Plan, provided, however, that the Board may not revoke any Plan Share Award
already made except as provided in Section 7.01(a) herein.
4.03 Limitation on Liability. No member of the Board or the Committee
shall be liable for any determination made in good faith with respect to the
Plan or any Plan Share Awards granted. If a member of the Board or 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 any reason of anything done or not done by him in such
capacity under or with respect to the Plan, the Company shall indemnify such
member against expenses (including attorney's fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him or her in
connection with such action, suit or proceeding if he or she acted in good faith
and in a manner he or she reasonably believed to be in the best interests of the
Company, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
Article V
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PLAN SHARE RESERVE
5.01 Plan Share Reserve. The Committee is authorized to deliver Plan
Share Awards representing up to 25,000 shares of Common Stock of the Company.
Such Awards may be from authorized, but unissued shares, treasury shares or
shares purchased by the Company for such purposes.
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5.02 Effect of Allocations, Returns and Forfeitures Upon Plan Share
Reserves. Upon the allocation of Plan Share Awards or the decision of the
Committee to return Plan Shares to the Company, the Plan Share Reserve shall be
reduced by the number of Shares subject to the Awards so allocated or returned.
Any Shares subject to an Award which may not be earned because of forfeiture by
the Participant shall be added to the Plan Share Reserve.
Article VI
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ELIGIBILITY; ALLOCATIONS
6.01 Allocations. As of the Effective Date of the Plan, each
Non-employee Director of the Company shall be granted a Plan Share Award under
the Plan consisting of 3,500 shares of Common Stock, subjected to the terms and
conditions specified hereinafter. Additionally, the Committee may make
additional Plan Share Awards under the Plan from time to time, provided that
such Awards in the agggregate do not exceed the limitations specified at Section
5.01.
6.02 Terms of Awards. Such Plan Share Awards shall be earned and
non-forfeitable at the rate of one-fifth as of the one-year anniversary of the
Effective Date and an additional one-fifth following each of the next four
successive years during such periods of service as a Director or Director
Emeritus. Further, such Plan Share Award shall be immediately 100% earned and
non-forfeitable in the event of the death or Disability of such Director or
Director Emeritus, or upon a Change in Control of the Company. Subsequent to the
Effective Date, Plan Share Awards may be awarded to newly elected or appointed
Directors of the Company by the Committee, provided that in no event shall
Awards to any individual Non-employee Director exceed 20% of the aggregate
authorized Plan Share Reserve. All actions by the Committee shall be deemed
final, except to the extent that such actions are revoked by the Board.
6.03 Form of Allocation. As promptly as practicable after a
determination is made that a Plan Share Award is to be made, the Committee shall
notify the Participant in writing of the grant of the Award, the number of Plan
Shares covered by the Award, and the terms upon which the Plan Shares subject to
the award may be earned. The date on which the Committee makes its award
determination or the date the Committee so notifies the Participant shall be
considered the date of grant of the Plan Share Awards as determined by the
Committee. The Committee shall maintain records as to all grants of Plan Share
Awards under the Plan.
6.04 Allocations Not Required. Notwithstanding anything to the
contrary, no Director shall have any right or entitlement to receive a Plan
Share Award hereunder, such Awards being at the total discretion of the
Committee and the Board. The Committee may, with the approval of the Board (or,
if so directed by the Board) return all Common Stock in the Plan Share Reserve
to the Company at any time, and cease issuing Plan Share Awards.
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Article VII
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FORFEITURES; DIVIDENDS; DISTRIBUTION OF PLAN SHARES; VOTING RIGHTS
7.01 Forfeitures.
(a) Revocation for Misconduct. Notwithstanding anything herein to the
contrary, the Board may, by resolution, immediately revoke, rescind and
terminate any Plan Share Award, or portion thereof, previously awarded under
this Plan, to the extent such Plan Shares have not been deemed earned and non-
forfeitable in the case of a Participant who is discharged from the employ or
service of the Company, Savings Bank or a Subsidiary for Cause, or who is
discovered after termination of employment or service to have engaged in conduct
that would have justified termination for Cause. A determination of Cause shall
be made by the Board within its sole discretion.
(b) Exception for Terminations Due to Death or Disability. All Plan
Shares subject to a Plan Share Award held by a Participant whose service with
the Company shall terminate due to death or Disability, shall be deemed 100%
earned and nonforfeitable as of the Participant's last date of service with the
Company.
(c) Exception for Termination after a Change in Control. All Plan
Shares subject to a Plan Share Award held by a Participant shall be deemed to be
immediately 100% earned and non- forfeitable in the event of a Change in Control
of the Company or Savings Bank.
7.02 Payment of Dividends. A holder of a Plan Share Award, whether or
not earned, shall also be entitled to receive an amount equal to any cash
dividends declared and paid with respect to shares of Common Stock represented
by such Plan Share Award commencing on the date the Plan Shares are awarded.
Such cash dividend amounts shall be paid directly to the Participant.
7.03 Distribution of Plan Shares.
(a) Timing of Distributions: General Rule. Plan Shares shall be
distributed to the Participant or his Beneficiary, as the case may be, as soon
as practicable after the date of grant of the Plan Share Award; provided that
such Common Stock representing such Plan Shares shall contain a restrictive
legend detailing the applicable limitations of such shares with respect to
transfer and forfeiture.
(b) Form of Distribution. All Plan Shares, together with any shares
representing stock dividends, shall be distributed in the form of Common Stock.
One share of Common Stock shall be given for each Plan Share earned.
(c) Regulatory Exceptions. No Plan Shares shall be distributed,
however, unless and until all of the requirements of all applicable law and
regulation shall have been fully complied with.
7.04 Voting of Plan Shares. The Participant shall be entitled to direct
the voting of all Common Stock represented by a Plan Share Award once
distributed.
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Article VIII
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MISCELLANEOUS
8.01 Adjustments for Capital Changes. The aggregate number of Plan
Shares available for issuance pursuant to the Plan Share Awards and the number
of Shares to which any Plan Share Award relates 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 the Plan resulting
from any split, subdivision or consolidation of the Common Stock or other
capital adjustment, change or exchange of the Common Stock, or other increase or
decrease in the number or kind of shares effected without receipt or payment of
consideration by the Company.
8.02 Amendment and Termination of the Plan. The Board may, by
resolution, at any time, amend or terminate the Plan.
8.03 Nontransferable. Plan Share Awards and rights to Plan Shares shall
not be transferable by a Participant prior to being deemed 100% earned and
non-forfeitable, except in the event of death of the Participant.
8.04 No Employment Rights. Neither the Plan nor any grant of a Plan
Share Award or Plan Shares hereunder nor any action taken by the Committee or
the Board in connection with the Plan shall create any right, either express or
implied, on the part of any Participant to continue in the employ or service of
the Company, Savings Bank, or a Subsidiary thereof.
8.05 Voting and Dividend Rights. No Participant shall have any voting
or dividend rights of a stockholder with respect to any Plan Shares covered by a
Plan Share Award prior to the time said Plan Shares are actually distributed to
such Participant.
8.06 Governing Law. The Plan shall be governed by and construed under
the laws of the State of New Jersey, except to the extent that Federal Law shall
be deemed applicable.
8.07 Effective Date. The Plan shall be effective as of April 17, 1997.
8.08 Term of Plan. This Plan shall remain in effect until the earlier
of (i) termination by the Board, (ii) the distribution of all shares of Common
Stock authorized under the Plan Share Award, or (iii) 10 years from the
Effective Date. Termination of the Plan shall not effect any Plan Share Awards
previously granted, and such Plan Share Awards shall remain valid and in effect
until they have been earned and paid, or by their terms expire or are forfeited.
8.09 Non-Trust Status of Plan. It is intended that benefits under the
Plan shall be awarded in the form of Common Stock of the Company. Prior to the
time of delivery of such Common Stock to a Participant, no assets of the Company
shall be deemed to constitute a trust hereunder.
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