AMBANC HOLDING CO., INC.
2001 STOCK OPTION PLAN
1. Purpose of the Plan. The Plan shall be known as the AMBANC HOLDING
CO., INC. 2001 Stock Option Plan (the "Plan"). The purpose of the Plan is to
attract and retain qualified personnel for positions of substantial
responsibility and to provide additional incentive to officers, directors,
employees and other persons providing services to the Company, the Bank or any
present or future Parent or Subsidiary of the Company, the Bank to promote the
success of the business. The Plan is intended to provide for the grant of
"Incentive Stock Options," within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code") and NonIncentive Stock Options,
options that do not so qualify. The provisions of the Plan relating to Incentive
Stock Options shall be interpreted to conform to the requirements of Section 422
of the Code.
2. Definitions. The following words and phrases when used in this Plan
with an initial capital letter, unless the context clearly indicates otherwise,
shall have the meaning as set forth below. Wherever appropriate, the masculine
pronoun shall include the feminine pronoun and the singular shall include the
plural.
"Award" means the grant by the Committee of an Incentive Stock Option
or a NonIncentive Stock Option, or any combination thereof, or grants of Stock
Options made in accordance with Section 9(a) of the Plan.
"Bank" or "Savings Bank" shall mean Mohawk Community Bank, or any
successor corporation thereto.
"Board" shall mean the Board of Directors of the Company, or any
successors thereto.
"Change in Control" shall mean: (i) the sale of all, or a material
portion, of the assets of the Company or the Bank; (ii) the merger or
recapitalization of the Company whereby the Company is not the surviving entity;
(iii) a change in control of the Company, as otherwise defined or determined by
the Office of Thrift Supervision ("OTS") or regulations promulgated by it; or
(iv) the acquisition, directly or indirectly, of the beneficial ownership
(within the meaning of that term as it is used in Section 13(d) of the
Securities Exchange Act of 1934 and the rules and regulations promulgated
thereunder) of twentyfive percent (25%) or more of the outstanding voting
securities of the Company by any person, trust, entity or group. This limitation
shall not apply to the purchase of shares by underwriters in connection with a
public offering of Company stock, or the purchase of shares of up to 25% of any
class of securities of the Company by a tax-qualified employee stock benefit
plan. The term "person" refers to an individual or a corporation, partnership,
trust, association, joint venture, pool, syndicate, sole proprietorship,
unincorporated organization or any other form of entity not specifically listed
herein.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
regulations promulgated thereunder.
"Committee" shall mean the Board or the Stock Option Committee
appointed by the Board in accordance with Section 5(a) of the Plan.
"Common Stock" shall mean the common stock of the Company, or any
successor or parent corporation thereto.
"Company" shall mean AMBANC HOLDING CO., INC.
"Continuous Employment" or "Continuous Status as an Employee" shall
mean the absence of any interruption or termination of employment with the
Company or any present or future Parent or Subsidiary of the Company. Employment
shall not be considered interrupted in the case of sick leave, military leave or
any other leave of absence approved by the Company or in the case of transfers
between payroll locations, of the Company or between the Bank, its Parent, its
Subsidiaries or a successor.
"Director" shall mean a member of the Board of the Company, or any
successor or Parent thereto.
"Director Emeritus" shall mean a person serving as a director
emeritus, advisory director, consulting director, or other similar position as
may be appointed by the Board of Directors of the Bank or the Company from time
to time.
"Disability" means (a) with respect to Incentive Stock Options, the
"permanent and total disability" of the Employee as such term is defined at
Section 22(e)(3) of the Code; and (b) with respect to Non-Incentive Stock
Options, any physical or mental impairment which renders the Participant
incapable of continuing in the employment or service of the Company, the Bank or
any present or future Parent or Subsidiary of the Company in his then current
capacity as determined by the Committee.
"Effective Date" shall mean February 23, 2001.
"Employee" shall mean any person employed by the Company, the Bank, or
any present or future Parent or Subsidiary of the Company.
"Fair Market Value" shall mean: (i) if the Common Stock is traded
otherwise than on a national securities exchange, then the Fair Market Value per
Share shall be equal to the mean between the last bid and ask price of such
Common Stock on such date or, if there is no bid and ask price on said date,
then on the immediately prior business day on which there was a bid and ask
price. If no such bid and ask price is available, then the Fair Market Value
shall be determined by the Committee in good faith; or (ii) if the Common Stock
is listed on a national securities exchange, then the Fair Market Value per
Share shall be not less than the average of the highest and lowest selling price
of such Common Stock on such exchange on such date, or if there were no sales on
said date, then the Fair Market Value shall be not less than the mean between
the last bid and ask price on such date.
"Incentive Stock Option" or "ISO" shall mean an option to purchase
Shares granted by the Committee pursuant to Section 8 hereof which is subject to
the limitations and restrictions of Section 8 hereof and is intended to qualify
as an incentive stock option under Section 422 of the Code.
"NonIncentive Stock Option" or "NonISO" shall mean an option to
purchase Shares granted pursuant to Section 9 hereof, which option is not
intended to qualify under Section 422 of the Code.
"Option" shall mean an Incentive Stock Option or NonIncentive Stock
Option granted pursuant to this Plan providing the holder of such Option with
the right to purchase Common Stock.
"Optioned Stock" shall mean stock subject to an Option granted
pursuant to the Plan.
"Optionee" shall mean any person who receives an Option or Award
pursuant to the Plan.
"Parent" shall mean any present or future corporation which would be a
"parent corporation" as defined in Sections 424(e) and (g) of the Code.
"Participant" means any director, officer or employee of the Company,
the Bank, or any Parent or Subsidiary of the Company or any other person
providing a service to the Company who is selected by the Committee to receive
an Award, or who by the express terms of the Plan is granted an Award.
"Plan" shall mean the AMBANC HOLDING CO., INC. 2001 Stock Option Plan.
"Retirement" shall mean termination of service in all capacities as an
Employee, Director and Director Emeritus following attainment of not less than
age 55 and completion of not less than ten years of Service to the Company.
Service to the Company rendered prior to the Effective Date shall be recognized
in determining eligibility to meet the requirements of Retirement under the
Plan.
"Share" shall mean one share of the Common Stock.
"Subsidiary" shall mean any present or future corporation which
constitutes a "subsidiary corporation" as defined in Sections 424(f) and (g) of
the Code.
3. Shares Subject to the Plan. Except as otherwise required by the
provisions of Section 13 hereof, the aggregate number of Shares with respect to
which Awards may be made pursuant to the Plan shall not exceed 434,000 Shares.
Such Shares may either be from authorized but unissued shares or shares
purchased in the market for Plan purposes. If an Award shall expire, become
unexercisable, or be forfeited for any reason prior to its exercise, new Awards
may be granted under the Plan with respect to the number of Shares as to which
such expiration has occurred.
4. Six Month Holding Period.
Subject to vesting requirements, if applicable, except in the event of
death or Disability of the Optionee or a Change in Control of the Company, a
minimum of six months must elapse between the date of the grant of an Option and
the date of the sale of the Common Stock received through the exercise of such
Option.
5. Administration of the Plan.
(a) Composition of the Committee. The Plan shall be administered by
the Board of Directors of the Company or a Committee which shall consist of not
less than two Directors of the Company appointed by the Board and serving at the
pleasure of the Board. All persons designated as members of the Committee shall
meet the requirements of a "Non-Employee Director" within the meaning of Rule
16b3 under the Securities Exchange Act of 1934, as amended, as found at 17 CFR
'240.16b-3.
(b) Powers of the Committee. The Committee is authorized (but only to
the extent not contrary to the express provisions of the Plan or to resolutions
adopted by the Board) to interpret the Plan, to prescribe, amend and rescind
rules and regulations relating to the Plan, to determine the form and content of
Awards to be issued under the Plan and to make other determinations necessary or
advisable for the administration of the Plan, and shall have and may exercise
such other power and authority as may be delegated to it by the Board from time
to time. A majority of the entire Committee shall constitute a quorum and the
action of a majority of the members present at any meeting at which a quorum is
present shall be deemed the action of the Committee. In no event may the
Committee revoke outstanding Awards without the consent of the Participant.
The President of the Company and such other officers as shall be
designated by the Committee are hereby authorized to execute written agreements
evidencing Awards on behalf of the Company and to cause them to be delivered to
the Participants. Such agreements shall set forth the Option exercise price, the
number of shares of Common Stock subject to such Option, the expiration date of
such Options, and such other terms and restrictions applicable to such Award as
are determined in accordance with the Plan or the actions of the Committee.
(c) Effect of Committee's Decision. All decisions, determinations and
interpretations of the Committee shall be final and conclusive on all persons
affected thereby.
6. Eligibility for Awards and Limitations.
(a) The Committee shall from time to time determine the officers,
Directors, employees and other persons who shall be granted Awards under the
Plan, the number of Awards to be granted to each such persons, and whether
Awards granted to each such Participant under the Plan shall be Incentive Stock
Options and/or NonIncentive Stock Options. In selecting Participants and in
determining the number of Shares of Common Stock to be granted to each such
Participant, the Committee may consider the nature of the prior and anticipated
future services rendered by each such Participant, each such Participant's
current and potential contribution to the Company and such other factors as the
Committee may, in its sole discretion, deem relevant. Participants who have been
granted an Award may, if otherwise eligible, be granted additional Awards.
(b) The aggregate Fair Market Value (determined as of the date the
Option is granted) of the Shares with respect to which Incentive Stock Options
are exercisable for the first time by each Employee during any calendar year
(under all Incentive Stock Option plans, as defined in Section 422 of the Code,
of the Company or any present or future Parent or Subsidiary of the Company)
shall not exceed $100,000. Notwithstanding the prior provisions of this Section
6, the Committee may grant Options in excess of the foregoing limitations,
provided said Options shall be clearly and specifically designated as not being
Incentive Stock Options.
(c) In no event shall Shares subject to Options granted to
non-employee Directors in the aggregate under this Plan exceed more than 30% of
the total number of Shares authorized for delivery under this Plan pursuant to
Section 3 herein or more than 5% to any individual non-employee Director;
provided, however, no such Options are specifically reserved for award to
non-employee Directors. In no event shall Shares subject to Options granted to
any Employee exceed more than 35% of the total number of Shares authorized for
delivery under the Plan.
7. Term of the Plan. The Plan shall continue in effect for a term of ten
(10) years from the Effective Date, unless sooner terminated pursuant to Section
18 hereof. No Option shall be granted under the Plan after ten (10) years from
the Effective Date.
8. Terms and Conditions of Incentive Stock Options. Incentive Stock
Options may be granted only to Participants who are Employees. Each Incentive
Stock Option granted pursuant to the Plan shall be evidenced by an instrument in
such form as the Committee shall from time to time approve. Each Incentive Stock
Option granted pursuant to the Plan shall comply with, and be subject to, the
following terms and conditions:
(a) Option Price.
(i) The price per Share at which each Incentive Stock Option granted
by the Committee under the Plan may be exercised shall not, as to any particular
Incentive Stock Option, be less than the Fair Market Value of the Common Stock
on the date that such Incentive Stock Option is granted. (ii) In the case of an
Employee who owns Common Stock representing more than ten percent (10%) of the
outstanding Common Stock at the time the Incentive Stock Option is granted, the
Incentive Stock Option exercise price shall not be less than one hundred and ten
percent (110%) of the Fair Market Value of the Common Stock on the date that the
Incentive Stock Option is granted.
(b) Payment. Full payment for each Share of Common Stock purchased
upon the exercise of any Incentive Stock Option granted under the Plan shall be
made at the time of exercise of each such Incentive Stock Option and shall be
paid in cash (in United States Dollars), Common Stock or a combination of cash
and Common Stock. Common Stock utilized in full or partial payment of the
exercise price shall be valued at the Fair Market Value at the date of exercise.
The Company shall accept full or partial payment in Common Stock only to the
extent permitted by applicable law. No Shares of Common Stock shall be issued
until full payment has been received by the Company, and no Optionee shall have
any of the rights of a stockholder of the Company until Shares of Common Stock
are issued to the Optionee.
(c) Term of Incentive Stock Option. The term of exercisability of each
Incentive Stock Option granted pursuant to the Plan shall be not more than ten
(10) years from the date each such Incentive Stock Option is granted, provided
that in the case of an Employee who owns stock representing more than ten
percent (10%) of the Common Stock outstanding at the time the Incentive Stock
Option is granted, the term of exercisability of the Incentive Stock Option
shall not exceed five (5) years.
(d) Exercise Generally. Except as otherwise provided in Section 10
hereof, no Incentive Stock Option may be exercised unless the Optionee shall
have been in the employ of the Company, the Bank, or any present or future
Parent or Subsidiary of the Company at all times during the period beginning
with the date of grant of any such Incentive Stock Option and ending on the date
three (3) months prior to the date of exercise of any such Incentive Stock
Option. The Committee may impose additional conditions upon the right of an
Optionee to exercise any Incentive Stock Option granted hereunder which are not
inconsistent with the terms of the Plan or the requirements for qualification as
an Incentive Stock Option. Except as otherwise provided by the terms of the Plan
or by action of the Committee at the time of the grant of the Options, the
Options will be first exercisable at the rate of 25% on the one year anniversary
of the date of grant and 25% annually thereafter during such periods of service
as an Employee, Director or Director Emeritus.
(e) Cashless Exercise. Subject to vesting requirements, if applicable,
an Optionee who has held an Incentive Stock Option for at least six months may
engage in the "cashless exercise" of the Option. Upon a cashless exercise, an
Optionee shall give the Company written notice of the exercise of the Option
together with an order to a registered brokerdealer or equivalent third party,
to sell part or all of the Optioned Stock and to deliver enough of the proceeds
to the Company to pay the Option exercise price and any applicable withholding
taxes. If the Optionee does not sell the Optioned Stock through a registered
brokerdealer or equivalent third party, the Optionee can give the Company
written notice of the exercise of the Option and the third party purchaser of
the Optioned Stock shall pay the Option exercise price plus any applicable
withholding taxes to the Company.
(f) Transferability. An Incentive Stock Option granted pursuant to the
Plan shall be exercised during an Optionee's lifetime only by the Optionee to
whom it was granted and shall not be assignable or transferable otherwise than
by will or by the laws of descent and distribution.
9. Terms and Conditions of NonIncentive Stock Options. Each NonIncentive
Stock Option granted pursuant to the Plan shall be evidenced by an instrument in
such form as the Committee shall from time to time approve. Each NonIncentive
Stock Option granted pursuant to the Plan shall comply with and be subject to
the following terms and conditions.
(a) Option Price. The exercise price per Share of Common Stock for
each NonIncentive Stock Option granted pursuant to the Plan shall be at such
price as the Committee may determine in its sole discretion, but in no event
less than the Fair Market Value of such Common Stock on the date of grant as
determined by the Committee in good faith.
(b) Payment. Full payment for each Share of Common Stock purchased
upon the exercise of any NonIncentive Stock Option granted under the Plan shall
be made at the time of exercise of each such NonIncentive Stock Option and shall
be paid in cash (in United States Dollars), Common Stock or a combination of
cash and Common Stock. Common Stock utilized in full or partial payment of the
exercise price shall be valued at its Fair Market Value at the date of exercise.
The Company shall accept full or partial payment in Common Stock only to the
extent permitted by applicable law. No Shares of Common Stock shall be issued
until full payment has been received by the Company and no Optionee shall have
any of the rights of a stockholder of the Company until the Shares of Common
Stock are issued to the Optionee.
(c) Term. The term of exercisability of each NonIncentive Stock Option
granted pursuant to the Plan shall be not more than ten (10) years from the date
each such NonIncentive Stock Option is granted.
(d) Exercise Generally. The Committee may impose additional conditions
upon the right of any Participant to exercise any NonIncentive Stock Option
granted hereunder which is not inconsistent with the terms of the Plan. Except
as otherwise provided by the terms of the Plan or by action of the Committee at
the time of the grant of the Options, the Options will be first exercisable at
the rate of one-third on the date of grant and one-third annually thereafter
during such periods of service as an Employee, Director or Director Emeritus.
(e) Cashless Exercise. Subject to vesting requirements, if applicable,
an Optionee who has held a NonIncentive Stock Option for at least six months may
engage in the "cashless exercise" of the Option. Upon a cashless exercise, an
Optionee shall give the Company written notice of the exercise of the Option
together with an order to a registered brokerdealer or equivalent third party,
to sell part or all of the Optioned Stock and to deliver enough of the proceeds
to the Company to pay the Option exercise price and any applicable withholding
taxes. If the Optionee does not sell the Optioned Stock through a registered
brokerdealer or equivalent third party, the Optionee can give the Company
written notice of the exercise of the Option and the third party purchaser of
the Optioned Stock shall pay the Option exercise price plus any applicable
withholding taxes to the Company.
(f) Transferability. Unless otherwise determined by the Committee in
accordance with this Section, any NonIncentive Stock Option granted pursuant to
the Plan shall be exercised during an Optionee's lifetime only by the Optionee
to whom it was granted and shall not be assignable or transferable otherwise
than by will or by the laws of descent and distribution. The Committee may,
however, in its sole discretion, permit transferability or assignment of a
NonIncentive Stock Option by a Participant if such transfer or assignment is, in
its sole determination, for valid estate planning purposes and such transfer or
assignment is permitted under the Code. For purposes of this Section, a transfer
for valid estate planning purposes includes, but is not limited to: (a) a
transfer to a revocable intervivos trust as to which the Participant is both the
settlor and trustee, or (b) a transfer for no consideration to: (i) any member
of the Participant's Immediate Family, (ii) any trust solely for the benefit of
members of the Participant's Immediate Family, (iii) any partnership whose only
partners are members of the Participant's Immediate Family, and (iv) any limited
liability corporation or corporate entity whose only members or equity owners
are members of the Participant's Immediate Family. For purposes of this Section,
"Immediate Family" includes, but is not necessarily limited to, a Participant's
parents, grandparents, spouse, children, grandchildren, siblings (including half
bothers and sisters), and individuals who are family members by adoption.
Nothing contained in this Section shall be construed to require the Committee to
give its approval to any transfer or assignment of any NonIncentive Stock Option
or portion thereof, and approval to transfer or assign any NonIncentive Stock
Option or portion thereof does not mean that such approval will be given with
respect to any other NonIncentive Stock Option or portion thereof. The
transferee or assignee of any NonIncentive Stock Option shall be subject to all
of the terms and conditions applicable to such NonIncentive Stock Option
immediately prior to the transfer or assignment and shall be subject to any
other conditions proscribed by the Committee with respect to such NonIncentive
Stock Option.
10. Effect of Termination of Employment, Disability, Death and Retirement
on Incentive Stock Options.
(a) Termination of Employment. In the event that any Optionee's
employment with the Company, the Bank, or other present or future Parent or
Subsidiaries shall terminate for any reason, other than Disability, death or
Retirement, all of any such Optionee's Incentive Stock Options, and all of any
such Optionee's rights to purchase or receive Shares of Common Stock pursuant
thereto, shall automatically terminate on (A) the earlier of (i) or (ii): (i)
the respective expiration dates of any such Incentive Stock Options, or (ii) the
expiration of not more than three (3) months after the date of such termination
of employment; or (B) at such later date as is determined by the Committee at
the time of the grant of such Award based upon the Optionee's continuing status
as a Director or Director Emeritus of the Bank or the Company, but only if, and
to the extent that, the Optionee was entitled to exercise any such Incentive
Stock Options at the date of such termination of employment, and further that
such Award shall thereafter be deemed a Non-Incentive Stock Option. In the event
that a Subsidiary ceases to be a Subsidiary of the Company, the employment of
all of its employees who are not immediately thereafter employees of the Company
shall be deemed to terminate upon the date such Subsidiary so ceases to be a
Subsidiary of the Company.
(b) Disability. In the event that any Optionee's employment with the
Bank, the Company, or any present or future Parent or Subsidiaries of the
Company shall terminate as the result of the Disability of such Optionee, such
Optionee may exercise any Incentive Stock Options granted to the Optionee
pursuant to the Plan at any time prior to the earlier of (i) the respective
expiration dates of any such Incentive Stock Options or (ii) the date which is
one (1) year after the date of such termination of employment, but only if, and
to the extent that, the Optionee was entitled to exercise any such Incentive
Stock Options at the date of such termination of employment.
(c) Death. In the event of the death of an Optionee, any Incentive
Stock Options granted to such Optionee may be exercised by the person or persons
to whom the Optionee's rights under any such Incentive Stock Options pass by
will or by the laws of descent and distribution (including the Optionee's estate
during the period of administration) at any time prior to the earlier of (i) the
respective expiration dates of any such Incentive Stock Options or (ii) the date
which is two (2) years after the date of death of such Optionee but only if, and
to the extent that, the Optionee was entitled to exercise any such Incentive
Stock Options at the date of death. For purposes of this Section 10(c), any
Incentive Stock Option held by an Optionee shall be considered exercisable at
the date of his death if the only unsatisfied condition precedent to the
exercisability of such Incentive Stock Option at the date of death is the
passage of a specified period of time. At the discretion of the Committee, upon
exercise of such Options the Optionee may receive Shares or cash or a
combination thereof. If cash shall be paid in lieu of Shares, such cash shall be
equal to the difference between the Fair Market Value of such Shares and the
exercise price of such Options on the exercise date.
(d) Incentive Stock Options Deemed Exercisable. For purposes of
Sections 10(a), 10(b) and 10(c) above, any Incentive Stock Option held by any
Optionee shall be considered exercisable at the date of termination of
employment if any such Incentive Stock Option would have been exercisable at
such date of termination of employment without regard to the Disability or death
of the Participant.
(e) Termination of Incentive Stock Options; Vesting Upon Retirement.
Except as may be specified by the Committee at the time of grant of an Option,
to the extent that any Incentive Stock Option granted under the Plan to any
Optionee whose employment with the Company or the Bank terminates shall not have
been exercised within the applicable period set forth in this Section 10, any
such Incentive Stock Option, and all rights to purchase or receive Shares of
Common Stock pursuant thereto, as the case may be, shall terminate on the last
day of the applicable period. Notwithstanding the foregoing, the Committee may
authorize at the time of the grant of an Option that such Award shall be
immediately 100% exercisable upon the Retirement of the Optionee.
11. Effect of Termination of Employment, Disability, Death or Retirement on
NonIncentive Stock Options. The terms and conditions of NonIncentive Stock
Options relating to the effect of the Retirement or other termination of an
Optionee's employment or service, Disability of an Optionee or his death shall
be such terms and conditions as the Committee shall, in its sole discretion,
determine at the time of termination of service, unless specifically provided
for by the terms of the Agreement at the time of grant of the Award.
12. Withholding Tax. The Company shall have the right to deduct from all
amounts paid in cash with respect to the cashless exercise of Options under the
Plan any taxes required by law to be withheld with respect to such cash
payments. Where a Participant or other person is entitled to receive Shares
pursuant to the exercise of an Option, the Company shall have the right to
require the Participant or such other person to pay the Company the amount of
any taxes which the Company is required to withhold with respect to such Shares,
or, in lieu thereof, to retain, or to sell without notice, a number of such
Shares sufficient to cover the amount required to be withheld.
13. Recapitalization, Merger, Consolidation, Change in Control and Other
Transactions.
(a) Adjustment. Subject to any required action by the stockholders of
the Company, within the sole discretion of the Committee, the aggregate number
of Shares of Common Stock for which Options may be granted hereunder, the number
of Shares of Common Stock covered by each outstanding Option, and the exercise
price per Share of Common Stock of each such Option, shall all be
proportionately adjusted for any increase or decrease in the number of issued
and outstanding Shares of Common Stock resulting from a subdivision or
consolidation of Shares (whether by reason of merger, consolidation,
recapitalization, reclassification, split-up, combination of shares, or
otherwise) or the payment of a stock dividend (but only on the Common Stock) or
any other increase or decrease in the number of such Shares of Common Stock
effected without the receipt or payment of consideration by the Company (other
than Shares held by dissenting stockholders).
(b) Change in Control. All outstanding Awards shall become immediately
exercisable in the event of a Change in Control of the Company. In the event of
such a Change in Control, the Committee and the Board of Directors will take one
or more of the following actions to be effective as of the date of such Change
in Control:
(i) provide that such Options shall be assumed, or equivalent options
shall be substituted, ("Substitute Options") by the acquiring or succeeding
corporation (or an affiliate thereof), provided that: (A) any such Substitute
Options exchanged for Incentive Stock Options shall meet the requirements of
Section 424(a) of the Code, and (B) the shares of stock issuable upon the
exercise of such Substitute Options shall constitute securities registered in
accordance with the Securities Act of 1933, as amended, ("1933 Act") or such
securities shall be exempt from such registration in accordance with Sections
3(a)(2) or 3(a)(5) of the 1933 Act, (collectively, "Registered Securities"), or
in the alternative, if the securities issuable upon the exercise of such
Substitute Options shall not constitute Registered Securities, then the Optionee
will receive upon consummation of the Change in Control transaction a cash
payment for each Option surrendered equal to the difference between (1) the Fair
Market Value of the consideration to be received for each share of Common Stock
in the Change in Control transaction times the number of shares of Common Stock
subject to such surrendered Options, and (2) the aggregate exercise price of all
such surrendered Options, or
(ii) in the event of a transaction under the terms of which the
holders of the Common Stock of the Company will receive upon consummation
thereof a cash payment (the "Merger Price") for each share of Common Stock
exchanged in the Change in Control transaction, to make or to provide for a cash
payment to the Optionees equal to the difference between (A) the Merger Price
times the number of shares of Common Stock subject to such Options held by each
Optionee (to the extent then exercisable at prices not in excess of the Merger
Price) and (B) the aggregate exercise price of all such surrendered Options in
exchange for such surrendered Options.
(c) Extraordinary Corporate Action. Notwithstanding any provisions of
the Plan to the contrary, subject to any required action by the stockholders of
the Company, in the event of any Change in Control, recapitalization, merger,
consolidation, exchange of Shares, spinoff, reorganization, tender offer,
partial or complete liquidation or other extraordinary corporate action or
event, the Committee, in its sole discretion, shall have the power, prior or
subsequent to such action or event to:
(i) appropriately adjust the number of Shares of Common Stock subject
to each Option, the Option exercise price per Share of Common Stock, and the
consideration to be given or received by the Company upon the exercise of any
outstanding Option;
(ii) cancel any or all previously granted Options, provided that
appropriate consideration is paid to the Optionee in connection therewith;
and/or
(iii) make such other adjustments in connection with the Plan as the
Committee, in its sole discretion, deems necessary, desirable, appropriate or
advisable; provided, however, that no action shall be taken by the Committee
which would cause Incentive Stock Options granted pursuant to the Plan to fail
to meet the requirements of Section 422 of the Code without the consent of the
Optionee.
(d) Acceleration. The Committee shall at all times have the power to
accelerate the exercise date of Options previously granted under the Plan.
(e) Non-recurring Dividends. Upon the payment of a special or
non-recurring cash dividend that has the effect of a return of capital to the
stockholders, the Option exercise price per share shall be adjusted
proportionately and in an equitable manner.
Except as expressly provided in Sections 13(a), 13(b) and 13(e)
hereof, no Optionee shall have any rights by reason of the occurrence of any of
the events described in this Section 13.
14. Time of Granting Options. The date of grant of an Option under the Plan
shall, for all purposes, be the date on which the Committee makes the
determination of granting such Option. Notice of the grant of an Option shall be
given to each individual to whom an Option is so granted within a reasonable
time after the date of such grant in a form determined by the Committee.
15. Effective Date. The Plan shall became effective upon the date of
approval of the Plan by the Board of the Company (February 23 , 2001).
16. Ratification by Stockholders. The Plan shall be ratified by
stockholders of the Company within twelve (12) months before or after the date
the Plan is approved by the Board.
17. Modification of Options. At any time and from time to time, the Board
may authorize the Committee to direct the execution of an instrument providing
for the modification of any outstanding Option, provided no such modification,
extension or renewal shall confer on the holder of said Option any right or
benefit which could not be conferred on the Optionee by the grant of a new
Option at such time, or shall not materially decrease the Optionee's benefits
under the Option without the consent of the holder of the Option, except as
otherwise permitted under Section 18 hereof.
18. Amendment and Termination of the Plan.
(a) Action by the Board. The Board may alter, suspend or discontinue
the Plan, except that no action of the Board may increase (other than as
provided in Section 13 hereof) the maximum number of Shares permitted to be
optioned under the Plan, materially increase the benefits accruing to
Participants under the Plan or materially modify the requirements for
eligibility for participation in the Plan unless such action of the Board shall
be subject to approval or ratification by the stockholders of the Company.
(b) Change in Applicable Law. Notwithstanding any other provision
contained in the Plan, in the event of a change in any federal or state law,
rule or regulation which would make the exercise of all or part of any
previously granted Option unlawful or subject the Company to any penalty, the
Committee may restrict any such exercise without the consent of the Optionee or
other holder thereof in order to comply with any such law, rule or regulation or
to avoid any such penalty.
19. Conditions Upon Issuance of Shares; Limitations on Option Exercise;
Cancellation of Option Rights.
(a) Shares shall not be issued with respect to any Option granted
under the Plan unless the issuance and delivery of such Shares shall comply with
all relevant provisions of applicable law, including, without limitation, the
Securities Act of 1933, as amended, the rules and regulations promulgated
thereunder, any applicable state securities laws and the requirements of any
stock exchange upon which the Shares may then be listed.
(b) The inability of the Company to obtain any necessary
authorizations, approvals or letters of non-objection from any regulatory body
or authority deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares issuable hereunder shall relieve the Company of
any liability with respect to the nonissuance or sale of such Shares.
(c) As a condition to the exercise of an Option, the Company may
require the person exercising the Option to make such representations and
warranties as may be necessary to assure the availability of an exemption from
the registration requirements of federal or state securities law.
(d) Notwithstanding anything herein to the contrary, upon the
termination of employment or service of an Optionee by the Company or its
Subsidiaries for "cause" as determined by the Board of Directors, all Options
held by such Participant shall cease to be exercisable as of the date of such
termination of employment or service.
(e) Upon the exercise of an Option by an Optionee (or the Optionee's
personal representative), the Committee, in its sole and absolute discretion,
may make a cash payment to the Optionee, in whole or in part, in lieu of the
delivery of shares of Common Stock. Such cash payment to be paid in lieu of
delivery of Common Stock shall be equal to the difference between the Fair
Market Value of the Common Stock on the date of the Option exercise and the
exercise price per share of the Option. Such cash payment shall be in exchange
for the cancellation of such Option. Such cash payment shall not be made in the
event that such transaction would result in liability to the Optionee or the
Company under Section 16(b) of the Securities Exchange Act of 1934, as amended,
and regulations promulgated thereunder.
20. Reservation of Shares. During the term of the Plan, the Company will
reserve and keep available a number of Shares sufficient to satisfy the
requirements of the Plan.
21. Unsecured Obligation. No Participant under the Plan shall have any
interest in any fund or special asset of the Company by reason of the Plan or
the grant of any Option under the Plan. No trust fund shall be created in
connection with the Plan or any grant of any Option hereunder and there shall be
no required funding of amounts which may become payable to any Participant.
22. No Employment Rights. No Director, Employee or other person shall have
a right to be selected as a Participant under the Plan. Neither the Plan nor any
action taken by the Committee in administration of the Plan shall be construed
as giving any person any rights of employment or retention as an Employee,
Director or in any other capacity with the Company, the Bank, or any present or
future Parent or Subsidiary.
23. Governing Law. The Plan shall be governed by and construed in
accordance with the laws of the State of New York, except to the extent that
federal law shall be deemed to apply.