EXHIBIT 10
UNITED BANCORP, INC.
2008 STOCK INCENTIVE PLAN
ARTICLE 1
General Purpose of Plan; Definitions
1.1 Name and Purposes. The name of this Plan is the United Bancorp, Inc. 2008
Stock Incentive Plan. The purpose of this Plan is to enable United Bancorp,
Inc. and its Affiliates to: (i) attract and retain skilled and qualified
directors, officers and key employees who are expected to contribute to the
Company's success by providing long-term incentive compensation
opportunities competitive with those made available by other companies;
(ii) motivate participants to achieve the long-term success and growth of
the Company; (iii) facilitate ownership of shares of the Company; and (iv)
align the interests of the participants with those of the Company's
shareholders.
1.2 Certain Definitions. Unless the context otherwise indicates, the following
words used herein shall have the following meanings whenever used in this
instrument:
(a) "Affiliate" means any corporation, partnership, joint venture or other
entity, directly or indirectly, through one or more intermediaries, controlling,
controlled by, or under common control with the Company, as determined by the
Board of Directors in its discretion.
(b) "Award" means any grant under this Plan of a Stock Option, Stock
Appreciation Right, Restricted Share, Restricted Share Unit or Performance Share
to any Plan participant.
(c) "Board of Directors" means the Board of Directors of the Company, as
constituted from time to time.
(d) "Cause" with respect to an employee of the Company or any affiliate of
the Company means and is limited to (a) criminal dishonesty, (b) refusal to
perform duties on an exclusive and substantially full-time basis, (c) refusal to
act in accordance with any specific substantive instructions given by the
Company or any affiliate of the Company with respect to performance of duties
normally associated with such employee's position, or (d) engaging in conduct
which could be materially damaging to the Company or any affiliate of the
Company without a reasonable good faith belief that such conduct was in the best
interest of the Company or any affiliate of the Company.
(e) "Code" means the Internal Revenue Code of 1986, as amended, and any
lawful regulations or guidance promulgated thereunder. Whenever reference is
made to a specific Internal Revenue Code section, such reference shall be deemed
to be a reference to any successor Internal Revenue Code section or sections
with the same or similar purpose.
(f) "Committee" means the committee administering this Plan as provided in
Section 2.1.
(g) "Common Shares" mean the common shares no par value per share, of the
Company.
(h) "Company" means United Bancorp, Inc., a corporation organized under the
laws of the State of Ohio and, except for purposes of determining whether a
Change in Control has occurred, any corporation or entity that is a successor to
United Bancorp, Inc. or substantially all of the assets of United Bancorp,
Inc. and that assumes the obligations of United Bancorp, Inc. under this Plan by
operation of law or otherwise.
(i) "Date of Grant" means the date on which the Committee grants an Award.
(j) "Director" means a member of the Board of Directors.
(k)"Disability" means the person (a) is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, (b) is, by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months, receiving income replacement benefits for a period of not less
than 3 months under an accident and health plan of the Company or an affiliate
covering the person, or (c) has been determined to be totally disabled by the
United States Social Security Administration.
(l) "Eligible Participant" is defined in Article 4.
(m) "Exchange Act" means the Securities Exchange Act of 1934, as amended,
and any lawful regulations or guidance promulgated thereunder.
(n) "Exercise Price" means the purchase price of a Share pursuant to a
Stock Option, or the exercise price per Share related to a Stock Appreciation
Right.
(o) "Fair Market Value" means the closing price of a Share as reported on
The Nasdaq Stock Market, or, if applicable, on any national securities exchange
or automated quotation system on which the Common Shares are principally traded:
(i) on the date for which the determination of Fair Market Value is made, or
(ii) if the closing price is not yet known as of such date then the date prior
to that, or, (iii) if there are no sales of Common Shares on such date, then on
the most recent immediately preceding date on which there were any sales of
Common Shares. If the Common Shares are not, or cease to be, traded on The
Nasdaq Stock Market or any national securities exchange or automated quotation
system, the "Fair Market Value" of Common Shares shall be determined pursuant to
a reasonable valuation method prescribed by the Committee. Notwithstanding the
foregoing, as of any date, the "Fair Market Value" of Common Shares shall be
determined in a manner consistent with Code Section 409A and the guidance
then-existing thereunder. In addition, "Fair Market Value" with respect to ISOs
and related SARs shall be determined in accordance with Section 6.2(f).
(p) "Incentive Stock Option" and "ISO" mean a Stock Option that is
identified as such and which is intended to meet the requirements of Section 422
of the Code.
(q) "Non-Qualified Stock Option" and "NQSO" mean a Stock Option that: (i)
is governed by Section 83 of the Code; and (ii) is not intended to meet the
requirements of Section 422 of the Code.
(r) "Outside Director" means a nonemployee Director. In addition, at all
times during which the Company is subject to the reporting requirements of the
Exchange Act, "Outside Director means a nonemployee Director who meets the
definitions of the terms "outside director" set forth in Section 162(m) of the
Code, "independent director" set forth in The Nasdaq Stock Market rules, and
"non-employee director" set forth in Rule 16b-3, or any successor definitions
adopted by the Internal Revenue Service, The Nasdaq Stock Market and Securities
and Exchange Commission, respectively, and similar requirements under any other
applicable laws and regulations.
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(s) "Parent" means any corporation which qualifies as a "parent
corporation" of the Company under Section 424(e) of the Code.
(t) "Performance Shares" is defined in Article 9.
(u) "Performance Period" is defined in Section 9.2.
(v) "Plan" means this United Bancorp, Inc. 2008 Stock Incentive Plan, as
amended from time to time.
(w) "Restricted Share Units" is defined in Article 8.
(x) "Restricted Shares" is defined in Article 8.
(y) "Rule 16b-3" is defined in Article 16.
(z) "Section 162(m) Person" means, for any taxable year, a person who is a
"covered employee" within the meaning of Section 162(m)(3) of the Code.
(aa) "Share" or "Shares" mean one or more of the Common Shares.
(bb) "Shareholder" means an individual or entity that owns one or more
Shares.
(cc) "Stock Appreciation Rights" and "SARs" mean any right to receive the
appreciation in Fair Market Value of a specified number of Shares over a
specified Exercise Price pursuant to an Award granted under Article 7.
(dd) "Stock Option" means any right to purchase a specified number of
Shares at a specified price which is granted pursuant to Article 5 and may be an
Incentive Stock Option or a Non-Qualified Stock Option.
(ee) "Stock Power" means a power of attorney executed by a participant and
delivered to the Company which authorizes the Company to transfer ownership of
Restricted Shares, Performance Shares or Common Shares from the participant to
the Company or a third party.
(ff) "Subsidiary" means any corporation which qualifies as a "subsidiary
corporation" of the Company under Section 424(f) of the Code.
(gg) "Vested" means, with respect to a Stock Option, that the time has been
reached when the option to purchase Shares first becomes exercisable; and with
respect to a Stock Appreciation Right, when the Stock Appreciation Right first
becomes exercisable for payment; with respect to Restricted Shares, when the
Shares are no longer subject to forfeiture and restrictions on transferability;
with respect to Restricted Share Units and Performance Shares, when the units or
Shares are no longer subject to forfeiture and are converted to Shares. The
words "Vest" and "Vesting" have meanings correlative to the foregoing.
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ARTICLE 2
Administration
2.1 Authority and Duties of the Committee.
(a) The Plan shall be administered by a Committee of at least three
Directors who are appointed by the Board of Directors. Unless otherwise
determined by the Board of Directors, the Compensation Committee of the Board of
Directors (or any subcommittee thereof) shall serve as the Committee, and all of
the members of the Committee shall be Outside Directors. Notwithstanding the
requirement that the Committee consist exclusively of Outside Directors, no
action or determination by the Committee or an individual then considered to be
an Outside Director shall be deemed void because a member of the Committee or
such individual fails to satisfy the requirements for being an Outside Director,
except to the extent required by applicable law.
(b) The Committee has the power and authority to grant Awards pursuant to
the terms of this Plan to Eligible Participants. The Committee may, at any time
and from time to time, at the request of a Participant or at the discretion of
the Committee, designate that a portion of such Participant's compensation
otherwise payable in cash be payable in Common Shares, Options or SARs. The
Committee shall have the sole discretion to determine the value of the Common
Shares, Options, or SARs so payable and the terms and conditions under which
such Common Shares shall be issued or such Options or SARs shall be granted.
(c) The Committee has the sole and exclusive authority, subject to any
limitations specifically set forth in this Plan, to:
(i) select the Eligible Participants to whom Awards are granted;
(ii) determine the types of Awards granted and the timing of such Awards;
(iii) determine the number of Shares to be covered by each Award granted
hereunder;
(iv) determine whether an Award is, or is intended to be,
"performance-based compensation" within the meaning of Section 162(m)
of the Code;
(v) determine the other terms and conditions, not inconsistent with the
terms of this Plan, of any Award granted hereunder; such terms and
conditions include, but are not limited to, the Exercise Price, the
time or times when Options or Stock Appreciation Rights may be
exercised (which may be based on performance objectives), any Vesting,
acceleration or waiver of forfeiture restrictions, any performance
criteria (including any performance criteria as described in Section
162(m)(4)(C) of the Code) applicable to an Award, and any restriction
or limitation regarding any Option or Stock Appreciation Right or the
Common Shares relating thereto, based in each case on such factors as
the Committee, in its sole discretion, shall determine;
(vi) determine whether any conditions or objectives related to Awards have
been met, including any such determination required for compliance
with Section 162(m) of the Code;
(vii) subsequently modify or waive any terms and conditions of Awards, not
inconsistent with the terms of this Plan;
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(viii) adopt, alter and repeal such administrative rules, guidelines and
practices governing this Plan as it deems advisable from time to time;
(ix) promulgate such administrative forms as it from time to time deems
necessary or appropriate for administration of the Plan;
(x) construe, interpret, administer and implement the terms and provisions
of this Plan, any Award and any related agreements;
(xi) correct any defect, supply any omission and reconcile any
inconsistency in or between the Plan, any Award and any related
agreements;
(xii) prescribe any legends to be affixed to certificates representing
Shares or other interests granted or issued under the Plan; and
(xiii) otherwise supervise the administration of this Plan.
(d) All decisions made by the Committee pursuant to the provisions of this
Plan are final and binding on all persons, including the Company, its
shareholders and participants, but may be made by their terms subject to
ratification or approval by, the Board of Directors, another committee of the
Board of Directors or shareholders.
(e) The Company shall furnish the Committee with such clerical and other
assistance as is necessary for the performance of the Committee's duties under
the Plan.
2.2 Delegation of Duties. The Committee may delegate ministerial duties to any
other person or persons, and it may employ attorneys, consultants,
accountants or other professional advisers for purposes of plan
administration at the expense of the Company. The power to delegate
provided for herein does not include the power to grant an Award.
2.3 Limitation of Liability. Members of the Board of Directors, members of the
Committee and Company employees who are their designees acting under this
Plan shall be fully protected in relying in good faith upon the advice of
counsel and shall incur no liability except for gross or willful misconduct
in the performance of their duties hereunder.
ARTICLE 3
Stock Subject to Plan
3.1 Total Shares Limitation. Subject to the provisions of this Article, the
maximum number of Shares that may be issued or transferred under this Plan,
shall not exceed in the aggregate 500,000 Common Shares, which may be
treasury or authorized but unissued Shares.
3.2 Participant Limitation. The aggregate number of Shares underlying Awards
granted under this Plan to any participant in any fiscal year (including
but not limited to Awards of Stock Options and SARs), regardless of whether
such Awards are thereafter canceled, forfeited or terminated, shall not
exceed 25,000 Shares. The foregoing annual limitation is intended to
include the grant of all Awards, including but not limited to, Awards
representing "performance-based compensation" as described in Section
162(m)(4)(C) of the Code.
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3.3 Awards Not Exercised; Effect of Receipt of Shares. If any outstanding
Award, or portion thereof, expires, or is terminated, canceled or
forfeited, the Shares that would otherwise be issuable or released from
restrictions with respect to the unexercised or non-Vested portion of such
expired, terminated, canceled or forfeited Award shall be available for
subsequent Awards under this Plan. If the Exercise Price of an Award is
paid in Shares, the Shares received by the Company in connection therewith
shall not be added to the maximum aggregate number of Shares which may be
issued under Section 3.1.
3.4 Dilution and Other Adjustments. In the event that the Committee determines
that any dividend or other distribution (whether in the form of cash,
Shares, other securities or other property), recapitalization, stock split,
reverse stock split, reorganization, redesignation, reclassification,
merger, consolidation, liquidation, split-up, reverse split, spin-off,
combination, repurchase or exchange of Shares or other securities of the
Company, issuance of warrants or other rights to purchase Shares or other
securities of the Company or other similar corporate transaction or event
affects the Shares such that an adjustment is determined by the Committee
to be appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under this
Plan, then the Committee shall, in such manner as it deems equitable,
adjust any or all of (i) the number and type of Shares (or other securities
or other property) which thereafter may be made the subject of Awards, (ii)
the number and type of Shares (or other securities or other property)
subject to outstanding Awards, (iii) the limitations set forth above and
(iv) the purchase or exercise price or any performance objective with
respect to any Award; provided, however, that the number of Shares or other
securities covered by any Award or to which such Award relates is always a
whole number. Notwithstanding the foregoing, the foregoing adjustments
shall be made in compliance with: (i) Sections 422 and 424 of the Code with
respect to ISOs; (ii) Treasury Department Regulation Section 1.424-1 (and
any successor) with respect to NQSOs, applied as if the NQSOs were ISOs;
(iii) Section 409 A of the Code, to the extent necessary to avoid its
application or avoid adverse tax consequences thereunder; and (iv) Section
162(m) of the Code with respect to Awards granted to Section 162(m) Persons
that are intended to be "performance-based compensation," unless
specifically determined otherwise by the Committee. In applying the
provisions of this Section 3.4, the Committee shall lack discretion with
respect to any adjustment which is required to prevent enlargement or
dilution of rights under any Award and shall promptly make such adjustments
as are required to prevent an enlargement or dilution of rights.
ARTICLE 4
Participants
4.1 Eligibility. Directors, Officers and all other key employees of the Company
or any of its Affiliates (each an "Eligible Participant") who are selected
by the Committee in its sole discretion are eligible to participate in this
Plan.
4.2 Award Agreements. Awards shall be evidenced by a written agreement in a
form prescribed by the Committee (hereinafter "Award Agreement"). Execution
of an Award Agreement shall constitute the participant's irrevocable
agreement to, and acceptance of, the terms and conditions of the Award set
forth in such agreement and of the terms and conditions of the Plan
applicable to such Award. Award Agreements may differ from time to time and
from participant to participant.
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ARTICLE 5
Stock Option Awards
5.1 Option Grant. Each Stock Option granted under this Plan will be evidenced
by minutes of a meeting, or by a unanimous written consent without a
meeting, of the Committee and by an Award Agreement dated as of the Date of
Grant and executed by the Company and by the appropriate participant.
5.2 Terms and Conditions of Grants. Stock Options granted under this Plan are
subject to the following terms and conditions and may contain such
additional terms, conditions, restrictions and contingencies with respect
to exercisability and/or with respect to the Shares acquired upon exercise
as may be provided in the relevant agreement evidencing the Stock Options,
so long as such terms and conditions are not inconsistent with the terms of
this Plan, as the Committee deems desirable:
(a) Exercise Price. Subject to Section 3.4, the Exercise Price shall never
be less than 100% of the Fair Market Value of the Shares on the Date of Grant.
If a variable Exercise Price is specified at the time of grant, the Exercise
Price may vary pursuant to a formula or other method established by the
Committee; provided, however, that such formula or method will provide for a
minimum Exercise Price equal to the Fair Market Value of the Shares on the Date
of Grant. Except as otherwise provided in Section 3.4, no subsequent amendment
of an outstanding Stock Option may reduce the Exercise Price to less than 100%
of the Fair Market Value of the Shares on the Date of Grant. Nothing in this
Section 5.2(a) shall be construed as limiting the Committee's authority to grant
premium price Stock Options which do not become exercisable until the Fair
Market Value of the underlying Shares exceeds a specified percentage (e.g.,
110%) of the Exercise Price; provided, however, that such percentage will never
be less than 100%.
(b) Option Term. Any unexercised portion of a Stock Option granted
hereunder shall expire at the end of the stated term of the Stock Option. The
Committee shall determine the term of each Stock Option at the time of grant,
which term shall not exceed 10 years from the Date of Grant. The Committee may
extend the term of a Stock Option, in its discretion, but not beyond the date
immediately prior to the tenth anniversary of the original Date of Grant. If a
definite term is not specified by the Committee at the time of grant, then the
term is deemed to be 10 years. Nothing in this Section 5.2(b) shall be construed
as limiting the Committee's authority to grant Stock Options with a term shorter
than 10 years.
(c) Vesting. Stock Options, or portions thereof, are exercisable at such
time or times as determined by the Committee in its discretion at or after
grant. The Committee may provide that a vesting schedule shall be specified in
an Award Agreement. If the Committee provides that any Stock Option becomes
Vested over a period of time or upon performance events, in full or in
installments, the Committee may waive or accelerate such Vesting provisions at
any time. Unless otherwise determined by the Committee in connection with the
grant and set forth in the Award Agreement, all unvested Stock Options shall
immediately vest upon the Death or Disability of the holder.
(d) Method of Exercise. Vested portions of any Stock Option may be
exercised in whole or in part at any time during the option term by giving
written notice of exercise to the Company specifying the number of Shares to be
purchased. The notice must be given by or on behalf of a person entitled to
exercise the Stock Option, accompanied by payment in full of the Exercise Price,
along with any tax withholding pursuant to Article 15. Subject to the approval
of the Committee, the Exercise Price may be paid:
(i) in cash in any manner satisfactory to the Committee;
(ii) by tendering (by either actual delivery of Shares or by attestation)
unrestricted Shares that
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have been owned for at least six months on the date of exercise by the
person entitled to exercise the Stock Option having an aggregate Fair
Market Value on the date of exercise equal to the Exercise Price
applicable to such Stock Option exercise, and, with respect to the
exercise of NQSOs, including restricted Shares;
(iii) by a combination of cash and unrestricted Shares that are owned on
the date of exercise by the person entitled to exercise the Stock
Option; and
(iv) by another method permitted by law and affirmatively approved by the
Committee which assures full and immediate payment or satisfaction of
the Exercise Price, which may include broker assisted cashless
exercise.
The Committee may withhold its approval for any method of payment for any
reason, in its sole discretion, including but not limited to concerns that the
proposed method of payment will result in adverse financial accounting
treatment, adverse tax treatment for the Company or a participant or a violation
of any law applicable to the Company from time to time, and related regulations
and guidance.
If the Exercise Price of an NQSO is paid by tendering Restricted Shares,
then the Shares received upon the exercise will contain restrictions that are no
less restrictive then the Restricted Shares so tendered.
(e) Form. Unless the grant of a Stock Option is expressly designated at the
time of grant as an ISO, it is deemed to be an NQSO. ISOs are subject to the
additional terms and conditions in Article 6.
(f) Special Limitations on Stock Option Awards. Unless an Award Agreement
approved by the Committee provides otherwise, Stock Options awarded under this
Plan are intended to meet the requirements for exclusion from coverage under
Code Section 409A and applicable Treasury regulations and all Stock Option
Awards shall be construed and administered accordingly.
5.3 Termination of Grants Prior to Expiration. Subject to Article 6 with
respect to ISOs, if the employment of an optionee with the Company or its
Affiliates terminates for any reason, all unexercised Stock Options may be
exercised only in accordance with rules established by the Committee or as
specified in the relevant agreement evidencing the Stock Options. Such
rules may provide, as the Committee deems appropriate, for the expiration,
continuation (but only to the originally scheduled expiration date), or
acceleration of the vesting of all or part of the Stock Options.
ARTICLE 6
Special Rules Applicable to Incentive Stock Options
6.1 Eligibility. Notwithstanding any other provision of this Plan to the
contrary, an ISO may only be granted to full or part-time employees
(including officers) of the Company or of an Affiliate, provided that the
Affiliate is a Parent or Subsidiary.
6.2 Special ISO Rules.
(a) Term. No ISO may be exercisable on or after the tenth anniversary of
the Date of Grant, and no ISO may be granted under this Plan on or after the
tenth anniversary of the effective date of this Plan.
(b) Ten Percent Shareholder. No grantee may receive an ISO under this Plan
if such grantee, at the time the Award is granted, owns (after application of
the rules contained in Section 424(d) of the Code) equity securities possessing
more than 10% of the total combined voting power of all classes of equity
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securities of the Company, its Parent or any Subsidiary, unless (i) the option
price for such ISO is at least 110% of the Fair Market Value of the Shares as of
the Date of Grant, and (ii) such ISO is not exercisable on or after the fifth
anniversary of the Date of Grant.
(c) Limitation on Grants. The aggregate Fair Market Value (determined with
respect to each ISO at the time of grant) of the Shares with respect to which
ISOs are exercisable for the first time by a grantee during any calendar year
(under this Plan or any other plan adopted by the Company or its Parent or its
Subsidiary) shall not exceed $100,000. Unless otherwise set forth in an Award
Agreement, if such aggregate Fair Market Value shall exceed $100,000, such
number of ISOs as shall have an aggregate Fair Market Value equal to the amount
in excess of $100,000 shall be treated as NQSOs.
(d) Non-Transferability. Notwithstanding any other provision herein to the
contrary, no ISO granted hereunder (and, if applicable, related Stock
Appreciation Right) may be transferred except by will or by the laws of descent
and distribution, nor may such ISO (or related Stock Appreciation Right) be
exercisable during a grantee's lifetime other than by him (or his guardian or
legal representative to the extent permitted by applicable law).
(e) Termination of Employment. No ISO may be exercised more than three
months following termination of employment for any reason (including retirement)
other than death or Disability, nor more than one year following termination of
employment for the reason of death or Disability (as defined in Section 422 of
the Code). If the Award Agreement for an ISO permits exercise after such date
such option will no longer qualify as an ISO and shall thereafter be, and
receive the tax treatment applicable to, an NQSO. For this purpose, a
termination of employment is cessation of employment such that no employment
relationship exists between the participant and the Company, a Parent or a
Subsidiary.
(f) Fair Market Value. For purposes of any ISO granted hereunder (or, if
applicable, related Stock Appreciation Right), the Fair Market Value of Shares
shall be determined in the manner required by Section 422 of the Code and any
Treasury regulations thereunder.
6.3 Subject to Code Amendments. The foregoing limitations are designed to
comply with the requirements of Section 422 of the Code and shall be
automatically amended or modified to comply with amendments or
modifications to Section 422 of the Code. Any ISO which fails to comply
with Section 422 of the Code is automatically treated as an NQSO
appropriately granted under this Plan provided it otherwise meets the
Plan's requirements for NQSOs.
ARTICLE 7
Stock Appreciation Rights
7.1 SAR Grant and Agreement. Stock Appreciation Rights (including SOSARs with
the meaning set forth below) may be granted under this Plan and each SAR
granted under this Plan will be evidenced by minutes of a meeting, or by a
unanimous written consent without a meeting, of the Committee and by an
Award Agreement dated as of the Date of Grant and executed by the Company
and by the appropriate participant.
(a) Term. Any unexercised portion of a Stock Appreciation Right granted
hereunder shall expire at the end of the stated term of the Stock Appreciation
Right. The Committee shall determine the term of each Stock Appreciation Right
at the time of grant, which term shall not exceed ten years from the Date of
Grant. The Committee may extend the term of a Stock Appreciation Right, in its
discretion, but not beyond the date immediately prior to the tenth anniversary
of the original Date of Grant. If a definite term is not specified by the
Committee at the time of grant, then the term is deemed to be ten years.
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(b) Vesting. A Stock Appreciation Right is exercisable, in whole or in
part, at such time or times as determined by the Committee at or after the time
of grant. Unless otherwise determined by the Committee in connection with the
grant and set forth in the Award Agreement, all unvested Stock Appreciation
Rights shall immediately vest upon the Death or Disability of the holder.
(c) Exercise Price. Subject to Section 3.4, the Exercise Price of a Stock
Appreciation Right will never be less than 100% of the Fair Market Value of the
related Shares on the Date of Grant. If a variable Exercise Price is specified
at the time of grant, the Exercise Price may vary pursuant to a formula or other
method established by the Committee; provided, however, that such formula or
method will provide for a minimum Exercise Price equal to the Fair Market Value
of the Shares on the Date of Grant. Except as otherwise provided in Section 3.4,
no subsequent amendment of an outstanding Stock Appreciation Right may reduce
the Exercise Price to less than 100% of the Fair Market Value of the Shares on
the Date of Grant. Nothing in this Section 7.3(c) shall be construed as limiting
the Committee's authority to grant premium price Stock Appreciation Rights which
do not become exercisable until the Fair Market Value of the related Shares
exceeds a specified percentage (e.g., 110%) of the Exercise Price; provided,
however, that such percentage will never be less than 100%.
(d) Method of Exercise. A Stock Appreciation Right may be exercised in
whole or in part during the term by giving written notice of exercise to the
Company specifying the number of Shares in respect of which the Stock
Appreciation Right is being exercised. The notice must be given by or on behalf
of a person entitled to exercise the Stock Appreciation Right. Upon the exercise
of a Stock Appreciation Right, subject to satisfaction of the tax withholding
requirements pursuant to Article 15, the holder of the Stock Appreciation Right
is entitled to receive Shares or cash as specified in the original Award
Agreement (as set forth below) equal in value to the excess of the Fair Market
Value of a Share on the exercise date over the Exercise Price of the SAR
multiplied by the number of Stock Appreciation Rights being exercised. At any
time the Fair Market Value of a Share on a proposed exercise date does not
exceed the Exercise Price of the SAR, the holder of the Stock Appreciation Right
shall not be permitted to exercise such right.
(i) Stock Appreciation Right designated as a Stock Only Stock
Appreciation Right ("SOSAR") in the original Award Agreement.
With respect to an Award designated by the Company in the
original Award Agreement as a SOSAR, the holder shall be entitled
to receive only Shares of the Company upon exercise.
(ii) All Other Stock Appreciation Rights. With respect to all other
Awards the holder shall be entitled to the cash or other property
set forth in the Award Agreement.
(e) Early Termination Prior to Expiration. If the employment of an optionee
with the Company or its Affiliates terminates for any reason, all unexercised
Stock Appreciation Rights may be exercised only in accordance with rules
established by the Committee or as specified in the relevant agreement
evidencing such Stock Appreciation Rights. Such rules may provide, as the
Committee deems appropriate, for the expiration, continuation (but only to the
originally scheduled expiration date), or acceleration of the vesting of all or
part of such Stock Appreciation Rights.
7.2 Other Terms and Conditions of SAR Grants. Stock Appreciation Rights are
subject to such other terms and conditions, not inconsistent with the
provisions of this Plan, as are determined from time to time by the
Committee.
7.3 Special Limitations on SAR Awards. Unless an Award Agreement approved by
the Committee provides otherwise, Stock Appreciation Rights awarded under
this Plan are intended to meet the requirements for exclusion from coverage
under Code Section 409A and applicable Treasury
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regulations and all Stock Appreciation Rights Awards shall be construed and
administered accordingly.
ARTICLE 8
Restricted Share and Restricted Share Unit Awards
8.1 Restricted Share Grants and Agreements. Restricted Share Awards consist of
Shares which are issued by the Company to a participant at no cost or at a
purchase price determined by the Committee which may be below their Fair
Market Value but which are subject to forfeiture and restrictions on their
sale or other transfer by the participant. Each Restricted Share Award
granted under this Plan will be evidenced by minutes of a meeting, or by a
unanimous written consent without a meeting, of the Committee and by an
Award Agreement dated as of the Date of Grant and executed by the Company
and by the participant. The timing of Restricted Share Awards and the
number of Shares to be issued (subject to Section 3.2) are to be determined
by the Committee in its discretion. By accepting a grant of Restricted
Shares, the participant consents to any tax withholding as provided in
Article 15.
8.2 Terms and Conditions of Restricted Share Grants. Restricted Shares granted
under this Plan are subject to the following terms and conditions, which,
except as otherwise provided herein, need not be the same for each
participant, and may contain such additional terms, conditions,
restrictions and contingencies not inconsistent with the terms of this Plan
and any operative employment or other agreement, as the Committee deems
desirable:
(a) Purchase Price. The Committee shall determine the prices, if any, at
which Restricted Shares are to be issued to a participant, which may vary from
time to time and from participant to participant and which may be below the Fair
Market Value of such Restricted Shares at the Date of Grant.
(b) Restrictions. All Restricted Shares issued under this Plan will be
subject to such restrictions as the Committee may determine, which may include,
without limitation, the following:
(i) a prohibition against the sale, transfer, pledge or other encumbrance
of the Restricted Shares, such prohibition to lapse at such time or
times as the Committee determines (whether in installments or
otherwise, but subject to the Change in Control provisions in Article
11);
(ii) a requirement that the participant forfeit such Restricted Shares in
the event of termination of the participant's employment with the
Company or its Affiliates prior to Vesting;
(iii) a prohibition against employment or retention of the participant by
any competitor of the Company or its Affiliates, or against
dissemination by the participant of any secret or confidential
information belonging to the Company or an Affiliate;
(iv) any applicable requirements arising under the Securities Act of 1933,
as amended, other securities laws, the rules and regulations of The
Nasdaq Stock Market or any other stock exchange or transaction
reporting system upon which such Restricted Shares are then listed or
quoted and any state laws, rules and regulations, including "blue sky"
laws;
(v) such additional restrictions as are required to avoid adverse tax
consequences under Code Section 409A; and
(vi) delivery of a valid election under Code Section 83(b).
11
The Committee may at any time waive such restrictions or accelerate the date or
dates on which the restrictions will lapse.
(c) Performance-Based Restrictions. The Committee may, in its sole
discretion, provide restrictions that lapse upon the attainment of specified
performance objectives. In such case, the provisions of Sections 9.2 and 9.3
will apply (including, but not limited to, the enumerated performance
objectives). If the Award Agreement governing an Award to a Section 162(m)
Person provides that such Award is intended to be "performance-based
compensation," the provisions of Section 9.4(d) will also apply.
(d) Delivery of Shares. Restricted Shares will be registered in the name of
the participant and the stock certificate deposited, together with a Stock
Power, with the Company or its designated officer or escrow agent. Each such
certificate will bear a legend in substantially the following form:
"The transferability of this certificate and the Common Shares represented
by it are subject to the terms and conditions (including conditions of
forfeiture) contained in the United Bancorp, Inc. 2008 Stock Incentive Plan
and an agreement entered into between the registered owner and the Company.
A copy of this Plan and agreement are on file in the office of the
Secretary of the Company."
At the end of any time period during which the Restricted Shares are subject to
forfeiture and restrictions on transfer, and after any tax withholding, such
Shares will be delivered free of all restrictions (except for any pursuant to
Article 14) to the participant or other appropriate person and with the
foregoing legend removed from the stock certificate.
(e) Forfeiture of Shares. If a participant who holds Restricted Shares
fails to satisfy the restrictions, vesting requirements and other conditions
relating to the Restricted Shares prior to the lapse, satisfaction or waiver of
such restrictions and conditions, except as may otherwise be determined by the
Committee, the participant shall forfeit the Shares and transfer them back to
the Company in exchange for a refund of any consideration paid by the
participant or such other amount which may be specifically set forth in the
Award Agreement. A participant shall execute and deliver to the Company one or
more Stock Powers with respect to Restricted Shares granted to such participant.
(f) Voting and Other Rights. Except as otherwise required for compliance
with Section 162(m) of the Code and the terms of the applicable Restricted Share
Agreement, during any period in which Restricted Shares are subject to
forfeiture and restrictions on transfer, the participant holding such Restricted
Shares shall have all the rights of a Shareholder with respect to such Shares,
including, without limitation, the right to vote such Shares and the right to
receive any dividends paid with respect to such Shares.
8.3 Restricted Share Unit Awards and Agreements. Restricted Share Unit Awards
consist of Shares that will be issued to a participant at a future time or
times at no cost, or at a purchase price determined by the Committee which
purchase price may be below their Fair Market Value if continued employment
and/or other terms and conditions specified by the Committee are satisfied.
Each Restricted Share Unit Award granted under this Plan will be evidenced
by minutes of a meeting, or by a unanimous written consent without a
meeting, of the Committee and by an Award Agreement dated as of the Date of
Grant and executed by the Company and the Plan participant. The timing of
Restricted Share Unit Awards and the number of Restricted Share Units to be
awarded (subject to Section 3.2) are to be determined by the Committee in
its sole discretion. By accepting a Restricted Share Unit Award, the
participant agrees to remit to the Company when due any tax withholding as
provided in Article 15.
12
8.4 Terms and Conditions of Restricted Share Unit Awards. Restricted Share Unit
Awards are subject to the following terms and conditions, which, except as
otherwise provided herein, need not be the same for each participant, and
may contain such additional terms, conditions, restrictions and
contingencies not inconsistent with the terms of this Plan and any
operative employment or other agreement, as the Committee deems desirable:
(a) Purchase Price. The Committee shall determine the prices, if any, at
which Shares are to be issued to a participant after Vesting of Restricted Share
Units, which may vary from time to time and among participants and which may be
below the Fair Market Value of Shares at the Date of Grant.
(b) Restrictions. All Restricted Share Units awarded under this Plan will
be subject to such restrictions as the Committee may determine, which may
include, without limitation, the following:
(i) a prohibition against the sale, transfer, pledge or other encumbrance
of the Restricted Share Unit;
(ii) a requirement that the participant forfeit such Restricted Share Unit
in the event of termination of the participant's employment with the
Company or its Affiliates prior to Vesting;
(iii) a prohibition against employment of the participant by, or provision
of services by the participant to, any competitor of the Company or
its Affiliates, or against dissemination by the participant of any
secret or confidential information belonging to the Company or an
Affiliate;
(iv) any applicable requirements arising under the Securities Act of 1933,
as amended, other securities laws, the rules and regulations of The
Nasdaq Stock Market or any other stock exchange or transaction
reporting system upon which the Common Shares are then listed or
quoted and any state laws, rules and interpretations, including "blue
sky" laws; and
(v) such additional restrictions as are required to avoid adverse tax
consequences under Code Section 409A.
The Committee may at any time waive such restrictions or accelerate the date or
dates on which the restrictions will lapse.
(c) Performance-Based Restrictions. The Committee may, in its sole
discretion, provide restrictions that lapse upon the attainment of specified
performance objectives. In such case, the provisions of Sections 9.2 and 9.3
will apply (including, but not limited to, the enumerated performance
objectives). If the Award Agreement governing an Award to a Section 162(m)
Person provides that such Award is intended to be "performance-based
compensation," the provisions of Section 9.4(d) will also apply.
(d) Voting and Other Rights. A participant holding Restricted Share Units
shall not be deemed to be a Shareholder solely because of such units. Such
participant shall have no rights of a Shareholder with respect to such units;
provided, however, that an Award Agreement may provide for payment of an amount
of money (or Shares with a Fair Market Value equivalent to such amount) equal to
the dividends paid from time to time on the number of Common Shares that would
become payable upon vesting of a Restricted Share Unit Award.
(e) Lapse of Restrictions. If a participant who holds Restricted Share
Units satisfies the restrictions and other conditions relating to the Restricted
Share Units prior to the lapse or waiver of such restrictions
13
and conditions, the Restricted Share Units shall be converted to, or replaced
with, Shares which are free of all restrictions except for any restrictions
pursuant to Article 14.
(f) Forfeiture of Restricted Share Units. If a participant who holds
Restricted Share Units fails to satisfy the restrictions, Vesting requirements
and other conditions relating to the Restricted Share Units (prior to the lapse,
satisfaction or waiver of such restrictions and conditions), except as may
otherwise be determined by the Committee, the participant shall forfeit the
Restricted Share Units.
(g) Termination. A Restricted Share Unit Award or unearned portion thereof
will terminate without the issuance of Shares on the termination date specified
on the Date of Grant or upon the termination of employment of the participant
during the time period or periods specified by the Committee during which any
performance objectives must be met (the "Performance Period"). If a
participant's employment with the Company or its Affiliates terminates by reason
of his or her death, disability or retirement, the Committee in its discretion
at or after the Date of Grant may determine that the participant (or the heir,
legatee or legal representative of the participant's estate) will receive a
distribution of Shares in an amount which is not more than the number of Shares
which would have been earned by the participant if 100% of the performance
objectives for the current Performance Period had been achieved prorated based
on the ratio of the number of months of active employment in the Performance
Period to the total number of months in the Performance Period. However, with
respect to Awards intended to be performance-based compensation (as described in
Section 9.4(d)), distribution of the Shares shall not be made prior to
attainment of the relevant performance objectives.
(h) Special Limitations on Restricted Share Unit Awards. Unless an Award
Agreement approved by the Committee provides otherwise, Restricted Share Units
awarded under this Plan are intended to meet the requirements for exclusion from
coverage under Code Section 409A and all Restricted Share Unit Awards shall be
construed and administered accordingly.
8.5 Time Vesting of Restricted Share and Restricted Share Unit Awards.
Restricted Shares or Restricted Share Units, or portions thereof, are
exercisable at such time or times as determined by the Committee in its
discretion at or after grant, subject to the restrictions on time Vesting
set forth in this Section. If the Committee provides that any Restricted
Shares or Restricted Share Unit Awards become Vested over time (with or
without a performance component), the Committee may waive or accelerate
such Vesting provisions at any time, subject to the restrictions on time
Vesting set forth in this Section. Unless otherwise determined by the
Committee in connection with the grant and set forth in the Award
Agreement, all unvested Restricted Share and Restricted Share Unit Awards
shall immediately Vest with respect to any required time vesting upon the
Death or Disability of the holder.
8.6 Special Limitations on Restricted Share and Restricted Stock Unit Awards.
Unless an Award Agreement approved by the Committee provides otherwise,
Restricted Share and Restricted Stock Units awarded under this Plan are
intended to meet the requirements for exclusion from coverage under Code
Section 409A and applicable Treasury regulations and all Awards shall be
construed and administered accordingly.
14
ARTICLE 9
Performance Share Awards
9.1 Performance Share Awards and Agreements. A Performance Share Award is a
right to receive Shares in the future conditioned upon the attainment of
specified performance objectives and such other conditions, restrictions
and contingencies as the Committee may determine. Each Performance Share
Award granted under this Plan will be evidenced by minutes of a meeting, or
by a unanimous written consent without a meeting, of the Committee and by
an Award Agreement dated as of the Date of Grant and executed by the
Company and by the Plan participant. The timing of Performance Share Awards
and the number of Shares covered by each Award (subject to Section 3.2) are
to be determined by the Committee in its discretion. By accepting a grant
of Performance Shares, the participant agrees to remit to the Company when
due any tax withholding as provided in Article 15.
9.2 Performance Objectives. At the time of grant of a Performance Share Award,
the Committee will specify the performance objectives which, depending on
the extent to which they are met, will determine the number of Shares that
will be distributed to the participant. The Committee will also specify the
time period or periods (the "Performance Period") during which the
performance objectives must be met. With respect to awards to Section
162(m) Persons intended to be "performance based compensation," the
Committee may use performance objectives based on one or more of the
following: earnings per share, total revenue, net interest income,
non-interest income, net income, net income before tax, non-interest
expense, efficiency ratio, return on equity, return on assets, economic
profit added, loans, deposits, tangible equity, assets, net charge-offs,
new market growth, product line developments, and nonperforming assets. The
Committee may designate a single goal criterion or multiple goal criteria
for performance measurement purposes. Performance measurement may be
described in terms of objectives that are related to the performance by the
Company, by any Subsidiary, or by any employee or group of employees in
connection with services performed by that employee or those employees for
the Company, a Subsidiary, or one or more subunits of the Company or of any
Subsidiary. The performance objectives may be made relative to the
performance of other companies. The performance objectives and periods need
not be the same for each participant nor for each Award.
9.3 Adjustment of Performance Objectives. The Committee may modify, amend or
otherwise adjust the performance objectives specified for outstanding
Performance Share Awards if it determines that an adjustment would be
consistent with the objectives of this Plan and taking into account the
interests of the participants and the public Shareholders of the Company
and such adjustment complies with the requirements of Section 162(m) of the
Code for Section 162(m) Persons, to the extent applicable, unless the
Committee indicates a contrary intention. The types of events which could
cause an adjustment in the performance objectives include, without
limitation, accounting changes which substantially affect the determination
of performance objectives, changes in applicable laws or regulations which
affect the performance objectives, and divisive corporate reorganizations,
including spin-offs and other distributions of property or stock.
9.4 Other Terms and Conditions. Performance Share Awards granted under this
Plan are subject to the following terms and conditions and may contain such
additional terms, conditions, restrictions and contingencies not
inconsistent with the terms of this Plan and any operative employment or
other agreement as the Committee deems desirable:
(a) Delivery of Shares. As soon as practicable after the applicable
Performance Period has ended, the participant will receive a distribution of the
number of Shares earned during the Performance Period, depending upon the extent
to which the applicable performance objectives were achieved. Such Shares
15
will be registered in the name of the participant and will be free of all
restrictions except for any restrictions pursuant to Article 14. Notwithstanding
the forgoing, the distribution of Shares provided for herein shall occur not
later than two and one-half months following the end of the calendar year in
which the Performance Period has ended.
(b) Termination. A Performance Share Award or unearned portion thereof will
terminate without the issuance of Shares on the termination date specified at
the time of grant or upon the termination of employment of the participant
during the Performance Period. If a participant's employment with the Company or
its Affiliates terminates by reason of his or her death, disability or
retirement (except with respect to Section 162(m) Persons), the Committee in its
discretion at or after the time of grant may determine, notwithstanding any
Vesting requirements, that the participant (or the heir, legatee or legal
representative of the participant's estate) will receive a distribution of a
portion of the participant's then-outstanding Performance Share Awards in an
amount which is not more than the number of shares which would have been earned
by the participant if 100% of the performance objectives for the current
Performance Period had been achieved prorated based on the ratio of the number
of months of active employment in the Performance Period to the total number of
months in the Performance Period. However, with respect to Awards intended to be
"performance-based compensation" (as described in Section 9.4(d)), distribution
of the Shares shall not be made prior to attainment of the relevant performance
objective.
(c) Voting and Other Rights. Awards of Performance Shares do not provide
the participant with voting rights or rights to dividends prior to the
participant becoming the holder of record of Shares issued pursuant to an Award;
provided, however, that an Award Agreement may provide for payment of an amount
of money (or Shares with a Fair Market Value equivalent to such amount) equal to
the dividends paid from time to time on the number of Common Shares that would
become payable upon vesting of a Performance Share Award. Prior to the issuance
of Shares, Performance Share Awards may not be sold, transferred, pledged,
assigned or otherwise encumbered.
(d) Performance-Based Compensation. The Committee may designate Performance
Share Awards as being "remuneration payable solely on account of the attainment
of one or more performance goals" as described in Section 162(m) (4)(C) of the
Code. Such Awards shall be automatically amended or modified to comply with
amendments to Section 162 of the Code to the extent applicable, unless the
Committee indicates a contrary intention.
9.5 Time Vesting of Performance Share Awards. Performance Share Awards, or
portions thereof, are exercisable at such time or times as determined by
the Committee in its discretion at or after grant which may include time
Vesting. If the Committee provides that any Performance Shares become
Vested over time (accelerated by a performance component), the Committee
may waive or accelerate any performance Vesting provisions in favor of time
Vesting provisions as provided for herein. Unless otherwise determined by
the Committee in connection with the grant and set forth in the Award
Agreement, all unvested Performance Share Awards shall immediately vest
with respect to any required time vesting upon the Death or Disability of
the holder.
9.6 Special Limitations on Performance Share Awards. Unless an Award Agreement
approved by the Committee provides otherwise, Performance Shares awarded
under this Plan are intended to meet the requirements for exclusion from
coverage under Code Section 409A and all Performance Share Awards shall be
construed and administered accordingly.
16
ARTICLE 10
Transfers and Leaves of Absence
10.1 Transfer of Participant. For purposes of this Plan, the transfer of a
participant among the Company and its Affiliates is deemed not to be a
termination of employment.
10.2 Effect of Leaves of Absence. For purposes of this Plan, the following
leaves of absence are deemed not to be a termination of employment:
(a) a leave of absence, approved in writing by the Company, for military
service, sickness or any other purpose approved by the Company, if the period of
such leave does not exceed 90 days;
(b) a leave of absence in excess of 90 days, approved in writing by the
Company, but only if the employee's right to reemployment is guaranteed either
by a statute or by contract, and provided that, in the case of any such leave of
absence, the employee returns to work within 30 days after the end of such
leave; and
(c) any other absence determined by the Committee in its discretion not to
constitute a termination of employment.
ARTICLE 11
Effect of Change in Control
11.1 Change in Control Defined. "Change in Control" shall mean a "Change in
Ownership" as defined in (a) hereof; a "Change in Effective Control" as
defined in (b), hereof; or a "Change in Ownership of a Substantial Portion
of Assets" as defined in (c) hereof.
(a) Change in Ownership. For purposes of this Agreement, a change in the
ownership of the Company occurs on the date that any one person, or more than
one person acting as a group (as defined in subsection (d) hereof), acquires
ownership of stock of the Company that, together with stock held by such person
or group, constitutes more than 50 percent of the total fair market value or
total voting power of the stock of the Company. However, if any one person, or
more than one person acting as a group, is considered to own more than 50
percent of the total fair market value or total voting power of the stock of the
Company, the acquisition of additional stock by the same person or persons is
not considered to cause a change in the ownership of the Company (or to cause a
change in the effective control of the Company within the meaning of subsection
(b) hereof). An increase in the percentage of stock owned by any one person, or
persons acting as a group, as a result of a transaction in which the Company
acquires its stock in exchange for property will be treated as an acquisition of
stock for purposes of this section.
(b) Change in the Effective Control. For purposes of this Agreement, a
change in the effective control of the Company occurs on the date that either -
(i) Any one person, or more than one person acting as a group (as
determined under subsection (d) hereof), acquires (or has
acquired during the 12-month period ending on the date of the
most recent acquisition by such person or persons) ownership of
stock of the Company possessing 35 percent or more of the total
voting power of the stock of the Company; or
17
(ii) a majority of members of the Company's board of directors is
replaced during any 12-month period by directors whose
appointment or election is not endorsed by a majority of the
members of the Company's board of directors prior to the date of
the appointment or election.
In the absence of an event described in subsection (b)(i) or (ii) above, a
change in the effective control of a Company will not have occurred.
(c) Change in the Ownership of a Substantial Portion of the Company's
Assets. For purposes of this Agreement, a change in the ownership of a
substantial portion of the Company's assets occurs on the date that any one
person, or more than one person acting as a group (as determined in subsection
(d) hereof), acquires (or has acquired during the 12-month period ending on the
date of the most recent acquisition by such person or persons) assets from the
Company that have a total gross fair market value equal to or more than 40
percent of the total gross fair market value of all of the assets of the Company
immediately prior to such acquisition or acquisitions. For this purpose, gross
fair market value means the value of the assets of the Company, or the value of
the assets being disposed of, determined without regard to any liabilities
associated with such assets.
There is no Change in Control Event under this subsection (c) when there is
a transfer to an entity that is controlled by the shareholders of the Company
immediately after the transfer, as provided in this paragraph. A transfer of
assets by the Company is not treated as a change in the ownership of such assets
if the assets are transferred to --
(i) A shareholder of the Company (immediately before the asset
transfer) in exchange for or with respect to its stock;
(ii) An entity, 50 percent or more of the total value or voting power
of which is owned, directly or indirectly, by the Company;
(iii) A person, or more than one person acting as a group, that owns,
directly or indirectly, 50 percent or more of the total value or
voting power of all the outstanding stock of the Company; or
(iv) An entity, at least 50 percent of the total value or voting power
of which is owned, directly or indirectly, by a person described
in section (iii) above.
For purposes of this subsection (c) and except as otherwise provided, a person's
status is determined immediately after the transfer of the assets. For example,
a transfer to a corporation in which the transferor corporation has no ownership
interest before the transaction, but which is a majority-owned subsidiary of the
transferor corporation after the transaction is not treated as a change in the
ownership of the assets of the transferor corporation.
(d) Persons Acting as a Group. Persons will not be considered to be acting
as a group solely because they purchase assets or purchase or own stock of the
same corporation at the same time, or as a result of the same public offering.
However, persons will be considered to be acting as a group if they are owners
of a corporation that enters into a merger, consolidation, purchase or
acquisition of stock, purchase or acquisition of assets, or similar business
transaction with the Company. If a person, including an entity shareholder, owns
stock in both corporations that enter into a merger, consolidation, purchase or
acquisition of stock, or similar transaction, such shareholder is considered to
be acting as a group with other shareholders in a corporation only to the extent
of the ownership in that corporation prior to the transaction giving rise to the
change and not with the ownership interest in the other corporation.
11.2 Effect of Change in Control. Unless otherwise determined by the Committee
in connection with the grant and set forth in the Award Agreement, in the
event of a Change in Control of the Company:
18
(a) all Stock Options or SARs, notwithstanding any limitations set forth in
the Plan or Award Agreement shall become fully Vested;
(b) all Restricted Shares, notwithstanding any limitations set forth in the
Plan or Award Agreement shall become fully Vested; and
(c) all Restricted Share Units and Performance Shares, notwithstanding any
limitations set forth in the Plan or Award Agreement shall become fully Vested.
In addition, in connection with a Change in Control the Committee shall have the
right, in its sole discretion, to:
(d) cancel any or all outstanding Stock Options, SARs, Restricted Share
Units and Performance Shares in exchange for the kind and amount of shares of
the surviving or new corporation, cash, securities, evidences of indebtedness,
other property or any combination thereof receivable in respect of one Share
upon consummation of the transaction in question (the "Acquisition
Consideration") that the holder of the Stock Option, SAR, Restricted Share Unit
or Performance Share would have received had the Stock Option, SAR, Restricted
Share Unit or Performance Share been exercised or converted into Shares, as
applicable, prior to such transaction, less the applicable exercise or purchase
price therefor;
(e) cause the holders of any or all Stock Options, SARs, Restricted Share
Units and Performance Shares to have the right thereafter and during the term of
the Stock Option, SAR, Restricted Share Unit or Performance Share to receive
upon exercise thereof the Acquisition Consideration receivable upon the
consummation of such transaction by a holder of the number of Common Shares
which might have been obtained upon exercise or conversion of all or any portion
thereof, less the applicable exercise or purchase price therefor, or to convert
such Stock Option, SAR, Restricted Share Unit or Performance Share into a stock
option, appreciation right, restricted share unit or performance share relating
to the surviving or new corporation in the transaction; or
(f) take such other action as it deems appropriate to preserve the value of
the Award to the Participant, including the cancellation of such Award and the
payment of the value of the Acquisition Consideration attributable to the Award,
net of payments due from the holder thereof upon exercise if any, in cash.
The Committee may provide for any of the foregoing in an Award Agreement
governing an Award in advance, may provide for any of the foregoing in
connection with a Change in Control, or do both. Alternatively, the Committee
shall also have the right to require any purchaser of the Company's assets or
stock, as the case may be, to take any of the actions set forth in the preceding
sentence.
The manner of application and interpretation of the foregoing provisions of
this Section 11.2 shall be determined by the Committee in its sole and absolute
discretion.
11.3 Code Section 409A. Unless an Award Agreement approved by the Committee
provides otherwise, each Award granted under this Plan is intended to meet
the requirements for exclusion from coverage under Code Section 409A. If
the Committee provides than an Award shall be subject to Code Section 409A,
then, notwithstanding the other provisions of this Article 11, the
Committee may provide in the Award Agreement for such changes to the
definition of Change in Control from the definition set forth in this
Article 11, and for such changes to the Committee's rights upon a Change in
Control, as the Committee may deem necessary in order for such Award to
comply with Code Section 409A.
19
ARTICLE 12
Transferability of Awards
12.1 Awards Are Non-Transferable. Except as provided in Sections 12.2 and 12.3,
Awards are non-transferable and any attempts to assign, pledge, hypothecate
or otherwise alienate or encumber (whether by operation of law or
otherwise) any Award shall be null and void.
12.2 Inter-Vivos Exercise of Awards. During a participant's lifetime, Awards are
exercisable only by the participant or, as permitted by applicable law and
notwithstanding Section 12.1 to the contrary, the participant's guardian or
other legal representative.
12.3 Limited Transferability of Certain Awards. Notwithstanding Section 12.1 to
the contrary, Awards may be transferred by will and by the laws of descent
and distribution. Moreover, the Committee, in its discretion, may allow at
or after the time of grant the transferability of Awards which are Vested,
provided that the permitted transfer is made (a) if the Award is an
Incentive Stock Option, the transfer is consistent with Section 422 of the
Code; (b) to the Company (for example in the case of forfeiture of
Restricted Shares), an Affiliate or a person acting as the agent of the
foregoing or which is otherwise determined by the Committee to be in the
interests of the Company; or (c) by the participant for no consideration to
Immediate Family Members or to a bona fide trust, partnership or other
entity controlled by and for the benefit of one or more Immediate Family
Members. "Immediate Family Members" means the participant's spouse,
children, stepchildren, parents, stepparents, siblings (including half
brothers and sisters), in-laws and other individuals who have a
relationship to the participant arising because of a legal adoption. No
transfer may be made to the extent that transferability would cause Form
S-8 or any successor form thereto not to be available to register Shares
related to an Award. The Committee in its discretion may impose additional
terms and conditions upon transferability.
ARTICLE 13
Amendment and Discontinuation
13.1 Amendment or Discontinuation of this Plan. The Board of Directors may
amend, alter, or discontinue this Plan at any time, provided that no
amendment, alteration, or discontinuance may be made:
(a) which would materially and adversely affect the rights of a participant
under any Award granted prior to the date such action is adopted by the Board of
Directors without the participant's written consent thereto; and
(b) without shareholder approval, if shareholder approval is required under
applicable laws, regulations or exchange requirements (including Section 422 of
the Code with respect to ISOs, and for the purpose of qualification as
"performance-based compensation" under Section 162(m) of the Code).
Notwithstanding the foregoing, this Plan may be amended without
participants' consent to: (i) comply with any law; (ii) preserve any intended
favorable tax effects for the Company, the Plan or participants; or (iii) avoid
any unintended unfavorable tax effects for the Company, the Plan or
participants.
13.2 Amendment of Grants. The Committee may amend, prospectively or
retroactively, the terms of any outstanding Award, provided that no such
amendment may be inconsistent with the terms of this Plan (specifically
including the prohibition on granting Stock Options or SARs with an
Exercise Price less
20
than 100% of the Fair Market Value of the Common Shares on the Date of
Grant) or would materially and adversely affect the rights of any holder
without his or her written consent.
ARTICLE 14
Issuance of Shares and Share Certificates
14.1 Issuance of Shares. The Company will issue or cause to be issued Shares as
soon as practicable upon exercise or conversion of an Award that is payable
in Shares. No certificates for Shares will be issued until full payment has
been made, to the extent payment is required. Until the issuance (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company) of the stock certificate
evidencing such Shares, no right to vote or receive dividends or any other
rights as a shareholder will exist with respect to the Shares,
notwithstanding the exercise or conversion of the Award payable in shares.
14.2 Delivery of Share Certificates. The Company is not required to issue or
deliver any certificates for Shares issuable with respect to Awards under
this Plan prior to the fulfillment of all of the following conditions:
(a) payment in full for the Shares and for any tax withholding (See Article
15);
(b) completion of any registration or other qualification of such Shares
under any Federal or state laws or under the rulings or regulations of the
Securities and Exchange Commission or any other regulating body which the
Committee in its discretion deems necessary or advisable;
(c) admission of such Shares to listing on The Nasdaq Stock Market or any
stock exchange on which the Shares are listed;
(d) in the event the Shares are not registered under the Securities Act of
1933, qualification as a private placement under said Act;
(e) obtaining of any approval or other clearance from any Federal or state
governmental agency which the Committee in its discretion determines to be
necessary or advisable; and
(f) the Committee is fully satisfied that the issuance and delivery of
Shares under this Plan is in compliance with applicable Federal, state or
local law, rule, regulation or ordinance or any rule or regulation of any
other regulating body, for which the Committee may seek approval of counsel
for the Company.
14.3 Applicable Restrictions on Shares. Shares issued with respect to Awards may
be subject to such stock transfer orders and other restrictions as the
Committee may determine necessary or advisable under any applicable Federal
or state securities law rules, regulations and other requirements, the
rules, regulations and other requirements of The Nasdaq Stock Market or any
stock exchange upon which the Shares are then-listed, and any other
applicable Federal or state law and will include any restrictive legends on
stock certificates that the Committee may deem appropriate to include.
14.4 Book Entry. In lieu of the issuance of stock certificates evidencing
Shares, the Company may use a "book entry" system in which a computerized
or manual entry is made in the records of the Company to evidence the
issuance of such Shares. Such Company records are, absent manifest error,
binding on all parties.
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ARTICLE 15
Satisfaction of Tax Liabilities
15.1 In General. The Company shall withhold any taxes which the Committee
determines the Company is required by law or required by the terms of this
Plan to withhold in connection with any payments incident to this Plan. The
participant or other recipient shall provide the Committee with such
additional information or documentation as may be necessary for the Company
to discharge its obligations under this Section. The Company may withhold:
(a) cash, (b) subject to any limitations under Rule 16b-3, Common Shares to
be issued, or (c) any combination thereof, in an amount equal to the amount
which the Committee determines is necessary to satisfy the obligation of
the Company, a Subsidiary or a Parent to withhold federal, state and local
income taxes or other amounts incurred by reason of the grant or exercise
of an Award, its disposition, or the disposition of the underlying Common
Shares. Alternatively, the Company may require the holder to pay to the
Company such amounts, in cash, promptly upon demand.
15.2 Withholding from Share Distributions. With respect to a distribution in
Shares pursuant to Restricted Share, Restricted Share Unit or Performance
Share Award under the Plan, the Committee may cause the Company to sell the
fewest number of such Shares for the proceeds of such sale to equal (or
exceed by not more than that actual sale price of a single Share) the
Company's required tax withholding relating to such distribution. The
Committee may withhold the proceeds of such sale for purposes of satisfying
such tax withholding obligation.
15.3 Section 83(b) Election. The Committee may, where applicable, provide in an
Award Agreement the right of the participant to make an election pursuant
to Section 83(b) of the Code, or comparable provisions of any state tax
law, to include in the participant's gross income the fair market value as
of the Award as of the Date of Grant. The participant may make such an
election only if, prior to making any such election, the participant (a)
notifies the Company of participant's intention to make such election in
accordance with any notice requirements set forth in the Award Agreement,
and (b) pays to the Company an amount sufficient to satisfy any taxes or
other amounts required by any governmental authority to be withheld or paid
over to such authority for participant's account, or otherwise makes
arrangements satisfactory to the Company for the payment of such amounts
through withholding or otherwise.
ARTICLE 16
General Provisions
16.1 No Implied Rights to Awards or Employment. No potential participant has any
claim or right to be granted an Award under this Plan, and there is no
obligation of uniformity of treatment of participants under this Plan.
Neither this Plan nor any Award thereunder shall be construed as giving any
individual any right to continued employment with the Company or any
Affiliate. The Plan does not constitute a contract of employment, and the
Company and each Affiliate expressly reserve the right at any time to
terminate employees free from liability, or any claim, under this Plan,
except as may be specifically provided in this Plan or in an Award
Agreement.
16.2 Other Compensation Plans. Nothing contained in this Plan prevents the Board
of Directors from adopting other or additional compensation arrangements,
subject to shareholder approval if such approval is required, and such
arrangements may be either generally applicable or applicable only in
specific cases.
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16.3 Rule 16b-3 Compliance. The Plan is intended to comply with all applicable
conditions of Rule 16b-3 of the Exchange Act, as such rule may be amended
from time to time ("Rule 16b-3"). All transactions involving any
participant subject to Section 16(a) of the Exchange Act shall be subject
to the conditions set forth in Rule 16b-3, regardless of whether such
conditions are expressly set forth in this Plan. Any provision of this Plan
that is contrary to Rule 16b-3 does not apply to such participants.
16.4 Code Section 162(m) Compliance. The Plan is intended to comply with all
applicable requirements of Section 162(m) of the Code with respect to
"performance-based compensation" for Section 162(m) Persons. Unless the
Committee expressly determines otherwise, any provision of this Plan that
is contrary to such requirements does not apply to such "performance-based
compensation."
16.5 Successors. All obligations of the Company with respect to Awards granted
under this Plan are binding on any successor to the Company, whether as a
result of a direct or indirect purchase, merger, consolidation or otherwise
of all or substantially all of the business and/or assets of the Company.
16.6 Severability. In the event any provision of this Plan, or the application
thereof to any person or circumstances, is held illegal or invalid for any
reason, the illegality or invalidity shall not affect the remaining parts
of this Plan, or other applications, and this Plan is to be construed and
enforced as if the illegal or invalid provision had not been included.
16.7 Governing Law. To the extent not preempted by Federal law, this Plan and
all Award Agreements pursuant thereto are construed in accordance with and
governed by the laws of the State of Ohio. This Plan is not intended to be
governed by the Employee Retirement Income Security Act and shall be so
construed and administered.
16.8 Legal Requirements. No Awards shall be granted and the Company shall have
no obligation to make any payment under the Plan, whether in Shares, cash,
or a combination thereof, unless such payment is, without further action by
the Committee, in compliance with all applicable Federal and state laws and
regulations, including, without limitation, the Code and Federal and state
securities laws.
16.9 Forfeiture by Employees in Connection with Termination for Cause.
Notwithstanding any other provision of this Plan, subject to the provisions
of the Award Agreement to which such Award relates, upon the termination of
employment of an employee Participant for Cause such employee Participant
shall forfeit all benefits associated with any Award as provided for
herein. Pursuant to this provision, an employee shall forfeit all
unexercised Options whether or not previously vested, all unexercised SARs
whether or not previously vested and all Restricted Shares, Restricted
Share Units and Performance Shares for which the delivery of Shares has not
yet occurred.
ARTICLE 17
Effective Date and Term
17.1 Effective Date. The effective date of this United Bancorp, Inc. 2008 Stock
Incentive Plan is the date on which the shareholders of the Company approve
it at a duly held shareholders' meeting.
17.2 Termination Date. This Plan will continue in effect until midnight on the
day before the tenth anniversary of the effective date specified in Section
17.1; provided, however, that Awards granted on or before that date may
extend beyond that date.
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