COMMUNITY SAVINGS, F.A.
1995 STOCK OPTION PLAN
1. PURPOSE
The purpose of the Community Savings, F. A. 1995 Stock Option Plan (the
"Plan") is to advance the interests of Community Savings, F. A. (the
"Association") and its shareholders by providing Employees of the Association
and its affiliates, including ComFed, M. H. C., the mutual holding company of
the Association (the "Company"), upon whose judgment, initiative and efforts the
successful conduct of the business of the Association and its affiliates largely
depends, with an additional incentive to perform in a superior manner as well as
to attract people of experience and ability.
2. DEFINITIONS
"AFFILIATE" means any "parent corporation" or "subsidiary corporation"
of the Association, as such terms are defined in Section 424(e) or 424(f),
respectively, of the Internal Revenue Code of 1986, as amended.
"AWARD" means an Award of Nonstatutory Stock Options, Incentive Stock
Options, and/or Limited Rights granted under the provisions of the Plan.
"BENEFICIARY" means the person or persons designated by a Recipient to
receive any benefits payable under the Plan in the event of such Recipient's
death. Such person or persons shall be designated in writing on forms provided
for this purpose by the Committee and may be changed from time to time by
similar written notice to the Committee. In the absence of a written
designation, the Beneficiary shall be the Recipient's surviving spouse, if any,
or if none, his estate.
"BOARD OF DIRECTORS" means the Board of Directors of the Association.
"CHANGE IN CONTROL" means:
(1) a reorganization, merger, merger conversion, consolidation or sale
of all or substantially all of the assets of the Association, the Company or the
Stock Holding Company, or a similar transaction in which the Association, the
Company or the Stock Holding Company is not the resulting entity;
(2) individuals who constitute the Incumbent Board of the Association,
the Company, or the Stock Holding Company cease for any reason to constitute a
majority thereof; or
(3) a change in control within the meaning of 12 C.F.R. ss. 574.4, as
determined by the board of directors of the Association or the Company;
(4) In the event that the Company converts to the Stock Holding Company
on a stand-alone basis, a "change in control" of the Association or the Stock
Holding Company (a) shall mean an event of a nature that would be required to be
reported in response to Item 1a of the current report on Form 8-K, as in effect
on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 (the "Exchange Act"), or results in a Change in Control of the
Association or the Stock Holding Company within the meaning of the Home Owners'
Loan Act of 1933 and the Rules and Regulations promulgated by the Office of
Thrift Supervision (or its predecessor agency), as in effect on the date hereof,
(b) without limitation shall be deemed to have occurred at such time as (i) any
"person" (as the term is used in Section 13(d) and 14(d) of the Exchange Act)
other than the Stock Holding
Company is or becomes a "beneficial owner" (as defined in Rule 13-d under the
Exchange Act) directly or indirectly, of securities of the Association
representing 25% or more of the Association's outstanding securities ordinarily
having the right to vote at the election of directors except for any securities
of the Association received by the Stock Holding Company in connection with the
Reorganization and any securities purchased by the Association's employee stock
ownership plan and trust shall not be counted in determining whether such plan
is the beneficial owner of more than 25% of the Association's securities, (ii) a
proxy statement soliciting proxies from stockholders of the Association, by
someone other than the current management of the Association, seeking
stockholder approval of a plan of reorganization, merger or consolidation of the
Stock Holding Company of the Association or similar transaction with one or more
corporations as a result of which the outstanding shares of the class of
securities then subject to the plan or transaction are exchanged or converted
into cash or property or securities not issued by the Association or the Stock
Holding Company, or (iii) a tender offer is made for 25% or more of the voting
securities of the Association and the shareholders owning beneficially or of
record 25% or more of the outstanding securities of the Association have
tendered or offered to sell their shares pursuant to such tender offer and such
tendered shares have been accepted by the tender offeror.
Notwithstanding, the foregoing, a "Change in Control" of the
Association or the Company shall not be deemed to have occurred if the Company
ceases to own at least 51% of all outstanding shares of stock of the Association
in connection with a conversion of the Company from mutual to stock form.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMITTEE" means the Stock Benefits Committee of the Board of
Directors consisting of at least three Outside Directors of the Association or
the Company, and all of whom are and must be "disinterested directors" as that
term is defined under Rule 16b-3 under the Securities Exchange Act of 1934, as
amended.
"COMMON STOCK" means the common stock of the Association, par value
$1.00 per share.
"CONVERSION TRANSACTION" means the conversion of the Company from the
mutual to stock form of organization either on a stand-alone basis or in the
context of a merger conversion, as contemplated by regulations of the OTS or any
successor thereof.
"DATE OF GRANT" means the actual date on which an Award is granted by
the Committee.
"DIRECTOR" means a member of the Board of Directors.
"DISABILITY" means the permanent and total inability by reason of
mental or physical infirmity, or both, of an employee to perform the work
customarily assigned to him. Additionally, a medical doctor selected or approved
by the Board of Directors must advise the Committee that it is either not
possible to determine when such Disability will terminate or that it appears
probable that such Disability will be permanent during the remainder of such
employee's lifetime.
"EMPLOYEE" means any person who is currently employed by the
Association or an Affiliate, including officers.
"FAIR MARKET VALUE" means, when used in connection with the Common
Stock on a certain date, the reported closing price of the Common Stock as
reported by the National Association of Securities Dealers Automated Quotation
("Nasdaq") National Market (as published by the WALL STREET JOURNAL, if
published) on the day prior to such date, or if the Common Stock was not traded
on such date, on the next preceding day on which the Common Stock was traded
thereon; PROVIDED, HOWEVER, that if the Common Stock is not reported on the
Nasdaq National Market, Fair Market Value shall mean the average sale price of
all shares of Common Stock sold during the 30-day period immediately preceding
the date on which such stock option was granted, and if no shares of stock
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have been sold within such 30-day period, the average sale price of the last
three sales of Common Stock sold during the 90-day period immediately preceding
the date on which such stock option was granted. In the event Fair Market Value
cannot be determined in the manner described above, then Fair Market Value shall
be determined by the Committee. The Committee shall be authorized to obtain an
independent appraisal to determine the Fair Market Value of the Common Stock.
"INCENTIVE STOCK OPTION" means an Option granted by the Committee to a
Participant, which Option is designated as an Incentive Stock Option pursuant to
Section 8.
"INCUMBENT BOARD" means, in the case of (i) the Company or the Stock
Holding Company, or (ii) the Association, the Board of Directors of the Company
or the Association, respectively, on the date hereof, provided that any person
becoming a director subsequent to the date hereof whose election was approved by
a vote of at least three-quarters of the directors comprising the Incumbent
Board, or whose nomination for election by members or stockholders was approved
by the same nominating committee serving under an Incumbent Board, shall be
considered as though he were a member of the Incumbent Board.
"LIMITED RIGHT" means the right to receive an amount of cash based upon
the terms set forth in Section 9.
"NONSTATUTORY STOCK OPTION" means an Option granted by the Committee to
(i) an Outside Director or (ii) to any other Participant and such option is
either (A) not designated by the Committee as an Incentive Stock Option, or (B)
fails to satisfy the requirements of an Incentive Stock Option as set forth in
Section 422 of the Code and the regulations thereunder.
"OFFERING" means the initial public offering of the Common Stock of the
Association.
"OPTION" means Award granted under Section 7 or Section 8.
"OUTSIDE DIRECTOR" means a Director who is not also an employee.
"PARTICIPANT" means an Outside Director or an Employee of the
Association or its Affiliates chosen by the Committee to participate in the
Plan.
"REORGANIZATION" means the reorganization of Community Savings, F. A.
as a stock savings association and the establishment of the Company as its
mutual holding company parent.
"STOCK HOLDING COMPANY" means the holding company resulting from a
stock conversion of the Company in a conversion transaction.
"TERMINATION FOR CAUSE" means the termination of employment caused by
the individual's personal dishonesty, willful misconduct, any breach of a
fiduciary duty involving personal profit or intentional failure to perform
stated duties, or willful violation of any law, rule or regulation (other than
traffic violations or similar offenses) or final cease-and-desist order, any of
which results in material loss to the Association, the Company, or one of its
Affiliates.
3. ADMINISTRATION
The Plan shall be administered by the Committee. The Committee is
authorized, subject to the provisions of the Plan, to establish such rules and
regulations as it deems necessary for the proper administration of the Plan and
to make whatever determinations and interpretations in connection with the Plan
it deems necessary or advisable. All determinations and interpretations made by
the Committee shall be binding and conclusive on all Participants in the Plan
and on their legal representatives and beneficiaries.
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The Awards of Nonstatutory Options to Outside Directors under Section 7
of the Plan are intended to comply with Rule 16b-3 under the Securities Exchange
Act of 1934. Notwithstanding any term to the contrary appearing herein, unless
permitted by Rule 16b-3(c)(2)(ii), neither the Committee nor the Board shall
have the authority to determine the amount and price of securities to be awarded
and/or timing of awards under Section 7 of the Plan to designated directors or
categories of directors, which terms shall be set forth herein. To the extent
any provision of the Plan or action by Plan administrators fails to comply with
this subsection 3, such provision or action shall be deemed null and void to the
extent permitted by law and deemed advisable by the Board.
4. TYPES OF AWARDS
Awards under the Plan may be granted in any one or a combination of (a)
Incentive Stock Options as defined in Section 7; (b) Non-Statutory Stock Options
as defined in Section 8; and (c) Limited Rights as defined herein in Section 9.
5. STOCK SUBJECT TO THE PLAN
Subject to adjustment as provided in Section 14, the maximum number of
shares reserved for issuance under the Plan is ten percent (10%) of the shares
of Common Stock of the Association sold in connection with the Stock Offering
(or 237,986 shares). The maximum number of shares reserved for issuance to
Employees is seven and one-half percent (7.5%) of the shares of Common Stock
issued in connection with the Offering. The maximum number of shares reserved
for issuance to Outside Directors is two and one-half percent (2.5%) of the
shares of Common Stock issued in connection with the Offering.
The shares of Common Stock represented by such options may be either
authorized but unissued shares or shares previously issued and reacquired by the
Association or the Company. To the extent that options or rights granted under
the Plan are exercised, the shares covered will be unavailable for future grants
under the Plan; to the extent that options together with any related rights
granted under the Plan terminate, expire or are cancelled without having been
exercised or, in the case of Limited Rights exercised for cash, new Awards may
be made with respect to these shares.
6. ELIGIBILITY
Officers and other employees of the Association or its affiliates shall
be eligible to receive Incentive Stock Options, Non-Statutory Stock Options
and/or Limited Rights under the Plan. Directors who are not employees or
officers of the Association or its affiliates shall not be eligible to receive
Incentive Stock Options under the Plan. Outside Directors shall be eligible to
receive only Nonstatutory Stock Options.
7. NON-STATUTORY STOCK OPTIONS
7.1 GRANT OF NON-STATUTORY STOCK OPTIONS
(a) GRANTS TO OUTSIDE DIRECTORS. Each Outside Director who is serving
in such capacity on the date of the Association's Offering and at the Effective
Date of the Stock Option Plan, shall be granted Options to purchase 11,850 of
Common Stock of the Association, subject to adjustment pursuant to Section 14.
Each person who becomes an Outside Director subsequent to the Effective Date of
the Stock Option Plan, shall be granted Nonstatutory Stock Options to purchase
200 shares of the Common Stock, subject to adjustment pursuant to Section 14, to
the extent shares remain available under this Stock Option Plan. Nonstatutory
Stock Options granted under this Plan are subject to the terms and conditions
set forth in this Section 7.
(b) GRANTS TO EMPLOYEES. The Committee may, from time to time, grant
Nonstatutory Stock Options to eligible Employees and, upon such terms and
conditions as the Committee may determine, grant Nonstatutory
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Stock Options in exchange for and upon surrender of previously granted Awards
under the Plan. Nonstatutory Stock Options granted under this Plan are subject
to the terms and conditions set forth in this Section 7.
(c) OPTION AGREEMENT. Each Option shall be evidenced by a written
option agreement between the Association and the employee specifying the number
of shares of Common Stock that may be acquired through its exercise and
containing such other terms and conditions that are not inconsistent with the
terms of this grant. The maximum number of shares subject to a Nonstatutory
Option that may be awarded under the Plan to any Employee shall be 40,000.
(d) PRICE. The purchase price per share of Common Stock deliverable
upon the exercise of each Non-Statutory Stock Option shall be determined by the
Committee on the date the Option is granted. Except as provided below, such
purchase price shall not be less than 100% of the Fair Market Value of the
Association's Common Stock on the date the Option is granted. The purchase price
per share of Common Stock deliverable upon the exercise of each Non-Statutory
Stock Option granted in exchange for and upon surrender of previously granted
awards shall be not less than 100% of the Fair Market Value of the Association's
Common Stock on the date the Option is granted, but in no event may the purchase
price of any Non-Statutory Stock Option be less than the par value of the Common
Stock. Shares may be purchased only upon full payment of the purchase price.
Payment of the purchase price may be made, in whole or in part, through the
surrender of shares of the Common Stock of the Association at the Fair Market
Value of such shares determined in the manner described in Section 2.
(e) MANNER OF EXERCISE. Nonstatutory Stock Options granted under the
Stock Option Plan shall vest in a Participant at the rate of twenty percent
(20%) per year commencing one year from the date of grant. The vested Options
may be exercised from time to time, in whole or in part, by delivering a written
notice of exercise to the President or Chief Executive Officer of the
Association. Such notice is irrevocable and must be accompanied by full payment
of the purchase price in cash or shares of previously acquired Common Stock of
the Association at the Fair Market Value of such shares determined on the
exercise date by the manner described in Section 2 hereof. If previously
acquired shares of Common Stock are tendered in payment of all or part of the
exercise price, the value of such shares shall be determined as of the date of
such exercise.
(f) TERMS OF OPTIONS. The term during which each Non-Statutory Stock
Option may be exercised shall be determined by the Committee, but in no event
shall a Non-Statutory Stock Option be exercisable in whole or in part more than
10 years and one day from the Date of Grant. The Nonstatutory Options shall be
exercisable in installments, as determined by the Committee. The Committee shall
determine the date on which each installment shall become exercisable. The
shares comprising each installment may be purchased in whole or in part at any
time after such installment becomes exercisable. The Committee, in its sole
discretion, may accelerate the time at which any Non-statutory Stock Option may
be exercised in whole or in part. Notwithstanding the above, in the event of a
Change in Control of the Association, all Non-Statutory Stock Options shall
become immediately exercisable.
(g) TERMINATION OF EMPLOYMENT OR SERVICE. Upon the termination of an
Employee's employment or upon termination of an Outside Director's service for
any reason other than Disability, death or Termination for Cause, the Employee's
or Outside Director's Non-Statutory Stock Options shall be exercisable only as
to those shares that were immediately purchasable by the Employee or Outside
Directors at the date of termination and only for a period of one year following
termination. In the event of Termination for Cause, all rights under his
Non-Statutory Stock Options shall expire upon termination. In the event of the
death or Disability of any Employee or Outside Director, all Non-Statutory Stock
Options held by such Employee or Outside Director, whether or not exercisable at
such time, shall be exercisable by such person or his legal representatives or
beneficiaries for one year following the date of his death or cessation of
employment or service, applicable, due to Disability, PROVIDED that in no event
shall the period extend beyond the expiration of the Non-Statutory Stock Option
term. Notwithstanding the above, all Nonstatutory Options held by a Participant
whose employment as an Employee or service as an Outside Director terminates
following a Change in Control of the Association or the Company shall
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be deemed earned as of the last day of employment or service with the
Association or an Affiliate and shall be exercisable for one year following such
termination of employment or service.
8. INCENTIVE STOCK OPTIONS
8.1 GRANT OF INCENTIVE STOCK OPTIONS
The Committee, from time to time, may grant Incentive Stock Options to
eligible Employees. Incentive Stock Options granted pursuant to the Plan shall
be subject to the following terms and conditions:
(a) OPTION AGREEMENT. Each Option shall be evidenced by a written
option agreement between the Association and the Employee specifying the number
of shares of Common Stock that may be acquired through its exercise and
containing such other terms and conditions that are not inconsistent with the
terms of this grant.
(b) PRICE. The purchase price per share of Common Stock deliverable
upon the exercise of each Incentive Stock Option shall be not less than 100% of
the Fair Market Value of the Association's Common Stock on the date the
Incentive Stock Option is granted. However, if an Employee owns stock possessing
more than 10% of the total combined voting power of all classes of Common Stock
of the Association (or under Section 424(d) of the Code, is deemed to own stock
representing more than 10% of the total combined voting power of all classes of
stock of the Association or its Affiliates by reason of the ownership of such
classes of common stock directly or indirectly, by or for any brother, sister,
spouse, ancestor or lineal descendant of such Employee or by or for any
corporation, partnership, estate or trust of which such employee is a
shareholder, partner or beneficiary), the purchase price per share of Common
Stock deliverable upon the exercise of each Incentive Stock Option shall not be
less than 110% of the Fair Market Value of the Association's Common Stock on the
date the Incentive Stock Option is granted. Shares may be purchased only upon
payment of the full purchase price. Payment of the purchase price may be made,
in whole or in part, through the surrender of shares of the Common Stock of the
Association. If previously acquired shares of common stock are tendered in
payment of all or part of the exercise price, the value of such shares shall be
determined as of the date of exercise of the Incentive Stock Option.
(c) MANNER OF EXERCISE. Incentive Stock Options granted under the Stock
Option Plan shall vest in a Participant at the rate of twenty percent (20%) per
year commencing one year from the date of grant. The vested Options may be
exercised from time to time, in whole or in part, by delivering a written notice
of exercise to the President or Chief Executive Officer of the Association,
PROVIDED, HOWEVER, that no Options shall be exercisable prior to approval of the
Plan by stockholders. Such notice is irrevocable and must be accompanied by full
payment of the purchase price in cash or shares of previously acquired Common
Stock of the Association. If previously acquired shares of Common Stock are
tendered in payment of all or part of the exercise price, the value of such
shares shall be determined as of the date of such exercise of the Incentive
Stock Option.
(d) AMOUNT OF OPTIONS. Incentive Stock Options may be granted to any
eligible Employee in such amounts as determined by the Committee; PROVIDED that
the amount granted is consistent with the terms of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"). Notwithstanding the above, the
maximum number of shares that may be subject to an Incentive Stock Option
awarded under the Plan to any Employee shall be 40,000. In granting Incentive
Stock Options the Committee shall consider the position and responsibilities of
the eligible Employee, the length and value of his or her service to the
Association, the compensation paid to the Employee and the Committee's
evaluation of the performance of the Association according to measurements that
include, among others, key financial ratios, levels of classified assets, and
independent audit findings. In the case of an option intended to qualify as an
Incentive Stock Option, the aggregate Fair Market Value (determined as of the
time the option is granted) of the Common Stock with respect to which Incentive
Stock Options granted are exercisable for the first time by the Participant
during any calendar year (under all plans of the Participant's employer
corporation and its parent and subsidiary corporations) shall not exceed
$100,000. The provisions of this
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Section 8.1(d) shall be construed and applied in accordance with Section 422(d)
of the Code and the regulations, if any, promulgated thereunder.
(e) TERM OF OPTIONS. The term during which each Incentive Stock Option
may be exercised shall be determined by the Committee, but in no event shall an
Incentive Stock Option be exercisable in whole or in part more than 10 years
from the Date of Grant. If any Employee, at the time an Incentive Stock Option
is granted to him, owns Common Stock representing more than 10% of the total
combined voting power of the Association or its Affiliates (or, under Section
424(d) of the Code, is deemed to own Common Stock representing more than 10% of
the total combined voting power of all such classes of Common Stock, by reason
of the ownership of such classes of Common Stock, directly or indirectly, by or
for any brother, sister, spouse, ancestor or lineal descendent of such Employee,
or by or for any corporation, partnership, estate or trust of which such
employee is a shareholder, partner or beneficiary), the Incentive Stock Option
granted to him shall not be exercisable after the expiration of five years from
the Date of Grant. No Incentive Stock Option granted under this Plan is
transferable except by will or the laws of descent and distribution and is
exercisable during his lifetime only by the Employee to which it is granted.
The Committee shall determine the date on which each Incentive Stock
Option shall become exercisable and may provide that an Incentive Stock Option
shall become exercisable in installments. The shares comprising each installment
may be purchased in whole or in part at any time after such installment becomes
purchasable, provided that the amount able to be first exercised in a given year
is consistent with the terms of Section 422 of the Code. To the extent required
by Section 422 of the Code, the aggregate fair market value (determined at the
time the Option is granted) of the Common Stock for which Incentive Stock
Options are exercisable for the first time by a Participant during any calendar
year (under all plans of the Association and its Affiliates) shall not exceed
$100,000. The Committee, in its sole discretion, may accelerate the time at
which any Incentive Stock Option may be exercised in whole or in part; PROVIDED
that it is consistent with the terms of Section 422 of the Code. Notwithstanding
the above, in the event of a Change in Control of the Association, all Incentive
Stock Options shall become immediately exercisable unless the fair market value
of the amount exercisable as a result of a Change in Control shall exceed
$100,000 (determined as of the date of grant). In such event, the first $100,000
of Incentive Stock Options (determined as of the date of grant) shall be
exercisable as Incentive Stock Options and any excess shall be exercisable as
Nonstatutory Stock Options.
(f) TERMINATION OF EMPLOYMENT. Upon the termination of an Employee's
employment for any reason other than Disability, Change in Control, death or
Termination for Cause, his Incentive Stock Options shall be exercisable only as
to those shares which were immediately purchasable by him at the date of
termination and only for a period of three months following termination. In the
event of Termination for Cause all rights under his Incentive Stock Options
shall expire upon termination.
In the event of death or Disability of any Employee, all Incentive
Stock Options held by such Employee, whether or not exercisable at such time,
shall be exercisable by such Employee or his legal representatives or
beneficiaries for one year following the date of his death or cessation of
employment due to Disability. Upon termination of an Employee's service due to a
Change in Control, all Incentive Stock Options held by such Employee, whether or
not exercisable at such time, shall be exercisable for a period of one year
following the date of his cessation of employment; PROVIDED, HOWEVER, that such
Option shall not be eligible for treatment as an Incentive Stock Option in the
event such Option is exercised more than three months following the date of the
Change in Control. In no event shall the exercise period extend beyond the
expiration of the Incentive Stock Option term.
(g) COMPLIANCE WITH CODE. The Options granted under this Section 8 of
the Plan are intended to qualify as Incentive Stock Options within the meaning
of Section 422 of the Code, but the Association makes no warranty as to the
qualification of any Option as an incentive stock option within the meaning of
Section 422 of the
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Code. If an Option granted hereunder fails for whatever reason to comply with
the provisions of Section 422 of the Code and such failure is not or cannot be
cured, such Option shall be a Nonstatutory Stock Option.
9. LIMITED RIGHTS
9.1 GRANT OF LIMITED RIGHTS
The Committee may grant a Limited Right simultaneously with the grant
of any Option to any Employee of the Association, with respect to all or some of
the shares covered by such Option. Limited Rights granted under this Plan are
subject to the following terms and conditions:
(a) TERMS OF RIGHTS. In no event shall a Limited Right be exercisable
in whole or in part before the expiration of six months from the date of grant
of the Limited Right. A Limited Right may be exercised only in the event of a
Change in Control of the Association.
The Limited Right may be exercised only when the underlying Option is
eligible to be exercised, provided that the Fair Market Value of the underlying
shares on the day of exercise is greater than the exercise price of the related
Option.
Upon exercise of a Limited Right, the related Option shall cease to be
exercisable. Upon exercise or termination of an Option, any related Limited
Rights shall terminate. The Limited Rights may be for no more than 100% of the
difference between the exercise price and the Fair Market Value of the Common
Stock subject to the underlying Option. The Limited Right is transferable only
when the underlying Option is transferable and under the same conditions.
(b) PAYMENT. Upon exercise of a Limited Right, the holder shall
promptly receive from the Association an amount of cash equal to the difference
between the Fair Market Value on the Date of Grant of the related Option and the
Fair Market Value of the underlying shares on the date the Limited Right is
exercised, multiplied by the number of shares with respect to which such Limited
Right is being exercised. In the event of a Change of Control in which pooling
accounting treatment is a condition to the transaction, the Limited Right shall
be exercisable solely for shares of stock of the Association, or in the event of
a merger transaction, for shares of the acquiring corporation, or its parent, as
applicable. The number of shares to be received on the exercise of such Limited
Right shall be determined by dividing the amount of cash that would have been
available under the first sentence above by the Fair Market Value at the time of
exercise of the shares underlying the Option subject to the Limited Right.
10. SURRENDER OF OPTION
In the event of a Participant's termination of employment or
termination of service as a result of death or Disability, the Participant (or
his personal representative(s), heir(s), or devisee(s)) may, in a form
acceptable to the Committee, make application to surrender all or part of the
Options held by such Participant in exchange for a cash payment from the
Association of an amount equal to the difference between the Fair Market Value
of the Common Stock on the date of termination of employment and the exercise
price per share of the Option on the Date of Grant. Whether the Association
accepts such application or determines to make payment, in whole or part, is
within its absolute and sole discretion, it being expressly understood that the
Association is under no obligation to any Participant whatsoever to make such
payments. In the event that the Association accepts such application and
determines to make payment, such payment shall be in lieu of the exercise of the
underlying Option and such Option shall cease to be exercisable.
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11. RIGHTS OF A SHAREHOLDER; NON-TRANSFERABILITY
An optionee shall have no rights as a shareholder with respect to any
shares covered by a Non-Statutory and/or Incentive Stock Option until the date
of issuance of a stock certificate for such shares. Nothing in this Plan or in
any Award granted confers on any person any right to continue in the employ of
the Association or its Affiliates or to continue to perform services for the
Association or its Affiliates or interferes in any way with the right of the
Association or its Affiliates to terminate his services as an officer or other
employee at any time.
No Award under the Plan shall be transferable by the optionee other
than by will or the laws of descent and distribution and may only be exercised
during his lifetime by the optionee, or by a guardian or legal representative.
12. AGREEMENT WITH GRANTEES
Each Award of Options, and/or Limited Rights will be evidenced by a
written agreement, executed by the Participant and the Association or its
Affiliates that describes the conditions for receiving the Awards including the
date of Award, the purchase price if any, applicable periods, and any other
terms and conditions as may be required by the Board of Directors or applicable
securities law.
13. DESIGNATION OF BENEFICIARY
A Participant, with the consent of the Committee, may designate a
person or persons to receive, in the event of death, any Option or Limited
Rights Award to which he would then be entitled. Such designation will be made
upon forms supplied by and delivered to the Association and may be revoked in
writing. If a Participant fails effectively to designate a Beneficiary, then his
estate will be deemed to be the Beneficiary.
14. DILUTION AND OTHER ADJUSTMENTS
In the event of any change in the outstanding shares of Common Stock of
the Association by reason of any stock dividend or split, recapitalization,
merger, consolidation, spin-off, reorganization, combination or exchange of
shares, or other similar corporate change, or other increase or decrease in such
shares without receipt or payment of consideration by the Association, the
Committee will make such adjustments to previously granted Awards, to prevent
dilution or enlargement of the rights of the Participant, including any or all
of the following:
(a) adjustments in the aggregate number or kind of shares of Common
Stock which may be awarded under the Plan;
(b) adjustments in the aggregate number or kind of shares of Common
Stock covered by Awards already made under the Plan;
(c) subject to Section 8.1(b) hereof, adjustments in the purchase price
of outstanding Incentive and/or Non-Statutory Stock Options, or any
Limited Rights attached to such options.
No such adjustments, however, may change materially the value of
benefits available to a Participant under a previously granted Award.
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15. LIMITATIONS UPON EXERCISE OF OPTIONS
Notwithstanding any other provision of the Plan, so long as the Company
remains in the mutual form of organization and so long as any applicable statute
or regulation requires the Company to own at least a majority of the outstanding
Common Stock of the Association, an Option granted under this Plan may not be
exercised if the exercise of such an Option would result in the Company owning
less than a majority of the Common Stock of the Association. Nothing herein
shall preclude the Association from issuing additional authorized but unissued
shares of Common Stock to the Company to allow for the exercise of options which
would otherwise have resulted in the Company owning less than a majority of the
Common Stock of the Association.
16. TREATMENT OF OPTIONS IN THE EVENT OF A CONVERSION TRANSACTION
In the event that the Company converts to stock form in a Conversion
Transaction ("Stock Holding Company"), any Options outstanding shall, at the
option of the holder, (i) be convertible into Options for Common Stock of the
Stock Holding Company, or (ii) be exercised by the holder prior to the effective
date of the Conversion Transaction and the holder shall be entitled to exchange,
in the same manner as other minority stockholders of the Association, the shares
of Common Stock of the Association received upon such exercise for shares of
Common Stock of the Stock Holding Company. If for any reason such options are
not to be converted or such shares are not exchanged, the holders of Options
under this plan shall receive cash payment for the shares of stock represented
by the Options in an amount equal to the fair market value of the underlying
Options or the initial offering price of the Common Stock of the Stock Holding
Company for which the Common Stock underlying the Option would otherwise be
exchanged, less the original exercise price of such options and, with respect to
options that have been exercised, the Stock Holding Company shall redeem such
shares for cash in the same manner as such redemption would occur for other
minority stockholders of the Association. Any exchange, conversion of Options,
or cash payment for shares shall be subject to applicable federal and state
regulations and, if necessary, subject to the approval of the appropriate
regulatory authorities.
17. WITHHOLDING
There may be deducted from each distribution of cash and/or Common
Stock under the Plan the amount of tax required by any governmental authority to
be withheld.
18. AMENDMENT OF THE PLAN
The Board of Directors may at any time, and from time to time, modify
or amend the Plan in any respect; PROVIDED, HOWEVER, that if necessary to
continue to qualify the Plan under the Securities and Exchange Commission Rule
16b-3, the approval by a majority of the shares represented in person or by
proxy shall be required for any such modification or amendment that:
(a) increases the maximum number of shares for which options may
be granted under the Plan (SUBJECT, HOWEVER, to the provisions
of Section 14 hereof);
(b) reduces the exercise price at which Awards may be granted
(SUBJECT, HOWEVER, to the provisions of Sections 8.1(a) and 14
hereof):
(c) extends the period during which options may be granted or
exercised beyond the times originally prescribed (subject,
however, to the provisions of Section 8.1(a) hereof); or
(d) changes the persons eligible to participate in the Plan.
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Failure to ratify or approve amendments or modifications to subsections
(a) through (d) of this Section 18 by shareholders shall be effective only as to
the specific amendment or modification requiring such ratification. Other
provisions, sections, and subsections of this Plan will remain in full force and
effect.
No such termination, modification or amendment may affect the rights of
a Participant under an outstanding Award.
19. APPROVAL BY STOCKHOLDERS
The Plan shall be approved by stockholders of the Association within 12
months after the Plan has been adopted. No Options granted pursuant to the Plan
shall be exercisable prior to such stockholder approval.
20. EFFECTIVE DATE OF PLAN
The Plan shall become effective upon the date adopted by the Board of
Directors, following the approval of stockholders (the "Effective Date").
21. TERMINATION OF THE PLAN
The right to grant Awards under the Plan will terminate upon the
earlier of ten (10) years after the Effective Date of the issuance of Common
Stock or the date on which the exercise of Options or related rights equaling
the maximum number of shares reserved under the Plan occurs as set forth in
Section 5 hereof. The Board of Directors has the right to suspend or terminate
the Plan at any time; PROVIDED that no such action will, without the consent of
a Participant, affect adversely his rights under a previously granted Award.
(Remainder of Page Intentionally Left Blank]
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22. APPLICABLE LAW
The Plan will be administered in accordance with the laws of the State
of Florida.
Adopted January 18, 1995
ATTEST: COMMUNITY SAVINGS, F. A.
/s/ Deborah Rousseau /s/ James B. Pittard, Jr.
- ----------------------------------- -------------------------------------
Secretary James B. Pittard, Jr., President and
Chief Executive Officer
January 18, 1995
- ------------------------------------
Date Approved by Stockholders
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