<PAGE>
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SEACOAST FINANCIAL SERVICES CORPORATION
- -------------------------------------------------------------------------------
(Exact name of issuer as specified in its charter)
MASSACHUSETTS 041659040
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
791 PURCHASE STREET, NEW BEDFORD, MASSACHUSETTS 02740
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
SEACOAST FINANCIAL SERVICES CORPORATION 1999 STOCK INCENTIVE PLAN
- -------------------------------------------------------------------------------
(Full title of the plan)
Kevin G. Champagne
President and Chief Executive Officer
Seacoast Financial Services Corporation
791 Purchase Street
New Bedford, Massachusetts 02740
(508) 984-6000
------------------------------------------
(Name and address, including zip code, and
telephone number, including area code, of agent for service)
WITH A COPY TO:
Peter W. Coogan, Esquire
Foley, Hoag & Eliot LLP
One Post Office Square
Boston, Massachusetts 02109
(617) 832-1000
-------------------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Amount Proposed Maximum Proposed Maximum Amount of
Title of Securities to be Offering Price Aggregate Offering Registration
to be Registered Registered (1) Per Share (2) Price Fee
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock (par value $.01) 1,960,000 shares $11.63 $22,794,800.00 $6,336.95
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Maximum number of shares issuable under the Seacoast Financial
Services Corporation 1999 Stock Incentive Plan is 1,960,000. In
addition, pursuant to Rule 416(c) under the Securities Act of
1933, this registration statement also covers an indeterminate
amount of interests to be offered or sold pursuant to the employee
benefit plan described herein.
(2) Estimated solely for the purpose of calculating the registration
fee pursuant to Rule 457(c) and (h), upon the basis of the average
of the high and low prices of the common stock of the Registrant
on August 24, 1999, as reported on the Nasdaq Stock Market.
<PAGE>
PART I
The document(s) containing the information specified in Part I of Form
S-8 will be sent or given to participating employees and directors as specified
by Rule 428(b)(1) of the Securities Act of 1933, as amended (the "Securities
Act"). These documents and the documents incorporated by reference into this
Registration Statement pursuant to Item 3 of Part II of this Registration
Statement, taken together, constitute a prospectus that meets the requirements
of Section 10(a) of the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The Registrant hereby incorporates by reference the following documents
filed or to be filed with the Securities and Exchange Commission (the
"Commission").
(i) The Annual Report on Form 10-K of Seacoast Financial Services
Corporation (the "Company") for the fiscal year ended October 31, 1998, filed
with the Commission on January 29, 1999.
(ii) The Company's Quarterly Report on Form 10-Q for the quarter ending
June 30, 1999 filed with the Commission on August 12, 1999.
(iii) The Company's Quarterly Report on Form 10-Q for the quarter
ending March 31, 1999 filed with the Commission on May 14, 1999.
(iv) The Company's Transition Report on Form 10-Q for the transitional
period from November 1, 1998 to December 31, 1998 filed with the Commission on
March 15, 1999.
(v) The Company's Current Report on Form 8-K filed with the Commission
on February 9, 1999.
(vi) The Company's Current Report on Form 8-K filed with the Commission
on December 17, 1998 and amended by Amendment Number 1 on Form 8-K filed with
the Commission on February 9, 1999.
(vii) The description of the Company's Common Stock contained in the
Company's Form 8-A filed with the Commission on November 18, 1998 including any
amendment or report filed for the purpose of updating such description.
In addition, all documents filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Act of 1934, as amended (the
"Exchange Act"), prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or
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<PAGE>
which deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be part hereof
from the date of filing of such documents.
Any statement contained in this Registration Statement, or in a
document incorporated or deemed to be incorporated by reference herein, shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein, or in any other subsequently
filed document which also is or is deemed to be incorporated by reference
herein, modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable since the Company's Common Stock is registered under
Section 12 of the Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 67 of Chapter 156B of the Massachusetts General Laws (the
"MGL") authorizes a corporation to indemnify its directors, officers, employees
and other agents unless such person shall have been adjudicated in any
proceeding not to have acted in good faith in the reasonable belief that such
action was in the best interests of the corporation or, to the extent such
matter related to service with respect to an employee benefit plan, in the best
interests of the participants or beneficiaries of such employee benefit plan.
The Articles of Organization of the Company provide that each Director of the
Company and each officer appointed or elected by the Board of Directors of the
Company shall be indemnified by the Company to the extent permitted by law
against any expenses incurred by such person in connection with any proceeding
in which he or she is involved as a result of (i) his or her serving or having
served as a Director, officer or employee of the Company, (ii) his or her
serving or having served as a Director, officer or employee of any of the
Company's wholly owned subsidiaries or (iii) his or her serving or having served
in any capacity with respect to any other corporation, organization,
partnership, joint venture, trust, employee benefit plan or other entity at the
request or direction of the Company. The Board of Directors may, in its
discretion, indemnify non-officer employees of the Company. In accordance with
Massachusetts law, the Articles also provide that no indemnification shall be
provided with respect to a matter as to which the indemnitee shall have been
determined by final judicial decision from which there is no further right to
appeal that the indemnitee is not entitled to be indemnified for such expenses.
-3-
<PAGE>
The Articles of Organization also provide that no Director of the
Company shall be personally liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a Director notwithstanding any
provision of law imposing such liability. However, in conformity with Section
13(b) (1 1/2) of Chapter 156B of the MGL, a Director SHALL be liable (i) for any
breach of the Director's duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Sections 61 or 62 of
Chapter 156B of the MGL or (iv) with respect to any transaction from which the
Director derived an improper personal benefit.
The effect of these provisions would be to permit indemnification by
the Company for liabilities arising out of the Securities Act.
Section 67 of Chapter 156B of the MGL also affords a Massachusetts
corporation the power to obtain insurance on behalf of its directors and
officers against liabilities incurred by them in those capacities. The
Company has procured a directors and officers liability and company
reimbursement liability insurance policy that (i) insures directors and
officers of the Company against losses (above a deductible amount) arising
from certain claims made against them by reason of certain acts or omissions
of such directors or officers in their capacity as directors or officers and
(ii) insures the Company against losses (above a deductible amount) arising
from any such claims, but only if the Company is required or permitted to
indemnify such directors or officers for such losses under statutory or
common law or under provisions of the Company's Articles of Organization or
By-Laws.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
5 Opinion of Foley, Hoag & Eliot LLP as to the legality of the securities
being registered
23.1 Consent of Foley, Hoag & Eliot LLP (included in Exhibit 5)
23.2 Consent of Arthur Andersen LLP
24 Power of Attorney (contained on the signature page)
99.1 Seacoast Financial Services Corporation 1999 Stock Incentive Plan
ITEM 9. UNDERTAKINGS.
1. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's or the Plan's annual report
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<PAGE>
pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
2. The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii)To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) of the Securities Act if, in the
aggregate, the changes in volume and price represent no more than 20
percent change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs 2(a)(i) and 2(a)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference herein.
(b) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
3. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the
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<PAGE>
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
* * *
-6-
<PAGE>
SIGNATURES
REGISTRANT. Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in New Bedford, Massachusetts, on August 26, 1999.
SEACOAST FINANCIAL SERVICES CORPORATION
By:/s/ Kevin G. Champagne
--------------------------------------
Kevin G. Champagne
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each individual whose signature
appears below constitutes and appoints Kevin G. Champagne and Francis S.
Mascianica, Jr. and each of them, his true and lawful attorneys-in-fact and
agents with full power of substitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing which they, or either of them, may deem necessary or
advisable to be done in connection with this Registration Statement, as fully to
all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or any
substitute or substitutes for either or both of them, may lawfully do or cause
to be done by virtue hereof.
* * *
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<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Kevin G. Champagne President, Chief Executive Officer August 26, 1999
- ------------------------------- and Director (PRINCIPAL EXECUTIVE OFFICER)
Kevin G. Champagne
/s/ Francis S. Mascianica, Jr. Senior Vice President, Treasurer and
- ------------------------------------- Chief Financial Officer(PRINCIPAL August 26, 1999
Francis S. Mascianica, Jr. FINANCIAL AND ACCOUNTING OFFICER)
/s/ Manuel G. Camacho Director August 26, 1999
- -------------------------------------
Manuel G. Camacho
/s/ David P. Cameron Director August 26, 1999
- --------------------------------------
David P. Cameron
/s/ Howard C. Dyer Jr. Director August 26, 1999
- ---------------------------------------
Howard C. Dyer, Jr.
/s/ Mary F. Hebditch Director August 26, 1999
- ---------------------------------------
Mary F. Hebditch
/s/ Glen F. Johnson Director August 26, 1999
- ---------------------------------------
Glen F. Johnson
/s/ Thornton P. Klaren, Jr. Director August 26, 1999
- ---------------------------------------
Thornton P. Klaren, Jr.
/s/ J. Louis LeBlanc Director August 26, 1999
- ---------------------------------------
J. Louis LeBlanc
Director August 26, 1999
- ---------------------------------------
Frederic D. Legate
/s/ Reale J. Lemieux Director August 26, 1999
- ---------------------------------------
Reale J. Lemieux
</TABLE>
-8-
<PAGE>
<TABLE>
<S> <C> <C>
/s/ A. William Munro Director August 26, 1999
- ---------------------------------------
A. William Munro
/s/ Carl Ribeiro Director August 26, 1999
- ---------------------------------------
Carl Ribeiro
/s/ Joseph H. Silverstein Director August 26, 1999
- ---------------------------------------
Joseph H. Silverstein
/s/ Gerald H. Silvia Director August 26, 1999
- ---------------------------------------
Gerald H. Silvia
</TABLE>
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<PAGE>
EXHIBIT INDEX
5 Opinion of Foley, Hoag & Eliot LLP as to the legality of the
securities being registered
23.1 Consent of Foley, Hoag & Eliot LLP (included in Exhibit 5)
23.2 Consent of Arthur Andersen LLP
24 Power of Attorney (contained on the signature page)
99.1 Seacoast Financial Services Corporation 1999 Stock Incentive Plan
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<PAGE>
EXHIBIT 5
FOLEY, HOAG & ELIOT LLP
ONE POST OFFICE SQUARE
BOSTON, MASSACHUSETTS 02109-2170
--------------
TELEPHONE: 617-832-1000 1747 PENNSYLVANIA AVE., N.W.
FACSIMILE: 617-832-7000 WASHINGTON, D.C. 20006
http://www.fhe.com TEL: 202-223-1200
FAX: 202-785-6687
August 27, 1999
Seacoast Financial Services Corporation
791 Purchase Street
New Bedford, Massachusetts 02740
Ladies and Gentlemen:
We are familiar with the Registration Statement on Form S-8 (the "S-8
Registration Statement") filed today by Seacoast Financial Services Corporation,
a Massachusetts corporation (the "Company"), with the Securities and Exchange
Commission under the Securities Act of 1933, as amended. The S-8 Registration
Statement relates to the proposed offering by the Company of 1,960,000 shares
(the "Shares") of its common stock, $.01 par value per share ("Common Stock")
issuable pursuant to the Seacoast Financial Services Corporation 1999 Stock
Incentive Plan (the "Plan).
In arriving at the opinion expressed below, we have examined and relied
on the following documents:
1. The Company's Articles of Organization and By-Laws, each as amended
as of the date hereof;
2. Such records of meetings and consents of the Company's Board of
Directors and of its stockholders, stock records and other records and documents
as we deemed necessary or appropriate for purposes of rendering this opinion;
and
3. The Plan.
Based upon the foregoing, it is our opinion that:
<PAGE>
Seacoast Financial Services Corporation
Page 2
1. The Company has corporate power adequate for the issuance of the
Shares in accordance with the S-8 Registration Statement.
2. The Company has taken all necessary corporate action required to
authorize the issuance and sale of the Shares.
3. When certificates for the Shares have been duly executed and
counter-signed and delivered against due receipt of the purchase price in
accordance with the provisions of the Plan, the Shares will be legally issued,
fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
S-8 Registration Statement.
Very truly yours,
FOLEY, HOAG & ELIOT LLP
By:/s/ Peter W. Coogan
-----------------------------
A Partner
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated December 10, 1998
included in Seacoast Financial Services Corporation's Form 10-K for the year
ended October 31, 1998 and to all references to our Firm included in this
registration statement.
/s/ ARTHUR ANDERSEN LLP
Boston, Massachusetts
August 24, 1999
<PAGE>
EXHIBIT 99.1
As Approved by Stockholders 6/18/99
--------------------------------------------------------------
SEACOAST FINANCIAL SERVICES CORPORATION
1999 STOCK INCENTIVE PLAN
--------------------------------------------------------------
<PAGE>
<TABLE>
TABLE OF CONTENTS
<S> <C>
SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS..............................................................1
SECTION 2. ADMINISTRATION OF PLAN; COMMITTEE AUTHORITY TO SELECT PARTICIPANTS AND
DETERMINE AWARDS...................................................................................3
(a) COMMITTEE..........................................................................................3
(b) POWERS OF COMMITTEE................................................................................4
(c) DECISIONS BINDING..................................................................................4
SECTION 3. SHARES ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION..................................................4
(a) SHARES ISSUABLE....................................................................................4
(b) LIMITATION ON AWARDS...............................................................................5
(c) STOCK DIVIDENDS, MERGERS, ETC......................................................................5
(d) SUBSTITUTE AWARDS..................................................................................5
SECTION 4. ELIGIBILITY...........................................................................................6
SECTION 5. STOCK OPTIONS.........................................................................................6
(a) GRANT OF STOCK OPTIONS.............................................................................6
(b) RELOAD OPTIONS.....................................................................................8
SECTION 6. CONDITIONED STOCK AWARDS..............................................................................9
(a) NATURE OF CONDITIONED STOCK AWARD..................................................................9
(b) ACCEPTANCE OF AWARD................................................................................9
(c) RIGHTS AS A SHAREHOLDER............................................................................9
(d) RESTRICTIONS.......................................................................................9
(e) VESTING OF CONDITIONED STOCK.......................................................................9
(f) WAIVER, DEFERRAL AND REINVESTMENT OF DIVIDENDS....................................................10
SECTION 7. UNRESTRICTED STOCK AWARDS............................................................................10
(a) GRANT OR SALE OF UNRESTRICTED STOCK...............................................................10
(b) RESTRICTIONS ON TRANSFERS.........................................................................10
SECTION 8. PERFORMANCE SHARE AWARDS.............................................................................10
(a) NATURE OF PERFORMANCE SHARES......................................................................10
(b) RESTRICTIONS ON TRANSFER..........................................................................10
(c) RIGHTS AS A SHAREHOLDER...........................................................................10
(d) TERMINATION.......................................................................................10
(e) ACCELERATION, WAIVER, ETC.........................................................................11
SECTION 9. STOCK APPRECIATION RIGHTS............................................................................11
SECTION 10. CHANGE OF CONTROL PAYMENT RIGHTS.....................................................................12
(a) TERMS OF RIGHTS...................................................................................12
(b) PAYMENT...........................................................................................12
SECTION 11. DEFERRED PAYMENTS....................................................................................13
(a) ELECTION TIMING...................................................................................13
(b) STOCK OPTION DEFERRAL.............................................................................13
(c) STOCK APPRECIATION RIGHT DEFERRAL.................................................................13
(d) CONDITIONED STOCK AWARDS..........................................................................14
(e) ACCELERATED DISTRIBUTIONS.........................................................................14
(f) ASSIGNABILITY.....................................................................................14
(g) UNFUNDED STATUS...................................................................................15
SECTION 12. TERMINATION OF STOCK OPTIONS AND STOCK APPRECIATION RIGHTS...........................................15
(a) INCENTIVE STOCK OPTIONS...........................................................................15
(b) OTHER AWARDS......................................................................................16
SECTION 13. TAX WITHHOLDING......................................................................................17
(a) PAYMENT BY PARTICIPANT............................................................................17
(b) PAYMENT IN SHARES.................................................................................17
SECTION 14. TRANSFER, LEAVE OF ABSENCE, ETC......................................................................17
SECTION 15. AMENDMENTS AND TERMINATION...........................................................................17
SECTION 16. STATUS OF PLAN.......................................................................................17
SECTION 17. COMPLIANCE WITH CONVERSION REGULATIONS...............................................................18
SECTION 18. GENERAL PROVISIONS...................................................................................18
(a) NO DISTRIBUTION; COMPLIANCE WITH LEGAL REQUIREMENTS...............................................18
(b) DELIVERY OF STOCK CERTIFICATES....................................................................18
(c) OTHER COMPENSATION ARRANGEMENTS; NO EMPLOYMENT RIGHTS.............................................18
(d) DELEGATION BY COMMITTEE...........................................................................18
SECTION 19. EFFECTIVE DATE OF PLAN...............................................................................19
SECTION 20. GOVERNING LAW........................................................................................19
</TABLE>
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<PAGE>
SEACOAST FINANCIAL SERVICES CORPORATION
1999 STOCK INCENTIVE PLAN
SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS
The name of the plan is the Seacoast Financial Services Corporation
1999 Stock Incentive Plan (the "Plan"). The purpose of the Plan is to encourage
and enable the officers, directors and employees of (and consultants to)
Seacoast Financial Services Corporation (the "Company") and its Subsidiaries
upon whose judgment, initiative and efforts the Company largely depends for the
successful conduct of its business to acquire a proprietary interest in the
Company. It is anticipated that providing such persons with a direct stake in
the Company's welfare will assure a closer identification of their interests
with those of the Company and its shareholders, thereby stimulating their
efforts on the Company's behalf and strengthening their desire to remain with
the Company.
The following terms shall be defined as set forth below:
"Act" means the Securities Exchange Act of 1934, as amended.
"Award" or "Awards", except where referring to a particular category of
grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock
Options, Conditioned Stock Awards, Unrestricted Stock Awards, Performance Share
Awards, Change of Control Payment Rights and Stock Appreciation Rights.
"Board" means the Board of Directors of the Company.
"Cause" means personal dishonesty, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule or regulation (other than traffic
violations or similar offenses) or final cease and desist order.
"Change of Control" shall have the meaning set forth in Section 17.
"Change of Control Payment Rights" shall have the meaning set forth in
Section 10.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.
"Committee" shall have the meaning set forth in Section 2.
"Conditioned Stock Award" means an Award granted pursuant to Section 6.
"Disability" means disability as set forth in Section 22(e)(3) of the
Code.
"Effective Date" shall have the meaning set forth in Section 19.
"Eligible Person" shall have the meaning set forth in Section 4.
<PAGE>
"Exchange Act" shall have the meaning set forth in Section 2(a).
"Fair Market Value" on any given date means the closing bid price per
share of the Stock on the trading day immediately preceding such date as
reported by the NASDAQ Stock Market or another nationally recognized stock
exchange, or, if the Stock is not listed on such an exchange, the fair market
value of the Stock as determined by the Committee.
"Incentive Stock Option" means any Stock Option designated and
qualified as an "incentive stock option" as defined in Section 422 of the Code.
"Merger" shall have the meaning set forth in Section 3(c).
"Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
"Normal Retirement" means retirement from active employment with the
Company and its Subsidiaries in accordance with the retirement policies of the
Company and its Subsidiaries then in effect.
"Option" or "Stock Option" means any option to purchase shares of Stock
granted pursuant to Section 5.
"Original Option" shall have the meaning set forth in Section 5(b).
"Outside Director" means any director who (i) is not an employee of the
Company or of any "affiliated group," as such term is defined in Section 1504(a)
of the Code, which includes the Company (an "Affiliate"), (ii) is not a former
employee of the Company or any Affiliate who is receiving compensation for prior
services (other than benefits under a tax-qualified retirement plan) during the
Company's or any Affiliate's taxable year, (iii) has not been an officer of the
Company or any Affiliate and (iv) does not receive remuneration from the Company
or any Affiliate, either directly or indirectly, in any capacity other than as a
director. "Outside Director" shall be determined in accordance with Section
162(m) of the Code and the Treasury regulations issued thereunder.
"Performance Goal" means an objective for the Company or any Subsidiary
or any unit thereof or any individual that may be established by the Committee
for a Performance Share Award to become vested, earned or exercisable.
Performance Goals applicable to Performance Share Awards are intended to
constitute "performance-based" compensation within the meaning of Section 162(m)
of the Code and shall be based on one or more of the following criteria:
(i) net income, as adjusted for non-recurring items
(ii) cash earnings
(iii) earnings per share
(iv) cash earnings per share
2
<PAGE>
(v) return on equity
(vi) return on assets
(vii) assets
(viii) stock price
(ix) total shareholder return
(x) capital
(xi) net interest income
(xii) market share
(xiii) cost control or efficiency ratio
(xiv) asset growth
"Performance Share Award" means an Award granted pursuant to Section 8.
"Request" shall have the meaning set forth in Section 9(d).
"Stock" means the Common Stock, $0.01 par value per share, of the
Company, subject to adjustments pursuant to Section 3.
"Stock Appreciation Right" means an Award granted pursuant to Section
9.
"Subsidiary" means a subsidiary as defined in Section 424 of the Code.
"Unrestricted Stock Award" means Awards granted pursuant to Section 7.
SECTION 2. ADMINISTRATION OF PLAN; COMMITTEE AUTHORITY TO SELECT PARTICIPANTS
AND DETERMINE AWARDS.
(a) COMMITTEE. The Plan shall be administered by a Stock Incentive Plan
Committee (the "Committee") consisting of all members of the Compensation
Committee of the Company who qualify as Outside Directors. The Committee shall
have at least two (2) members at all times. It is the intention of the Company
that the Plan shall be administered to comply with the provisions of Rule 16b-3
under the Securities Exchange Act of 1934 (the "Exchange Act"), but the
authority and validity of any act taken or not taken by the Committee shall not
be affected if any person administering the Plan is not a Non-Employee Director
as defined in the Rule. Except as specifically reserved to the Board under the
terms of the Plan, the Committee shall have full and final authority to operate,
manage and administer the Plan on behalf of the Company. Action by the Committee
shall require the affirmative vote of a majority of all members thereof.
3
<PAGE>
(b) POWERS OF COMMITTEE. The Committee shall have the power and
authority to grant Awards consistent with the terms of the Plan, including the
power and authority:
(i) to select the directors, officers and employees of (and
consultants to) the Company and its Subsidiaries to whom Awards may
from time to time be granted;
(ii) to determine the time or times of grant, and the extent, if
any, of Incentive Stock Options, Non-Qualified Stock Options,
Conditioned Stock, Unrestricted Stock, Performance Share Awards, Stock
Appreciation Rights and Change of Control Payment Rights, or any
combination of the foregoing, granted to any one or more participants;
(iii) to determine the number of shares to be covered by any
Award;
(iv) to determine and modify the terms and conditions, including
restrictions, not inconsistent with the terms of the Plan, of any
Award, which terms and conditions may differ among individual Awards
and participants, and to approve the form of written instruments
evidencing the Awards; PROVIDED, however, that no such action shall
adversely affect rights under any outstanding Award without the
participant's consent;
(v) to accelerate the exercisability or vesting of all or any
portion of any Award;
(vi) subject to the provisions of Section 5(a)(ii), to extend the
period in which any outstanding Stock Option or Stock Appreciation
Right may be exercised;
(vii) to determine whether, to what extent, and under what
circumstances Stock and other amounts payable with respect to an Award
shall be deferred either automatically or at the election of the
participant and whether and to what extent the Company shall pay or
credit amounts equal to interest (at rates determined by the Committee)
or dividends or deemed dividends on such deferrals; and
(viii) to adopt, alter and repeal such rules, guidelines and
practices for administration of the Plan and for its own acts and
proceedings as it shall deem advisable; to interpret the terms and
provisions of the Plan and any Award (including related written
instruments); to make all determinations it deems advisable for the
administration of the Plan; to decide all disputes arising in
connection with the Plan; and to otherwise supervise the administration
of the Plan.
(c) DECISIONS BINDING. All decisions and interpretations of the
Committee shall be binding on all persons, including the Company and Plan
participants.
SECTION 3. SHARES ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION.
(a) SHARES ISSUABLE. The maximum number of shares of Stock which may be
issued as a result of Awards granted under the Plan shall be 1,960,000 (which
number equals 14% of the aggregate number of shares of Common Stock issued by
the Company in connection with its conversion from mutual to stock form
("Conversion Shares")). The maximum number of shares which may be issued under
Conditioned Stock Awards (granted pursuant to Section 6) is 560,000
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(which number equals 4% of the aggregate number of Conversion Shares). The
maximum number of shares which may be issued as a result of other Awards under
the Plan is 1,400,000 (which number equals 10% of the aggregate number of
Conversion Shares). For purposes of this limitation, the shares of Stock
underlying any Awards which are forfeited, canceled, reacquired by the Company
or otherwise terminated (other than by exercise) shall be added back to the
shares of Stock with respect to which Awards may be granted under the Plan so
long as the participants to whom such Awards had been previously granted
received no benefits of ownership of the underlying shares of Stock to which the
Award related. Likewise, if any Option is exercised by the delivery of a number
of shares of Stock, either actually or by attestation, to the Company as full or
partial payment in connection with the exercise of an Option under this Plan,
only the number of shares of Stock issued net of the shares of Stock delivered
shall be deemed issued for purposes of determining the maximum number of shares
of Stock available for issuance under the Plan. Subject to such overall
limitation, any type or types of Award may be granted with respect to shares,
including Incentive Stock Options. Shares issued under the Plan may be
authorized but unissued shares or shares reacquired by the Company.
(b) LIMITATION ON AWARDS. In no event may any Plan participant be
granted Awards (including Stock Appreciation Rights) with respect to more than
four hundred and ninety thousand (490,000) shares of Stock in any calendar year.
The number of shares of Stock relating to an Award granted to a Plan participant
in a calendar year that is subsequently forfeited, canceled or otherwise
terminated shall continue to count toward the foregoing limitation in such
calendar year. In addition, if the exercise price of an Award is subsequently
reduced, the transaction shall be deemed a cancellation of the original Award
and the grant of a new one so that both transactions shall count toward the
maximum shares issuable in the calendar year of each respective transaction.
(c) STOCK DIVIDENDS, MERGERS, ETC. In the event that after approval of
the Plan by the stockholders of the Company in accordance with Section 19, the
Company effects a stock dividend, stock split or similar change in
capitalization affecting the Stock, the Committee shall make appropriate
adjustments in (i) the number and kind of shares of stock or securities with
respect to which Awards may thereafter be granted (including without limitation
the limitations set forth in Sections 3(a) and 3(b) above), (ii) the number and
kind of shares remaining subject to outstanding Awards, and (iii) the option or
purchase price in respect of such shares. In the event of any merger,
consolidation, dissolution or liquidation of the Company, the Committee in its
sole discretion may, as to any outstanding Awards, make such substitution or
adjustment in the aggregate number of shares reserved for issuance under the
Plan and in the number and purchase price (if any) of shares subject to such
Awards as it may determine and as may be permitted by the terms of such
transaction, or accelerate, amend or terminate such Awards upon such terms and
conditions as it shall provide (which, in the case of the termination of the
vested portion of any Award, shall require payment or other consideration which
the Committee deems equitable in the circumstances), subject, however, to the
provisions of Section 17.
(d) SUBSTITUTE AWARDS. The Committee may grant Awards under the Plan in
substitution for stock and stock based awards held by employees of another
corporation who concurrently become employees of the Company or a Subsidiary as
the result of a merger or consolidation of the employing corporation with the
Company or a Subsidiary or the acquisition by the Company or a Subsidiary of
property or stock of the employing corporation (collectively,
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"Merger"). The Committee may direct that the substitute awards be granted on
such terms and conditions as the Committee considers appropriate in the
circumstances. Shares which may be delivered under such substitute awards may be
in addition to the maximum number of shares provided for in Section 3(a).
SECTION 4. ELIGIBILITY.
Awards may be granted to directors, officers or other key employees of
the Company or its Subsidiaries and to consultants and advisors of the Company
or its Subsidiaries (collectively, "Eligible Persons").
SECTION 5. STOCK OPTIONS.
Any Stock Option granted under the Plan shall be in such form as the
Committee may from time to time approve. Stock Options granted under the Plan
may be either Incentive Stock Options or Non-Qualified Stock Options. To the
extent that any option does not qualify as an Incentive Stock Option, it shall
constitute a Non-Qualified Stock Option. No Incentive Stock Option shall be
granted under the Plan after the tenth anniversary of the Effective Date.
(a) GRANT OF STOCK OPTIONS. The Committee in its discretion may
determine the effective date of Stock Options. Grants of Incentive Stock Options
shall be made only to persons who are, on the effective date of the grant,
employees of the Company or any Subsidiary. Stock Options granted pursuant to
this Section 5(a) shall be subject to the following terms and conditions and the
terms and conditions of Section 13 and shall contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as the Committee shall
deem desirable.
(i) EXERCISE PRICE. The exercise price per share for the Stock
covered by a Stock Option granted pursuant to this Section 5(a) shall
be determined by the Committee at the time of grant but shall be, in
the case of Incentive Stock Options, not less than one hundred percent
(100%) of Fair Market Value on the date of grant. If an employee owns
or is deemed to own (by reason of the attribution rules applicable
under Section 424(d) of the Code) more than ten percent (10%) of the
combined voting power of all classes of stock of the Company or any
Subsidiary or parent corporation and an Incentive Stock Option is
granted to such employee, the option price shall be not less than one
hundred ten percent (110%) of Fair Market Value on the grant date.
(ii) OPTION TERM. The term of each Stock Option shall be fixed by
the Committee but no Incentive Stock Option shall be exercisable more
than ten (10) years after the date the option is granted. If an
employee owns or is deemed to own (by reason of the attribution rules
of Section 424(d) of the Code) more than ten percent (10%) of the
combined voting power of all classes of stock of the Company or any
Subsidiary or parent corporation and an Incentive Stock Option is
granted to such employee, the term of such option shall be no more than
five (5) years from the date of grant.
(iii) EXERCISABILITY; RIGHTS OF A SHAREHOLDER. Stock Options
shall become vested and exercisable at such time or times, whether or
not in installments, as shall be determined by the Committee at or
after the grant date. The Committee may at any time
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accelerate the exercisability of all or any portion of any Stock
Option. An optionee shall have the rights of a shareholder only as to
shares acquired upon the exercise of a Stock Option and not as to
unexercised Stock Options.
(iv) METHOD OF EXERCISE. Stock Options may be exercised in whole
or in part, by delivering written notice of exercise to the Company,
specifying the number of shares to be purchased. Payment of the
purchase price may be made by one or more of the following methods:
(A) In cash, by certified or bank check or other instrument
acceptable to the Committee;
(B) If permitted by the Committee, in its discretion, in the
form of shares of Stock that are not then subject to restrictions under
any Company plan. Such surrendered shares shall be valued at Fair
Market Value on the exercise date; or
(C) If permitted by the Committee, in its discretion, by the
optionee delivering to the Company a properly executed exercise notice
together with irrevocable instructions to a broker to promptly deliver
to the Company cash or a check payable and acceptable to the Company to
pay the purchase price; PROVIDED that in the event the optionee chooses
to pay the purchase price as so provided, the optionee and the broker
shall comply with such procedures and enter into such agreements of
indemnity and other agreements as the Committee shall prescribe as a
condition of such payment procedure. The Company need not act upon such
exercise notice until the Company receives full payment of the exercise
price; or
(D) If permitted by the Committee, in its discretion, by
reducing the number of Option shares otherwise issuable to the optionee
upon exercise of the Option by a number of shares having a Fair Market
Value equal to such aggregate exercise price (it being understood that
this alternative will be available only if the optionee holds
sufficient "mature" shares as defined in Financial Accounting Standards
Board's Emerging Issues Task Force Issue 84-18);
(E) By any other means (including, without limitation, by
delivery of a promissory note of the optionee payable on such terms as
are specified by the Committee, in its discretion) which the Committee
determines are consistent with the purpose of the Plan and with
applicable laws and regulations.
The delivery of certificates representing shares of Stock to be purchased
pursuant to the exercise of a Stock Option will be contingent upon receipt
from the Optionee (or a purchaser acting in his stead in accordance with
the provisions of the Stock Option) by the Company of the full purchase
price for such shares and the fulfillment of any other requirements
contained in the Stock Option or applicable provisions of laws.
(v) NON-TRANSFERABILITY OF OPTIONS. Except as otherwise may be
provided in this Section 5(a)(v) or in an option agreement governing an
Option granted under the Plan, no Stock Option shall be transferable other
than by will or by the laws of descent and
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distribution, and all Stock Options shall be exercisable, during the
optionee's lifetime, only by the optionee. The Committee may, however, in
its sole discretion, permit transferability or assignment of a
Non-Qualified Stock Option if such transfer or assignment is, in its sole
determination, for valid estate planning purposes and such transfer or
assignment is permitted under the Code and Rule 16b-3 under the Exchange
Act. For purposes of this Section 5(a)(v), a transfer for valid estate
planning purposes includes, but is not limited to: (a) a transfer to a
revocable inter-vivos trust as to which the participant is both the settlor
and trustee, (b) a transfer for no consideration to: (i) any member of the
participant's Immediate Family, (ii) any trust solely for the benefit of
members of the participant's Immediate Family, and (iii) any partnership
whose only partners are members of the participant's Immediate Family, or
(iv) any limited liability corporation or corporate entity whose only
members or equity owners are members of the Participant's Immediate Family.
For purposes of this Section 5(a)(v), "Immediate Family" includes, but is
not necessarily limited to, a Participant's parents, spouse, children,
grandchildren and great-grandchildren. Nothing contained in this Section
5(a)(v) shall be construed to require the Committee to give its approval to
any transfer or assignment of any Non-Qualified Stock Option or portion
thereof, and approval to transfer or assign any Non-Qualified Stock Option
or portion thereof does not mean that such approval will be given with
respect to any other Non-Qualified Stock Option or portion thereof. The
transferee or assignee of any Non-Qualified Stock Option shall be subject
to all of the terms and conditions applicable to such Non-Qualified Stock
Option immediately prior to the transfer or assignment and shall be subject
to any conditions proscribed by the Committee with respect to such
Non-Qualified Stock Option.
(vi) ANNUAL LIMIT ON INCENTIVE STOCK OPTIONS. To the extent required
for "incentive stock option" treatment under Section 422 of the Code, the
aggregate Fair Market Value (determined as of the time of grant) of the
Stock with respect to which Incentive Stock Options granted under this Plan
and any other plan of the Company or its Subsidiaries become exercisable
for the first time by an optionee during any calendar year shall not exceed
$100,000. Notwithstanding the foregoing, to the extent that the aggregate
Fair Market Value (determined as of the time of grant) of the Stock with
respect to which Incentive Stock Options granted under this Plan and any
other plan of the Company or its Subsidiaries become exercisable for the
first time by an optionee during any calendar year exceeds $100,000 said
excess shall be treated as a Non-Qualified Stock Option.
(vii) FORM OF SETTLEMENT. Shares of Stock issued upon exercise of a
Stock Option shall be free of all restrictions under the Plan, except as
otherwise provided in this Plan.
(b) RELOAD OPTIONS. At the discretion of the Committee, Options granted
under Section 5(a) may include a so-called "reload" feature pursuant to which an
optionee exercising an option (the "Original Option") by the delivery of a
number of shares of Stock in accordance with Section 5(a)(iv)(B) hereof would
automatically be granted an additional Option (with an exercise price equal to
the Fair Market Value of the Stock on the date the additional Option is granted
and with the same expiration date as the original Option being exercised, and
with such other terms as the Committee may provide) to purchase that number of
shares of Stock equal to the number delivered to exercise the Original Option;
PROVIDED, HOWEVER, that the grant of such additional Option shall be subject to
the availability of shares of Stock under the Plan at the time of the
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exercise of the Original Option.
SECTION 6. CONDITIONED STOCK AWARDS.
(a) NATURE OF CONDITIONED STOCK AWARD. The Committee in its discretion
may grant Conditioned Stock Awards to any Eligible Person. A Conditioned Stock
Award is an Award entitling the recipient to acquire, at no cost or for a
purchase price determined by the Committee, shares of Stock subject to such
restrictions and conditions as the Committee may determine at the time of grant
("Conditioned Stock"). Conditions may be based on continuing employment and/or
achievement of Performance Goals. In addition, a Conditioned Stock Award may be
granted to an employee by the Committee in lieu of a cash bonus due to such
employee pursuant to any other plan of the Company.
(b) ACCEPTANCE OF AWARD. A participant who is granted a Conditioned
Stock Award shall have no rights with respect to such Award unless the
participant shall have accepted the Award within sixty (60) days (or such
shorter date as the Committee may specify) following the award date by making
payment to the Company, if required, by certified or bank check or other
instrument or form of payment acceptable to the Committee in an amount equal to
the specified purchase price, if any, of the shares covered by the Award and by
executing and delivering to the Company a written instrument that sets forth the
terms and conditions of the Conditioned Stock in such form as the Committee
shall determine.
(c) RIGHTS AS A SHAREHOLDER. Upon complying with Section 6(b) above, a
participant shall have all the rights of a shareholder with respect to the
Conditioned Stock, including voting and dividend rights, subject to
non-transferability restrictions and Company repurchase or forfeiture rights
described in this Section 6 and subject to such other conditions contained in
the written instrument evidencing the Conditioned Award. Unless the Committee
shall otherwise determine, certificates evidencing shares of Conditioned Stock
shall remain in the possession of the Company until such shares are vested as
provided in Section 6(e) below.
(d) RESTRICTIONS. Shares of Conditioned Stock may not be sold,
assigned, transferred, pledged or otherwise encumbered or disposed of except as
specifically provided herein. In the event of termination of employment by (or
termination of service with) the Company and its Subsidiaries for any reason
(including death, Disability, Normal Retirement and for Cause), the Company
shall have the right, at the discretion of the Committee, to repurchase shares
of Conditioned Stock with respect to which conditions have not lapsed at their
purchase price, or to require forfeiture of such shares to the Company if
acquired at no cost, from the participant or the participant's legal
representative. The Company must exercise such right of repurchase or forfeiture
within ninety (90) days following such termination of employment or service
(unless otherwise specified, in the written instrument evidencing the
Conditioned Award).
(e) VESTING OF CONDITIONED STOCK. The Committee at the time of grant
shall specify the date or dates and/or the attainment of pre-established
performance goals, objectives and other conditions on which the
non-transferability of the Conditioned Stock and the Company's right of
repurchase or forfeiture shall lapse. Subsequent to such date or dates and/or
the attainment of such preestablished performance goals, objectives and other
conditions, the shares on which all restrictions have lapsed shall no longer be
Conditioned Stock and shall be deemed "vested." The
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Committee at any time may accelerate such date or dates and otherwise waive or,
subject to Section 15, amend any conditions of the Award.
(f) WAIVER, DEFERRAL AND REINVESTMENT OF DIVIDENDS. The written
instrument evidencing the Conditioned Stock Award may require or permit the
immediate payment, waiver, deferral or investment of dividends paid on the
Restricted Stock.
SECTION 7. UNRESTRICTED STOCK AWARDS.
(a) GRANT OR SALE OF UNRESTRICTED STOCK. The Committee in its
discretion may grant or sell to any Eligible Person shares of Stock free of any
restrictions under the Plan ("Unrestricted Stock") at a purchase price
determined by the Committee. Shares of Unrestricted Stock may be granted or sold
as described in the preceding sentence in respect of past services or other
valid consideration.
(b) RESTRICTIONS ON TRANSFERS. The right to receive unrestricted Stock
may not be sold, assigned, transferred, pledged or otherwise encumbered, other
than by will or the laws of descent and distribution.
SECTION 8. PERFORMANCE SHARE AWARDS.
(a) NATURE OF PERFORMANCE SHARES. A Performance Share Award is an award
entitling the recipient to acquire shares of Stock upon the attainment of
specified performance goals. The Committee may make Performance Share Awards
independent of or in connection with the granting of any other Award under the
Plan. Performance Share Awards may be granted under the Plan to any Eligible
Person including those who qualify for awards under other performance plans of
the Company. The Committee in its discretion shall determine whether and to whom
Performance Share Awards shall be made, the Performance Goals applicable under
each such Award, the periods during which performance is to be measured, and all
other limitations and conditions applicable to the awarded Performance Shares;
PROVIDED, HOWEVER, that the Committee may rely on the Performance Goals and
other standards applicable to other performance-based plans of the Company in
setting the standards for Performance Share Awards under the Plan.
(b) RESTRICTIONS ON TRANSFER. Performance Share Awards and all rights
with respect to such Awards may not be sold, assigned, transferred, pledged or
otherwise encumbered.
(c) RIGHTS AS A SHAREHOLDER. A participant receiving a Performance
Share Award shall have the rights of a shareholder only as to shares actually
received by the participant under the Plan and not with respect to shares
subject to the Award but not actually received by the participant. A participant
shall be entitled to receive a stock certificate evidencing the acquisition of
shares of Stock under a Performance Share Award only upon satisfaction of all
conditions specified in the written instrument evidencing the Performance Share
Award (or in a performance plan adopted by the Committee).
(d) TERMINATION. Except as may otherwise be provided by the Committee
at any time prior to termination of employment, a participant's rights in all
Performance Share Awards shall
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automatically terminate upon the participant's termination of employment by the
Company and its Subsidiaries for any reason (including death, Disability, Normal
Retirement and for Cause).
(e) ACCELERATION, WAIVER, ETC. At any time prior to the participant's
termination of employment, the Committee may in its sole discretion accelerate,
waive or, subject to Section 15, amend any or all of the goals, restrictions or
conditions imposed under any Performance Share Award.
SECTION 9. STOCK APPRECIATION RIGHTS
(a) The Committee in its discretion may grant Stock Appreciation Rights
to any Eligible Person (i) alone, (ii) simultaneously with the grant of a Stock
Option and in conjunction therewith or in the alternative thereto or (iii)
subsequent to the grant of a Non-Qualified Option and in conjunction therewith
or in the alternative thereto.
(b) The exercise price per share of a Stock Appreciation Right granted
alone shall be determined by the Committee. A Stock Appreciation Right granted
simultaneously with or subsequent to the grant of a Stock Option and in
conjunction therewith or in the alternative thereto shall have the same exercise
price as the related Stock Option, shall be transferable only upon the same
terms and conditions as the related Stock Option, and shall be exercisable only
to the same extent as the related Stock Option; PROVIDED, HOWEVER, that a Stock
Appreciation Right, by its terms, shall be exercisable only when the Fair Market
Value per share of Stock exceeds the exercise price per share thereof.
(c) Upon any exercise of a Stock Appreciation Right which has been
issued in conjunction with a Stock Option, the number of shares of Stock for
which any related Stock Option shall be exercisable shall be reduced by the
number of shares for which the Stock Appreciation Right shall have been
exercised. The number of shares of Stock with respect to which a Stock
Appreciation Right shall be exercisable shall be reduced upon any exercise of
any related Stock Option by the number of shares for which such Option shall
have been exercised. Any Stock Appreciation Right shall be exercisable upon such
additional terms and conditions as may from time to time be prescribed by the
Committee.
(d) A Stock Appreciation Right shall entitle the participant upon
exercise thereof to receive from the Company, upon written request to the
Company at its principal offices (the "Request"), a number of shares of Stock
(with or without restrictions as to substantial risk of forfeiture and
transferability, as determined by the Committee in its sole discretion), an
amount of cash, or any combination of Stock and cash, as specified in the
Request (but subject to the approval of the Committee in its sole discretion, at
any time up to and including the time of payment, as to the making of any cash
payment), having an aggregate Fair Market Value equal to the product of (i) the
excess of Fair Market Value, on the date of such Request, over the exercise
price per share of Stock specified in such Stock Appreciation Right or its
related Option, multiplied by (ii) the number of shares of Stock for which such
Stock Appreciation Right shall be exercised. Notwithstanding the foregoing, the
Committee may specify at the time of grant of any Stock Appreciation Right that
such Stock Appreciation Right may be exercisable solely for cash and not for
Stock.
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(e) Within thirty (30) days of the receipt by the Company of a Request
to receive cash in full or partial settlement of a Stock Appreciation Right or
to exercise such Stock Appreciation Right for cash, the Committee shall, in its
sole discretion, either consent to or disapprove, in whole or in part, such
Request. A Request to receive cash in full or partial settlement of a Stock
Appreciation Right or to exercise a Stock Appreciation Right for cash may
provide that, in the event the Committee shall disapprove such Request, such
Request shall be deemed to be an exercise of such Stock Appreciation Right for
Stock.
(f) If the Committee disapproves in whole or in part any election by a
participant to receive cash in full or partial settlement of a Stock
Appreciation Right or to exercise such Stock Appreciation Right for cash, such
disapproval shall not affect such participant's right to exercise such Stock
Appreciation Right at a later date, to the extent that such Stock Appreciation
Right shall be otherwise exercisable, or to elect the form of payment at a later
date, provided that an election to receive cash upon such later exercise shall
be subject to the approval of the Committee. Additionally, such disapproval
shall not affect such participant's right to exercise any related Option.
(g) A Stock Appreciation Right shall be deemed exercised on the last
day of its term, if not otherwise exercised by the holder thereof, provided that
the fair market value of the Stock subject to the Stock Appreciation Right
exceeds the exercise price thereof on such date.
(h) No Stock Appreciation Right shall be transferable other than by
will or by the laws of descent and distribution and all Stock Appreciation
Rights shall be exercisable, during the holder's lifetime, only by the holder.
SECTION 10. CHANGE OF CONTROL PAYMENT RIGHTS. Contemporaneously with the grant
of any Option, the Committee may grant a Change of Control Payment Right with
respect to all or some of the shares of common stock covered by such Option.
Change of Control Payment Rights granted under this Plan are subject to the
following terms and conditions:
(a) TERMS OF RIGHTS. A Change of Control Payment Right may be exercised
only in the event of a Change in Control (which term shall be defined by the
Committee in the applicable agreement granting the Change in Control Payment
Right), PROVIDED, HOWEVER, in no event shall a Change of Control Payment Right
be exercisable in whole or in part before the expiration of six (6) months from
the date of grant of the Change of Control Payment Right. The Change of Control
Payment Right may be exercised only when (i) the underlying Option is eligible
to be exercised, and (ii) the Fair Market Value of the underlying shares of
Stock on the date of exercise is greater than the exercise price of the
underlying Option. Upon exercise of a Change of Control Payment Right, the
underlying Option shall cease to be exercisable and shall be terminated. Upon
exercise or termination of an Option, any related Change of Control Payment
Right shall terminate. The Change of Control Payment Right is transferable only
when the underlying Option is transferable and under the same terms and
conditions.
(b) PAYMENT. Upon exercise of a Change of Control Payment Right, the
holder shall promptly receive from the Company or its Subsidiaries an amount of
cash equal to the difference between the exercise price of the underlying Option
and the Fair Market Value of the shares of Stock subject to such Option on the
date the Change of Control Payment Right is exercised,
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multiplied by the number of shares of Stock with respect to which such Change of
Control Payment Right is being exercised.
SECTION 11. DEFERRED PAYMENTS. Notwithstanding any other provision of this Plan,
any participant may elect, with the concurrence of the Committee and consistent
with any rules and regulations established by the Committee, to defer the
delivery of the proceeds of the exercise of any Non-Qualified Stock Option,
Conditioned Stock Awards, Unrestricted Stock Awards, Performance Share Awards
and Stock Appreciation Rights.
(a) ELECTION TIMING. The election to defer the delivery of the proceeds
from any eligible Non-Qualified Stock Option or Stock Appreciation Right must be
made at least six (6) months prior to the date such Award is exercised or at
such other time as the Committee may specify. The election to defer the delivery
of any Conditioned Stock Award, Unrestricted Stock Award or Performance Share
Award must be made no later than the last day of the calendar year preceding the
calendar year in which the participant would otherwise have an unrestricted
right to receive such Conditioned Stock Award, Unrestricted Stock Award or
Performance Share Award. Deferrals of eligible Awards shall only be allowed for
exercises of Options and lapses of restrictions on Conditioned Stock Awards,
Unrestricted Stock Awards or Performance Share Award that occur while the
participant is in active service with the Company or its Subsidiaries. Any
election to defer the proceeds from an eligible Award shall be irrevocable as
long as the participant remains an employee or director of the Company or its
Subsidiaries.
(b) STOCK OPTION DEFERRAL. The deferral of the proceeds of
Non-Qualified Stock Options may be elected by a participant subject to the rules
and regulations established by the Committee. The proceeds from such an exercise
shall be credited to a deferred stock option account established for the
participant. The proceeds shall be credited to the deferred stock option account
as a number of deferred shares or share units equivalent in value to those
proceeds. Deferred share units shall be valued at the Fair Market Value on the
date of exercise. Subsequent to exercise, the deferred shares or share units
shall be valued at the Fair Market Value of Common Stock; PROVIDED, HOWEVER,
that at the discretion of the Committee, the participant may elect to have the
value of his deferred stock option account valued on some other basis of
measurement approved by the Committee. Unless the participant's deferred stock
option account is valued using a basis of measurement other than Common Stock,
deferred share units shall accrue dividends at the rate paid upon the Common
Stock credited in the form of additional deferred share units. Deferred shares
or share units shall be distributed in shares of Common Stock or cash, at the
discretion of the Committee, upon the termination of service of the Participant
or at such other date, as may be approved by the Committee, over a period of no
more than ten (10) years.
(c) STOCK APPRECIATION RIGHT DEFERRAL. The deferral of the proceeds of
Stock Appreciation Rights may be made by a Participant subject to the rules and
regulations established by the Committee. Upon exercise, the Committee will
credit the Participant's deferred stock option account with a number of deferred
shares or share units equivalent in value to the difference between the Fair
Market Value of a share of Common Stock on the exercise date and the Exercise
Price of the Stock Appreciation Right multiplied by the number of shares
exercised. Deferred shares or share units shall be valued at the Fair Market
Value on the date of exercise. Subsequent to exercise, the deferred shares or
share units shall be valued at the Fair
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Market Value of Common Stock; PROVIDED, HOWEVER, that at the discretion of the
Committee, the Participant may elect to have the value of his deferred stock
option account valued on some other basis of measurement approved by the
Committee. Unless the Participant's deferred stock option account is valued
using a basis of measurement other than Common Stock, deferred shares or share
units shall accrue dividends at the rate paid upon the Common Stock credited in
the form of additional deferred shares or share units. Deferred shares or share
units shall be distributed in shares of Common Stock or cash, at the discretion
of the Committee, upon the Participant's termination of service or at such other
date, as may be approved by the Committee, over a period of no more than ten
(10) years.
(d) CONDITIONED STOCK AWARDS, UNRESTRICTED STOCK AWARDS AND PERFORMANCE
SHARE AWARDS DEFERRALS. The deferral of Conditioned Stock Awards, Unrestricted
Stock Awards or Performance Share Awards may be elected by a Participant subject
to the rules and regulations established by the Committee. Upon the lapsing of
restrictions on such an Award, the Committee shall credit to a deferred stock
award account established for the Participant a number of deferred shares or
share units equivalent in value to the number of deferred Conditioned Stock
Awards, Unrestricted Stock Awards or Performance Share Awards multiplied by the
Fair Market Value of Common Stock. Deferred shares or share units shall be
valued at the Fair Market Value on the date all restrictions on the Conditioned
Stock Awards, Unrestricted Stock Awards or Performance Share Awards lapse or are
waived. Subsequent to the lapsing of all restrictions, the deferred shares or
share units shall be valued at the Fair Market Value of Common Stock; PROVIDED,
HOWEVER, that at the discretion of the Committee, the Participant may elect to
have the value of his deferred stock award account valued on some other basis of
measurement approved by the Committee. Unless the Participant's deferred stock
award account is valued using a basis of measurement other than Common Stock,
deferred shares or share units shall accrue dividends at the rate paid upon the
Common Stock credited in the form of additional deferred share units. Deferred
share units shall be distributed in shares of Common Stock or cash, at the
discretion of the Committee, upon the termination of service of the Participant
or at such other date, as may be approved by the Committee, over a period of no
more than ten (10) years.
(e) ACCELERATED DISTRIBUTIONS. The Committee may, at its sole
discretion, allow for the early payment of a Participant's deferred stock option
account and/or deferred stock award account in the event of an "unforeseeable
emergency" or in the event of the death or Disability of the Participant. An
"unforeseeable emergency" means an unanticipated emergency caused by an event
beyond the control of the Participant that would result in severe financial
hardship if the distribution were not permitted. Such distributions shall be
limited to the amount necessary to sufficiently address the financial hardship.
Any distributions under this provision, shall be consistent with the Code and
the regulations promulgated thereunder. Additionally, the Committee may use its
discretion to cause stock option deferral accounts and/or deferred stock award
accounts to be distributed when continuing the program is no longer in the best
interest of the Company or any Subsidiary.
(f) ASSIGNABILITY. No rights to deferred stock option accounts or
deferred stock award accounts may be assigned or subject to any encumbrance,
pledge or charge of any nature except that a Participant may designate a
beneficiary pursuant to any rules established by the Committee.
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(g) UNFUNDED STATUS. No Participant or other person shall have any
interest in any fund or in any specific asset of the Company or its Subsidiaries
by reason of any amount credited hereunder. Any amounts payable hereunder shall
be paid from the general assets of the Company or its Subsidiaries and no
participant or other person shall have any rights to such assets beyond the
rights afforded general creditors of the Company and its Subsidiaries. However,
the Company or any Subsidiary shall have the right to establish a reserve, trust
or make any investment for the purpose of satisfying the obligations created
under this Section 11 of the Plan; PROVIDED, HOWEVER, that no participant or
other person shall have any interest in such reserve, trust or investment.
SECTION 12. TERMINATION OF STOCK OPTIONS AND STOCK APPRECIATION RIGHTS.
Unless otherwise provided in the applicable agreement pursuant to
which the Award was granted,
(a) INCENTIVE STOCK OPTIONS:
(i) TERMINATION BY DEATH. If any participant's employment or
directorship with the Company and its Subsidiaries terminates by reason
of death, any Stock Option owned by such participant may thereafter be
exercised to the extent exercisable at the date of death, by the legal
representative or legatee of the participant, for a period of one year
from the date of death (or such longer period as the Committee shall
specify at any time, it being understood that any Incentive Stock
Options that are so extended shall thereafter become Non-Qualified
Stock Options to the extent provided by applicable law), or until the
expiration of the stated term of the Incentive Stock Option, if
earlier.
(ii) TERMINATION BY REASON OF DISABILITY. Any Stock Option
held by a participant whose employment or directorship with the Company
and its Subsidiaries has terminated by reason of Disability may
thereafter be exercised, to the extent it was exercisable at the time
of such termination, for a period of six months from the date of such
termination of employment or directorship (or such longer period as the
Committee shall specify at any time, it being understood that any
Incentive Stock Options that are so extended shall thereafter become
Non-Qualified Stock Options to the extent provided by applicable law),
or until the expiration of the stated term of the Stock Option, if
earlier. The Committee shall have sole authority and discretion to
determine whether a participant's employment or directorship has been
terminated by reason of Disability. Except as otherwise provided by the
Committee at the time of grant, the death of a participant during a
period provided in this Section 12(a)(ii) for the exercise of a Stock
Option shall extend such period for one year from the date of death,
subject to termination on the expiration of the stated term of the
Stock Option, if earlier.
(iii) TERMINATION BY REASON OF NORMAL RETIREMENT. Any Stock
Option held by a participant whose employment or directorship with the
Company and its Subsidiaries has terminated by reason of Normal
Retirement may thereafter be exercised, to the extent it was
exercisable at the time of such termination, for a period of three
months from the
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date of such termination of employment or directorship (or such
longer period as the Committee shall specify at any time, it being
understood that any Incentive Stock Options that are so extended shall
thereafter become Non-Qualified Stock Options to the extent provided
by applicable law) or until the expiration of the stated term of the
Option, if earlier. The Committee shall have sole authority and
discretion to determine whether a participant's employment or
directorship has been terminated by reason of Normal Retirement.
Except as otherwise provided by the Committee at the time of grant,
the death of a participant during a period provided in this Section
12(a)(iii) for the exercise of an Stock Option shall extend such
period for one year from the date of death, subject to termination on
the expiration of the stated term of the Stock Option, if earlier.
(iv) VOLUNTARY TERMINATION. Any Stock Option held by a
participant whose employment or directorship by the Company and its
Subsidiaries has terminated by reason of voluntary resignation by the
optionee may thereafter be exercised, to the extent it was exercisable
at the time of such termination, for a period of thirty (30) days from
the last day of the optionee's employment or, in the case of a
director, for a period of thirty (30) days from the effective date of
the optionee's resignation from the Board of Directors (or in either
case for such longer period as the Committee shall specify at any time,
it being understood that any Incentive Stock Options that are so
extended shall thereafter become Non-Qualified Stock Options to the
extent provided by applicable law) or until the expiration of the
stated term of the Stock Option, if earlier.
(v) TERMINATION FOR CAUSE. If any participant's employment or
directorship with the Company and its Subsidiaries has been terminated
by the Company or any of its Subsidiaries for cause, any Stock Option
held by such participant shall immediately terminate at the end of the
last day of the optionee's employment or directorship and shall
thereafter be of no further force and effect; PROVIDED, HOWEVER, that
the Committee may, in its sole discretion, provide that such Stock
Option can be exercised for such longer period as the Committee shall
specify at any time (it being understood that any Incentive Stock
Options so extended shall thereafter become Non-Qualified Stock Options
to the extent provided by applicable law) or until the expiration of
the stated term of the Stock Option, if earlier. The Committee shall
have sole authority and discretion to determine whether a participant's
employment has been terminated for cause.
(vi) TERMINATION WITHOUT CAUSE. Unless otherwise determined by
the Committee, if a participant's employment or directorship with the
Company and its Subsidiaries is terminated by the Company or any of its
Subsidiaries without cause, any Stock Option held by such participant
may thereafter be exercised, to the extent it was exercisable on the
date of termination of employment or directorship, for thirty (30) days
from the last day of the optionee's employment or directorship (or such
longer period as the Committee shall specify at any time, it being
understood that any Incentive Stock Options that are so extended shall
thereafter become Non-Qualified Stock Options to the extent provided by
applicable law).
(b) OTHER AWARDS. All Awards other than Incentive Stock Option granted
under the Plan shall contain such terms and conditions with respect to its
termination as the Committee, in its discretion, may from time to time
determine.
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SECTION 13. TAX WITHHOLDING.
(a) PAYMENT BY PARTICIPANT. Each participant shall, no later than the
date as of which the value of an Award or of any Stock or other amounts received
thereunder first becomes includable in the gross income of the participant for
Federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Committee regarding payment of any Federal, state or local
taxes of any kind required by law to be withheld with respect to such income.
The Company and its Subsidiaries shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
participant.
(b) PAYMENT IN SHARES. A Participant may elect, with the consent of the
Committee, in its discretion, to have such tax withholding obligation satisfied,
in whole or in part, by authorizing the Company to withhold from shares of Stock
to be issued pursuant to an Award a number of shares with an aggregate Fair
Market Value (as of the date the withholding is effected) that would satisfy the
withholding amount due with respect to such Award.
SECTION 14. TRANSFER, LEAVE OF ABSENCE, ETC.
For purposes of the Plan, the following events shall not be deemed a
termination of employment:
(a) a transfer to the employment of the Company from a Subsidiary or
from the Company to a Subsidiary, or from one Subsidiary to another;
(b) an approved leave of absence for military service or sickness, or
for any other purpose approved by the Company, if the employee's right to
re-employment is guaranteed either by a statute or by contract or under the
policy pursuant to which the leave of absence was granted or if the Committee
otherwise so provides in writing.
SECTION 15. AMENDMENTS AND TERMINATION.
The Board may at any time amend or discontinue the Plan and the
Committee may at any time amend or cancel any outstanding Award (or provide
substitute Awards at the same or reduced exercise or purchase price or with no
exercise or purchase price, but such price, if any, must satisfy the
requirements which would apply to the substitute or amended Award if it were
then initially granted under this Plan) for the purpose of responding to
comments of banking regulators satisfying changes in law or for any other lawful
purpose, but no such action shall adversely affect rights under any outstanding
Award without the holder's consent. However, no such amendment, unless approved
by the stockholders of the Company, shall be effective if it would cause the
Plan to fail to satisfy the "incentive stock option" requirements of the Code,
or cause transactions under the Plan to fail to satisfy the requirements of Rule
16b-3 or any successor rule under the Act as in effect on the date of such
amendment.
SECTION 16. STATUS OF PLAN.
With respect to the portion of any Award which has not been exercised
and any payments in cash, Stock or other consideration not received by a
participant, a participant shall have no
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rights greater than those of a general creditor of the Company unless the
Committee shall otherwise expressly determine in connection with any Award or
Awards. In its sole discretion, the Committee may authorize the creation of
trusts or other arrangements to meet the Company's obligations to deliver Stock
or make payments with respect to Awards hereunder, provided that the existence
of such trusts or other arrangements is consistent with the provision of the
foregoing sentence.
SECTION 17. COMPLIANCE WITH CONVERSION REGULATIONS.
(a) No award shall be made under this Plan that would be prohibited by
209 CMR Section 33.28(1)(u).
(b) Notwithstanding any other provision contained in this Plan no Award
granted before the date which is one (1) year from the date of the conversion of
the Company from mutual to stock form shall become vested or exercisable before
the date which is one year after the approval of this Plan by the stockholders
of the Company or at a rate in excess of 20% per year of the total number of
Stock Awards or Options (whichever may be the case) granted to such Participant,
PROVIDED, that the Committee may provide that such Awards shall become fully
vested or immediately exercisable in the event of a Participant's termination of
employment or service due to death or Disability or with the permission of the
Massachusetts Commissioner of Bank.
SECTION 18. GENERAL PROVISIONS.
(a) NO DISTRIBUTION; COMPLIANCE WITH LEGAL REQUIREMENTS. The Committee
may require each person acquiring shares pursuant to an Award to represent to
and agree with the Company in writing that such person is acquiring the shares
without a view to distribution thereof. No shares of Stock shall be issued
pursuant to an Award until all applicable securities laws and other legal and
stock exchange requirements have been satisfied. The Committee may require the
placing of such stop orders and restrictive legends on certificates for Stock
and Awards as it deems appropriate.
(b) DELIVERY OF STOCK CERTIFICATES. Delivery of stock certificates to
participants under this Plan shall be deemed effected for all purposes when the
Company or a stock transfer agent of the Company shall have delivered such
certificates in the United States mail, addressed to the participant, at the
participant's last known address on file with the Company.
(c) OTHER COMPENSATION ARRANGEMENTS; NO EMPLOYMENT RIGHTS. Nothing
contained in this Plan shall prevent the Board from adopting other or additional
compensation arrangements, including trusts, subject to stockholder approval if
such approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases. The adoption of the Plan or any
Award under the Plan does not confer upon any employee any right to continued
employment with the Company or any Subsidiary.
(d) DELEGATION BY COMMITTEE. The Committee may delegate to the Chief
Financial Officer or other officer of the Company the authority to make
decisions relating to the exercise of Options or other Awards, including without
limitation (i) the authority to permit the holder of an
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Award to deliver Stock in payment of the exercise price, and (ii) the authority
to permit a holder of an Award to satisfy a tax withholding obligation by
authorizing the Company to withhold shares from the shares of Stock to be issued
pursuant to an Award. However, only the Committee or a portion of the Committee
may certify the attainment of a Performance Goal.
SECTION 19. EFFECTIVE DATE OF PLAN.
The Effective Date of the Plan shall be the date of its adoption
by the Board of Directors provided that the stockholders of the Company shall
have approved the Plan within twelve months following the adoption of the Plan.
SECTION 20. GOVERNING LAW.
This Plan shall be governed by, and construed and enforced in
accordance with, the substantive laws of The Commonwealth of Massachusetts
without regard to its principles of conflicts of laws.
