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EXHIBIT 99.1
THREE RIVERS FINANCIAL CORPORATION
STOCK OPTION AND INCENTIVE PLAN
1. PURPOSE OF THE PLAN.
The purpose of this Three Rivers Financial Corporation Stock Option and
Incentive Plan (the "Plan") is to advance the interests of the Company through
providing select key Employees and Directors of the Bank, the Company, and
their Affiliates with the opportunity to acquire Shares. By encouraging such
stock ownership, the Company seeks to attract, retain and motivate the best
available personnel for positions of substantial responsibility and to provide
additional incentive to Directors and key Employees of the Company or any
Affiliate to promote the success of the business. In accordance with
regulations of the Office of Thrift Supervision ("OTS"), no individual employee
of the Company or the Bank may receive more than 25% of the available Awards
under this Plan. In addition, directors who are not employees may not receive
more than 5% individually or 30% in the aggregate of the available Awards under
this Plan.
2. DEFINITIONS.
As used herein, the following definitions shall apply.
(a) "Affiliate" shall mean any "parent corporation" or "subsidiary
corporation" of the Company, as such terms are defined in Section 424(e) and
(f), respectively, of the Code, and any other subsidiary corporations of a
parent corporation of the Company.
(b) "Agreement" shall mean a written agreement entered into in accordance
with Paragraph 5(c).
(c) "Awards" shall mean, collectively, Options and SARs, unless the
context clearly indicates a different meaning.
(d) "Bank" shall mean First Savings Bank, A Federal Savings Bank.
(e) "Board" shall mean the Board of Directors of the Company.
(f) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(g) "Committee" shall mean the Stock Option Committee appointed by the
Board in accordance with Paragraph 5(a) hereof.
(h) "Common Stock" shall mean the common stock, par value $.01 per share,
of the Company.
(i) "Company" shall mean Three Rivers Financial Corporation.
(j) "Continuous Service" shall mean the absence of any interruption or
termination of service as an Employee or Director of the Company or an
Affiliate. Continuous Service shall not be considered interrupted in the case
of sick leave, military leave or any other leave of absence approved by the
Company or in the case of transfers between payroll locations of the Company or
between the Company, an Affiliate or a successor.
(k) "Control" shall have the meaning ascribed to such term in 12 C.F.R.,
Part 574.
(l) "Director" shall mean any member of the Board, and any member of the
board of directors of any Affiliate that the Board has by resolution designated
as being eligible for participation in this Plan.
(m) "Disinterested Person" shall mean any member of the Board who, at the
time discretion under the Plan is exercised, is a "disinterested person" within
the meaning of Rule 16b-3.
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(n) "Effective Date" shall mean the date specified in Paragraph 15 hereof.
(o) "Employee" shall mean any person employed by the Company, the Bank or
an Affiliate who is an employee for federal tax purposes.
(p) "Exercise Price" shall mean the price per Optioned Share at which an
Option may be exercised.
(q) "ISO" means an option to purchase Common Stock which meets the
requirements set forth in the Plan, and which is intended to be and is
identified as an "incentive stock option" within the meaning of Section 422 of
the Code.
(r) "Market Value" shall mean the fair market value of the Common Stock,
as determined under Paragraph 7(b) hereof.
(s) "Measurement Price" shall mean the price of the Common Stock to be
utilized to determine the extent of stock appreciation. The Measurement Price
as to any particular SAR shall not be less than the market value of the
Optioned Shares on the date of grant.
(t) "Non-ISO" means an option to purchase Common Stock which meets the
requirements set forth in the Plan but which is not intended to be and is not
identified as an ISO.
(u) "Option" means an ISO and/or a Non-ISO.
(v) "Optioned Shares" shall mean Shares subject to an Award granted
pursuant to this Plan.
(w) "Participant" shall mean any key Employee or other person who receives
an Award pursuant to the Plan.
(x) "Plan" shall mean this Three Rivers Financial Corporation Stock Option
and Incentive Plan.
(y) "Rule 16b-3" shall mean Rule 16b-3 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended.
(z) "Share" shall mean one share of Common Stock.
(aa) "SAR" (or "Stock Appreciation Right") means a right to receive the
appreciation in value, or a portion of the appreciation in value, of a
specified number of shares of Common Stock.
3. TERM OF THE PLAN AND AWARDS.
(a) Term of the Plan. The Plan shall continue in effect for a term of 10
years from the Effective Date or the date the Plan is adopted by the Board
(whichever period ends earlier), unless sooner terminated pursuant to Paragraph
17 hereof. No Award shall be granted under the Plan after such ten year term.
(b) Term of Awards. The term of each Award granted under the Plan shall
be established by the Committee, but shall not exceed 10 years; provided,
however, that in the case of an Employee who owns Shares representing more than
10% of the outstanding Common Stock at the time an ISO is granted, the term of
such ISO shall not exceed five years, subject to the provisions of Section 8(e)
hereof.
4. SHARES SUBJECT TO THE PLAN.
(a) General Rule. Except as otherwise required by the provisions of
Paragraph 12 hereof, the aggregate number of Shares deliverable pursuant to
Awards shall not exceed 85,962 Shares, which equals 10% of the Shares issued in
the Bank's conversion from mutual-to-stock form. Such Shares may either be
authorized but unissued Shares or Shares held in treasury. If any Awards
should expire, become unexercisable, or be forfeited for any reason without
having been exercised
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or become vested in full, the Optioned Shares shall, unless the Plan shall have
been terminated, be available for the grant of additional Awards under the
Plan.
(b) Special Rule for SARs. The number of Shares with respect to which a
SAR is granted, but not the number of Shares which the Company delivers or
could deliver to an Employee or individual upon exercise of a SAR, shall be
charged against the aggregate number of Shares remaining available under the
Plan; provided, however, that in the case of a SAR granted in conjunction with
an option, under circumstances in which the exercise of the SAR results in
termination of the Option and vice versa, only the number of Shares subject to
the Option shall be charged against the aggregate number of Shares remaining
available under the Plan. The Shares involved in an Option as to which option
rights have terminated by reason of the exercise of a related SAR, as provided
in Paragraph 10 hereof, shall not be available for the grant of further Options
under the Plan.
5. ADMINISTRATION OF THE PLAN.
(a) Composition of the Committee. The Plan shall be administered by the
Committee, which shall consist of not less than three (3) members of the Board
who are Disinterested Persons. Members of the Committee shall serve at the
pleasure of the Board. In the absence at any time of a duly appointed
Committee, the Plan shall be administered by those members of the Board who are
Disinterested Persons.
(b) Powers of the Committee. Except as limited by the express provisions
of the Plan or by resolutions adopted by the Board, the Committee shall have
sole and complete authority and discretion, subject to compliance with
applicable OTS regulations (i) to select Participants and grant Awards, (ii) to
determine the form and content of Awards to be issued in the form of Agreements
under the Plan, (iii) to interpret the Plan, (iv) to prescribe, amend and
rescind rules and regulations relating to the Plan, and (v) to make other
determinations necessary or advisable for the administration of the Plan. The
Committee shall have and may exercise such other power and authority as may be
delegated to it by the Board from time to time. A majority of the entire
Committee shall constitute a quorum and the action 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 deemed the
action of the Committee.
(c) Agreement. Each Award shall be evidenced by a written agreement
containing such provisions as may be approved by the Committee. Each such
Agreement shall constitute a binding contract between the Company and the
Participant, and every Participant, upon acceptance of such Agreement, shall be
bound by the terms and restrictions of the Plan and of such Agreement. The
terms of each such Agreement shall be in accordance with the Plan, but each
Agreement may include such additional provisions and restrictions determined by
the Committee, in its discretion, subject to compliance with applicable OTS
regulations, provided that such additional provisions and restrictions are not
inconsistent with the terms of the Plan. In particular, the Committee shall
set forth in each Agreement (i) the Exercise Price of an Option or SAR, (ii)
the number of Shares subject to, and the expiration date of, the Award, (iii)
the manner, time and rate (cumulative or otherwise) of exercise or vesting of
such Award, (iv) the restrictions, if any, to be placed upon such Award, or
upon Shares which may be issued upon exercise of such Award, and (v) whether
the Option is intended to be an ISO or a Non-ISO.
The Chairman of the Committee and such other Directors and officers as
shall be designated by the Committee are hereby authorized to execute
Agreements on behalf of the Company and to cause them to be delivered to the
recipients of Awards.
(d) Effect of the Committee's Decisions. All decisions, determinations
and interpretations of the Committee shall be final and conclusive on all
persons affected thereby.
(e) Indemnification. In addition to such other rights of indemnification
as they may have, the members of the Committee shall be indemnified by the
Company in connection with any claim, action, suit or proceeding relating to
any action taken or failure to act under or in connection with the Plan or any
Award, granted hereunder to the full extent provided for under the Company's
governing instruments with respect to the indemnification of Directors.
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6. GRANT OF OPTIONS.
(a) General Rule. Only key Employees shall be eligible to receive
discretionary grants of Options pursuant to the Plan. Non-Employee Directors
shall be ineligible to receive discretionary grants of Options (or other
Awards), but shall receive formula grants pursuant to Paragraph 9 hereof.
(b) Automatic Grants to Certain Key Employees. On the Effective Date,
each of the following key Employees shall receive an Option (in the form of an
ISO, to the extent permissible) to purchase the number of Shares listed below,
at an Exercise Price per Share equal to the Market Value of a Share on the
Effective Date; provided that such grant shall not be made to an Employee whose
Continuous Service terminates on or before the Effective Date:
Percentage of Shares
Optionee Reserved under Paragraph 4(a)
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G. Richard Gatton 23.1%
Martha Romig 15.4%
R. Orville Poling 10.5%
William Cody 8.5%
Susan Hotovy 1.5%
With respect to each of the above-named Optionees, the Option granted to
the optionee hereunder (i) shall become vested and exercisable, on a cumulative
basis, with respect to 20% of the Optioned Shares upon each of the first five
anniversary dates of the date of grant, provided that vesting shall not occur
on a particular date if the Optionee's Continuous Service has terminated on or
before such date, (ii) shall have a term of 10 years from the date of the
Award, and (iii) shall be subject to the general rule set forth in Paragraph
8(c) with respect to the effect of an optionee's termination of Continuous
Service on the Optionee's right to exercise his Options.
(c) Special Rules for ISOs. The aggregate Market Value, as of the date
the option is granted, of the Shares with respect to which ISOs are exercisable
for the first time by an Employee during any calendar year (under all incentive
stock option plans, as defined in Section 422 of the Code, of the Company or
any present or future Parent or Subsidiary of the Company) shall not exceed
$100,000. Notwithstanding the foregoing, the Committee may grant Options in
excess of the foregoing limitations, in which case such Options granted in
excess of such limitation shall be Options which are Non-ISOs.
7. EXERCISE PRICE FOR OPTIONS AND MEASUREMENT PRICE FOR SARS.
(a) Limits on Committee Discretion. The Exercise Price as to any
particular Option and the Measurement Price for any particular SAR shall not be
less than 100% of the Market Value of the Optioned Shares on the date of grant
without taking into account any restrictions on the Optioned Shares. In the
case of an Employee who owns Shares representing more than 10% of the Company's
outstanding Shares of Common Stock at the time an ISO is granted, the Exercise
Price shall not be less than 110% of the Market Value of the Optioned Shares at
the time the ISO is granted.
(b) Standards for Determining Exercise Price or Measurement Price. If the
Common Stock is listed on a national securities exchange (including the NASDAQ
National Market or Small Cap System) on the date in question, then the Market
Value per Share shall be the average of the highest and lowest selling price on
such exchange on such date, or if there were no sales on such date, then the
Exercise Price or Measurement Price shall be the mean between the bid and asked
price on such date. If the Common Stock is traded otherwise than on a national
securities exchange on the date in question, then the Market value per Share
shall be the mean between the bid and asked price on such date, or, if there is
no bid and asked price on such date, then on the next prior business day on
which there was a bid and asked price. If no such bid and asked price is
available, then the Market Value per Share shall be its fair market value as
determined by the Committee, in its sole and absolute discretion.
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8. EXERCISE OF OPTIONS.
(a) Generally. Subject to (e) below, any Option granted hereunder shall
be exercisable at such times and under such conditions as shall be permissible
under the terms of the Plan and of the Agreement granted to a Participant. An
Option may not be exercised for a fractional Share.
(b) Procedure for Exercise. A Participant may exercise Options, subject to
provisions relative to its termination and limitations on its exercise, only by
(1) written notice of intent to exercise the option with respect to a specified
number of Shares, and (2) payment to the Company (contemporaneously with
delivery of such notice) in cash, in Common Stock, or a combination of cash and
Common Stock, of the amount of the Exercise Price for the number of Shares with
respect to which the option is then being exercised. Each such notice (and
payment where required) shall be delivered, or mailed by prepaid registered or
certified mail, addressed to the Treasurer of the Company at the Company's
executive offices. Common Stock utilized in full or partial payment of the
Exercise Price for options shall be valued at its Market Value at the date of
exercise.
(c) Period of Exercisability. Except to the extent otherwise provided in
more restrictive terms of an Agreement, an Option may be exercised by a
Participant only with respect to the vested portion of such Option and only
while he is an Employee or Director and has maintained Continuous Service from
the date of the grant of the Option, or within three months after termination
of such Continuous Service (but not later than the date on which the Option
would otherwise expire), except if the Employee's or Director's Continuous
Service terminates by reason of:
(1) "Just Cause" which for purposes hereof shall have the
meaning set forth in any unexpired employment agreement between the
Participant and the Bank and/or the Company (and, in the absence of
any such agreement, shall mean termination because of the
Employee's or Director's personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties, willful violation of
any law, rule or regulation (other than traffic violations or
similar offenses) or final cease-and-desist order, then the
Participant's rights to exercise such Option shall expire on the
date of such termination;
(2) death, then all Options of the deceased Participant shall
become immediately exercisable and may be exercised within two
years from the date of his death (but not later than the date on
which the Option would otherwise expire) by the personal
representatives of his estate or person or persons to whom his
rights under such Option shall have passed by will or by laws of
descent and distribution;
(3) Permanent and Total Disability (as such term is defined in
Section 22(e)(3) of the Code), then all Options of the disabled
Participant shall become immediately exercisable and may be
exercised within one year from the date of such Permanent and Total
Disability, but not later than the date on which the Option would
otherwise expire.
(d) Effect of the Committee's Decisions. The Committee's determination
whether a Participant's Continuous Service has ceased, and the effective date
thereof, shall be final and conclusive on all persons affected thereby.
(e) No Option may be exercised prior to the first anniversary date of the
grant of such Option, at which time it may become exercisable with respect to
no more than 20% of the Optioned Shares. On each anniversary date of the
Option grant thereafter, the Option may become exercisable with respect to no
more than an additional 20% of the Optioned Shares. Vesting shall cease
immediately upon the termination of employment or directorship of an optionee.
The foregoing vesting schedule is the most rapid vesting permitted under the
Plan, except in the case of death or disability (which shall be governed by
Paragraphs 8(c)(2) and (3) above).
9. GRANTS OF OPTIONS TO NON-EMPLOYEE DIRECTORS
(a) Automatic Grants. Notwithstanding any other provisions of this Plan,
each Director who is not an Employee but is a Director on the Effective Date
shall receive, on said date, Non-ISOs to purchase 5% of the number of Shares
reserved for issuance under Paragraph 4(a) of the Plan.
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Such Non-ISOs shall have an Exercise Price per Share equal to the Market
Value of a Share on the date of grant. Each Director who joins the Board after
the Effective Date and who is not then an Employee shall receive, on the date
of joining the Board, Non-ISOs to purchase 5% of the Shares reserved under
Paragraph 4(a) of the Plan, at an Exercise Price per Share equal to its Market
Value on the date of grant.
(b) Terms of Exercise. Options received under the provisions of this
Paragraph may be exercised in accordance with Paragraph 8 above.
10. SARS (STOCK APPRECIATION RIGHTS)
(a) Granting of SARs. In its sole discretion, subject to compliance with
applicable OTS regulations, the Committee may from time to time grant SARs to
Employees either in conjunction with, or independently of, any Options granted
under the Plan. A SAR granted in conjunction with an Option may be an
alternative right wherein the exercise of the Option terminates the SAR to the
extent of the number of shares purchased upon exercise of the Option and,
correspondingly, the exercise of the SAR terminates the Option to the extent of
the number of Shares with respect to which the SAR is exercised.
Alternatively, a SAR granted in conjunction with an Option may be an additional
right wherein both the SAR and the Option may be exercised. A SAR may not be
granted in conjunction with an ISO under circumstances in which the exercise of
the SAR affects the right to exercise the ISO or vice versa, unless the SAR, by
its terms, meets all of the following requirements:
(1) The SAR will expire no later than the ISO;
(2) The SAR may be for no more than the difference between the
Exercise Price of the ISO and the Market Value of the Shares
subject to the ISO at the time the SAR is exercised;
(3) The SAR is transferable only when the ISO is transferable,
and under the same conditions;
(4) The SAR may be exercised only when the ISO may be
exercised; and
(5) The SAR may be exercised only when the Market Value of the
Shares subject to the ISO exceeds the Exercise Price of the ISO.
(b) Timing of Exercise. Any election by a Participant to exercise SARs
shall be made during the period beginning on the 3rd business day following the
release for publication of quarterly or annual financial information and ending
on the 12th business day following such date. This condition shall be deemed
to be satisfied when the specified financial data is first made publicly
available. In no event, however, may a SAR be exercised within the six-month
period following the date of its grant.
The provisions of Paragraphs 8(c) and 8(e) regarding the period of
exercisability and vesting of Options is incorporated by reference herein, and
shall determine the period of exercisability and vesting of SARs.
(c) Exercise of SARs. A SAR granted hereunder shall be exercisable at
such times and under such conditions as shall be permissible under the terms of
the Plan and of the Agreement granted to a Participant, provided that a SAR may
not be exercised for a fractional Share. Upon exercise of a SAR, the
Participant shall be entitled to receive, without payment to the Company except
for applicable withholding taxes, an amount equal to the excess of (or, in the
discretion of the Committee if provided in the Agreement, a portion of) the
excess of the then aggregate Market Value of the number of Optioned Shares with
respect to which the Participant exercises the SAR, over the aggregate
Measurement Price of such number of Optioned Shares. This amount shall be
payable by the Company, in the discretion of the Committee, in cash or in
Shares valued at the then Market Value thereof, or any combination thereof.
(d) Procedure for Exercising SARs. To the extent not inconsistent
herewith, the provisions of Paragraph 8(b) as to the procedure for exercising
Options are incorporated by reference, and shall determine the procedure for
exercising SARs.
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11. CHANGE IN CONTROL.
The individual agreements concerning Awards under this Plan or other
agreements between Participants and the Company and/or the Bank may provide
restrictions on Awards in the case of a change in Control in order to avoid
adverse tax results under Section 280G and/or Section 4999 of the Code.
12. EFFECT OF CHANGES IN COMMON STOCK SUBJECT TO THE PLAN.
(a) Recapitalizations; Stock Splits, Etc. The number and kind of shares
reserved for issuance under the Plan, and the number and kind of shares subject
to outstanding Awards (and the Exercise Price thereof in the case of Options
and the Measurement Price in the case of SARs), shall be proportionately
adjusted for any increase, decrease, change or exchange of Shares for a
different number or kind of shares or other securities of the Company which
results from a merger, consolidation, recapitalization, reorganization,
reclassification, stock dividend, split-up, combination of shares, or similar
event in which the number or kind of shares is changed without the receipt or
payment of consideration by the Company.
(b) Transactions in which the Company Is Not the Surviving Entity.
Subject to Paragraph 11 hereof, in the event of (i) the liquidation or
dissolution of the Company, (ii) a merger or consolidation in which the Company
is not the surviving entity, or (iii) the sale or disposition of all or
substantially all of the Company's assets (any of the foregoing to be referred
to herein as a "Transaction"), all outstanding Awards shall be surrendered.
With respect to each Award so surrendered as to which the holder has become
vested, the Committee shall in its sole and absolute discretion, subject to
compliance with applicable OTS regulations, determine whether the holder of the
vested surrendered Award shall receive:
(1) for each Share then subject to an outstanding Award the
number and kind of shares into which each outstanding Share (other
than Shares held by dissenting stockholders) is changed or
exchanged, together with an appropriate adjustment to the Exercise
Price in the case of Options and the Measurement Price in the case
of SARs; or
(2) a cash payment (from the Company or the successor
corporation), in an amount equal to the Market Value of the Shares
subject to the Award on the date of the Transaction, less the
Exercise Price of the Award in the case of Options and the
Measurement Price in the case of SARs.
(c) Special Rule for ISOs. Any adjustment made pursuant to subparagraphs
(a) or (b)(1) hereof shall be made in such a manner as not to constitute a
modification, within the meaning of Section 424(h) of the Code, of outstanding
ISOs.
(d) Conditions and Restrictions on New, Additional or Different Shares or
Securities. If, by reason of any adjustment made pursuant to this Paragraph, a
Participant becomes entitled to new, additional or different shares of stock or
securities, such new, additional or different shares of stock or securities
shall thereupon be subject to all of the conditions and restrictions which were
applicable to the Shares pursuant to the Award before the adjustment was made.
(e) Other Issuances. Except as expressly provided in this Paragraph, the
issuance by the Company or an Affiliate of shares of stock of any class, or of
securities convertible into Shares or stock of another class, for cash or
property or for labor or services either upon direct sale or upon the exercise
of rights or warrants to subscribe therefor, shall not affect, and no
adjustment shall be made with respect to, the number, class, Exercise Price or
Measurement Price of Shares then subject to Awards or reserved for issuance
under the Plan.
13. NON-TRANSFERABILITY OF AWARDS.
Awards may not be sold, pledged, assigned, hypothecated, transferred or
disposed of in any manner other than by will or by the laws of descent and
distribution, or pursuant to the terms of a "qualified domestic relations
order" (within the meaning of Section 414(p) of the Code and the regulations
and rulings thereunder). An Award may be exercised only by a Participant, the
Participant's personal representative or a permitted transferee.
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14. TIME OF GRANTING AWARDS.
The date of grant of an Award shall, for all purposes, be the later of the
date on which the Committee makes the determination of granting such Award, and
the Effective Date. Notice of the determination shall be given to each
Participant to whom an Award is so granted within a reasonable time after the
date of such grant.
15. EFFECTIVE DATE.
The Plan shall become effective immediately upon its approval by a
favorable vote of stockholders owning at least a majority of the Shares
eligible to be cast at a meeting duly held in accordance with applicable laws,
provided that the Plan shall not be submitted for such approval until at least
six months after the effective date of the Bank's conversion from mutual to
stock form. No Awards may be made prior to approval of the Plan by the
stockholders of the Company.
16. MODIFICATION OF AWARDS.
At any time, and from time to time, the Board may authorize the Committee
to direct execution of an instrument providing for the modification of any
outstanding Award, provided no such modification shall confer on the holder of
said Award any right or benefit which could not be conferred on him by the
grant of a new Award at such time, or impair the Award without the consent of
the holder of the Award.
17. AMENDMENT AND TERMINATION OF THE PLAN.
The Board may from time to time amend the terms of the Plan, subject to
compliance with OTS regulations, and, with respect to any Shares at the time
not subject to Awards, suspend or terminate the Plan; provided that the
provisions of Paragraph 9 may not be amended more than once every six months
(other than to comport with changes in the Code, the Employee Retirement Income
Security Act of 1974, as amended, or the rules thereunder).
Shareholder approval must be obtained for any amendment of the Plan that
would change the number of Shares subject to the Plan (except in accordance
with Section 13 above), change the category of persons eligible to be
Participants, or materially increase the benefits under the Plan.
No amendment, suspension or termination of the Plan shall, without the
consent of any affected holders of an Award, alter or impair any rights or
obligations under any Award theretofore granted.
18. CONDITIONS UPON ISSUANCE OF SHARES.
(a) Compliance with Securities Laws. Shares of Common Stock shall not be
issued with respect to any Award unless the issuance and delivery of such
Shares shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, the rules and regulations
promulgated thereunder, any applicable state securities law, and the
requirements of any stock exchange upon which the Shares may then be listed.
The Plan is intended to comply with Rule 16b-3, and any provision of the Plan
which the Committee determines in its sole and absolute discretion to be
inconsistent with said Rule shall, to the extent of such inconsistency, be
inoperative and null and void, and shall not affect the validity of the
remaining provisions of the Plan.
(b) Special Circumstances. The inability of the Company to obtain
approval from any regulatory body or authority deemed by the Company's counsel
to be necessary to the lawful issuance and sale of any Shares hereunder shall
relieve the Company of any liability in respect of the non-issuance or sale of
such Shares. As a condition to the exercise of an option or SAR, the Company
may require the person exercising the Option or SAR to make such
representations and warranties as may be necessary to assure the availability
of an exemption from the registration requirements of federal or state
securities law.
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(c) Committee Discretion. The Committee shall have the discretionary
authority, subject to compliance with applicable OTS regulations, to impose in
Agreements such restrictions on Shares as it may deem appropriate or desirable,
including but not limited to the authority to impose a right of first refusal
or to establish repurchase rights or both of these restrictions.
19. RESERVATION OF SHARES.
The Company, during the term of the Plan, will reserve and keep available
a number of Shares sufficient to satisfy the requirements of the Plan.
20. WITHHOLDING TAX.
The Company's obligation to deliver Shares upon exercise of Options and/or
SARs shall be subject to the Participant's satisfaction of all applicable
federal, state and local income and employment tax withholding obligations.
The Committee, in its discretion, may permit the Participant to satisfy the
obligation, in whole or in part, by irrevocably electing to have the Company
withhold Shares, or to deliver to the Company Shares that he already owns,
having a value equal to the amount required to be withheld. The value of
Shares to be withheld, or delivered to the Company, shall be based on the
Market Value of the Shares on the date the amount of tax to be withheld is to
be determined. As an alternative, the Company may retain, or sell without
notice, a number of such Shares sufficient to cover the amount required to be
withheld.
21. NO EMPLOYMENT OR OTHER RIGHTS.
In no event shall an Employee's or Director's eligibility to participate
or participation in the Plan create or be deemed to create any legal or
equitable right of the Employee, Director, or any other party to continue
service with the Company, the Bank, or any Affiliate of such corporations.
Except to the extent provided in Paragraphs 6(b) and 9(a), no Employee or
Director shall have a right to be granted an Award or, having received an
Award, the right to again be granted an Award. However, an Employee or
Director who has been granted an Award may, if otherwise eligible, be granted
an additional Award or Awards.
22. GOVERNING LAW.
The Plan shall be governed by and construed in accordance with the laws of
the State of Michigan, except to the extent that federal law shall be deemed to
apply.
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