Exhibit 10.11
PLAN DESCRIPTION
Restated 1987 Stock Option and Appreciation Rights Plan of ONBANCorp,
Inc.
Preamble
Pursuant to an Agreement and Plan of Reorganization dated as of January
31, 1989, Onondaga Savings Bank and ONBANCorp, Inc. ("ONBANCorp") agreed to a
reorganization whereby ONBANCorp, Inc. would become the holder of all the
outstanding stock of Onondaga Savings Bank and the holders of Onondaga Savings
Bank common stock immediately prior to the reorganization would become the
owners of all the issued and outstanding common stock of ONBANCorp, Inc.
Section 4.2 of the Agreement and Plan of Reorganization provided that,
at the time of reorganization, the 1987 Stock Option and Appreciation Rights
Plan of Onondaga Savings Bank (1987 ONBANK Stock Option Plan) would be continued
and become a Stock Option Plan of ONBANCorp, Inc. (1987 ONBANCorp Stock Option
Plan).
The 1987 ONBANK Stock Option Plan was approved by the shareholders of
the Bank on April 19, 1988. Pursuant to regulations applicable to the Bank, the
Superintendent of Banks of the New York State Banking Department also approved
the 1987 ONBANK Stock Option and all subsequent amendments. The shareholders of
the Bank and the Superintendent of Banks of the New York State Banking
Department approved the Agreement and Plan of Reorganization on April 18, 1989
and July 13, 1989, respectively. This contained the above referenced section 4.2
providing for the transfer of the stock option plan to the Corporation.
Effective upon the reorganization, dated September 18, 1989, the stock option
plan was amended as approved by action of the Board of the Corporation which
directed the appropriate officers to amend the stock option plan to reflect the
reorganization. Accordingly, the 1987 ONBANCorp Stock Option Plan (formerly 1987
ONBANK Stock Option Plan) is hereby restated and shall hereafter be construed to
reflect the fact that it is the Restated 1987 Stock Option and Appreciation
Rights Plan of ONBANCorp, Inc.
ARTICLE I--Purpose
1.1 General Purpose of the Plan
The purpose of the plan is to promote the growth and profitability of
the Corporation and to provide certain key executives of the Corporation with an
incentive to achieve corporate objectives, to attract and retain key executives
of outstanding competence and to provide such executives with an equity interest
in the Corporation.
ARTICLE II--Definitions
The following definitions shall apply for purposes of the Plan, unless
a different meaning is plainly indicated by the context:
2.1 Appreciation Right ("SAR") means a right granted pursuant to section
5.1.
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2.2 Board of Directors means the Board of Directors of ONBANCorp.
2.3 Code means the Internal Revenue Code of 1986 (including the
corresponding provisions of any succeeding law).
2.4 Committee means the Committee described in section 3.1.
2.5 Conversion Price means, with respect to a Share, the price per Share
at which Shares were offered for sale to the depositors of Onodaga
in the subscription offering of such Shares that was made in
connection with the conversion of Onodaga from a New York mutual
savings bank to a New York stock-form savings bank.
2.6 Corporation means ONBANCorp, its wholly owned subsidiary Onondaga,
and any other subsidiary of ONBANCorp, which, with the prior
approval of the Board of Directors and subject to such terms and
conditions as the Board of Directors may impose, shall adopt this
Plan.
2.7 Disability means a condition of total incapacity, mental or
physical, to engage in any substantial gainful activity which the
Committee shall have determined, on the basis of competent medical
evidence, is likely to be permanent, is likely to result in death or
has lasted, or can be expected to last, for a continuous period of
at least twelve months.
2.8 Eligible Board Member means a member of the Board of Directors who
is not currently and has not at any time during the immediately
preceding one-year period been an Eligible Employee and is a
"Disinterested Person" as such term is defined in Rule 16b-3 of the
Securities Exchange Act of 1934.
2.9 Eligible Employee means an officer or an employee of the
Corporation, including a member of the Board of Directors of the
Corporation who is an officer or an employee of the Corporation,
whom the Committee determines to be in a key executive position in
the Corporation.
2.10 Exercise Price means the price per Share at which Shares subject to
an Option may be purchased upon exercise of the Option, determined
in accordance with section 4.4.
2.11 Fair Market Value means, with respect to a Share on a specified date:
(a) the average of the high and low quoted sales prices on
the date in question (or, if there is no reported sale on such
date, on the last preceding date on which any reported sale
occurred) on the principal United States securities exchange on
which the Shares are listed or admitted to trading; or
(b) if the Shares are not listed or admitted to trading on
any such exchange, the closing bid quotation with respect to a
Share on such date on the National Association of Securities
Dealers, Inc., Automated Quotation System, or, if no such
quotation is provided, on another similar system, selected by
the Committee, then in use, or
(c) if sections 2.11(a) or (b) are not applicable, the
Fair Market Value of a
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Share as the Committee may determine, taking into account,
among other things, the difference between the market value and
the book value of the shares of common stock of financial
institutions comparable to the Corporation and the trend of the
Corporation's earnings and its book capital account.
2.12 Incentive Stock Options means a right to purchase Shares that is
granted pursuant to section 4.1 that is designated by the Committee
to be an Incentive Stock Option and is intended to satisfy the
requirements of section 422A of the Code.
2.13 Non-Qualified Stock Option means a right to purchase Shares that is
granted pursuant to section 4.1 that is designated by the Committee
to a Non-Qualified Stock Option and is not intended to satisfy the
requirements of section 422A of the Code.
2.14 ONBANCorp means ONBANCorp, Inc. and any successor thereto.
2.15 Onondaga means Onondaga Savings Bank ("OnBank") and any successor
thereto.
2.16 Option means either an Incentive Stock Option or a Non-Qualified
Stock Option.
2.17 Option Period means the period during which an Option or an
Appreciation Right may be exercised, determined in accordance with
section 4.5.
2.18 Plan means the Restated 1987 Stock Option and Appreciation Rights
Plan of ONBANCorp. Inc.
2.19 Share shall mean a share of common stock of ONBANCorp.
ARTICLE III--Administration
3.1 Committee. The Plan shall be administered by a Committee consisting
of the members of the Compensation and Stock Option Committee
("Compensation Committee" or "Committee") of the Board of Directors
who are Eligible Board Members (e.g. "Disinterested Persons" as such
term is defined in Rule 16b-3 of the Securities Exchange Act of
1934). If fewer than five members of the Compensation Committee are
Eligible Board Members, then the Board of Directors shall appoint to
the Committee such additional Eligible Board Members as shall be
necessary to provide for a Committee consisting of at least five
Eligible Board Members.
3.2 Committee Action. The Committee shall hold meetings, at least
annually, and make such administrative rules and regulations as it
may deem proper. The greater of (a) five members of the Committee or
(b) a majority of the members of the Committee shall constitute a
quorum, and the action of two-thirds of the members of the Committee
present at a meeting at which a quorum is present, as well as
actions taken pursuant to the unanimous written consent of all of
the members of the Committee without holding a meeting shall be
deemed to be actions of the Committee. All actions of the Committee
shall be final and conclusive and shall be binding upon the
Corporation
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and all other interested parties. Any person dealing with the
Committee shall be fully protected in relying upon any written
notice, instructions, direction or other communication signed by the
secretary of the Committee and one member of the Committee, by two
members of the Committee or by a representative of the Committee
authorized to sign the same in its behalf.
3.3 Committee Responsibilities. Subject to the terms and conditions of
the Plan, the Committee shall be responsible for the overall
management and administration of the Plan and shall have such
authority as shall be necessary or appropriate in order to carry out
its responsibilities, including, without limitation, the authority:
(a) to interpret and construe the Plan, and to determine all
questions that may arise under the Plan as to eligibility for
participation in the Plan, the amount of Options and Appreciation
Rights, if any, to be granted, and the terms and conditions thereof;
(b) to adopt rules and regulations and to prescribe forms for
the operation and administration of the Plan; and
(c) to take any other action not inconsistent with the provisions
of the Plan that it may deem necessary or appropriate.
ARTICLE IV--Stock Options
4.1 In General. Subject to the limitations of the Plan, the Committee
may, in its discretion, grant to an Eligible Employee an Option to
purchase Shares. Any such Option shall be evidenced by a written
agreement (the "Option Agreement") which shall:
(a) designate the Option as either an Incentive Stock
Option or a Non-Qualified Stock Option;
(b) specify the number of Shares covered by the Option;
(c) specify the Exercise Price, determined in
accordance with section 4.4, for the Shares subject to the
Option;
(d) specify the Option Period, determined in
accordance with section 4.5, for the Option;
(e) set forth specifically or incorporate by reference
the applicable provisions of the Plan; and
(f) contain such other terms and conditions not
inconsistent with the Plan as the Committee may, in its
discretion, prescribe.
The Committee may grant pursuant to this Plan Options which
would satisfy awards earned by Eligible Employees under the 1991
Long Term Incentive Plan of ONBANCorp, Inc. The Option Agreement
shall specify whether the Options granted are to satisfy such awards.
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4.2 Available Shares. Subject to section 6.3, the maximum aggregate
number of Shares with respect to which Options may be granted at any
time shall be equal to the excess of:
(a) 700,000 shares; over
(b) the sum of:
(i) the number of Shares with respect to which
previously granted Options may then or may in the future be
exercised; plus
(ii) the number of Shares with respect to which
previously granted Options have been exercised.
For purposes of this section 4.2, an Option shall not be
considered as having been exercised to the extent that such Option
terminates by reason other than the purchase of the related Shares.
4.3 Size of Option. Subject to sections 4.2, 4.7 and 4.8, and such
limitations as the Board of Directors may from time to time impose,
the number of Shares as to which an Eligible Employee may be granted
Options shall be determined by the Committee in its discretion.
4.4 Exercise Price. The price per Share at which an Option may be
exercised shall be determined by the Committee, in its discretion;
provided, however, that the Exercise Price established for any
Option shall not be less than:
(a) the Fair Market Value of a Share on the date on which the
Option is granted; or
(b) if less and such Option is granted no later than the date of
the first meeting of the Board of Directors held following the
conversion of Onondaga from a New York mutual savings bank to a New
York stock-form savings bank, the Convention Price.
4.5 Option Period. The Option Period during which an Option may be
exercised shall commence one year after the date on which the Option
is granted and shall expire on the earliest of:
(a) the date specified by the Committee in the Option
Agreement;
(b) in the case of an Incentive Stock Option, the last day
of the three-month period commencing on the date of the Option
holder's termination of employment with the Bank other than on
account of death or Disability;
(c) in the case of an Incentive Stock Option, the last day
of the one-year period commencing on the date of the Option
holder's death or Disability; and
(d) the last day of the ten-year period commencing on the
date on which the Option was granted.
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4.6 Method of Exercise
(a) Subject to the limitations of the plan and the Option
Agreement, an Option holder may, at any time during the Option
Period, exercise his right to purchase all or any part of the
Shares to which the Option relates; provided, however, that the
minimum number of Shares which may be purchased shall be twenty
(20), or, if less, the total number of Shares relating to the
Option which are then available for purchase. An Option holder
shall exercise an Option to purchase Shares by:
(i) giving written notice to the Committee or its
designate, in such form and manner as the Committee may
prescribe, of his intent to exercise the Option;
(ii) delivering, to the Committee or its designate
full payment for the Shares as to which the Option is to be
exercised; and
(iii) satisfying such other conditions as may be
prescribed in the Option agreement.
Payment shall be made (1) in United States dollars in cash or
by certified check, money order or bank draft drawn payable to
the order of ONBANCorp, or (2) by delivering a certificate or
certificates evidencing the Option holder's ownership in
Shares having a Fair Market Value equaling the Exercise Price
of the Shares to be acquired.
(b) When the requirements of section 4.6(a) have been
satisfied, the Committee or its designate shall take such
action as is necessary to cause ONBANCorp to issue a stock
certificate evidencing the Option holder's ownership of such
Shares. The person exercising the Option shall have no right to
vote or to receive dividends, nor have any other rights with
respect to the Shares, prior to the date as of which such
Shares are transferred to such person on the stock transfer
records of ONBANCorp, and no adjustments shall be made for any
dividends or other rights for which the record date is prior to
the date as of which such transfer is effected, excepted,
except as may be required under section 6.3.
4.7 Limitations on Options
(a) Shares acquired in connection with the exercise of an
Option shall not be assignable or transferable, other than by
will or by the laws of descent and distribution, during the
six-month period commencing on the date of acquisition.
(b) An Option by its terms shall not be assignable or
transferable by the Option holder other than by will or by the
laws of descent and distribution, and shall be exercisable,
during the lifetime of the Option holder, only by the Option
holder.
(c) No person shall be granted an Option to the extent
that the number of Shares subject to such Option, when added to
the total number of Shares subject to other Options then
outstanding to him and the number of Shares owned by him,
represent more than 10%
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of the total combined voting power of all classes of stock of
ONBANCorp.
(d) The Corporation's obligation to deliver Shares with
respect to an Option shall, if the Committee so requests, be
conditioned upon the receipt of a representation as to the
investment intention of the Option holder to whom such Shares
are to be delivered, in such form as the Committee shall
determine to be necessary or advisable to comply with the
provisions of applicable federal, state or local law. It may be
provided that any such representation shall become inoperative
upon a registration of the Shares or upon the occurrence of any
other event eliminating the necessity of such representation.
The Corporation shall not be required to deliver any Shares
under the Plan prior to (i) the admission of such Shares to
listing on any stock exchange on which Shares may then be
listed, or (ii) the completion of such registration or other
qualification under any state or federal law, rule or
regulation as the Committee shall determine to be necessary or
advisable.
4.8 Additional Restrictions on Incentive Stock Options. In addition to
the limitations of section 4.7, an Option designated by the
Committee to be an Incentive Stock Option shall be subject to the
following limitations:
(a) no Incentive Stock Option shall provide any person
with a right to purchase Shares that first becomes exercisable
during a prescribed calendar year if the sum of:
(i) the Fair Market Value (determined as of the date of
grant) of the Shares subject to such Incentive Stock Option
which first become available for purchase during such calendar
year, plus
(ii) the Fair Market Value (determined as of the date of
grant) of all Shares subject to other Incentive Stock Options
previously granted to such person (pursuant to this Plan or
any other plan of the Corporation) which first become
available for purchase during such calendar year; exceeds
$100,000.
ARTICLE V--Appreciation Rights
5.1 In General. If the Committee grants to an Eligible Employee an
Incentive Stock Option or a Non-Qualified Stock Option, it may, in
its discretion, simultaneously or thereafter grant to such Eligible
Employee an Appreciation Right ("SAR") relating to all or any
portion of the Shares relating to such Option. Any such stock
Appreciation Right shall be evidenced by a written agreement which
shall:
(a) identify the Option to which the Appreciation Right
relates;
(b) specify the number of Shares covered by the
Appreciation Right;
(c) specify the Exercise Price at which the
Appreciation Right may be exercised; and
(d) contain such other terms and conditions not
inconsistent with the Plan as the
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Committee may, in its discretion, prescribe.
Except as provided otherwise in this Article V, Appreciation Rights
shall be exercisable in accordance with and subject to the terms and
conditions imposed under the Plan and the relevant Option Agreement.
5.2 Exercise of Appreciation Rights. A holder of an Appreciation Right
who desires to exercise such Appreciation Right shall do so by
delivering to the Committee or its designate advance written notice,
in the form and manner which may be prescribed by the Committee, of
his intent to exercise the Appreciation Right and of the proposed
date of exercise. On the date of exercise or as soon thereafter as
is practicable, the Corporation shall pay to the person exercising
the Appreciation Right an amount equivalent to the excess of (a) the
Fair Market Value of the Shares on the date of exercise, over (b)
the Exercise Price of such Shares. Payment may, in the Committee's
discretion, be made in cash (including check, bank draft or money
order), in Shares equivalent in value to the excess of such Fair
Market Value over such Exercise Price, or in a combination of cash
and Shares which, together, are equivalent in value to the excess of
such Fair Market Value over such Exercise Price.
5.3 Limitations on Exercise. In the discretion of the Committee, an
Appreciation Right may not be exercisable, and the written agreement
governing such Appreciation Right may provide that such Appreciation
Right shall not be exercised, except in the event of a "change in
control" of ONBANCorp. For purposes of this section 5.3, the term
"change in control" of ONBANCorp shall means:
(a) the reorganization, merger or consolidation of
ONBANCorp with one or more banks, savings banks, savings and
loan associations or other financial institutions, other than a
transaction as a result of which at least 51% of the ownership
interests of the institutions resulting from such transaction
are owned by individuals, who, prior to such transaction, owned
as least 51% of the outstanding voting shares of ONBANCorp;
(b) the acquisition of substantially all of the assets of
ONBANCorp or of more than 35% of the voting shares of ONBANCorp
by any person or entity, or by any persons or entities acting
in concert; or
(c) if at any time during a period of twenty-four (24)
consecutive months, individuals who at the beginning of such
period constitute the Board of Directors cease for any reason
to constitute at least the majority thereof unless the
election, or the nomination for election by ONBANCorp's
stockholders, of each new director was approved by a vote of at
least two-thirds (2/3) of the directors still in office who
were directors at the beginning of such twenty-four (24) month
period except if the approval of the election or nomination for
election of such new director was in connection with an actual
or threatened election contest.
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5.4 Automatic Cancellation of Option(s) or Appreciation Right(s).
(a) Upon the exercise of an Appreciation Right granted in
connection with an Option, the Option shall be cancelled to the
extent of the number of shares as to which the Appreciation
Right is exercised, and conversely,
(b) upon the exercise of an Option granted in connection
with an Appreciation Right, the Appreciation Right shall be
cancelled to the extent of the number of shares as to which the
Option is exercised.
ARTICLE VI--Amendments and Termination
6.1 Termination. Subject to section 6.4, the Board of Directors may
suspend or terminate the Plan in whole or in part at any time prior
to April 30, 1997 by giving written notice of such suspension or
termination to the Committee. Unless sooner terminated, the Plan
shall terminate automatically on April 30, 1997.
6.2 Amendment. Subject to section 6.4, the Board of Directors may amend
or revise the Plan in whole or in part at any time: provided,
however, that, subject to section 6.3, the following amendments or
revisions shall be subject to approval by the holders of at least a
majority of the outstanding voting stock of ONBANCorp:
(a) an increase in the number of Shares as to which
Options may be granted;
(b) a decrease in the Exercisable Price for an Option
previously granted;
(c) an extension of the term of the Plan or an
extension of the Option Period beyond the last day of the
ten-year period commencing on the date on which the Option was
granted for an Option previously granted;
(d) a change in the class of employees eligible to be
granted Options;
(e) any other amendment which would materially
increase the benefits accruing to participants in the Plan
within the meaning of section 16b-3 of the Securities Exchange
Act of 1934; and any change which requires an amendment of
ONBANCorp's certificate of organization.
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6.3 Adjustments in the Event of Reorganization or Recapitalization.
(a) In the event of any merger, consolidation, or other
business reorganization in which ONBANCorp is the surviving
entity, and in the event of any stock split, stock dividend or
other event generally affecting the Shares held by each person
who is then a holder of record of Shares, the Committee shall
determine the appropriate adjustments, if any, to the maximum
number of Shares with respect to which Options or Appreciation
Rights may be granted under the Plan. the number of Shares as
to which Options or Appreciation Rights have been granted under
the Plan, and the Exercise Price therefor, if applicable, to
preserve but not to increase the benefits under the plan.
(b) In the event of any merger, consolidation, or other
business reorganization in which ONBANCorp is not the surviving
entity:
(i) Any Option or Appreciation Rights granted under
the Plan which remain outstanding may be cancelled by the
Board upon written notice to each Option holder given at least
30 days in advance of the effective date of such merger,
consolidation, business reorganization, liquidation or sale;
and
(ii) Any Option or Appreciation Rights which are not
cancelled pursuant to section 6.3(b)(i) shall be adjusted in
such manner as the Committee shall deem appropriate to account
for such merger, consolidation or other business
reorganization.
6.4 Consent of Grantee. No amendment, suspension or termination of the
plan shall be made that would materially adversely affect any grant
previously made under the Plan without the consent of the grantee.
ARTICLE VII--Miscellaneous Provisions
7.1 Status as an Employee Benefit Plan. This Plan is not intended to
satisfy the requirements for qualification under section 401(a) of
the Code or to satisfy the definitional requirements for an
"employee benefit plan" under section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended. It is intended
to be a non-qualified incentive compensation program that is exempt
from the regulatory requirements of the Employee Retirement Income
Security Act of 1974, as amended. The Plan shall be construed and
administered so as to effectuate this intent.
7.2 No Right to Continued Employment. Neither the establishment of the
Plan nor any provisions of the Plan nor any action of the Board of
Directors or the Committee with respect to the Plan shall be held or
construed to confer upon any Eligible Employee any right to a
continuation of employment by the Corporation. The Corporation
reserves the right to dismiss any Eligible Employee or otherwise
deal with any Eligible Employee to the same extent as though the
Plan had not been adopted.
7.3 Construction of Language. Whenever appropriate in the Plan, words
used in the singular
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may be read in the plural, words used in the plural may be read in
the singular, and words importing the masculine gender may read as
referring equally to the feminine or the neuter. Any reference to an
article or section number shall refer to an article or section of
this Plan, unless otherwise indicated.
7.4 Governing Law. The Plan shall be construed and enforced in
accordance with the laws of the State of Delaware, except to the
extent that such laws are preempted by the federal laws of the
United States of America.
7.5 Headings. The headings of articles and sections are included solely
for convenience of reference. If there is any conflict between such
headings and the text of the Plan, the text shall control.
7.6 Non-Alienation of Benefits. The right to receive a benefit under the
Plan shall not be subject in any manner to anticipation, alienation
or assignment, nor shall such right be liable for or subject to
debts, contracts, liabilities, engagements or torts.
7.7 Taxes. The Corporation shall have the right to deduct from all
amounts paid by the Corporation in cash with respect to an Option or
an Appreciation Right under the Plan any taxes required by law to be
withheld with respect to such Option or Appreciation Right. Where
any persons is entitle to receive Shares pursuant to the exercise of
an Option, the Corporation shall have the right to require such
person to pay the Corporation the amount of any tax which the
Corporation is required to withhold with respect to such Shares, or,
in lieu thereof, to retain, or to sell without notice, a sufficient
number of Shares to cover the amount required to be withheld.
7.8 Notices. Any notice required or permitted to be given to a party
under the Plan shall be deemed given if personally delivered or if
mailed. postage pre-paid, by certified mail. return receipt
requested, to the party at the address listed below, or at such
other address as one such party may be written notice specify to the
other:
(a) if to the Committee:
ONBANCorp, Inc.
101 South Salina Street
Syracuse, New York 13202
Attention: Treasurer of the Corporation
(b) If to an Option holder, to the Option holder's address as
shown in the Corporation's personnel records.
7.9 Effective Date. The effective date of this Plan shall be
August 6, 1987.
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