Exhibit 4.2
EVANS BANCORP, INC. 1999 STOCK OPTION
AND LONG-TERM INCENTIVE PLAN
(AS AMENDED AND RESTATED JANUARY 27, 2003)
1. PURPOSE.
Evans Bancorp, Inc., a New York corporation (the "Corporation"), has
adopted the Evans Bancorp, Inc. Stock Option and Long-Term Incentive Plan,
effective as of January 19, 1999.
The purpose of the Evans Bancorp, Inc. Stock Option and Long-Term Incentive
Plan (the "Plan") is to enable the Corporation and its subsidiaries to
attract, retain, and reward employees non-employee directors and
consultants ("Eligible Persons") by offering them an opportunity to have a
greater proprietary interest in and closer identity with the Corporation
and with its financial success. An option granted under the Plan to an
Eligible Person to purchase shares of the Corporation's common stock, $.50
par value ("Common Stock"), may be an incentive stock option ("ISO") as
defined in Section 422 of the Internal Revenue Code of 1986 as heretofore
or hereafter amended ("Code") or a nonqualified stock option ("NSO")
(collectively referred to as "Options") and may be accompanied by stock
appreciation rights ("SARs"). An Option that is not an ISO shall be an NSO.
Shares of Common Stock ("Restricted Stock") may be granted or offered for
sale to Eligible Persons either separately from or in tandem with the grant
of an Option. Grants of Options and SARs, and grants of Restricted Stock to
Eligible Persons, shall be collectively referred to as "Awards." Proceeds
received by the Corporation from the sale of Restricted Stock, or shares of
Common Stock pursuant to Options granted under the Plan, shall be used for
general corporate purposes.
2. ADMINISTRATION.
The Plan shall be administered by a committee ("Committee") appointed by
the Board. The Committee shall be composed of not fewer than two members.
Except for Director Options described in Section 5A, the Committee Members
shall not be eligible to receive Awards under the Plan. Subject to the
express provisions of the Plan, the Committee may interpret the Plan,
prescribe, amend and rescind rules and regulations relating to it,
determine the terms and provisions of Awards to Eligible Persons under the
Plan (which need not be identical), and make such other determinations as
it deems necessary and advisable for the administration of the Plan. The
Committee may delegate decisions with respect to Awards to Eligible Persons
who are not elected officers or directors of the Corporation or its
subsidiaries to such elected officer or officers of the Corporation as the
Committee determines. The decisions of the Committee under the Plan shall
be conclusive and binding. No member of the Board or the Committee shall be
liable for any action taken or determination made hereunder in good faith.
Service on the Committee shall constitute service as a director of the
Corporation so that the members of the Committee shall be entitled to
indemnification and reimbursement as directors of the Corporation pursuant
to its bylaws.
3. ELIGIBILITY.
Eligible Persons who have been selected by the Committee to receive an
Award shall participate in the Plan. Non-employee directors shall also
participate in the Plan as provided in Section 5A. (Eligible Persons who
participate in the Plan shall be referred to as "Participants"). SARs may
be granted only to an Eligible Person to whom an Option has been granted.
Shares of Restricted Stock may be granted or sold to Eligible Persons.
ISO's may be granted only to an employee of the Corporation ("Employee").
The Committee shall determine, within the limits of the express provisions
of the Plan, those Eligible Persons to whom, and the time or times at which
Awards shall be granted. Except for Director Options, the Committee shall
also determine, with respect to Awards to Eligible Persons, the number of
shares of Common Stock to be subject to each such Award; the type of
Options (ISO or NSO); the duration of each Option; the exercise price under
each Option; the time or times within which (during the term of the Option)
all or portions of each Option may be exercised; whether cash, Common
Stock, Options or other property may be accepted in full or partial payment
upon exercise of an Option; whether an Option shall include SARs and the
terms of the SARs; the base price with respect to each Nontandem SAR
(hereinafter defined); the restrictions to be imposed on shares of
Restricted Stock; whether the shares of Restricted Stock shall be granted
or sold; and any other terms and conditions of such Awards. In making such
determinations, the Committee may take into account the nature of the
services rendered by the Eligible Person, his present and potential
contributions to the Corporation's success and such other factors as the
Committee in its discretion shall deem relevant.
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4. COMMON STOCK.
The total number of shares of Common Stock that may be subject to Awards
(including ISOs and Director Options)] under the Plan shall be 250,000
shares. Such total number of shares shall be adjusted in accordance with
the provisions of Section 12 hereof, and a share of Common Stock subject to
an Option and its related Tandem SAR (hereinafter defined) shall only be
counted once. Such shares may be either authorized but unissued shares or
reacquired shares. In the event that (a) any Option granted under the Plan
expires unexercised or is terminated, surrendered or canceled (other than
in connection with the exercise of a Tandem SAR) without being exercised,
in whole or in part, for any reason, or (b) any Nontandem SAR granted under
the Plan expires unexercised or is terminated, surrendered or canceled
without being exercised, in whole or in part, for any reason, or (c) any
Restricted Stock granted under the Plan is forfeited or reacquired by the
Corporation in connection with the violation of any restrictions imposed
upon such shares pursuant to the Plan, then the number of shares of Common
Stock theretofore subject to such Option, or SAR, or constituting such
Restricted Stock, or the unexercised, terminated, surrendered, forfeited,
canceled or reacquired portion thereof shall be added to the remaining
number of shares of Common Stock that may be made subject to Awards under
the Plan. Such Awards include Awards to former holders of such Options,
SARs, or Restricted Stock and, with respect to Awards to Eligible Persons,
upon such terms and conditions as the Committee shall determine, which
terms may be more or less favorable than those applicable to such former
holders of Options, SARs or Restricted Stock.
5. OPTIONS.
The following provisions shall apply to each Option granted to an Eligible
Person:
(a) Options (other than Director Options) may be granted to Eligible
Persons at any time and from time to time as shall be determined by
the Committee. Except for Director Options, the Committee shall have
complete discretion in determining the number of shares of Common
Stock subject to Options granted to each Eligible Person. The
Committee may grant any type of Option to purchase Common Stock that
is permitted by law at the time of the grant, including ISOs. Unless
otherwise expressly provided at the time of grant, Options granted
under the Plan will not be ISOs.
(b) Each Option shall be evidenced by a written agreement specifying the
type of Option granted, the Option exercise price, the terms for
payment of the exercise price, the duration of the Option, the number
of shares of Common Stock to which the Option pertains and the terms
of related SARs, if any (the "Option Agreement"). An Option Agreement
may also contain a vesting schedule, a noncompetition agreement, a
confidentiality provision, provisions for forfeiture in the event of
termination of the Eligible Person's employment by the Corporation and
such restrictions and conditions and other terms as the Committee
shall determine. Option Agreements need not be identical.
(c) The Committee, in its discretion, shall have the power to accelerate
the dates for exercise of any or all Options, or any part thereof,
granted to an Eligible Person under the Plan.
(d) In the discretion of the Committee, the grant of any Option may be
accompanied by a Reload Option. A Reload Option may be granted to an
Eligible Person who is an Option holder and who satisfies all or part
of the exercise price of the Option with shares of Common Stock. The
Reload Option represents an additional Option to acquire the same
number of shares of Common Stock as is used by the Eligible Person to
pay for the original Option. A Reload Option is subject to all of the
same terms and conditions as the original Option except that (i) the
exercise price of the shares of Common Stock subject to the Reload
Option will be determined at the time the original Option is exercised
and (ii) such Reload Option will conform to all provisions of the Plan
at the time the original Option is exercised
5A. Director Options. Each Director of the Corporation who is not an
employee of the Corporation or any subsidiary of the Corporation
(a "Non-Employee Director") shall be granted options (the
"Director Options"), subject to the following terms and
conditions:
(a) GRANT. As of the date of the 2003 Annual Meeting of
Stockholders and the date of each Annual Meeting of
Stockholders held thereafter during the term of this Plan,
each Non-Employee Director elected at such meeting or
continuing in office after such meeting shall receive an
option to purchase 1,000 shares. In the event a Non-Employee
Director serves as Chairman of the Board of Directors, he
shall receive an option to purchase 2,500 shares instead of
1,000 shares and in the event a Non-Employee Director serves
as Vice Chairman of the Board of Directors, he shall receive
an option to purchase 1,500 shares instead of 1,000 shares.
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(b) EXERCISE PRICE. The exercise price per share for the Director Options
shall be 100% of the Fair Market Value of the Common Stock at the time
the Director Option is granted. In no event may the exercise price be
less than the par value of the Common Stock subject to such Director
Option.
(c) VESTING. The Director Options granted shall vest six months from the
date of grant, unless compliance with such holding period is not
required to qualify for an exemption from potential liability under
Section 16 of the Securities Exchange Act of 1934, as amended from
time and any successor thereto.
(d) TERM. The term of the Director Options shall be ten years.
(e) EXPIRATION. Notwithstanding the provisions of Section 8 of this Plan,
in the event a Non-Employee Director is removed for cause, then the
unexercised portion of the vested Director Option shall expire thirty
days after the date he or she is no longer a Director. In the event
that the Non-Employee Director ceases to serve as a Director for any
other reason including death or disability, then the unexercised
portion of the vested Director Option shall expire on the earlier of
three years from the date the Non-Employee Director ceases to serve as
a Director or the expiration of the ten year term of the Director
Option.
(f) DESIGNATION. All of the Director Options shall be designated NSO's.
(g) OTHER PROVISIONS. Subject to the provisions of this Section 5A, all of
the provisions of this Plan not inconsistent with this Section 5A
shall apply to the Director Options.
6. REQUIRED TERMS AND CONDITIONS OF ISOs.
The provisions of each ISO granted to an Employee under this Section 6
shall be interpreted in a manner consistent with Section 422 of the Code
and with all regulations issued thereunder. Each ISO granted to an Employee
shall be in such form and subject to such restrictions and conditions and
other terms as the Committee may determine at the time of grant, subject to
the general provisions of the Plan, Section 422 of the Code, the applicable
Option Agreement and the following specific rules:
(a) EXERCISE PRICE. Except as otherwise provided, the per share exercise
price of each ISO shall be at least 100% of the Fair Market Value of
the Common Stock at the time such ISO is granted, provided that in the
case of an ISO granted to an Employee who at the time of grant owns
(as defined in Section 424(d) of the Code) stock of the Corporation or
its parent or subsidiaries possessing more than 10% of the total
combined voting power of all classes of stock of any such corporation,
the exercise price shall be at least 110% of the Fair Market Value of
the Common Stock subject to the ISO at the time such ISO is granted
and the ISO by its terms shall not be exercisable after the expiration
of five years from the date the ISO is granted. In no event may the
exercise price be less than the par value of the Common Stock subject
to such ISO.
(b) MAXIMUM TERM. Subject to earlier termination as provided in Section 8,
each ISO shall expire on the date determined in the applicable Option
Agreement at the time the ISO is granted, provided that no ISO shall
be exercisable after the expiration of 10 years from the date it is
granted, except as otherwise provided in subsection (a) next above.
(c) TIME OF EXERCISE. The Committee shall specify in the Option Agreement,
at the time each ISO is granted, the duration of each ISO and the time
or times within which (during the term of the ISO) all or portions of
each ISO may be exercised, except to the extent that other terms of
exercise are specifically provided by other provisions of the Plan.
(d) VALUE OF SHARES. The aggregate Fair Market Value (determined at the
time of grant) of Common Stock with respect to which ISOs are
exercisable for the first time by an Employee during any calendar year
(under all option plans of the Corporation or of a corporation which,
at the time such ISO was granted, is a parent or subsidiary of the
Corporation, or is a predecessor corporation of any such corporation)
shall not exceed $100,000. If the aggregate Fair Market Value
(determined at the time of grant) of the stock subject to an Option,
which first becomes exercisable in any calendar year and during this
period exceeds the limitation of this subsection, so much of the
Option that does not exceed the applicable dollar limit shall be an
ISO and the remainder shall be an NSO; but in all other respects, the
original Option Agreement shall remain in full force and effect.
(e) CONVERSION. The Committee may, in its sole discretion, cause the
Corporation to convert an ISO to an NSO upon such terms and conditions
and in such manner as the Committee deems equitable.
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7. REQUIRED TERMS AND CONDITIONS OF NSOs.
Each NSO granted to an Eligible Person shall be in such form and subject to
such restrictions and conditions and other terms as the Committee may
determine at the time of grant, subject to the general provisions of the
Plan, the applicable Option Agreement, and the following specific rules:
(a) EXERCISE PRICE. The number of shares of Common Stock subject to each
NSO and the per share exercise price of each NSO shall be determined
by the Committee at the time the NSO is granted, provided that such
exercise price shall not be less than 100% of the Fair Market Value of
the Common Stock on the date the NSO is granted. In no event may the
exercise price be less than the par value of the Common Stock subject
to such NSO.
(b) MAXIMUM TERM. Subject to earlier termination as provided in Section 8,
each such NSO shall expire on the date determined in the applicable
Option Agreement at the time the NSO is granted, provided that such
date shall not be more than ten years after the date of grant.
(c) TIME OF EXERCISE. The Committee shall specify in the Option Agreement
at the time each NSO is granted, the duration of each NSO and the time
or times within which (during the term of the NSO) all or portions of
each NSO may be exercised, except to the extent that other terms of
exercise are specifically provided by other provisions of the Plan.
8. EXPIRATION OF OPTIONS GRANTED TO ELIGIBLE PERSONS; TERMINATION OF
EMPLOYMENT, DISABILITY OR DEATH, OR RETIREMENT.
(a) GENERAL RULE. Except with respect to Options expiring pursuant to
subsection 8(b), (c) or (d) below, each Option granted to an Eligible
Person shall, expire on the expiration date or dates set forth in the
applicable Option Agreement. Each Option expiring pursuant to
subsection 8(b), (c) or (d) below shall expire on the date set forth
in subsection 8(b), (c) or (d) notwithstanding any restrictions and
conditions that may be contained in an Eligible Person's Option
Agreement.
(b) EXPIRATION UPON TERMINATION OF EMPLOYMENT. An Option granted to an
Eligible Person shall expire on the first to occur of (i) the
applicable date or dates determined pursuant to subsection 8(a) or
(ii) the date that the employment or period of service of the Eligible
Person with the Corporation and its subsidiaries terminates for any
reason other than death or disability pursuant to subsection 8(c) or
retirement pursuant to subsection 8(d). Notwithstanding the preceding
provisions of this subsection 8(b), the Committee, in its sole
discretion, may permit an Eligible Person (i) to exercise an Option
that is exercisable immediately prior to the termination of employment
or termination of his period of service, notwithstanding any
restrictions and conditions that may be contained in his Option
Agreement during a period not to exceed one month following his
termination of employment or period of service, and/or (ii) to
exercise an Option that becomes exercisable after termination of
employment or termination of his period of service and prior to the
termination of such one month period, during such period. In no event,
however, may the Committee permit such Eligible Person to exercise an
Option under this subsection 8(b) after the expiration date or dates
set forth in the applicable Option Agreement.
(c) EXPIRATION UPON DISABILITY OR DEATH. If the employment or period of
service of an Eligible Person with the Corporation and its
subsidiaries terminates by reason of disability (as determined by the
Committee) or death, his unexpired Options or portions thereof, if
any, held on the date of disability or death that would expire
pursuant to the terms of his Option Agreement during the 12-month
period commencing on the date of disability or death, shall expire on
the last day of such 12-month period. During such 12-month period, any
such Option or portion thereof referred to in the preceding sentence
may be exercised by such Eligible Person, or the person specified in
Section 9, with respect to the same number of shares and in the same
manner and to the same extent as if the Eligible Person had continued
as an employee, director or consultant of the Corporation or its
subsidiaries during such 12-month period. Any unexpired Option or
portion thereof held by the Eligible Person on the date of disability
or death, that would expire pursuant to the terms of his Option
Agreement on a date more than 12 months after the date of disability
or death, shall expire unexercised on the date of disability or death.
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(d) EXPIRATION UPON RETIREMENT. If the employment of an Eligible Person
with the Corporation and its subsidiaries terminates due to retirement
under any qualified retirement plan maintained by the Corporation
and/or any of its subsidiaries, his Option shall expire on the earlier
to occur of (i) the applicable expiration date or dates set forth in
the applicable Option Agreement(s) or (ii) the first anniversary of
the date of such termination of employment. If an Eligible Person who
has so retired dies prior to exercising in full an Option that has not
expired pursuant to the preceding sentence, then notwithstanding the
preceding sentence, such Option shall expire on the first anniversary
of the date of the Eligible Person's death. During the period
commencing on the date of retirement or death, as the case may be, and
ending on the applicable later expiration date, the Options may be
exercised by such Eligible Person, or the person specified in Section
9, with respect to the same number of shares and in the same manner
and to the same extent as if the Eligible Person had continued as a
full-time employee of the Corporation or its subsidiaries during such
period.
9. METHOD OF EXERCISE OF OPTIONS.
Any Option granted under the Plan may be exercised by the Participant, by a
legatee or legatees of such Option under the Participant's last will, by
his executors, personal representatives or distributees, or by his assignee
or assignees as provided in Section 14 below, by delivering to the
Secretary of the Corporation written notice of the number of shares of
Common Stock with respect to which the Option is being exercised,
accompanied by full payment to the Corporation of the exercise price of the
shares being purchased under the Option, and by satisfying all other
conditions provided for in the Plan. Except as otherwise provided in the
Plan or in any Option Agreement, the exercise price of Common Stock upon
exercise of any Option by an Eligible Person shall be paid in full (i) in
cash, (ii) in Common Stock valued at its Fair Market Value on the date of
exercise, (iii) in cash by a broker-dealer to whom the holder of the Option
has submitted an exercise notice consisting of a fully endorsed Option,
(iv) by agreeing to surrender SARs then exercisable by him valued pursuant
to subsection 10(b) below on the date of exercise, (v) by agreeing to
surrender Options then exercisable by him valued at the excess of the
aggregate Fair Market Value of the Common Stock subject to such Options on
the date of exercise over the aggregate option price of such Common Stock,
(vi) by directing the Corporation to withhold such number of shares of
Common Stock otherwise issuable upon exercise of such Option having an
aggregate Fair Market Value on the date of exercise equal to the exercise
price of the Option, or (vii) by such other medium of payment as the
Committee, in its discretion, shall authorize, or by any combination of
(i), (ii), (iii), (iv), (v) and (vi), at the discretion of the Committee or
in any manner provided in the Option Agreement. In the case of payment
pursuant to (ii), (iii), (iv), (v) or (vi) above, the Participant's
election must be made on or prior to the date of exercise of the Option and
must be irrevocable. In lieu of a separate election governing each exercise
of an Award, a Participant may file a blanket election which shall govern
all future exercises of Awards until revoked by the Participant. The
Corporation shall issue, in the name of the Participant (or, if applicable,
the legatee(s), executor(s), personal representative(s), or distributee(s)
of a deceased Participant, or the assignee(s) as provided in Section 14),
stock certificates representing the total number of shares of Common Stock
issuable pursuant to the exercise of any Option as soon as reasonably
practicable after such exercise, provided that any Common Stock purchased
by an Eligible Person through a broker-dealer pursuant to clause (iii)
above shall be delivered to such broker-dealer in accordance with 12 CFR
Section 220.3(e)(4).
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10. REQUIRED TERMS OF STOCK APPRECIATION RIGHTS.
If deemed by the Committee to be in the best interests of the Corporation,
an Eligible Person who receives an Option may also be granted a SAR. Each
SAR shall be granted subject to such restrictions and conditions and other
terms as the Committee may specify in the Option Agreement at the time the
Option is granted, or as the Committee may determine at the time of grant,
subject to the general provisions of the Plan, and the following specific
rules:
(a) GRANT OF SARs. SARs will be granted, if at all, at the time of
granting of an Option and may be granted either in addition to the
related Option ("Nontandem SAR") or in tandem with the related Option
("Tandem SAR"). At the time of grant of a Nontandem SAR, the Committee
shall specify the base price of Common Stock to be used in connection
with the calculation described in subsection (b)(i) below. The base
price of a Nontandem SAR shall not be less than 80% of the Fair Market
Value of a share of Common Stock on the date of grant, provided that
the Board shall approve any base price that is less than 100% of the
Fair Market Value of the Common Stock on the date of grant. The number
of shares of Common Stock subject to a Tandem SAR shall not exceed one
for each share of Common Stock subject to the Option. The number of
shares of Common Stock subject to a Nontandem SAR shall be one for
each share of Common Stock subject to the Option. No Tandem SAR may be
granted to an Eligible Person in connection with an ISO in a manner
that will disqualify the ISO under Section 422 of the Code unless the
Eligible Person consents thereto.
(b) VALUE OF SARs. Upon exercise, a SAR shall entitle the Eligible Person
to receive from the Corporation the number of shares of Common Stock
having an aggregate Fair Market Value equal to the following:
(i) in the case of a Nontandem SAR, the excess of the Fair Market
Value of one share of Common Stock as of the date on which the
SAR is exercised over the base price specified in such SAR,
multiplied by the number of shares of Common Stock then subject
to the SAR, or the portion thereof being exercised.
(ii) in the case of a Tandem SAR, the excess of the Fair Market Value
of one share of Common Stock as of the date on which the SAR is
exercised over the exercise price per share specified in such
Option, multiplied by the number of shares then subject to the
Option, or the portion thereof as to which the SAR is being
exercised.
Cash shall be delivered in lieu of any fractional shares. The Committee, in
its discretion, shall be entitled to cause the Corporation to elect to
settle any part or all of its obligation arising out of the exercise of a
SAR by the payment of cash in lieu of all or part of the shares of Common
Stock it would otherwise be obligated to deliver in an amount equal to the
Fair Market Value of such shares on the date of exercise.
(c) EXERCISE OF TANDEM SARs. A Tandem SAR shall be exercisable during such
time, and be subject to such restrictions and conditions and other
terms, as the Committee shall specify in the applicable Option
Agreement at the time such Tandem SAR is granted. Notwithstanding the
preceding sentence, the Tandem SAR shall be exercisable only at such
time as the Option to which it relates is exercisable and shall be
subject to the restrictions and conditions and other terms applicable
to such Option. Upon the exercise of a Tandem SAR, the unexercised
Option, or the portion thereof to which the exercised portion of the
Tandem SAR is related, shall expire. The exercise of any Option shall
cause the expiration of the Tandem SAR related to such Option, or
portion thereof, that is exercised.
(d) EXERCISE OF NONTANDEM SARs.
(i) A Nontandem SAR granted under the Plan shall be exercisable during
such time, and be subject to such restrictions and conditions and
other terms, as the Committee shall specify in the Option Agreement at
the time the Nontandem SAR is granted, which restrictions and
conditions and other terms need not be the same for all Eligible
Persons. Without limiting the generality of the foregoing, the
Committee may specify a minimum number of full shares with respect to
which any exercise of a Nontandem SAR must be made.
(ii) Subject to earlier termination as provided in the last sentence
of this paragraph (ii), a Nontandem SAR granted under the Plan shall
expire on the date specified by the Committee in the Option Agreement,
provided that such date shall not be more than ten years after the
date of grant. The Committee shall specify in the Option Agreement at
the time each Nontandem SAR is granted, the time during which the
Nontandem SAR may be exercised prior to its expiration and other
provisions relevant to the SAR. The Committee, in its discretion,
shall have the power to accelerate the dates for exercise of any or
all Nontandem SARs or any part thereof, granted under the Plan.
Notwithstanding the foregoing, any Nontandem SAR granted to an
Eligible Person under the Plan shall expire, notwithstanding any
restrictions and conditions that may be contained in his applicable
Option Agreement, following a termination of his employment with the
Corporation and its subsidiaries in the same manner as an Option held
by such Eligible Person would expire pursuant to the provisions of
Section 8.
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(e) PARTIES ENTITLED TO EXERCISE SARs. A SAR may be exercised only by the
Eligible Person (or by a legatee or legatees of such SAR under his
last will, by his executors, personal representatives or distributees,
or by an assignee or assignees pursuant to Section 14 below).
(f) SETTLEMENT OF SARs. As soon as is reasonably practicable after the
exercise of a SAR, the Corporation shall (i) issue, in the name of the
Eligible Person, stock certificates representing the total number of
full shares of Common Stock to which the Eligible Person is entitled
pursuant to subsection (b) hereof and cash in an amount equal to the
Fair Market Value, as of the date of exercise, or any resulting
fractional shares, and (ii) if the Committee causes the Corporation to
elect to settle all or part of its obligations arising out of the
exercise of the SAR in cash, deliver to the Eligible Person an amount
in cash equal to the Fair Market Value, as of the date of exercise, of
the shares of Common Stock it would otherwise be obligated to deliver.
11. RESTRICTED STOCK AWARDS TO ELIGIBLE PERSONS.
The Committee may from time to time cause the Corporation to grant, or sell
for such amount of cash, Common Stock or such other consideration as the
Committee deems appropriate (which amount may be less than the Fair Market
Value of the Common Stock on the date of grant or sale), shares of
Restricted Stock under the Plan to such Eligible Persons, and subject to
such restrictions and conditions and other terms as the Committee may
determine at the time of grant or sale, subject to the general provisions
of the Plan, the applicable Restricted Stock Agreement, and the following
specific rules:
(a) GRANT OR SALE. Restricted Stock may be granted or sold to an Eligible
Person either separately from, or in tandem with, the grant of an
Option (with or without SARs) to Eligible Persons. In the case of
Restricted Stock granted or sold in tandem with the grant of an
Option: (i) the exercise of the Option shall cause the forfeiture (or
sale at the purchase price paid for the Restricted Stock) to the
Corporation of the Restricted Stock related to the Option, or portion
thereof that is exercised, and (ii) the lapse of restrictions
applicable to such Restricted Stock shall cause the expiration of the
unexercised Option, or pro rata portion thereof, related to such
Restricted Stock. Restricted Stock not granted or sold in tandem with
the grant of an Option shall have no effect on, and shall not be
affected by, the exercise of any Option by the holder of such
Restricted Stock.
(b) RESTRICTED STOCK AGREEMENTS. Shares of Restricted Stock issued to an
Eligible Person under the Plan shall be governed by a Restricted Stock
Agreement which shall specify whether the shares of Restricted Stock
are granted or sold to the Eligible Persons and whether such
Restricted Stock is issued separate from, or in tandem with, the grant
of an Option and such other provisions as the Committee shall
determine.
(c) ISSUANCE OF RESTRICTED STOCK. The Corporation shall issue, in the name
of the Eligible Person, stock certificates representing the total
number of shares of Restricted Stock granted or sold to the Eligible
Person, as soon as may be reasonably practicable after such grant or
sale, which shall be held by the Secretary of the Corporation as
provided in subsection (h) hereof.
(d) RIGHTS OF STOCKHOLDERS. Subject to the provisions of subsections (c)
and (e) hereof and subsection 13(b), and the restrictions set forth in
the related Restricted Stock Agreement, the Eligible Persons receiving
a grant of or purchasing Restricted Stock shall thereupon be a
stockholder with respect to all of the shares represented by such
certificate or certificates and shall have the rights of a stockholder
with respect to such shares, including the right to vote such shares
and to receive dividends and other distributions paid with respect to
such shares.
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(e) RESTRICTIONS; FORFEITURE OR RESALE. Any share of Restricted Stock
granted to an Eligible Person pursuant to the Plan shall be forfeited,
and any share of Restricted Stock sold to an Eligible Person pursuant
to the Plan shall, at the Corporation's option, be resold to the
Corporation for an amount equal to the value of the cash and/or
property paid therefor, and, in either case, such shares shall revert
to the Corporation, if (i) the Eligible Person violates a
non-competition or confidentiality agreement or other condition set
forth in the Restricted Stock Agreement, (ii) the Eligible Person's
employment with the Corporation or its subsidiaries terminates prior
to a date or dates for expiration of the forfeiture or resale
provisions set forth in his Restricted Stock Agreement, which date
shall not be earlier than the first anniversary of such grant or sale,
(iii) the date the Eligible Person's employment with the Corporation
terminates for cause, or (iv) the date there occurs a violation of any
provision of the applicable Restricted Stock Agreement. The
Corporation shall exercise its right to require a forfeiture, and
exercise its right to require a resale of the Restricted Stock
pursuant to this subsection (e), by giving notice to the Eligible
Persons at any time within the 30-day period following (i) the date
that the Corporation acquires knowledge of his violation of a
noncompetition or confidentiality agreement or other condition, or
(ii) his termination of employment with the Corporation or its
subsidiaries prior to such date set forth in the Restricted Stock
Agreement. Upon receipt of such notice, the Secretary of the
Corporation shall promptly cancel shares of Restricted Stock that are
forfeited or resold to the Corporation, and the corporation shall make
payment therefor, if applicable, as soon as reasonably practicable
after the date of said surrender.
(f) ACCELERATION. The Committee, in its discretion, shall have the power
to accelerate the date on which the restrictions of this Section 11 or
contained in any Restricted Stock Agreements shall lapse with respect
to any or all shares of Restricted Stock granted or sold under the
Plan that have been outstanding for at least one year.
(g) TERMINATION OF EMPLOYMENT. Notwithstanding the foregoing, if the
Eligible Person's employment terminates (i) upon the Eligible Person's
retirement [as described in subsection 10(d)], (ii) because of his
death or disability (as determined by the Committee), or (iii) under
circumstances described in subsection 10(e), any restrictions of this
Section 11 or in any Restricted Stock Agreement shall lapse.
(h) RESTRICTED STOCK CERTIFICATES. The Secretary of the Corporation shall
hold the certificate or certificates representing shares of Restricted
Stock issued under the Plan on behalf of each Participant who holds
such shares, whether by grant or sale, until such time as the
Restricted Stock is forfeited, resold to the Corporation, or the
restrictions lapse.
(i) TERMS AND CONDITIONS. The Committee may prescribe such other
restrictions and conditions and other terms applicable to the shares
of Restricted Stock issued to an Eligible Person under the Plan that
are neither inconsistent with nor prohibited by the Plan or any
Restricted Stock Agreement, including, without limitation, terms
providing for a lapse of the restrictions of this Section 11 or in any
Restricted Stock Agreement, in installments.
12. ADJUSTMENTS.
(a) Appropriate adjustment in the maximum number of shares of Common Stock
issuable pursuant to the Plan, the number of shares subject to Awards
under the Plan, the exercise price with respect to Options and Tandem
SARs and the base price with respect to Nontandem SARs, shall be made
to give effect to any increase or decrease in the number of shares of
issued Common Stock resulting from a subdivision or consolidation of
shares whether through reorganization, recapitalization, stock split,
reverse stock split, spin-off, split off, spin-out, or other
distribution of assets to stockholders, stock distributions or
combination of shares, assumption and conversion of outstanding Awards
due to an acquisition by the Corporation of the stock or assets of any
other corporation, payment of stock dividends, other increase or
decrease in the number of such shares outstanding effected, without
receipt of consideration by the Corporation, or any other occurrence
for which the Committee determines an adjustment is appropriate;
provided, however, that no adjustment in the number of shares with
respect to which Awards may be granted under the Plan, or in the
number of shares subject to outstanding Awards, shall be made except
in the event, and then only to the extent that such adjustment
together with all respective prior adjustments which were not made as
a result of this provision, involve a net change of more than ten
percent (i) from the number of shares of Common Stock with respect to
which Awards may be granted under the Plan, or (ii) with respect to
each outstanding Option, from the respective number of shares of
Common Stock subject thereto on the date of grant thereof. Without
limiting the generality of the foregoing provisions of this paragraph,
any such adjustment shall be deemed to have prevented any dilution and
enlargement of an Eligible Person's rights, if such Eligible Person
receives in any such adjustment, rights that are substantially similar
(after taking into account the fact that the Eligible Person has not
paid the applicable exercise price) to the rights the Eligible Person
would have received had he exercised his outstanding Awards, and
become a stockholder of the Corporation immediately prior to the event
giving rise to such adjustment. Adjustments under this paragraph shall
be made by the Committee whose decision as to the amount and timing of
any such adjustment shall be conclusive and binding on all persons.
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(b) In the event that:
(i) Any person (as such term is used in Section 12 of the Securities
Exchange Act of 1934 and the rules and regulations thereunder and
including any Affiliate or Associate of such person, as defined
in Rule 12b-2 under said Act, and any person acting in concert
with such person) directly or indirectly acquires or otherwise
become entitled to vote more than 50 percent of the voting power
entitled to be cast at elections for directors ("Voting Power")
of the Corporation; or
(ii) There occurs any merger or consolidation of the Corporation, or
any sale, lease or exchange of all or any substantial part of the
consolidated assets of the Corporation and its subsidiaries to
any other person and (A) in the case of a merger or
consolidation, the holders of outstanding stock of the
Corporation entitled to vote in elections of directors
immediately before such merger or consolidation hold less than
50% of the Voting Power of the survivor of such merger or
consolidation or its parent; or (B) in the case of any such sale,
lease or exchange, the Corporation does not own at least 50% of
the Voting Power of the other person;
The Committee may, in its discretion, revise, alter, amend or modify any Option
Agreement or Restricted Stock Agreement with an Eligible Person and any then
outstanding and unexercised Option granted to an Eligible Person, any SAR, and
any share of Restricted Stock granted or sold to an Eligible Person, in any
manner that it deems appropriate, including, but not limited to, any of the
following respects:
(A) The Option and SAR may be deemed to pertain to and apply to the
securities to which a holder of the number of shares of Common Stock
subject to the unexercised portion of the Option would be entitled if
he actually owned such shares immediately prior to the record date or
other time any such event became effective, and the number of SARs may
be adjusted as necessary to maintain the ratio between the number of
SARs and the securities, cash and other property subject to the
Option; and
(B) Subject to subsection 6(d), the dates upon which outstanding and
unexercised Options may be exercised may be advanced (without regard
to installment exercise limitations, if any);
(C) The dates upon which restrictions and conditions applicable to
outstanding Restricted Stock shall lapse may be advanced (without
regard to any installment limitations); and
(D) Shares of Restricted Stock may be surrendered in a merger,
consolidation or share exchange involving the Corporation,
notwithstanding any restrictions and conditions applicable to such
shares, provided that the securities and/or other consideration
received in exchange therefor shall be subject to the restrictions and
conditions applicable to the Restricted Stock at the time of surrender
and that the surrendering Eligible Persons agrees to any reasonable
provisions requested by the Corporation to assure that any
consideration received as a result of such surrender is subject to the
same restrictions and conditions as those imposed on the Restricted
Stock surrendered and that the consideration cannot be transferred in
violation of any such restrictions.
If the Committee believes that any such event is reasonably likely to
occur, the Committee may so revise,alter, amend or modify as set forth
above at any time before and contingent upon the consummation of such an
event.
(c) In the case of dissolution of the Corporation, (i) every Option and
SAR granted to an Eligible Person outstanding hereunder shall
terminate notwithstanding any restrictions and conditions that may be
contained in his Option Agreement and (ii) the restrictions and
conditions on Restricted Stock held by an Eligible Person shall lapse
and the holders of such Restricted Stock shall have all the rights of
a stockholder with respect to participation in the dissolution. Each
such Option and SAR holder shall have 30 days prior written notice of
such event, during which time he shall have a right, subject to
subsection 7(d), to exercise his partly or wholly unexercised Option
and SAR (without regard to installment exercise limitations, if any).
(d) On the basis of information known to the Corporation, the Committee
shall make all determinations relating to the applicability and
interpretation of this Section 12, and all such determinations shall
be conclusive and binding.
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13. TERMS AND CONDITIONS OF AWARDS.
(a) Each Eligible Person shall agree to such restrictions and conditions
and other terms in connection with the exercise of an Option or SAR,
or the grant or sale of Restricted Stock, including restrictions and
conditions on the disposition of the Common Stock acquired upon the
exercise, grant or sale thereof, as the Committee may deem
appropriate. The certificates delivered to a Participant or to the
Secretary of the Corporation evidencing the shares of Common Stock
acquired upon exercise of an Option may, and in the case of a grant or
a sale of Restricted Stock to a Participant shall, bear a legend
referring to the restrictions and conditions and other terms contained
in the respective Option Agreement or Restricted Stock Agreement and
the Plan, and the Corporation may place a stop transfer order with its
transfer agent against the transfer of such shares. Each Eligible
Person shall execute a written instrument stating that he is
purchasing the Common Stock for investment and not with any present
intention to sell the same.
(b) The obligation of the Corporation to sell and deliver Common Stock
under the Plan shall be subject to all applicable laws, regulations,
rules and approvals, including, but not by way of limitation, the
effectiveness of a registration statement under the Securities Act of
1933, if deemed necessary or appropriate by the Committee, of the
Common Stock, Options, SARs and other securities reserved for issuance
or that may be offered under the Plan. A Participant shall have no
rights as a stockholder with respect to any shares covered by an
Option granted to, or exercised by, him until the date of delivery of
a stock certificate to him for such shares, or with respect to
Restricted Stock granted or sold to him, until the date of delivery of
a stock certificate representing such Restricted Stock to the
Secretary of the Corporation on his behalf. No adjustment other than
pursuant to Section 12(a) hereof shall be made for dividends or other
rights for which the record date is prior to the date such stock
certificate is delivered.
14. NONTRANSFERABILITY.
(a) Except as provided in subsection 12(b)(iii)(D) and in subsection (b)
next below, or in connection with unrestricted Common Stock issued
pursuant to an Award, Awards granted under the Plan and any rights and
privileges pertaining thereto, may not be transferred, assigned,
pledged or hypothecated in any manner, by operation of law or
otherwise, other than by will or by the laws of descent and
distribution and shall not be subject to execution, attachment or
similar process. The granting of an Option or SAR shall impose no
obligation upon the applicable Participant to exercise such Option or
SAR.
(b) Notwithstanding the provisions of subsection (a) above, a Participant,
at any time prior to his death, may assign all or any portion of an
Award granted to him (other than an ISO) to (i) his spouse or lineal
descendant, (ii) the trustee of a trust for the primary benefit of his
spouse or lineal descendant, (iii) a partnership of which his spouse
and lineal descendants are the only partners, or (iv) a tax exempt
organization as described in Section 501(c)(3) of the Code. In such
event, the spouse, lineal descendant, trustee, partnership or tax
exempt organization will be entitled to all of the rights of the
Participant with respect to the assigned portion of such Award, and
such portion of the Award will continue to be subject to all of the
terms, conditions and restrictions applicable to the Award, as set
forth herein and in the related Option Agreement or Restricted Stock
Agreement immediately prior to the effective date of the assignment.
Any such assignment will be permitted only if (i) the Participant does
not receive any consideration therefore, and (ii) the assignment is
expressly permitted by the applicable Option Agreement or Restricted
Stock Agreement as approved by the Committee. Any such assignment
shall be evidenced by an appropriate written document executed by the
Participant, and a copy thereof shall be delivered to the Corporation
on or prior to the effective date of the assignment.
15. INDEMNIFICATION OF THE COMMITTEE.
In addition to such other rights of indemnification as they may have as
members of the Board, or as members of the Committee, or as its delegatees,
the members of the Committee and its delegatees shall be indemnified by the
Corporation against (a) the reasonable expenses (as such expenses are
incurred), including attorneys' fees actually and necessarily 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 the Plan, any Option or SAR granted hereunder or any grant
or sale of shares of Restricted Stock; and (b) against all amounts paid by
them in settlement thereof (provided such settlement is approved by
independent legal counsel selected by the Corporation) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, except
in relation to matters as to which it shall be adjudged in such action,
suit or proceeding that such Committee member or delegatee is liable for
gross negligence or misconduct in the performance of his duties; provided
that within 60 days after institution of any such action, suit or
proceeding a Committee member or delegatee shall in writing offer the
Corporation the opportunity, at its own expense, to handle and defend the
same.
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16. NO CONTRACT OF EMPLOYMENT.
Neither the adoption of the Plan nor the grant of any Award shall be deemed
to obligate the Corporation or any subsidiary to continue the employment or
period of service of any Eligible Person for any particular period, nor
shall the granting of an Award constitute a request or consent to postpone
the retirement date of any Eligible Person.
17. TERMINATION AND AMENDMENT OF PLAN.
(a) No ISOs shall be granted under the Plan more than ten years after the
first to occur of (i) the date the Plan was adopted by the Board, or
(ii) the date the Plan was approved by the stockholders of the
Corporation. The Board may at any time terminate, suspend or modify
the Plan without the authorization of stockholders to the extent
allowed by law, including, with respect to ISOs, Section 422 of the
Code and regulations issued thereunder.
(b) No termination, suspension or modification of the Plan shall adversely
affect any right acquired by any Participant under an Award granted
before the date of such termination, suspension or modification,
unless such Participant shall consent; but it shall be conclusively
presumed that any adjustment for changes in capitalization as provided
for herein does not adversely affect any such right. Any member of the
Board who is an officer or employee of the Corporation shall be
without vote on any proposed amendment to the Plan, or on any other
matter which might affect that member's individual interest under the
Plan.
18. EFFECTIVE DATE OF PLAN.
The Plan shall become effective upon adoption by the Board; provided,
however, that it shall be submitted for approval by either written consent
of all of holders of the outstanding Common Stock or by the holders of a
majority of the outstanding shares of Common Stock of the Corporation
present, or represented, and entitled to vote at a stockholders' meeting
held within 12 months thereafter, and Awards granted prior to such
stockholder approval shall become null and void if such stockholder
approval is not obtained.
19. WITHHOLDING TAXES.
Whenever the Corporation proposes or is required to issue or transfer
shares of Common Stock to a Participant under the Plan, the Corporation
shall have the right to require the Participant to remit to the Corporation
an amount sufficient to satisfy all federal, state and local withholding
tax requirements prior to the delivery of any certificate or certificates
for such shares. If such certificates have been delivered prior to the time
a withholding obligation arises, the Corporation shall have the right to
require the Participant to remit to the Corporation an amount sufficient to
satisfy all federal, state or local withholding tax requirements at the
time such obligation arises and to withhold from other amounts payable to
the Participant, as compensation or otherwise, as necessary. Whenever
payments under the Plan are to be made to a Participant in cash, such
payments shall be net of any amounts sufficient to satisfy all federal,
state and local withholding tax requirements. In connection with an Award
in the form of shares of Common Stock, a Participant may elect to satisfy
his tax withholding obligation incurred with respect to the Taxable Date of
the Award by (a) directing the Corporation to withhold a portion of the
shares of Common Stock otherwise distributable to the Participant, or (b)
by transferring to the Corporation a certain number of shares (either
subject to a restricted Stock Award or previously owned), such shares being
valued at the Fair Market Value thereof on the Taxable Date.
Notwithstanding any provisions of the Plan to the contrary, a Participant's
election pursuant to the preceding sentence (a) must be made on or prior to
the Taxable Date with respect to such Award, and (b) must be irrevocable.
In lieu of a separate election on each Taxable Date of an Award, a
Participant may make a blanket election with the Committee that shall
govern all future Taxable Dates until revoked by the Participant. If the
holder of shares of Common Stock purchased in connection with the exercise
of an ISO disposes of such shares within two years of the date such ISO was
granted or within one year of such exercise, he shall notify the
Corporation of such disposition and remit an amount necessary to satisfy
applicable withholding requirements including those arising under federal
income tax laws. If such holder does not remit such amount, the Corporation
may withhold all or a portion of any salary then or in the future owed to
such holder as necessary to satisfy such requirements. Taxable Date means
the date a Participant recognizes income with respect to an Award under the
Code or any applicable state income tax law.
20. LEAVES OF ABSENCE.
The Committee shall be entitled to make such rules, regulations and
determinations as it deems appropriate under the Plan regarding any leave
of absence taken by an Eligible Person who is the recipient of any Award.
Without limiting the generality of the foregoing, the Committee shall be
entitled to determine (a) whether or not any such leave of absence shall
constitute a termination of employment within the meaning of the Plan, and
(b) the impact, if any, of any such leave of absence on Awards under the
Plan theretofore made to any Eligible Person who takes such leave of
absence.
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21. GOVERNING LAW.
The Plan, and all agreements hereunder, shall be construed in accordance
with and governed by the laws of the State of New York and, in the case of
ISOs, Section 422 of the Code and regulations issued thereunder.
22. FAIR MARKET VALUE.
"Fair Market Value" as of a given date for all purposes of the Plan and any
Option Agreement or Restricted Stock Agreement means (a) if the Common
Stock is listed on a national securities exchange, the average of the
closing prices of the Common Stock on the Composite Tape for the 10
consecutive trading days immediately preceding such given date; (b) if the
Common Stock is traded on an exchange or market in which prices are
reported on a bid and asked price, the average of the mean between the bid
and the asked price for the Common Stock at the close of trading for the
ten consecutive trading days immediately preceding such given date; and (c)
if the Common Stock is not listed on a national securities exchange nor
traded on the over-the-counter market, such value as the Committee, in good
faith, shall determine. Notwithstanding any provision of the Plan to the
contrary, no determination made with respect to the Fair Market Value of
Common Stock subject to an ISO shall be inconsistent with Section 422 of
the Code or regulations issued thereunder.
23. SUCCESSORS.
In the event of a sale of substantially all of the assets of the
Corporation, or a merger, consolidation or share exchange involving the
Corporation, all obligations of the Corporation under the Plan with respect
to Awards granted hereunder shall be binding on the successor to the
transaction. Employment or continuation of service of an Eligible Person
with such a successor shall be considered employment or period of service
of the Eligible Person with the Corporation for purposes of the Plan.
24. NOTICES.
Notices given pursuant to the Plan shall be in writing and shall be deemed
received when personally delivered or five days after mailed by United
States registered or certified mail, return receipt requested, addressee
only, postage prepaid.
Notice to the Corporation shall be directed to:
Evans Bancorp, Inc.
14 - 16 N. Main Street
Angola, New York 14006
Notices to or with respect to a Participant shall be directed to the
Participant, or the executors, personal representatives or distributees of
a deceased Participant, at the Participant's home address on the records of
the Corporation.
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