Exhibit 99.3
UNITED COMMUNITY BANCORP
FGB STOCK OPTION PLAN
ARTICLE I
GENERAL PROVISIONS
1. Purpose. The Stock Option Plan (the "Plan") of United Community Bancorp
(the "Corporation") is intended to allow certain officers, key employees and
directors of the Corporation to have an opportunity to acquire an ownership
interest in the Corporation as an additional incentive to attract and retain
such officers, employees and directors and to encourage them to promote the
Corporation's business.
2. Elements of the Plan. Options granted under the Plan shall be granted
pursuant to either Article II or Article III of the Plan. Options granted
pursuant to Article II are intended to qualify as incentive stock options
("Incentive Stock Options") under Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"). Options granted pursuant to Article III of the
Plan are not intended to qualify as Incentive Stock Options ("Nonqualified Stock
Options").
3. Administration. The Plan shall be administered by the Board of Directors
of the Corporation (the "Board") or, in the case of options granted pursuant to
Article II, a Committee (the "Committee"), which shall consist of not less than
three nonemployee directors of the Corporation. No member of the Board or of the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or to any option granted thereunder. In addition,
directors, including Committee members, shall be eligible for indemnification
from the Corporation, pursuant to the Corporation's bylaws, for any expenses,
judgments or other costs incurred as a result of a lawsuit filed against them or
any one of them claiming any rights or remedies due to their participation in
the administration of the Plan.
4. Authority of the Board and Committee.
(a) Subject to the other provisions of the Plan, the Board or the
Committee, as the case may be, shall have sole authority in its absolute
discretion: to grant options under the Plan; to determine the number of shares
subject to any option under the Plan; to fix the option price and the duration
of each option; to establish any other terms and conditions of options; and to
accelerate the time at which any outstanding option may be exercised.
(b) Subject to the other provisions of the Plan, and with a view to
effecting its purpose, the Board or the Committee, as the case may be, shall
have sole authority in their absolute discretion: to construe and interpret the
Plan; to define the terms used herein; to prescribe, amend, and rescind rules
and regulations relating to the Plan; to make any other determinations and to do
everything necessary or advisable to administer the Plan.
(c) All decisions, determinations, and interpretations made by the
Board or the Committee, as the case may be, shall be binding and conclusive on
all participants in the Plan and on their legal representatives, heirs and
beneficiaries.
5. Shares Subject to the Plan.
(a) The maximum aggregate number of shares of the Corporation's common
stock, par value $1.00 per share ("Common Stock") available pursuant to the
Plan, subject to adjustment as provided in Section 10 of Article I, shall be
88,446 shares. If any option granted pursuant to the Plan expires or terminates
for any reason before it has been exercised in full, the unpurchased shares
subject to that option shall not again be available for the purposes of the
Plan, regardless of whether the option was granted pursuant to Article II or
Article III of the Plan. The Corporation, during the term of the Plan, will at
all times reserve and keep available such number of shares of the Common Stock
as shall be sufficient to satisfy the requirements of the Plan.
6. Eligibility.
(a) Incentive Stock Options. Incentive Stock Options may be granted to
such officers and key employees of the Corporation or any of its subsidiaries as
may be determined by the Committee.
(b) Nonqualified Stock Options. Nonqualified Stock Options may be
granted to such directors of the Corporation or any of its subsidiaries (whether
or not employees) as may be determined by the Board.
(c) Number of options. More than one option may be granted to the same
person if the person is an eligible recipient under the Plan.
7. Terms and Conditions of Options. Stock options granted under the Plan
shall be evidenced by agreements in such form as the Board or the Committee may
from time to time approve, which agreements shall comply with and be subject to
the following terms and conditions, in addition to the provisions of Article II
or Article III, as applicable:
(a) Number of Shares; Designation. Each option shall state the number
of shares to which it pertains and whether it is an Incentive Stock Option
granted under Article II of the Plan or a Nonqualified Stock Option granted
under Article III of the Plan.
(b) Option Price. Each option shall state the option price, which
shall not be less than the fair market value (as hereinafter defined) per share
of the Common Stock at the time the option is granted (except that for an
Incentive Stock Option granted to any employee who owns more than 10% of the
combined voting power of all classes of stock of the Corporation, or of its
parent or subsidiary, the option price shall not be less than 110% of fair
market value). Fair market value shall be determined by the Board or the
Committee, as the case may be, on the basis of such factors as either deems
appropriate; provided, however, that fair market value shall be
determined without regard to any restriction other than a restriction which, by
its terms, will never lapse, and further provided that if at the time the
determination of fair market value is made, the Common Stock is admitted to
trading on a national securities exchange for which sales prices are regularly
reported, fair market value shall not be less than the mean of the high and low
asked or closing sales prices reported for the Common Stock on that exchange on
the date of grant (or most recent trading day preceding the date on which the
option is granted). For purposes of the Plan, the term "national securities
exchange" shall include the National Association of Securities Dealers Automated
Quotation System and the over-the-counter market.
(c) Exercise of Options; Vesting. Each option agreement shall set
forth a period during which the option may be exercised and, with regard to
Incentive Stock Options pursuant to Article II hereof, the vesting schedule for
such options as indicated in such Article II; provided, however, that this
period shall not exceed ten (10) years from the date of grant of the option. Not
less than 100 shares may be purchased at any one time unless the number
purchased is the total number that may be purchased under the option at that
time. No option may be exercised for any fraction of a share of Common Stock.
(d) Written Notice and Payment Required. An option granted pursuant to
the terms of the Plan shall be exercised when written notice of that exercise
has been received by the Corporation at its principal office from the person
entitled to exercise the option and full payment for the shares with respect to
which the option is exercised has been received by the Corporation. The purchase
price of any shares purchased shall be paid in full in cash or by certified or
cashier's check payable to the order of the Corporation or, unless prohibited by
the applicable option agreement, by shares of Common Stock or by a combination
of cash, check, and (unless prohibited by the applicable option agreement)
shares of Common Stock. If any portion of the purchase price is paid in shares
of Common Stock, those shares shall be tendered at their then fair market value
as determined in accordance with Section 7(b) of this article I.
(e) Compliance with Securities Laws. The options granted under the
Plan may, at the option of the Corporation, be registered under applicable
federal and state securities laws, but the Corporation shall have no obligation
to undertake any such registrations. Shares of Common Stock shall not be issued
with respect to any option granted under the Plan unless the exercise of that
option and the issuance and delivery of those shares pursuant to that exercise
shall comply with all relevant provisions of state and federal law, and the
requirements of any stock exchange upon which the shares may then be listed, and
shall be further subject to the approval of counsel for the Corporation with
respect to such compliance. The Board or the Committee, as the case may be, may
also require an optionee to furnish evidence satisfactory to the Corporation,
including a written and signed representation letter and consent to be bound by
any transfer restriction imposed by law, legend, condition, or otherwise, that
the shares are being purchased only for investment and without any present
intention to sell or distribute the shares in violation of any state or federal
law, rule, or regulation. Further, each optionee shall consent to the imposition
of a legend on the shares of Common Stock subject to his or her option
restricting their transferability as required by law or by the Plan.
(f) Options Not Transferable. Options granted pursuant to the Plan may
not be sold, pledged, assigned, or transferred in any manner otherwise than by
will or the laws of descent or distribution and may be exercised during the
lifetime of an optionee only by that optionee.
(g) Duration of Options. Each option and all rights thereunder granted
pursuant to the terms of this Plan shall expire on the date specified in the
applicable option agreement, but in no event shall any option be exercisable
after ten years from the date of grant of the option. Moreover, any Incentive
Stock Option granted to an employee who owns more than 10% of the combined
voting power of all classes of stock of the Corporation, or of its parent or
subsidiary, shall expire within five years from the date of grant of the option.
In addition, each option shall be subject to early termination as provided in
the Plan or applicable option agreement.
(h) Option Agreements. The option agreements authorized under the Plan
may differ from one another and shall contain such other provisions not
inconsistent with the Plan and Article II or Article III as applicable as the
Board or the Committee, as the case may be, may in its discretion deem advisable
from time to time, including, without limitation, conditions precedent to the
exercise of the option covered by any agreement, which conditions may include
the satisfaction of specified performance criteria by the Corporation or the
optionee.
(i) Limited Stock Appreciation Rights. In connection with the grant of
any Option under this Plan, the Board or Committee, as the case may be, may, in
its discretion, provide an optionee with the right (herein sometimes referred to
as "Limited Stock Appreciation Rights"), following a "change in control" (as
hereinafter defined) of the Corporation and without regard to any restrictions
on exercise that would otherwise apply, to surrender any unexercised portion of
such option as such optionee then may have for a cash payment equal to the
amount by which the fair market value (as determined by the Board or Committee,
as the case may be,) of the number of shares of Common Stock then subject to
such option exceeds the aggregate option price therefor. Limited Stock
Appreciation Rights shall be exercised by written notice to the Corporation as
provided in Section 7(d) of this Article I at any time prior to the earlier of
(i) the date which is thirty (30) days after the date of notice of a change in
control is given by the Board or Committee to the optionee or (ii) the last day
of the option period provided for in an option agreement, but in no event later
than ten years from the date of grant of the option. Limited Stock Appreciation
Rights may be exercised only when the market value of the Common Stock subject
to an option exceeds the aggregate option price as determined in accordance with
Section 7(b) of this Article I.
(j) When used herein, the phrase "change - in- control" refers to (i)
the acquisition by any person, group of persons or entities of the beneficial
ownership or power to vote more than 20% of the Corporation's outstanding stock,
(ii) during any period of two consecutive years, a change in the majority of the
Board unless the election of each new director was approved by at least
two-thirds of the directors then still in office who were directors at the
beginning of such two year period, or (iii) a reorganization, merger, exchange
of shares, combination or consolidation of the Corporation with one or more
other corporations or other legal entities in
which the Corporation is not the surviving corporation, or a transfer of all or
substantially all of the assets of the Corporation to another person or entity.
8. Tax Withholding. The exercise of any option granted under the Plan is
subject to the condition that if at any time the Corporation shall determine, in
its discretion, that the satisfaction of withholding tax or other withholding
liabilities under any state or federal law is necessary or desirable as a
condition of, or in any connection with, such exercise or the delivery or
purchase of shares pursuant thereto, then in such event, the exercise of the
option shall not be effective unless such withholding tax or other withholding
liabilities shall have been satisfied in a manner acceptable to the Corporation.
9. Employment. Nothing in the Plan or in any option award shall confer upon
any eligible employee any right to continued employment by the Corporation, or
by its parent or subsidiary corporations, or limit in any way the right of the
Corporation or its parent or subsidiary corporation at any time to terminate or
alter the terms of that employment.
10. Adjustments.
(a) If the shares of Common Stock of the Corporation are increased,
decreased, changed into, or exchanged for a different number or kind of shares
or securities through merger, consolidation, combination, exchange of shares,
other reorganization, recapitalization, reclassification, stock dividend, stock
split or reverse stock split in which the Corporation is the surviving entity,
the Board shall make an appropriate and proportionate adjustment in the maximum
number and kind of shares as to which options may be granted under the Plan. A
corresponding adjustment changing the number or kind of shares allocated to
unexercised options that shall have been granted prior to any such change shall
likewise be made. Any such adjustment in outstanding options shall be made
without change in the aggregate purchase price applicable to the unexercised
portion of the option, but with a corresponding adjustment in the price for each
share or other unit of any security covered by the option. In making any
adjustment pursuant to this Section 10(a), any fractional shares shall be
disregarded.
(b) In the event of a consolidation or a merger in which the
Corporation is not the surviving corporation, or any other merger in which the
shareholders of the Corporation exchange their shares of stock in the
Corporation for stock of another corporation, or in the event of complete
liquidation of the Corporation, or in the case of a tender offer approved by the
Board, all outstanding options, unless the applicable option agreement provides
otherwise, shall become exercisable in full immediately prior to the effective
date of any such transaction, regardless of the vesting schedule for Incentive
Stock Options.
11. [Removed]
12. Termination and Amendment of Plan. The Plan may be terminated at any
time by the Board. Unless sooner terminated the Plan shall terminate November
29, 2005. No options shall be granted under the Plan after the Plan is
terminated. Subject to the limitation contained in Section 13 of this Article I,
the Board or the Committee, as the case may be, may at any time
amend or revise the terms of the Plan, including the form and substance of the
option agreements to be used hereunder; provided that no amendment or revision,
unless approved by the shareholders, shall (a) increase the maximum aggregate
number of shares subject to this Plan, except as permitted under Section 10 of
this Article I; (b) change the minimum purchase price for shares subject to
options granted under the Plan; (c) extend the maximum term established under
the Plan for any option award; or (d) permit the granting of an option award to
anyone other than as provided in the Plan.
13. Prior Rights and Obligations. No amendment, suspension, or termination
of the Plan shall, without the consent of the person who has received an option
award, alter or impair any of that person's rights or obligations under any
option award granted under the Plan prior to such amendment, suspension, or
termination.
14. Construction. The provisions set forth in Article II shall not apply to
the provisions of Article III, and vice versa.
ARTICLE II
INCENTIVE STOCK OPTIONS
Options granted pursuant to this Article II of the Plan shall constitute
Incentive Stock Options under Section 422 of the Code and shall be designated as
such at the time of grant. Incentive Stock Options granted pursuant to this
Article II shall be subject to the terms, conditions and limitations set forth
in Article I above and to the following:
1. Maximum Amount of Incentive Stock Options. The maximum aggregate fair
market value of Common Stock, determined as of the time the Incentive Stock
Option is granted, for which any employee may be granted Incentive Stock Options
(as defined in Section 422(b) of the Code) exercisable for the first time during
any calendar year under all incentive stock option plans of the Corporation and
any parent, subsidiary, and predecessor corporations held by such employee shall
not exceed $100,000.
2. Compliance with Section 422 of the Code. This Plan is intended to comply
in every respect with Section 422 of the Code and the regulations promulgated
thereunder with regard to the grant of Incentive Stock Options and the purchase
and delivery of shares of Common Stock upon the exercise thereof. In the event
any future statute or regulation shall modify Section 422, the Plan shall be
deemed to incorporate by reference such modification for purposes of granting
Incentive Stock Options or the purchase and delivery of any shares of Common
Stock upon the exercise thereof. Any option agreement relating to an Incentive
Stock Option granted pursuant to the Plan that is outstanding and unexercised at
the time any modifying statute or regulation becomes effective shall also be
deemed to incorporate by reference such modification, and no notice of such
modification need be given to the optionee. If any provision of the Plan is
determined to disqualify the shares purchasable pursuant to Incentive Stock
Options granted under the Plan from the special tax treatment provided by
Section 422, such provision shall be
deemed to incorporate by reference for purposes of the Incentive Stock Options
the modification required to qualify the shares of said tax treatment.
3. Termination of Employment, Disability or Death.
(a) If an optionee ceases to be employed by the Corporation, or its
parent or any of its subsidiaries (or a corporation or a parent or subsidiary of
such corporation issuing or assuming a stock option in a transaction to which
Section 424 (a) of the Code applies), for any reason other than disability or
death or cause as defined in the applicable option agreement, his or her option
may be exercised at any time up to three months after the date of termination of
employment.
(b) If an optionee becomes disabled within the meaning of Section
22(e)(3) of the Code while employed by the Corporation, or any parent or
subsidiary corporation (or a corporation or a parent or subsidiary of such
corporation issuing or assuming a stock option in a transaction to which Section
424(a) of the Code applies), the option may be exercised at any time within
twelve months after the date of termination of employment due to disability.
(c) If an optionee dies while employed by the Corporation, its parent
or any of its subsidiaries, (or a corporation or a parent or subsidiary of such
corporation issuing or assuming a stock option in a transaction to which Section
424 (a) of the Code applies) or within three months of retirement, his or her
option shall expire one year after the date of death. During this period, the
option may be exercised, except as otherwise provided in the applicable option
agreement, by the person or persons to whom the optionee's rights under the
option shall pass by will or by the laws of descent and distribution.
(d) Any option that may be exercised for a period following
termination of the optionee's employment may be exercised only to the extent it
was exercisable immediately before such termination and in no event after the
option would expire by its terms without regard to such termination.
4. Vesting of Options.
(a) Options granted as Incentive Stock options under this Plan shall
vest and the right of a recipient to the options shall be nonforfeitable in
accordance, with the following schedule:
DATE WHEN SUCH OPTIONS PERCENTAGE OF SUCH
BECOME VESTED OPTIONS VESTED
Date of Grant 0%
First Anniversary of Grant Date 20%
Second Anniversary of Grant Date 20%
Third Anniversary of Grant Date 20%
Fourth Anniversary of Grant Date 20%
Fifth Anniversary of Grant Date 20%
(b) In determining the number of options vested under the above
vesting schedule a recipient shall not receive fractional options. If the
product resulting from multiplying the vested percentage times the allocated
options results in a fractional option, then a recipient's vested right shall be
to the whole number of options disregarding any fractional options.
(c) In the event any recipient to whom options are awarded under this
Plan terminates employment with the Corporation for any reason other than as
provided in subparagraph 4(d) below and such recipient does not have a 100%
vested interest in the recipient's options under this Plan, then any options
which are not vested, based upon the schedule above, shall be forfeited and
shall be not available again for grant to officers and key employees as may be
determined by the Committee.
(d) In the event that the employment of a recipient with the
Corporation should terminate because of such recipient's disability or death
prior to the date when all options allocated to the recipient would be 100%
vested in accordance with the schedule above, then, notwithstanding the schedule
above, all options allocated to such recipient shall immediately become fully
vested and nonforfeitable. For purposes of this Plan, the term disability shall
be defined in the same manner as such term is defined in Section 22 (e) (3) of
the Internal Revenue Code of 1986, as amended.
(e) All options granted prior to January 1, 2002 which have not yet
become fully vested by the same date shall be immediately vested and fully
exercisable notwithstanding the vesting schedule set forth in subparagraph 4(a)
above.
ARTICLE III
NONQUALIFIED STOCK OPTIONS
Options granted pursuant to this Article III shall constitute Nonqualified
Stock Options and shall be designated as not being Incentive Stock Options under
Section 422 of the Code. Nonqualified Stock Options shall be subject to the
terms, conditions and limitations set forth in Article I above and to the
following:
1. TERMINATION. If an optionee ceases to be employed by or ceases service
as a director for the Corporation, or its parent or any of its subsidiaries (or
a corporation or a parent or
subsidiary of such corporation issuing or assuming a stock option in a
transaction to which Section 424 (a) of the Code applies), for any reason other
than cause as defined in the applicable option agreement, his or her option may
be exercised for such period of time as may be specified in the applicable
option agreement or as determined by the Corporation.
2. EXERCISE PERIOD. Any option that may be exercised for a period following
termination of the optionee's position may be exercised only to the extent it
was exercisable immediately before such termination and in no event after the
option would expire by its terms without regard to such termination.