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EXHIBIT 99.4
CFX CORPORATION
1997 LONG-TERM INCENTIVE PLAN
1. Definitions. In this Plan, except where the context otherwise
indicates, the following definitions shall apply:
1.1. "Agreement" means a written agreement implementing an Award.
1.2. "Award" means a grant of an Option.
1.3. "Board" means the Board of Directors of the Corporation.
1.4. "Code" means the Internal Revenue Code of 1986, as amended.
1.5. "Committee" means the committee or subcommittee of the Board
appointed by the Board to administer this Plan. Unless otherwise determined
by the Board, the Stock Option Committee of the Board shall be the
Committee.
1.6. "Common Stock" means the common stock, par value $0.66 2/3 per
share, of the Corporation.
1.7. "Corporation" means CFX Corporation.
1.8. "Date of Exercise" means the date on which the Corporation
receives notice of the exercise of an Option in accordance with the terms
of Section 7.1.
1.9. "Date of Grant" means the date on which an Option is granted
under this Plan.
1.10. "Director" means a member of the Board of the Corporation or
any Subsidiary.
1.11. "Employee" means any employee of the Corporation or a
Subsidiary, including an Employee Director or any person who has been hired
to be an employee of the Corporation or a Subsidiary.
1.12. "Employee Director" means a Director who is also an Employee.
1.13. "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
1.14. "Fair Market Value" means an amount equal to the closing sale
price for a Share, on the date such fair market value is to be determined
(or if there is no sale of Shares on such date, the closing sale price on
the nearest trading date preceding such date), in the principal trading
market for the Shares as reported by such source as the Committee may
select, or, if such price quotations of the Common Stock are not then
reported, then the fair market value of a Share as determined by the
Committee pursuant to a reasonable method adopted in good faith for such
purpose.
1.15. "Incentive Stock Option" means an Option granted under this
Plan that qualifies as an incentive stock option under Section 422 of the
Code and that the Corporation designates as such in the Agreement granting
the Option.
1.16. "Independent Director" means a Director who is not an Employee
Director.
1.17. "Nonstatutory Stock Option" means an Option granted under this
Plan that is not an Incentive Stock Option.
1.18. "Option" means an option to purchase Shares granted under this
Plan in accordance with the terms of Section 6.
1.19. "Option Period" means the period during which an Option may be
exercised.
1.20. "Option Price" means the price per Share at which an Option may
be exercised. The Option Price shall be determined by the Committee and
shall not be less than the Fair Market Value determined as of the Date of
Grant. Notwithstanding the foregoing, in the case of an Incentive Stock
Option granted
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to a Ten-Percent Stockholder, the Option Price shall not be less than 110%
of the Fair Market Value on the Date of Grant.
1.21. "Optionee" means an Employee or Independent Director to whom an
Option has been granted.
1.22. "Plan" means the CFX Corporation 1997 Long-Term Incentive Plan.
1.23. "Rule 16b-3" means Rule 16b-3 under Section 16 of the Exchange
Act, or any successor rule.
1.24. "Share" means a share of Common Stock.
1.25. "Subsidiary" means a corporation at least 50% of the total
combined voting power of all classes of stock of which is owned by the
Corporation, either directly or through one or more other Subsidiaries.
1.26. "Ten-Percent Stockholder" means an Optionee who (applying the
rules of Section 424(d) of the Code) owns stock possessing more than 10% of
the total combined voting power of all classes of stock of the Corporation
or a Subsidiary.
2. Purpose. This Plan is intended to assist the Corporation and its
Subsidiaries in attracting and retaining Employees and Independent Directors of
outstanding ability and to promote the identification of their interests with
those of the stockholders of the Corporation.
3. Administration. The Committee shall administer this Plan and shall
have plenary authority, in its discretion, to award Options to Employees and
Independent Directors, subject to the provisions of this Plan. The Committee
shall have plenary authority and discretion, subject to the provisions of this
Plan, to determine the terms (which terms need not be identical) of all Awards
to Employees and Independent Directors, including without limitation the
exercise price of Options, the time or times at which Awards are made, the
number of Shares covered by Awards, whether an Option shall be an Incentive
Stock Option or a Nonstatutory Stock Option, any exceptions to
non-transferability, any provisions relating to vesting, any circumstances in
which the Options would terminate, the period during which Options may be
exercised, and the period during which Options shall be subject to restrictions.
In making these determinations, the Committee may take into account the nature
of the services rendered by the Award recipients, their present and potential
contributions to the success of the Corporation and its Subsidiaries, and such
other factors as the Committee in its discretion shall deem relevant. Subject to
the provisions of this Plan, the Committee shall have plenary authority to
interpret this Plan, prescribe, amend and rescind rules and regulations relating
to it, and make all other determinations deemed necessary or advisable for the
administration of this Plan. The determinations of the Committee on the matters
referred to in this Section 3 shall be binding and final.
4. Eligibility. Incentive Stock Options may be granted or awarded only to
Employees. Nonstatutory Stock Options may be granted or awarded to Employees or
Independent Directors.
5. Stock Subject to Plan.
5.1. Subject to adjustment as provided in Section 8, the maximum
number of Shares that may be issued under this Plan is 500,000 Shares. The
maximum number of Shares with respect to which an Employee may receive
Awards under this Plan during its term is 100,000.
5.2. If an Option expires or terminates for any reason without having
been fully exercised, the unissued or forfeited Shares which had been
subject to the Award shall become available for the grant of additional
Awards.
6. Options.
6.1. Options granted under this Plan to Employees shall be either
Incentive Stock Options or Nonstatutory Stock Options, as designated by the
Committee. Each Option granted under this Plan shall be clearly identified
either as a Nonstatutory Stock Option or an Incentive Stock Option and
shall be evidenced by an Agreement that specifies the terms and conditions
of the grant. Options granted to
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Employees shall be subject to the terms and conditions set forth in this
Section 6 and such other terms and conditions not inconsistent with this
Plan as the Committee may specify. All Incentive Stock Options granted
under this Plan shall comply with the provisions of the Code governing
incentive stock options and with all other applicable rules and
regulations.
6.2. The Option Period for Options granted to Employees shall be
determined by the Committee and specifically set forth in the Agreement;
provided, however, that an Option shall not be exercisable after ten years
(five years in the case of an Incentive Stock Option granted to a
Ten-Percent Stockholder) from its Date of Grant.
6.3. The Committee, in its discretion, may provide in an Agreement
for the right of the Optionee to surrender to the Corporation an Option (or
a portion thereof) that has become exercisable and to receive upon such
surrender, without any payment to the Corporation (other than required tax
withholding amounts) that number of Shares (equal to the highest whole
number of Shares) having an aggregate fair market value as of the date of
surrender equal to that number of Shares subject to the Option (or portion
thereof) being surrendered multiplied by an amount equal to the excess of
(i) the Fair Market Value on the date of surrender over (ii) the Option
Price, plus an amount of cash equal to the fair market value of any
fractional Share to which the Optionee would be entitled but for the
parenthetical above relating to whole number of Shares. Any such surrender
shall be treated as the exercise of the Option (or portion thereof).
6.4. Options made under this Plan shall not be transferable other
than by will, the laws of descent and distribution, or as provided by the
Committee in an Agreement.
7. Exercise of Options.
7.1. An Option may, subject to the terms of the applicable Agreement
under which it was granted, be exercised in whole or in part by the
delivery to the Corporation of written notice of the exercise, in such form
as the Committee may prescribe, accompanied by full payment for the Shares
with respect to which the Option is exercised. To the extent provided in
the applicable Option Agreement, payment may be made in whole or in part by
delivery (including constructive delivery) of Shares valued at Fair Market
Value on the Date of Exercise or by delivery of a promissory note as
provided in Section 7.2 hereof.
7.2. To the extent provided in an Agreement and permitted by
applicable law, the Committee may accept as partial payment of the Option
Price a promissory note executed by the Optionee evidencing his or her
obligation to make future cash payment thereof. Promissory notes made
pursuant to this Section 7.2 shall be payable upon such terms as may be
determined by the Committee, shall be secured by a pledge of the Shares
received upon exercise of the Option and shall bear interest at a rate
fixed by the Committee.
8. Capital Adjustments. In the event of any change in the outstanding
Common Stock by reason of any stock dividend, split-up, recapitalization,
reclassification, combination or exchange of shares, merger, consolidation or
liquidation and the like, the Committee may, in its discretion, provide for a
substitution for or adjustment in (1) the number and class of Shares subject to
outstanding Options, (2) the Option Price of Options, and (3) the aggregate
number and class of Shares for which Awards thereafter may be made under this
Plan and to individual Award recipients.
9. Termination or Amendment. The Board may amend, alter or terminate this
Plan in any respect at any time; provided, however, that, after this Plan has
been approved by the stockholders of the Corporation, no amendment, alteration
or termination of this Plan shall be made by the Board without approval of (1)
the Corporation's stockholders to the extent stockholder approval of the
amendment is required by applicable law or regulations or the requirements of
the principal exchange or interdealer quotation system on which the Common Stock
is listed or quoted, and (2) each affected Optionee if such amendment,
alteration or termination would adversely affect his or her rights or
obligations under any Award made prior to the date of such amendment, alteration
or termination.
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10. Modification, Extension, Renewal, Substitution.
10.1. Subject to the terms and conditions of this Plan, the Committee
may modify, extend or renew outstanding Options, or accept the surrender of
outstanding Options granted under this Plan or options granted under any
other plan of the Corporation or a Subsidiary (to the extent not
theretofore exercised), and authorize the granting of new Options pursuant
to this Plan in substitution therefor. Any substituted Options may specify
a lower exercise price than the surrendered options, a longer term than the
surrendered options, or have any other provisions that are authorized by
this Plan. Notwithstanding the foregoing, however, no modification of an
Award shall, without the consent of the Optionee, alter or impair any of
the Optionee's rights or obligations under such Award.
10.2. Anything contained herein to the contrary notwithstanding,
Options may, at the discretion of the Committee, be granted under this Plan
in substitution for options to purchase shares of capital stock of another
corporation which is merged into, consolidated with, or all or a
substantial portion of the property or stock of which is acquired by, the
Corporation or one of its Subsidiaries. The terms and conditions of the
substitute Options so granted may vary from the terms and conditions set
forth in this Plan to such extent as the Committee may deem appropriate in
order to conform, in whole or part, to the provisions of the options in
substitution for which they are granted. Such Options shall not be counted
toward the 100,000 Share limit imposed by the second sentence of Section
5.1, except to the extent it is determined by the Committee that the
applicability of such sentence is required in order for grants of Options
hereunder to be eligible to qualify as "performance-based compensation"
within the meaning of Section 162(m) of the Code.
11. Effectiveness of this Plan. This Plan and any amendments requiring
stockholder approval pursuant to Section 9 are subject to approval by vote of
the stockholders of the Corporation within 12 months after their adoption by the
Board. Subject to that approval, this Plan and any amendments are effective on
the date on which they are adopted by the Board. Options may be granted or
awarded prior to stockholder approval of this Plan or amendments, but each such
Award shall be subject to the approval of this Plan or amendments by the
stockholders. The date on which any Option granted or awarded prior to
stockholder approval of this Plan or amendment is granted or awarded shall be
the Date of Grant for all purposes as if the Option had not been subject to
approval; no such Option may be exercised prior to such stockholder approval,
and any such Option shall be void ab initio if such stockholder approval is not
obtained.
12. Withholding. The Corporation's obligation to deliver Shares or pay
any amount pursuant to the terms of any Award hereunder shall be subject to the
satisfaction of applicable federal, state and local tax withholding
requirements. To the extent provided in the applicable Agreement and in
accordance with rules prescribed by the Committee, an Optionee may satisfy any
such withholding tax obligation by any of the following means or by a
combination of such means: (1) tendering a cash payment, (2) authorizing the
Corporation to withhold Shares otherwise issuable to the Optionee, or (3)
delivering to the Corporation already owned and unencumbered Shares.
13. Term of this Plan. Unless sooner terminated by the Board pursuant to
Section 9, this Plan shall terminate on December 10, 2006, and no Option, may be
granted or awarded after such date. The termination of this Plan shall not
affect the validity of any Award outstanding on the date of termination.
14. Indemnification of Committee. In addition to such other rights of
indemnification as they may have as Directors or as members of the Committee,
the members of the Committee shall be indemnified by the Corporation against all
reasonable expenses, including attorneys' fees, actually and reasonably incurred
in connection with the defense of any action, suit or proceeding, or in
connection with any appeal therein, to which they or any of them may be a party
by reason of any action taken or failure to act under or in connection with this
Plan or any Option granted or awarded hereunder, and against all amounts
reasonably paid by them in settlement thereof or paid by them in satisfaction of
a judgment in any such action, suit or proceeding, if such members acted in good
faith and in a manner which they believed to be in, and not opposed to, the best
interests of the Corporation.
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15. General Provisions.
15.1. The establishment of this Plan shall not confer upon any
Employee or Independent Director any legal or equitable right against the
Corporation, any Subsidiary or the Committee, except as expressly provided
in this Plan.
15.2. This Plan does not constitute inducement or consideration for
the employment of any Employee or the service of any Independent Director,
nor is it a contract between the Corporation or any Subsidiary and any
Employee or Independent Director. Participation in this Plan shall not give
an Employee or Independent Director any right to be retained in the service
of the Corporation or any Subsidiary.
15.3. Neither the adoption of this Plan nor its submission to the
stockholders, shall be taken to impose any limitations on the powers of the
Corporation or its Subsidiaries to issue, grant, or assume options,
warrants, rights, or restricted stock, otherwise than under this Plan, or
to adopt other stock option or restricted stock plans or to impose any
requirement of stockholder approval upon the same.
15.4. The interests of any Employee or Independent Director under
this Plan are not subject to the claims of creditors and may not, in any
way, be assigned, alienated or encumbered except as provided in an
Agreement.
15.5. This Plan shall be governed, construed and administered in
accordance with the laws of the State of New Hampshire and it is the
intention of the Corporation that Incentive Stock Options granted under
this Plan qualify as such under Section 422 of the Code.
15.6. The Committee may require each person acquiring Shares pursuant
to Awards hereunder to represent to and agree with the Corporation in
writing that such person is acquiring the Shares without a view to
distribution thereof. The certificates for such Shares may include any
legend which the Committee deems appropriate to reflect any restrictions on
transfer. All certificates for Shares issued pursuant to this Plan shall be
subject to such stock transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any stock exchange
upon which the Common Stock is then listed, and any applicable federal or
state securities laws. The Committee may place a legend or legends on any
such certificates to make appropriate reference to such restrictions.
15.7. The Corporation shall not be required to issue any certificate
or certificates for Shares with respect to Awards under this Plan, or
record any person as a holder of record of such Shares, without obtaining,
to the complete satisfaction of the Committee, the approval of all
regulatory bodies deemed necessary by the Committee, and without complying
to the Committee's complete satisfaction, with all rules and regulations,
under federal, state or local law deemed applicable by the Committee.
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