EXHIBIT 10.2
THE FIDELITY DEPOSIT AND DISCOUNT BANK
1998 STOCK INCENTIVE PLAN
THE FIDELITY DEPOSIT AND DISCOUNT BANK
1998 STOCK INCENTIVE PLAN
1. Purpose. The purpose of this Stock Incentive Plan (the "Plan") is to
advance the development, growth and financial condition of The Fidelity
Deposit and Discount Bank (the "Bank") and each subsidiary thereof, as
defined in Section 424 of the Internal Revenue Code of 1986, as amended
(the "Code"), by providing incentives through participation in the
appreciation of the common stock of the Bank to secure, retain and
motivate personnel who may be responsible for the operation and for
management of the affairs of the Bank and any subsidiary now or hereafter
existing ("Subsidiary").
2. Term. The Plan shall become effective as of the date it is duly approved
by the shareholders of the Bank. Any and all options and rights awarded
under the Plan (the "Awards") before it is approved by the Bank's
shareholders shall be conditioned upon, and may not be exercised before,
receipt of shareholder approval, and shall lapse upon failure to receive
such approval. Unless previously terminated by the Board, the Plan shall
terminate on, and no options shall be granted after the tenth anniversary
of the effective date of the Plan.
3. Stock. Shares of the Bank's common stock, par value $1.5625 per share (the
"Stock"), that may be issued under the Plan shall not exceed, in the
aggregate, 25,000 shares, as may be adjusted pursuant to Section 16
hereof. Shares may be either authorized and unissued shares, or authorized
shares, issued by and subsequently reacquired by the Bank as treasury
stock. Under no circumstances shall any fractional shares be awarded under
the Plan. Except as may be otherwise provided in the Plan, any Stock
subject to an Award that, for any reason, lapses or terminates prior to
exercise, shall again become available for grant under the Plan. While the
Plan is in effect, the Bank shall reserve and keep available the number of
shares of Stock needed to satisfy the requirements of the Plan. The Bank
shall apply for any requisite governmental authority to issue shares under
the Plan. The Bank's failure to obtain any such governmental authority,
deemed necessary by the Bank's legal counsel for the lawful issuance and
sale of Stock under the Plan, shall relieve the Bank of any duty, or
liability for the failure to issue or sell the Stock.
4. Administration. The ability to control and manage the operation and
administration of the Plan shall be vested in the Board or in a committee
of three or more non-employee members of the Board, selected by the Board
(the "Committee"). The Committee shall have the authority and discretion
to interpret the Plan, to establish, amend and rescind any rules and
regulations relating to the Plan, to determine the terms and provisions of
any agreements made pursuant to the Plan, and to make any and all
determinations that may be necessary or advisable for the administration
of the Plan. Any interpretation of the Plan by the Committee and any
decision made by the Committee under the Plan is final and binding.
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The Committee shall be responsible and shall have full, absolute and
final power of authority to determine what, to whom, when and under what
facts and circumstances Awards shall be made, and the form, number, terms,
conditions and duration thereof, including but not limited to when
exercisable, the number of shares of Stock subject thereto, and the stock
option exercise prices. The Committee shall make all other determinations
and decisions, take all actions and do all things necessary or appropriate
in and for the administration of the Plan. No member of the Committee or
of the Board shall be liable for any decision, determination or action
made or taken in good faith by such person under or with respect to the
Plan or its administration.
5. Awards. Awards may be made under the Plan in the form of: (a) "Qualified
Options" to purchase Stock, which are intended to qualify for certain tax
treatment as incentive stock options under Sections 421 and 422 of the
Code, or (b) "Non-Qualified Options" to purchase Stock, which are not
intended to qualify under Sections 421 through 424 of the Code. More than
one Award may be granted to an eligible person, and the grant of any Award
shall not prohibit the grant of any other Award, either to the same person
or otherwise, or impose any obligation to exercise on the participant. All
Awards and the terms and conditions thereof shall be set forth in written
agreements, in such form and content as approved by the Committee from
time to time, and shall be subject to the provisions of the Plan whether
or not contained in such agreements. Multiple Awards for a particular
person may be set forth in a single written agreement or in multiple
agreements, as determined by the Committee, but in all cases each
agreement for one or more Awards shall identify each of the Awards thereby
represented as a Qualified Option or Non-Qualified Option, as the case may
be.
Unless otherwise stated, in the event that an award of Qualified
Option, or any part thereof, for any reason fails to qualify under
Sections 421 and 422 of the Code, then that award or part thereof shall be
deemed a grant of a Non-Qualified Option.
6. Eligibility. Persons eligible to receive Awards shall be those key
officers and other employees of the Bank and each Subsidiary, as
determined by the Committee. A person's eligibility to receive an Award
shall not confer upon him or her any right to receive an Award. Except as
otherwise provided, a person's eligibility to receive, or actual receipt
of an Award under the Plan shall not limit or affect his or her benefits
under or eligibility to participate in any other incentive or benefit plan
or program of the Bank or of its affiliates.
7. Qualified Options. In addition to other applicable provisions of the Plan,
all Qualified Options and Awards thereof shall be under and subject to the
following terms and conditions:
(a) No Qualified Option shall be awarded more than ten (10) years after
the date the Plan is adopted by the Board or the date the Plan is
approved by the Bank's shareholders, whichever is earlier;
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(b) The time period during which any Qualified Option is exercisable, as
determined by the Committee, shall not commence before the
expiration of six (6) months or continue beyond the expiration of
ten (10) years after the date the Qualified Option is awarded;
(c) If a participant, who was awarded a Qualified Option, ceases to be
employed by the Bank or any Subsidiary for any reason other than his
or her death, the Committee may permit the participant thereafter to
exercise the option during its remaining term for a period of not
more than three (3) months after cessation of employment to the
extent that the Qualified Option was then and remains exercisable,
unless such employment cessation was due to the participant's
disability, as defined in Section 22(e)(3) of the Code, in which
case the three (3) month period shall be twelve (12) months; if the
participant dies while employed by the Bank or a Subsidiary, the
Committee may permit the participant's qualified personal
representatives, or any persons who acquire the Qualified Option
pursuant to his or her Will or laws of descent and distribution, to
exercise the Qualified Option during its remaining term for a period
of not more than twelve (12) months after the participant's death to
the extent that the Qualified Option was then and remains
exercisable; the Committee may impose terms and conditions upon and
for the exercise of a Qualified Option after the cessation of the
participant's employment or his or her death;
(d) The purchase price of Stock subject to any Qualified Option shall
not be less than the Stock's Fair Market Value (pursuant to Section
11 hereof) at the time the Qualified Option is awarded or less than
the Stock's par value; and
(e) Qualified Options may not be sold, transferred or assigned by the
participant except by will or the laws of descent and distribution.
8. Non-Qualified Options. In addition to other applicable provisions of the
Plan, all NonQualified Options and Awards thereof shall be under and
subject to the following terms and conditions:
(a) The time period during which any Non-Qualified Option is exercisable
shall not commence before the expiration of six (6) months or
continue beyond the expiration of ten (10) years after the date the
Non-Qualified Option is awarded;
(b) If a participant, who was awarded a Non-Qualified Option, ceases to
be eligible under the Plan, before lapse or full exercise of the
option, the Committee may permit the participant to exercise the
option during its remaining term, to the extent that the option was
then and remains exercisable, or for such time period and under such
terms and conditions as may be prescribed by the Committee;
(c) The purchase price of a share of Stock subject to any Non-Qualified
Option shall not be less than the Stock's par value; and
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(d) Except as otherwise provided by the Committee, Non-Qualified Stock
Options granted under the Plan are not transferable except as
designated by the participant by Will and the laws of descent and
distribution.
9. Exercise. Except as otherwise provided in the Plan, Awards may be
exercised in whole or in part by giving written notice thereof to the
Secretary of the Bank, or his or her designee, identifying the Award to be
exercised, the number of shares of Stock with respect thereto, and other
information pertinent to exercise of the Award. The purchase price of the
shares of Stock with respect to which an Award is exercised shall be paid
with the written notice of exercise, either in cash or in securities of
the Bank (which has been owned by the optionee for at least six (6) months
prior to the date of exercise), including securities issuable hereunder,
at its then current Fair Market Value (pursuant to Section 11 hereof), or
any combination thereof, as the Committee shall determine. Funds received
by the Bank from the exercise of any Award shall be used for its general
corporate purposes.
The Committee may permit an acceleration of previously established
exercise terms of any Awards as, when, under such facts and circumstances,
and subject to such other or further requirements and conditions as the
Committee may deem necessary or appropriate. In addition:
(a) if the Bank or its shareholders execute an agreement to dispose of
all or substantially all of the Bank's assets or stock by means of
sale, merger, consolidation, reorganization, liquidation or
otherwise, as a result of which the Bank's shareholders, immediately
before the transaction, will not own at least fifty percent (50%) of
the total combined voting power of all classes of voting stock of
the surviving entity (be it the Bank or otherwise) immediately after
the consummation of the transaction, then any and all outstanding
Awards shall immediately become and remain exercisable or, if the
transaction is not consummated, until the agreement relating to the
transaction expires or is terminated, in which case, all Awards
shall be treated as if the agreement was never executed;
(b) if there is an actual, attempted or threatened change in the
ownership of at least twenty-five percent (25%) of all classes of
voting stock of the Bank through the acquisition of, or an offer to
acquire such percentage of the Bank's voting stock by any person or
entity, or persons or entities acting in concert or as a group, and
the acquisition or offer has not been duly approved by the Board; or
(c) if during any period of two (2) consecutive years, the individuals
who at the beginning of such period constituted the Board cease, for
any reason, to constitute at least a majority of the Board, (unless
the election of each director of the Board, who was not a director
of the Board at the beginning of such period, was approved by a vote
of at least two-thirds of the directors then still in office who
were directors at the beginning of such period) thereupon any and
all Awards immediately shall become and remain exercisable.
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10. Withholding. When a participant exercises a stock option awarded under the
Plan, the Bank, in its discretion and as required by law, may require the
participant to remit to the Bank an amount sufficient to satisfy fully any
federal, state and other jurisdictions' income and other tax withholding
requirements prior to the delivery of any certificates for shares of
Stock, at the Committee's discretion remittance may be made in cash,
shares already held by the participant or by the withholding by the Bank
of sufficient shares issuable pursuant to the option to satisfy the
participant's withholding obligation.
11. Value. Where used in the Plan, the "Fair Market Value" of Stock or any
options or rights with respect thereto, including Awards, shall mean and
be determined by (a) the average of the highest and lowest reported sales
prices thereof on the principal established domestic securities exchange
on which listed, and if not listed, then (b) the average of the dealer
"bid" and "ask" prices thereof on the New York over-the-counter market, as
reported by the National Association of Securities Dealers, Inc., in
either case as of the specified or otherwise required or relevant time, or
if not traded as of such specified, required or relevant time, then based
upon such reported sales or "bid" and "ask" prices before and/or after
such time in accordance with pertinent provisions of and principles under
the Code and the regulations promulgated thereunder.
12. Amendment. To the extent permitted by applicable law, the Board may amend,
suspend, or terminate the Plan at any time. The amendment or termination
of this Plan shall not, without the consent of the participants, alter or
impair any rights or obligations under any Award previously granted
hereunder.
From time to time, the Committee may rescind, revise and add to any
of the terms, conditions and provisions of the Plan or of an Award as
necessary or appropriate to have the Plan and any Awards thereunder be or
remain qualified and in compliance with all applicable laws, rules and
regulations, and the Committee may delete, omit or waive any of the terms
conditions or provisions that are no longer required by reason of changes
of applicable laws, rules or regulations, but not limited to, the
provisions of Sections 421 and 422 of the Code, Section 16 of the
Securities Exchange Act of 1934, as amended, (the "1934 Act") and the
rules and regulations promulgated by the Securities and Exchange
Commission. Without limiting the generality of the preceding sentence,
each Qualified Option shall be subject to such other and additional terms,
conditions and provisions as the Committee may deem necessary or
appropriate in order to qualify as a Qualified Option under Section 422 of
the Code, including, but not limited to, the following provisions:
(a) At the time a Qualified Option is awarded, the aggregate Fair Market
Value of the Stock subject thereto and of any Stock or other capital
stock with respect to which incentive stock options qualifying under
Sections 421 and 422 of the Code are exercisable for the first time
by the participant during any calendar year under the Plan and any
other plans of the Bank or its affiliates, shall not exceed
$100,000.00; and
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(b) No Qualified Option, shall be awarded to any person if, at the time
of the Award, the person owns shares of the stock of the Bank
possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Bank or its affiliates, unless,
at the time the Qualified Option is awarded, the exercise price of
the Qualified Option is at least one hundred and ten percent (110%)
of the Fair Market Value of the Stock on the date of grant and the
option, by its terms, is not exercisable after the expiration of
five (5) years from the date it is awarded.
13. Continued Employment. Nothing in the Plan or any Award shall confer upon
any participant or other persons any right to continue in the employ of,
or maintain any particular relationship with, the Bank or its affiliates,
or limit or affect any rights, powers or privileges that the Bank or its
affiliates may have to supervise, discipline and terminate the
participant. However, the Committee may require, as a condition of making
and/or exercising any Award, that a participant agree to, and in fact
provide services, either as an employee or in another capacity, to or for
the Bank or any Subsidiary for such time period as the Committee may
prescribe. The immediately preceding sentence shall not apply to any
Qualified Option, to the extent such application would result in
disqualification of the option under Sections 421 and 422 of the Code.
14. General Restrictions. If the Committee or Board determines that it is
necessary or desirable to: (a) list, register or qualify the Stock subject
to the Award, or the Award itself, upon any securities exchange or under
any federal or state securities or other laws, (b) obtain the approval of
any governmental authority, or (c) enter into an agreement with the
participant with respect to disposition of any Stock (including, without
limitation, an agreement that, at the time of the participant's exercise
of the Award, any Stock thereby acquired is and will be acquired solely
for investment purposes and without any intention to sell or distribute
the Stock), then such Award shall not be consummated in whole or in part
unless the listing, registration, qualification, approval or agreement, as
the case may be, shall have been appropriately effected or obtained to the
satisfaction of the Committee and legal counsel for the Bank.
15. Rights. Except as otherwise provided in the Plan, participants shall have
no rights as a holder of the Stock unless and until one or more
certificates for the shares of Stock are issued and delivered to the
participant.
16. Adjustments. In the event that the shares of common stock of the Bank, as
presently constituted, shall be changed into or exchanged for a different
number or kind of shares of common stock or other securities of the Bank
or of other securities of the Bank or of another corporation or entity
(whether by reason of merger, consolidation, recapitalization,
reclassification, split-up, combination of shares or otherwise) or if the
number of such shares of common stock shall be increased through the
payment of a stock dividend, stock split or similar transaction, then,
there shall be substituted for or added to each share of common stock of
the Bank that was theretofore appropriated, or which thereafter may become
subject to an option under the Plan, the number and kind of shares of
common stock or other
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securities into which each outstanding share of the common stock of the
Bank shall be so changed or for which each such share shall be exchanged
or to which each such shares shall be entitled, as the case may be. Each
outstanding Award shall be appropriately amended as to price and other
terms, as may be necessary to reflect the foregoing events.
If there shall be any other change in the number or kind of the
outstanding shares of the common stock of the Bank, or of any common stock
or other securities in which such common stock shall have been changed, or
for which it shall have been exchanged, and if a majority of the
disinterested members of the Committee shall, in its sole discretion,
determine that such change equitably requires an adjustment in any Award
that was theretofore granted or that may thereafter be granted under the
Plan, then such adjustment shall be made in accordance with such
determination.
The grant of an Award under the Plan shall not affect in any way the
right or power of the Bank to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, to merge,
to consolidate, to dissolve, to liquidate or to sell or transfer all or
any part of its business or assets.
Fractional shares resulting from any adjustment in Awards pursuant
to this Section 16 may be settled as a majority of the disinterested
members of the Board of Directors or of the Committee, as the case may be,
shall determine.
To the extent that the foregoing adjustments relate to common stock
or securities of the Bank, such adjustments shall be made by a majority of
the members of the Board, whose determination in that respect shall be
final, binding and conclusive. Notice of any adjustment shall be given by
the Bank to each holder of an Award that is so adjusted.
17. Forfeiture. Notwithstanding anything to the contrary in this Plan, if the
Committee finds, after full consideration of the facts presented on behalf
of the Bank and the involved participant, that he or she has been engaged
in fraud, embezzlement, theft, commission of a felony, or dishonesty in
the course of his or her employment by the Bank or by any Subsidiary and
such action has damaged the Bank or the Subsidiary, as the case may be, or
that the participant has disclosed trade secrets of the Bank or its
affiliates, the participant shall forfeit all rights under and to all
unexercised Awards, and under and to all exercised Awards under which the
Bank has not yet delivered payment or certificates for shares of Stock (as
the case may be), all of which Awards and rights shall be automatically
canceled. The decision of the Committee as to the cause of the
participant's discharge from employment with the Bank or any Subsidiary
and the damage thereby suffered shall be final for purposes of the Plan,
but shall not affect the finality of the participant's discharge by the
Bank or Subsidiary for any other purposes. The preceding provisions of
this paragraph shall not apply to any Qualified Option to the extent such
application would result in disqualification of the option as an incentive
stock option under Sections 421 and 422 of the Code.
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18. Indemnification. In and with respect to the administration of the Plan,
the Bank shall indemnify each member of the Committee and/or of the Board,
each of whom shall be entitled, without further action on his or her part,
to indemnification from the Bank for all damages, losses, judgments,
settlement amounts, punitive damages, excise taxes, fines, penalties,
costs and expenses (including without limitation attorneys' fees and
disbursements) incurred by the member in connection with any threatened,
pending or completed action, suit or other proceedings of any nature,
whether civil, administrative, investigative or criminal, whether formal
or informal, and whether by or in the right or name of the Bank, any class
of its security holders, or otherwise, in which the member may be or may
have been involved, as a party or otherwise, by reason of his or her being
or having been a member of the Committee and/or of the Board, whether or
not he or she continues to be a member of the Committee or of the Board.
The provisions, protection and benefits of this Section 18 shall apply and
exist to the fullest extent permitted by applicable law to and for the
benefit of all present and future members of the Committee and/or of the
Board and their respective heirs, personal and legal representatives,
successors and assigns, in addition to all other rights that they may have
as a matter of law, by contract, or otherwise, except (a) to the extent
there is entitlement to insurance proceeds under insurance coverages
provided by the Bank on account of the same matter or proceeding for which
indemnification hereunder is claimed, or (b) to the extent there is
entitlement to indemnification from the Bank, other than under this
Section 18, on account of the same matter or proceeding for which
indemnification hereunder is claimed.
19. Miscellaneous. (a) Any reference contained in this Plan to particular
section or provision of law, rule or regulation, including but not limited
to the Code and the 1934 Act, shall include any subsequently enacted or
promulgated section or provision of law, rule or regulation, as the case
may be. With respect to persons subject to Section 16 of the 1934 Act,
transactions under this Plan are intended to comply with all applicable
conditions of Section 16 and the rules and regulations promulgated
thereunder, or any successor rules and regulations that may be promulgated
by the Securities and Exchange Commission, and to the extent any provision
of this Plan or action by the Committee fails to so comply, it shall be
deemed null and void, to the extent permitted by applicable law and deemed
advisable by the Committee.
(b) Where used in this Plan: the plural shall include the singular, and
unless the context otherwise clearly requires, the singular shall
include the plural; and the term "affiliates" shall mean each and
every Subsidiary and any parent of the Bank.
(c) The captions of the numbered Sections contained in this Plan are for
convenience only, and shall not limit or affect the meaning,
interpretation or construction of any of the provisions of the Plan.
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