<PAGE> 1
As filed with the Securities and Exchange Commission on August 9, 1999
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
GRAND CENTRAL FINANCIAL CORP.
(exact name of registrant as specified in its certificate of incorporation)
DELAWARE 6035 34-1877137
(state or other jurisdiction of (Primary Standard (IRS Employer
incorporation or organization) Classification Code Number) Identification No.)
601 MAIN STREET
WELLSVILLE, OHIO 43968
(330) 532-1517
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
GRAND CENTRAL FINANCIAL CORP.
1999 STOCK-BASED INCENTIVE PLAN
(Full Title of the Plan)
--------------------------------------
COPIES TO:
WILLIAM R. WILLIAMS JOHN R. HALL, ESQUIRE
PRESIDENT AND CHIEF EXECUTIVE OFFICER SUZANNE A. WALKER, ESQUIRE
GRAND CENTRAL FINANCIAL CORP. MULDOON, MURPHY & FAUCETTE LLP
601 MAIN STREET 5101 WISCONSIN AVENUE, N.W.
WELLSVILLE, OHIO 43968 WASHINGTON, D.C. 20016
(330) 532-1517 (202) 362-0840
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. / X /
<TABLE>
<CAPTION>
=====================================================================================================
Proposed
Maximum Proposed Maximum Amount of
Title of Amount to be Offering Price Per Aggregate Offering Registration
Securities to be Registered Registered (1) Share Price(2) Fee
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 193,887
$.01 par Value Shares(2) $13.00(3) $2,520,531 $701
- -----------------------------------------------------------------------------------------------------
Common Stock 77,554
$.01 par Value Shares (4) $13.25(5) $1,027,591 $286
=====================================================================================================
</TABLE>
(1) Together with an indeterminate number of additional shares which may be
necessary to adjust the number of shares reserved for issuance pursuant to
the Grand Central Financial Corp. 1999 Stock-Based Incentive Plan (the
"Plan") as the result of a stock split, stock dividend, or similar
adjustment of the outstanding Common Stock of Grand Central Financial Corp.
pursuant to 17 C.F.R ss. 230.416(a)
(2) Represents the total number of shares currently reserved or available for
issuance upon the exercise of stock options pursuant to the Plan.
(3) This amount represents the exercise price of the options, which equals the
fair market value of the stock as listed on the Nasdaq SmallCap Market on
July 15, 1999, the date the options under the Plan were granted.
(4) Represents the total number of shares currently available for issuance as
stock awards under the Plan.
(5) The fair market value on August 3, 1999, at which the 77,554 shares have
been purchased to satisfy awards under the Plan.
THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE IMMEDIATELY UPON FILING IN
ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, (THE
"SECURITIES ACT") AND 17 C.F.R. SECTION 230.462.
Number of Pages = 32
Exhibit Index begins on Page 10
<PAGE> 2
GRAND CENTRAL FINANCIAL CORP.
PART I INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEMS 1 & 2.
The documents containing the information for the Grand Central Financial
Corp. (The "Company" or the "Registrant") 1999 Stock-Based Incentive Plan (the
"Plan") required by Part I of the Registration Statement will be sent or given
to the participants in the Plan as specified by Rule 428(b)(1). Such document is
not filed with the Securities and Exchange Commission (the "SEC") either as a
part of this Registration Statement or as a prospectus or prospectus supplement
pursuant to Rule 424 in reliance on Rule 428.
PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed or to be filed with the SEC are incorporated
by reference in this Registration Statement:
(a) The Form 10-KSB filed by the Registrant (File No. 0-25045) with the
SEC on March 31, 1999, which includes the consolidated balance sheet
of Grand Central Financial Corp. and subsidiary as of December 31,
1998 and 1997, and the related consolidated statements of income,
changes in shareholders' equity, and cash flows for each of the
three years in the period ended December 31, 1998. The financial
statements as of and for the year ended December 31, 1998, have been
audited by Crowe, Chizek and Company, LLP, independent certified
public accountants. The financial statements for the years ended
December 31, 1997 and 1996 were audited by Robb, Dixon, Francis,
Oneson and Company. These audited reports are incorporated herein in
reliance upon the authority of said firms as experts in accounting
and auditing.
(b) The Form 10-QSB report filed by the Registrant for the fiscal
quarter ended March 31, 1999 (File #0-25045), filed with the SEC on
May 17, 1999.
(c) The Form 8-K (File No. 0-25045) filed by the Registrant on January
15, 1999 and amended on January 26, 1999, which reports the change
in the Registrant's Certifying Accountant from Robb, Dixon, Francis,
Davis, Oneson & Company to Crowe, Chizek and Company LLP, effective
January 11, 1999.
(d) The description of Registrant's Common Stock contained in
Registrant's Form 8-A12G (File #0-25045) dated November 6, 1998,
pursuant to Section 12(g) of the Securities Exchange Act of 1934
(the "Exchange Act").
(e) All documents filed by the Registrant pursuant to Section 13(a) and
(c), 14 or 15(d) of the Exchange Act after the date hereof and prior
to the filing of a post-effective amendment which deregisters all
securities then remaining unsold.
2
<PAGE> 3
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 INCORPORATED OR 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
The common stock to be offered pursuant to the Plan has been registered
pursuant to Section 12 of the Exchange Act. Accordingly, a description of the
common stock is not required herein.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
None
The validity of the Common Stock offered hereby has been passed upon by
Muldoon, Murphy & Faucette LLP, Washington, DC for the Registrant.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Directors and officers of the Registrant are indemnified and held harmless
against liability to the fullest extent permissible by the general corporation
law of Delaware as it currently exists or as it may be amended provided any such
amendment provides broader indemnification provisions than currently exist. This
indemnification applies to the Board of Directors who administer the Plan.
In accordance with the General Corporation Law of the State of Delaware
(being Chapter 1 of Title 8 of the Delaware Code), Articles 10 and 11 of the
Registrant's Certificate of Incorporation provide as follows:
TENTH:
- -----
A. Each person who was or is made a party or is threatened to be made a
party to or is otherwise involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative (hereinafter a
"proceeding"), by reason of the fact that he or she is or was a Director
or an Officer of the Corporation or is or was serving at the request of
the Corporation as a Director, Officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to an employee benefit plan (hereinafter an
"indemnitee"), whether the basis of such proceeding is alleged action in
an official capacity as a Director, Officer, employee or agent or in any
other capacity while serving as a Director, Officer, employee or agent,
shall be indemnified and held harmless by the Corporation to the fullest
extent authorized by the Delaware General Corporation Law, as the same
exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the Corporation
to provide broader indemnification rights than such law permitted the
Corporation to provide prior to such amendment), against all expense,
liability and loss (including attorneys' fees, judgments, fines, ERISA
excise taxes or penalties and amounts paid in settlement) reasonably
incurred or suffered by such indemnitee in connection therewith; provided,
however, that, except as provided in Section C
3
<PAGE> 4
hereof with respect to proceedings to enforce rights to indemnification,
the Corporation shall indemnify any such indemnitee in connection with a
proceeding (or part thereof) initiated by such indemnitee only if such
proceeding (or part thereof) was authorized by the Board of Directors of
the Corporation.
B. The right to indemnification conferred in Section A of this Article
TENTH shall include the right to be paid by the Corporation the expenses
incurred in defending any such proceeding in advance of its final
disposition (hereinafter an "advancement of expenses"); provided, however,
that, if the Delaware General Corporation Law requires, an advancement of
expenses incurred by an indemnitee in his or her capacity as a Director or
Officer (and not in any other capacity in which service was or is rendered
by such indemnitee, including, without limitation, services to an employee
benefit plan) shall be made only upon delivery to the Corporation of an
undertaking (hereinafter an "undertaking"), by or on behalf of such
indemnitee, to repay all amounts so advanced if it shall ultimately be
determined by final judicial decision from which there is no further right
to appeal (hereinafter a "final adjudication") that such indemnitee is not
entitled to be indemnified for such expenses under this Section or
otherwise. The rights to indemnification and to the advancement of
expenses conferred in Sections A and B of this Article TENTH shall be
contract rights and such rights shall continue as to an indemnitee who has
ceased to be a Director, Officer, employee or agent and shall inure to the
benefit of the indemnitee's heirs, executors and administrators.
C. If a claim under Section A or B of this Article TENTH is not paid in
full by the Corporation within sixty days after a written claim has been
received by the Corporation, except in the case of a claim for an
advancement of expenses, in which case the applicable period shall be
twenty days, the indemnitee may at any time thereafter bring suit against
the Corporation to recover the unpaid amount of the claim. If successful
in whole or in part in any such suit, or in a suit brought by the
Corporation to recover an advancement of expenses pursuant to the terms of
an undertaking, the indemnitee shall be entitled to be paid also the
expenses of prosecuting or defending such suit. In (i) any suit brought by
the indemnitee to enforce a right to indemnification hereunder (but not in
a suit brought by the indemnitee to enforce a right to an advancement of
expenses) it shall be a defense that, and (ii) in any suit by the
Corporation to recover an advancement of expenses pursuant to the terms of
an undertaking the Corporation shall be entitled to recover such expenses
upon a final adjudication that, the indemnitee has not met any applicable
standard for indemnification set forth in the Delaware General Corporation
Law. Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such suit that indemnification
of the indemnitee is proper in the circumstances because the indemnitee
has met the applicable standard of conduct set forth in the Delaware
General Corporation Law, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) that the indemnitee has not met such applicable standard of
conduct, shall create a presumption that the indemnitee has not met the
applicable standard of conduct or, in the case of such a suit brought by
the indemnitee, be a defense to such suit. In any suit brought by the
indemnitee to enforce a right to indemnification or to an advancement of
expenses hereunder, or by the Corporation to recover an advancement of
expenses pursuant to the terms of an undertaking, the burden of proving
that the indemnitee is not entitled to be indemnified, or to such
advancement of expenses, under this Article TENTH or otherwise shall be on
the Corporation.
4
<PAGE> 5
D. The rights to indemnification and to the advancement of expenses
conferred in this Article TENTH shall not be exclusive of any other right
which any person may have or hereafter acquire under any statute, the
Corporation's Certificate of Incorporation, Bylaws, agreement, vote of
stockholders or Disinterested Directors or otherwise.
E. The Corporation may maintain insurance, at its expense, to protect
itself and any Director, Officer, employee or agent of the Corporation or
subsidiary or Affiliate or another corporation, partnership, joint
venture, trust or other enterprise against any expense, liability or loss,
whether or not the Corporation would have the power to indemnify such
person against such expense, liability or loss under the Delaware General
Corporation Law.
F. The Corporation may, to the extent authorized from time to time by
the Board of Directors, grant rights to indemnification and to the
advancement of expenses to any employee or agent of the Corporation to the
fullest extent of the provisions of this Article TENTH with respect to the
indemnification and advancement of expenses of Directors and Officers of
the Corporation.
ELEVENTH:
--------
A. A Director of this Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a Director, except for liability: (i) for any breach of
the Director's duty of loyalty to the Corporation 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 Section 174 of the
Delaware General Corporation Law; or (iv) for any transaction from which
the Director derived an improper personal benefit. If the Delaware General
Corporation Law is amended to authorize corporate action further
eliminating or limiting the personal liability of Directors, then the
liability of a Director of the Corporation shall be eliminated or limited
to the fullest extent permitted by the Delaware General Corporation Law,
as so amended.
B. Any repeal or modification of the foregoing paragraph by the
stockholders of the Corporation shall not adversely affect any right or
protection of a Director of the Corporation existing at the time of such
repeal or modification.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
5
<PAGE> 6
Item 8. List of Exhibits.
The following exhibits are filed with or incorporated by reference into
this Registration Statement on Form S-8 (numbering corresponds generally to
Exhibit Table in Item 601 of Regulation S-B):
4.1 Grand Central Financial Corp. 1999 Stock-Based Incentive Plan
4.2 Stock Certificate of common stock of Grand Central Financial Corp.1
4.3 Certificate of Incorporation of Grand Central Financial Corp.2
4.4 Bylaws of Grand Central Financial Corp.3
5 Opinion of Muldoon, Murphy & Faucette LLP, Washington, DC as to the
legality of the Common Stock registered hereby.
23.1 Consent of Muldoon, Murphy & Faucette LLP (contained in the opinion
included as Exhibit 5).
23.2 Consent of Crowe, Chizek and Company LLP
23.3 Consent of Robb, Dixon, Francis, Davis, Oneson and Company
24 Power of Attorney is located on the signature pages.
- --------------------------
1 Incorporated herein by reference from Exhibit 4 contained in the Registration
Statement on Form SB-2 (SEC No. 333-64089), as amended, filed with the SEC on
November 6, 1998, and declared effective on November 12, 1998.
2 Incorporated herein by reference from Exhibit 3.1 contained in the
Registration Statement on Form SB-2 (SEC No. 333-64089), as amended, filed
with the SEC on November 6, 1998, and declared effective on November 12, 1998.
3 Incorporated herein by reference from Exhibit 3.2 contained in the
Registration Statement on Form SB-2 (SEC No. 333-64089), as amended, filed
with the SEC on November 6, 1998, and declared effective on November 12, 1998.
ITEM 9. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which it offers or sells securities, a
post-effective amendment to this Registration Statement:
(i) To include any Prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
6
<PAGE> 7
(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 end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price
represent no more than a 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 (a)(1)(i) and (a)(1)(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 15(d) of the Securities Exchange Act
of 1934 that are incorporated by reference into this Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new Registration Statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered that remain
unsold at the termination of the Offering.
(b) The undersigned hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the
Registrant's or the Plan's annual report pursuant to section 13(a)
or section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the Registration Statement shall be
deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 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 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 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.
7
<PAGE> 8
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act of
1933, Grand Central Financial Corp. 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 the City of Wellsville, State of
Ohio, on August 9, 1999.
GRAND CENTRAL FINANCIAL CORP.
By: /s/ William R. Williams
-------------------------------------
William R. Williams
President and Chief Executive Officer
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.
KNOW ALL MEN BY THESE PRESENT, that each person whose signature appears
below (other than Mr. Williams) constitutes and appoints William R. Williams and
Mr. Williams appoints John A. Rife, as the true and lawful attorney-in-fact and
agent with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities to sign any or all amendments
to the Form S-8 Registration Statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the U.S. Securities
and Exchange Commission, respectively, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and things
requisite and necessary to be done as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Name Title Date
---- ----- ----
/s/ Gerry W. Grace Chairman of the Board of the August 9, 1999
- -------------------------- Company and the Association
Gerry W. Grace
/s/ William R. Williams President, Chief Executive Officer August 9, 1999
- -------------------------- and Director
William R. Williams (principal executive officer)
8
<PAGE> 9
/s/ John A. Rife Executive Vice President August 9, 1999
- -------------------------- and Treasurer
John A. Rife (principal accounting and
financial officer)
/s/ Jeffrey W. Aldrich Director August 9, 1999
- ---------------------------
Jeffrey W. Aldrich
/s/ Thomas P. Ash Director August 9, 1999
- ---------------------------
Thomas P. Ash
/s/ Fred C. Jackson Director August 9, 1999
- ---------------------------
Fred C. Jackson
9
<PAGE> 10
<TABLE>
<CAPTION>
EXHIBIT INDEX
Sequentially
Numbered
Page
Exhibit No. Description Method of Filing Location
- ------------ ------------------------ ---------------------------------------------- ---------
<S> <C> <C> <C>
4.1 Grand Central Filed herewith. 12
Financial Corp. 1999
Stock-Based Incentive
Plan
4.2 Stock Certificate of Incorporated herein by reference from --
Grand Central Exhibit 4 of the Registrant's Form SB-2, as
Financial Corp. amended, filed with the SEC (No. 333-
64089) on November 6, 1998, and declared
effective on November 12, 1998.
4.3 Certificate of Incorporated herein by reference from --
Incorporation of Grand Exhibit 3.1 of the Registrant's Form SB-2,
Central Financial as amended.
Corp.
4.4 Bylaws of Grand Incorporated herein by reference from --
Central Financial Exhibit 3.2 of the Registrant's Form SB-2,
Corp. as amended.
5 Opinion of Muldoon, Filed herewith. 27
Murphy & Faucette
LLP
23.1 Consent of Muldoon, Contained within Exhibit 5 hereof. 27
Murphy & Faucette
LLP
23.2 Consent of Crowe, Filed herewith. 30
Chizek and Company
LLP
23.3 Consent of Robb, Filed herewith. 32
Dixon, Francis, Davis,
Oneson and Company
24 Power of Attorney Located on the signature page. 8
</TABLE>
10
<PAGE> 1
EXHIBIT 4.1 GRAND CENTRAL FINANCIAL CORP. 1999 STOCK BASED INCENTIVE PLAN
<PAGE> 2
GRAND CENTRAL FINANCIAL CORP.
1999 STOCK-BASED INCENTIVE PLAN
1. DEFINITIONS
(a) "Affiliate" means any "parent corporation" or "subsidiary corporation"
of the Holding Company, as such terms are defined in Sections 424(e) and 424(f)
of the Code.
(b) "Association" means Central Federal Savings and Loan Association of
Wellsville.
(c) "Award" means, individually or collectively, a grant under the Plan of
Non-Statutory Stock Options, Incentive Stock Options and Stock Awards.
(d) "Award Agreement" means an agreement evidencing and setting forth the
terms of an Award.
(e) "Board of Directors" means the board of directors of the Holding
Company.
(f) "Change in Control" of the Holding Company or the Association shall
mean an event of a nature that: (i) would be required to be reported in response
to Item 1(a) of the current report on Form 8-K, as in effect on the date hereof,
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act"); or (ii) results in a Change in Control of the Institution or
the Holding Company within the meaning of the Home Owners' Loan Act of 1933, as
amended, the Federal Deposit Insurance Act, and the Rules and Regulations
promulgated by the Office of Thrift Supervision (or its predecessor agency), as
in effect on the date hereof (provided, that in applying the definition of
change in control as set forth under the rules and regulations of the OTS, the
Board shall substitute its judgment for that of the OTS); or (iii) without
limitation such a Change in Control shall be deemed to have occurred at such
time as (A) any "person" (as the term is used in Sections 13(d) and 14(d) of the
Exchange Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of voting securities of the
Institution or the Holding Company representing 20% or more of the Institution's
or the Holding Company's outstanding voting securities or right to acquire such
securities except for any voting securities of the Institution purchased by the
Holding Company and any voting securities purchased by any employee benefit plan
of the Holding Company or its Subsidiaries, or (B) individuals who constitute
the Board on the date hereof (the "Incumbent Board") cease for any reason to
constitute at least a majority thereof, provided that any person becoming a
director subsequent to the date hereof whose election was approved by a vote of
at least three-quarters of the directors comprising the Incumbent Board, or
whose nomination for election by the Company's stockholders was approved by a
Nominating Committee solely composed of members which are Incumbent Board
members, shall be, for purposes of this clause (B), considered as though he were
a member of the Incumbent Board, or (C) a plan of reorganization, merger,
consolidation, sale of all or substantially all the assets of the Institution or
the Holding Company or similar transaction occurs or is effectuated in which the
Institution or Holding Company is not the resulting entity; provided, however,
that such an event listed above will be deemed to have occurred or to have been
effectuated upon the receipt of all required federal regulatory approvals not
including the lapse of any statutory waiting periods, or (D) a proxy statement
has been distributed soliciting proxies from stockholders of the Holding
Company, by someone other than the current management of the Holding Company,
seeking stockholder approval of a plan of reorganization, merger or
consolidation of the Holding Company or Institution with one or more
corporations as a result of which the outstanding shares of the class of
securities then subject to such plan or transaction are exchanged for or
converted into cash or property or securities not issued by the Institution or
the Holding
<PAGE> 3
Company shall be distributed, or (E) a tender offer is made for 20% or more of
the voting securities of the Institution or Holding Company then outstanding.
(g) "Code" means the Internal Revenue Code of 1986, as amended.
(h) "Committee" means the committee designated by the Board of Directors,
pursuant to Section 2 of the Plan, to administer the Plan.
(i) "Common Stock" means the Common Stock of the Holding Company, par
value, $.01 per share.
(j) "Date of Grant" means the effective date of an Award.
(k) "Disability" means any mental or physical condition with respect to
which the Participant qualifies for and receives benefits for under a long-term
disability plan of the Holding Company or an Affiliate, or in the absence of
such a long-term disability plan or coverage under such a plan, "Disability"
shall mean a physical or mental condition which, in the sole discretion of the
Committee, is reasonably expected to be of indefinite duration and to
substantially prevent the Participant from fulfilling his duties or
responsibilities to the Holding Company or an Affiliate.
(l) "Effective Date" means the earlier of the date the Plan is approved by
shareholders or December 30, 1999.
(m) "Employee" means any person employed by the Holding Company or an
Affiliate. Directors who are employed by the Holding Company or an Affiliate
shall be considered Employees under the Plan.
(n) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(o) "Exercise Price" means the price at which a Participant may purchase a
share of Common Stock pursuant to an Option.
(p) "Fair Market Value" means the market price of Common Stock, determined
by the Committee as follows:
(i) If the Common Stock was traded on the date in question on The
Nasdaq Stock Market then the Fair Market Value shall be equal
to the closing price reported for such date;
(ii) If the Common Stock was traded on a stock exchange on the date
in question, then the Fair Market Value shall be equal to the
closing price reported by the applicable composite
transactions report for such date; and
(iii) If neither of the foregoing provisions is applicable, then the
Fair Market Value shall be determined by the Committee in good
faith on such basis as it deems appropriate.
2
<PAGE> 4
Whenever possible, the determination of Fair Market Value by the Committee
shall be based on the prices reported in THE WALL STREET JOURNAL. The
Committee's determination of Fair Market Value shall be conclusive and binding
on all persons.
(q) "Holding Company" means Grand Central Financial Corp.
(r) "Incentive Stock Option" means a stock option granted to a
Participant, pursuant to Section 7 of the Plan, that is intended to meet the
requirements of Section 422 of the Code.
(s) "Non-Statutory Stock Option" means a stock option granted to a
Participant pursuant to the terms of the Plan but which is not intended to be
and is not identified as an Incentive Stock Option or a stock option granted
under the Plan which is intended to be and is identified as an Incentive Stock
Option but which does not meet the requirements of Section 422 of the Code.
(t) "Option" means an Incentive Stock Option or Non-Statutory Stock
Option.
(u) "Outside Director" means a member of the board(s) of directors of the
Holding Company or an Affiliate who is not also an Employee of the Holding
Company or an Affiliate.
(v) "Participant" means any person who holds an outstanding Award.
(w) "Plan" means this Grand Central Financial Corp. 1999 Stock-Based
Incentive Plan.
(x) "Retirement" means retirement from employment with the Holding Company
or an Affiliate in accordance with the then current retirement policies of the
Holding Company or Affiliate, as applicable. "Retirement" with respect to an
Outside Director means the termination of service from the board(s) of directors
of the Holding Company and any Affiliate following written notice to such
board(s) of directors of the Outside Director's intention to retire.
(y) "Stock Award" means an Award granted to a Participant pursuant to
Section 8 of the Plan.
(z) "Termination for Cause" shall mean, in the case of an Outside
Director, removal from the board(s) of directors of the Holding Company and its
Affiliates in accordance with the applicable by-laws of the Holding Company and
its Affiliates or, in the case of an Employee, as defined under any employment
agreement with the Holding Company or an Affiliate; provided, however, that if
no employment agreement exists with respect to the Employee, Termination for
Cause shall mean termination of employment because of a material loss to the
Holding Company or an Affiliate, as determined by and in the sole discretion of
the Board of Directors or its designee(s).
(aa) "Trust" means a trust established by the Board of Directors in
connection with this Plan to hold Common Stock or other property for the
purposes set forth in the Plan.
(bb) "Trustee" means any person or entity approved by the Board of
Directors or its designee(s) to hold any of the Trust assets.
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2. ADMINISTRATION
(a) The Committee shall administer the Plan. The Committee shall consist
of the entire Board of Directors.
(b) The Committee shall (i) select the Employees and Outside Directors who
are to receive Awards under the Plan, (ii) determine the type, number, vesting
requirements and other features and conditions of such Awards, (iii) interpret
the Plan and Award Agreements in all respects and (iv) make all other decisions
relating to the operation of the Plan. The Committee may adopt such rules or
guidelines as it deems appropriate to implement the Plan. The Committee's
determinations under the Plan shall be final and binding on all persons.
(c) Each Award shall be evidenced by a written agreement ("Award
Agreement") containing such provisions as may be required by the Plan and
otherwise approved by the Committee. Each Award Agreement shall constitute a
binding contract between the Holding Company or an Affiliate and the
Participant, and every Participant, upon acceptance of an Award Agreement, shall
be bound by the terms and restrictions of the Plan and the Award Agreement. The
terms of each Award Agreement shall be in accordance with the Plan, but each
Award Agreement may include any additional provisions and restrictions
determined by the Committee, in its discretion, provided that such additional
provisions and restrictions are not inconsistent with the terms of the Plan. In
particular and at a minimum, the Committee shall set forth in each Award
Agreement: (i) the type of Award granted; (ii) the Exercise Price of any Option;
(iii) the number of shares subject to the Award; (iv) the expiration date of the
Award; (v) the manner, time, and rate (cumulative or otherwise) of exercise or
vesting of such Award; and (vi) the restrictions, if any, placed upon such
Award, or upon shares which may be issued upon exercise of such Award. The
Chairman of the Committee and such other directors and officers as shall be
designated by the Committee is hereby authorized to execute Award Agreements on
behalf of the Company or an Affiliate and to cause them to be delivered to the
recipients of Awards.
(d) The Committee may delegate all authority for: (i) the determination of
forms of payment to be made by or received by the Plan and (ii) the execution of
any Award Agreement.
3. TYPES OF AWARDS
The following Awards may be granted under the Plan:
(a) Non-Statutory Stock Options.
(b) Incentive Stock Options.
(c) Stock Awards.
4. STOCK SUBJECT TO THE PLAN
Subject to adjustment as provided in Section 14 of the Plan, the maximum
number of shares reserved for Awards under the Plan is 271,441, which number
shall not exceed 14% of the shares of the Common Stock determined immediately as
of the Effective Date. Subject to adjustment as provided in Section 14 of the
Plan, the maximum number of shares reserved hereby for purchase pursuant to the
exercise of Options granted under the Plan is 193,887 which number shall not
exceed 10% of the shares of Common Stock as of the Effective Date. The maximum
number of the shares reserved for Stock Awards is 77,554 which number shall not
exceed 4% of the shares of Common Stock as of the Effective Date. The shares of
Common Stock issued under the Plan may be either authorized but unissued shares
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or authorized shares previously issued and acquired or reacquired by the Trustee
or the Holding Company, respectively. To the extent that Options and Stock
Awards are granted under the Plan, the shares underlying such Awards will be
unavailable for any other use including future grants under the Plan except
that, to the extent that Stock Awards or Options terminate, expire or are
forfeited without having vested or without having been exercised, new Awards may
be made with respect to these shares.
5. ELIGIBILITY
Subject to the terms of the Plan, all Employees and Outside Directors
shall be eligible to receive Awards under the Plan. In addition, the Committee
may grant eligibility to consultants and advisors of the Holding Company or an
Affiliate, as it sees fit.
6. NON-STATUTORY STOCK OPTIONS
The Committee may, subject to the limitations of this Plan and the
availability of shares of Common Stock reserved but not previously awarded under
the Plan, grant Non-Statutory Stock Options to eligible individuals upon such
terms and conditions as it may determine to the extent such terms and conditions
are consistent with the following provisions:
(a) EXERCISE PRICE. The Committee shall determine the Exercise Price of
each Non- Statutory Stock Option. However, the Exercise Price shall not be less
than 100% of the Fair Market Value of the Common Stock on the Date of Grant.
(b) TERMS OF NON-STATUTORY STOCK OPTIONS. The Committee shall determine
the term during which a Participant may exercise a Non-Statutory Stock Option,
but in no event may a Participant exercise a Non-Statutory Stock Option, in
whole or in part, more than ten (10) years from the Date of Grant. The Committee
shall also determine the date on which each Non-Statutory Stock Option, or any
part thereof, first becomes exercisable and any terms or conditions a
Participant must satisfy in order to exercise each Non-Statutory Stock Option.
The shares of Common Stock underlying each Non-Statutory Stock Option may be
purchased in whole or in part by the Participant at any time during the term of
such Non-Statutory Stock Option, or any portion thereof, once the Non-Statutory
Stock Option becomes exercisable.
(c) NON-TRANSFERABILITY. Unless otherwise determined by the Committee in
accordance with this Section 6(c), a Participant may not transfer, assign,
hypothecate, or dispose of in any manner, other than by will or the laws of
intestate succession, a Non-Statutory Stock Option. The Committee may, however,
in its sole discretion, permit transferability or assignment of a Non-Statutory
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 6(c), a transfer for valid estate planning purposes includes, but is not
limited to: (a) a transfer to a revocable intervivos trust as to which the
Participant is both the settlor and trustee, or (b) a transfer for no
consideration to: (i) any member of the Participant's Immediate Family, (ii) any
trust solely for the benefit of members of the Participant's Immediate Family,
(iii) any partnership whose only partners are members of the Participant's
Immediate Family, and (iv) any limited liability corporation or corporate entity
whose only members or equity owners are members of the Participant's Immediate
Family. Nothing contained in this Section 6(c) shall be construed to require the
Committee to give its approval to any transfer or assignment of any
Non-Statutory Stock Option or portion thereof, and approval to transfer or
assign any Non-Statutory Stock Option or portion thereof does not mean that such
approval will be given with respect to any other Non-Statutory Stock Option or
portion thereof. The
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transferee or assignee of any Non-Statutory Stock Option shall be subject to all
of the terms and conditions applicable to such Non-Statutory Stock Option
immediately prior to the transfer or assignment and shall be subject to any
other conditions proscribed by the Committee with respect to such Non-Statutory
Stock Option.
(d) TERMINATION OF EMPLOYMENT OR SERVICE (GENERAL). Unless otherwise
determined by the Committee, upon the termination of a Participant's employment
or other service for any reason other than Retirement, Disability or death, a
Change in Control, or Termination for Cause the Participant may exercise only
those Non-Statutory Stock Options that were immediately exercisable by the
Participant at the date of such termination and only for a period of three (3)
months following the date of such termination.
(e) TERMINATION OF EMPLOYMENT OR SERVICE (RETIREMENT). In the event of a
Participant's Retirement, the Participant may exercise only those Non-Statutory
Stock Options that were immediately exercisable by the Participant at the date
of Retirement and only for a period of one (1) year following the date of
Retirement; PROVIDED, HOWEVER, that upon the Participant's Retirement, the
Committee, in its discretion, may determine that all Non-Statutory Stock Options
that were not exercisable by the Participant as of such date shall continue to
become exercisable in accordance with the terms of the Award Agreement if the
Participant is immediately engaged by the Holding Company or an Affiliate as a
consultant or advisor or continues to serve the Holding Company or an Affiliate
as a director, advisory director, or director emeritus.
(f) TERMINATION OF EMPLOYMENT OR SERVICE (DISABILITY OR DEATH). Unless
otherwise determined by the Committee, in the event of the termination of a
Participant's employment or other service due to Disability or death, all
Non-Statutory Stock Options held by such Participant shall immediately become
exercisable and remain exercisable for a period one (1) year following the date
of such termination.
(g) TERMINATION OF EMPLOYMENT OR SERVICE (TERMINATION FOR CAUSE). Unless
otherwise determined by the Committee, in the event of a Participant's
Termination for Cause, all rights with respect to the Participant's
Non-Statutory Stock Options shall expire immediately upon the effective date of
such Termination for Cause.
(h) TERMINATION OF EMPLOYMENT OR SERVICE (CHANGE IN CONTROL). In the event
of the termination of a Participant's employment or service due to a Change in
Control, whether such termination is actual, constructive, or otherwise, the
Participant may exercise only those Non-Statutory Stock Options that were
immediately exercisable by the Participant at the date of such termination. Such
Options shall remain exercisable for the remaining term of the Options.
(i) PAYMENT. Payment due to a Participant upon the exercise of a
Non-Statutory Stock Option shall be made in the form of shares of Common Stock.
7. INCENTIVE STOCK OPTIONS
The Committee may, subject to the limitations of the Plan and the
availability of shares of Common Stock reserved but unawarded under this Plan,
grant Incentive Stock Options to an Employee upon such terms and conditions as
it may determine to the extent such terms and conditions are consistent with the
following provisions:
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(a) EXERCISE PRICE. The Committee shall determine the Exercise Price of
each Incentive Stock Option. However, the Exercise Price shall not be less than
100% of the Fair Market Value of the Common Stock on the Date of Grant;
PROVIDED, HOWEVER, that if at the time an Incentive Stock Option is granted, the
Employee owns or is treated as owning, for purposes of Section 422 of the Code,
Common Stock representing more than 10% of the total combined voting securities
of the Holding Company ("10% Owner"), the Exercise Price shall not be less than
110% of the Fair Market Value of the Common Stock on the Date of Grant.
(b) AMOUNTS OF INCENTIVE STOCK OPTIONS. To the extent the aggregate Fair
Market Value of shares of Common Stock with respect to which Incentive Stock
Options that are exercisable for the first time by an Employee during any
calendar year under the Plan and any other stock option plan of the Holding
Company or an Affiliate exceeds $100,000, or such higher value as may be
permitted under Section 422 of the Code, such Options in excess of such limit
shall be treated as Non-Statutory Stock Options. Fair Market Value shall be
determined as of the Date of Grant with respect to each such Incentive Stock
Option.
(c) TERMS OF INCENTIVE STOCK OPTIONS. The Committee shall determine the
term during which a Participant may exercise an Incentive Stock Option, but in
no event may a Participant exercise an Incentive Stock Option, in whole or in
part, more than ten (10) years from the Date of Grant; PROVIDED, HOWEVER, that
if at the time an Incentive Stock Option is granted to an Employee who is a 10%
Owner, the Incentive Stock Option granted to such Employee shall not be
exercisable after the expiration of five (5) years from the Date of Grant. The
Committee shall also determine the date on which each Incentive Stock Option, or
any part thereof, first becomes exercisable and any terms or conditions a
Participant must satisfy in order to exercise each Incentive Stock Option. The
shares of Common Stock underlying each Incentive Stock Option may be purchased
in whole or in part at any time during the term of such Incentive Stock Option
after such Option becomes exercisable.
(d) NON-TRANSFERABILITY. No Incentive Stock Option shall be transferable
except by will or the laws of descent and distribution and is exercisable,
during his lifetime, only by the Employee to whom the Committee grants the
Incentive Stock Option. The designation of a beneficiary does not constitute a
transfer of an Incentive Stock Option.
(e) TERMINATION OF EMPLOYMENT (GENERAL). Unless otherwise determined by
the Committee, upon the termination of a Participant's employment or other
service for any reason other than Retirement, Disability or death, a Change in
Control, or Termination for Cause, the Participant may exercise only those
Incentive Stock Options that were immediately exercisable by the Participant at
the date of such termination and only for a period of three (3) months following
the date of such termination.
(f) TERMINATION OF EMPLOYMENT (RETIREMENT). In the event of a
Participant's Retirement, the Participant may exercise only those Incentive
Stock Options that were immediately exercisable by the Participant at the date
of Retirement and only for a period of one (1) year following the date of
Retirement; PROVIDED HOWEVER, that upon the Participant's Retirement, the
Committee, in its discretion, may determine that all Incentive Stock Options
that were not otherwise exercisable by the Participant as of such date shall
continue to become exercisable in accordance with the terms of the Award
Agreement if the Participant is immediately engaged by the Holding Company or an
Affiliate as a consultant or advisor or continues to serve the Holding Company
or an Affiliate as a director, advisory director, or director emeritus. Any
Option originally designated as an Incentive Stock Option shall be treated as a
Non-Statutory Stock Options to the extent the Participant exercises such Option
more than three (3) months following the Date of the Participant's Retirement.
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(g) TERMINATION OF EMPLOYMENT (DISABILITY OR DEATH). Unless otherwise
determined by the Committee, in the event of the termination of a Participant's
employment or other service due to Disability or death, all Incentive Stock
Options held by such Participant shall immediately become exercisable and remain
exercisable for a period one (1) year following the date of such termination.
(h) TERMINATION OF EMPLOYMENT (TERMINATION FOR CAUSE). Unless otherwise
determined by the Committee, in the event of an Employee's Termination for
Cause, all rights under such Employee's Incentive Stock Options shall expire
immediately upon the effective date of such Termination for Cause.
(i) TERMINATION OF EMPLOYMENT (CHANGE IN CONTROL). In the event of the
termination of a Participant's employment or service due to a Change in Control,
whether such termination is actual, constructive or otherwise, the Participant
may exercise only those Incentive Stock Options that were immediately
exercisable by the Participant at the date of such termination. Such Options
shall remain exercisable for the remaining term of the Options. However, any
Option originally designated as an Incentive Stock Option shall be treated as a
Non-Statutory Stock Option to the extent the Participant exercises such Option
more than three (3) months following the Date of the Participant's cessation of
employment.
(j) PAYMENT. Payment due to a Participant upon the exercise of an
Incentive Stock Option shall be made in the form of shares of Common Stock.
(k) DISQUALIFYING DISPOSITIONS. Each Award Agreement with respect to an
Incentive Stock Option shall require the Participant to notify the Committee of
any disposition of shares of Common Stock issued pursuant to the exercise of
such Option under the circumstances described in Section 421(b) of the Code
(relating to certain disqualifying dispositions), within 10 days of such
disposition.
8. STOCK AWARDS
The Committee may make grants of Stock Awards, which shall consist of the
grant of some number of shares of Common Stock, to a Participant upon such terms
and conditions as it may determine to the extent such terms and conditions are
consistent with the following provisions:
(a) GRANTS OF THE STOCK AWARDS. Stock Awards may only be made in whole
shares of Common Stock. Stock Awards may only be granted from shares reserved
under the Plan and available for award at the time the Stock Award is made to
the Participant.
(b) TERMS OF THE STOCK AWARDS. The Committee shall determine the dates on
which Stock Awards granted to a Participant shall vest and any terms or
conditions which must be satisfied prior to the vesting of any Stock Award or
portion thereof. Any such terms or conditions shall be determined by the
Committee as of the Date of Grant.
(c) TERMINATION OF EMPLOYMENT OR SERVICE (GENERAL). Unless otherwise
determined by the Committee, upon the termination of a Participant's employment
or service for any reason other than Retirement, Disability or death, a Change
in Control, or Termination for Cause, any Stock Awards in which the Participant
has not become vested as of the date of such termination shall be forfeited and
any rights the Participant had to such Stock Awards shall become null and void.
(d) TERMINATION OF EMPLOYMENT OR SERVICE (RETIREMENT). In the event of a
Participant's Retirement, any Stock Awards in which the Participant has not
become vested as of the date of
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Retirement shall be forfeited and any rights the Participant had to such
unvested Stock Awards shall become null and void; PROVIDED HOWEVER, that upon
the Participant's Retirement, the Committee, in its discretion, may determine
that all unvested Stock Awards shall continue to vest in accordance with the
Award Agreement if the Participant is immediately engaged by the Holding Company
or an Affiliate as a consultant or advisor or continues to serve the Holding
Company or an Affiliate as a director, advisory director, or director emeritus.
(e) TERMINATION OF EMPLOYMENT OR SERVICE (DISABILITY OR DEATH). Unless
otherwise determined by the Committee, in the event of a termination of the
Participant's service due to Disability or death all unvested Stock Awards held
by such Participant shall immediately vest as of the date of such termination.
(f) TERMINATION OF EMPLOYMENT OR SERVICE (TERMINATION FOR CAUSE). Unless
otherwise determined by the Committee, or in the event of the Participant's
Termination for Cause, all Stock Awards in which the Participant had not become
vested as of the effective date of such Termination for Cause shall be forfeited
and any rights such Participant had to such unvested Stock Awards shall become
null and void.
(g) TERMINATION OF EMPLOYMENT OR SERVICE (CHANGE IN CONTROL). In the event
of a termination of the Participant's service due to a Change in Control whether
such termination is actual, constructive or otherwise, any Stock Awards in which
the Participant has not become vested as of the date of such termination shall
be forfeited and any rights the Participant had to such unvested Stock Awards
shall become null and void.
(h) ISSUANCE OF CERTIFICATES. Unless otherwise held in Trust and
registered in the name of the Trustee, reasonably promptly after the Date of
Grant with respect to shares of Common Stock pursuant to a Stock Award, the
Holding Company shall cause to be issued a stock certificate, registered in the
name of the Participant to whom such Stock Award was granted, evidencing such
shares; provided, that the Holding Company shall not cause such a stock
certificate to be issued unless it has received a stock power duly endorsed in
blank with respect to such shares. Each such stock certificate shall bear the
following legend:
The transferability of this certificate and the shares of stock
represented hereby are subject to the restrictions, terms and
conditions (including forfeiture provisions and restrictions against
transfer) contained in the Grand Central Financial Corp 1999
Stock-Based Incentive Plan and Award Agreement entered into between
the registered owner of such shares and Grand Central Financial
Corp. or its Affiliates. A copy of the Plan and Award Agreement is
on file in the office of the Corporate Secretary of Grand Central
Financial Corp. located at 601 Main Street, Wellsville, Ohio 43968.
Such legend shall not be removed until the Participant becomes vested in such
shares pursuant to the terms of the Plan and Award Agreement. Each certificate
issued pursuant to this Section 8(i), in connection with a Stock Award, shall be
held by the Holding Company or its Affiliates, unless the Committee determines
otherwise.
(i) NON-TRANSFERABILITY. Except to the extent permitted by the Code, the
rules promulgated under Section 16(b) of the Exchange Act or any successor
statutes or rules:
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(i) The recipient of a Stock Award shall not sell, transfer,
assign, pledge, or otherwise encumber shares subject to the
Stock Award until full vesting of such shares has occurred.
For purposes of this section, the separation of beneficial
ownership and legal title through the use of any "swap"
transaction is deemed to be a prohibited encumbrance.
(ii) Unless determined otherwise by the Committee and except in the
event of the Participant's death or pursuant to a domestic
relations order, a Stock Award is not transferable and may be
earned in his lifetime only by the Participant to whom it is
granted. Upon the death of a Participant, a Stock Award is
transferable by will or the laws of descent and distribution.
The designation of a beneficiary shall not constitute a
transfer.
(iii) If a recipient of a Stock Award is subject to the provisions
of Section 16 of the Exchange Act, shares of Common Stock
subject to such Stock Award may not, without the written
consent of the Committee (which consent may be given in the
Award Agreement), be sold or otherwise disposed of within six
(6) months following the date of grant of the Stock Award.
(j) ACCRUAL OF DIVIDENDS. To the extent Stock Awards are held in Trust and
registered in the name of the Trustee, unless otherwise specified by the Trust
Agreement whenever shares of Common Stock underlying a Stock Award are
distributed to a Participant or beneficiary thereof under the Plan, such
Participant or beneficiary shall also be entitled to receive, with respect to
each such share distributed, a payment equal to any cash dividends and the
number of shares of Common Stock equal to any stock dividends, declared and paid
with respect to a share of the Common Stock if the record date for determining
shareholders entitled to receive such dividends falls between the date the
relevant Stock Award was granted and the date the relevant Stock Award or
installment thereof is issued. There shall also be distributed an appropriate
amount of net earnings, if any, of the Trust with respect to any dividends paid
out on the shares related to the Stock Award.
(k) VOTING OF STOCK AWARDS. After a Stock Award has been granted but for
which the shares covered by such Stock Award have not yet been vested, earned
and distributed to the Participant pursuant to the Plan, the Participant shall
be entitled to vote or to direct the Trustee to vote, as the case may be, such
shares of Common Stock which the Stock Award covers subject to the rules and
procedures adopted by the Committee for this purpose and in a manner consistent
with the Trust agreement.
(l) PAYMENT. Payment due to a Participant upon the redemption of a Stock
Award shall be made in the form of shares of Common Stock.
9. DEFERRED PAYMENTS
The Committee, in its discretion, may permit a Participant to elect to
defer receipt of all or any part of any cash or stock payment under the Plan, or
the Committee may determine to defer receipt by some or all Participants, of all
or part of any such payment. The Committee shall determine the terms and
conditions of any such deferral, including the period of deferral, the manner of
deferral, and the method for measuring appreciation on deferred amounts until
their payout.
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10. METHOD OF EXERCISE OF OPTIONS
Subject to any applicable Award Agreement, any Option may be exercised by
the Participant in whole or in part at such time or times, and the Participant
may make payment of the Exercise Price in such form or forms permitted by the
Committee, including, without limitation, payment by delivery of cash, Common
Stock or other consideration (including, where permitted by law and the
Committee, Awards) having a Fair Market Value on the day immediately preceding
the exercise date equal to the total Exercise Price, or by any combination of
cash, shares of Common Stock and other consideration, including exercise by
means of a cashless exercise arrangement with a qualifying broker-dealer, as the
Committee may specify in the applicable Award Agreement.
11. RIGHTS OF PARTICIPANTS
No Participant shall have any rights as a shareholder with respect to any
shares of Common Stock covered by an Option until the date of issuance of a
stock certificate for such Common Stock. Nothing contained herein or in any
Award Agreement confers on any person any right to continue in the employ or
service of the Holding Company or an Affiliate or interferes in any way with the
right of the Holding Company or an Affiliate to terminate a Participant's
services.
12. DESIGNATION OF BENEFICIARY
A Participant may, with the consent of the Committee, designate a person
or persons to receive, in the event of death, any Award to which the Participant
would then be entitled. Such designation will be made upon forms supplied by and
delivered to the Holding Company and may be revoked in writing. If a Participant
fails effectively to designate a beneficiary, then the Participant's estate will
be deemed to be the beneficiary.
13. DILUTION AND OTHER ADJUSTMENTS
In the event of any change in the outstanding shares of Common Stock by
reason of any stock dividend or split, recapitalization, merger, consolidation,
spin-off, reorganization, combination or exchange of shares, or other similar
corporate change, or other increase or decrease in such shares without receipt
or payment of consideration by the Holding Company, or in the event an
extraordinary capital distribution is made, the Committee may make such
adjustments to previously granted Awards, to prevent dilution, diminution, or
enlargement of the rights of the Participant, including any or all of the
following:
(a) adjustments in the aggregate number or kind of shares of Common
Stock or other securities that may underlie future Awards under the
Plan;
(b) adjustments in the aggregate number or kind of shares of Common
Stock or other securities underlying Awards already made under the
Plan;
(c) adjustments in the Exercise Price of outstanding Incentive and/or
Non-Statutory Stock Options.
No such adjustments may, however, materially change the value of benefits
available to a Participant under a previously granted Award. All Awards under
this Plan shall be binding upon any successors or assigns of the Holding
Company. Notwithstanding the above, no adjustment shall be made for an
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extraordinary capital distribution before December 30, 1999, which has not been
approved by the Office of Thrift Supervision.
14. TAXES
(a) Whenever under this Plan, cash or shares of Common Stock are to be
delivered upon exercise or payment of an Award or any other event with respect
to rights and benefits hereunder, the Committee shall be entitled to require as
a condition of delivery (i) that the Participant remit an amount sufficient to
satisfy all federal, state, and local withholding tax requirements related
thereto, (ii) that the withholding of such sums come from compensation otherwise
due to the Participant or from any shares of Common Stock due to the Participant
under this Plan or (iii) any combination of the foregoing PROVIDED, HOWEVER,
that no amount shall be withheld from any cash payment or shares of Common Stock
relating to an Award which was transferred by the Participant in accordance with
this Plan. Furthermore, a Participant may direct the Committee to instruct the
Trustee to sell shares of Common Stock to be delivered upon the payment of an
Award to satisfy his or her minimum required tax obligations.
(b) If any disqualifying disposition described in Section 7(k) is made
with respect to shares of Common Stock acquired under an Incentive Stock Option
granted pursuant to this Plan, or any transfer described in Section 6(c) is
made, or any election described in Section 15 is made, then the person making
such disqualifying disposition, transfer, or election shall remit to the Holding
Company or its Affiliates an amount sufficient to satisfy all federal, state,
and local withholding taxes thereby incurred; provided that, in lieu of or in
addition to the foregoing, the Holding Company or its Affiliates shall have the
right to withhold such sums from compensation otherwise due to the Participant,
or, except in the case of any transfer pursuant to Section 6(c), from any shares
of Common Stock due to the Participant under this Plan.
15. NOTIFICATION UNDER SECTION 83(B)
The Committee may, on the Date of Grant or any later date, prohibit a
Participant from making the election described below. If the Committee has not
prohibited such Participant from making such election, and the Participant
shall, in connection with the exercise of any Option, or the grant of any Stock
Award, make the election permitted under Section 83(b) of the Code, such
Participant shall notify the Committee of such election within 10 days of filing
notice of the election with the Internal Revenue Service, in addition to any
filing and notification required pursuant to regulations issued under the
authority of Section 83(b) of the Code.
16. AMENDMENT OF THE PLAN AND AWARDS
(a) Except as provided in paragraph (c) of this Section 16, the Board of
Directors may at any time, and from time to time, modify or amend the Plan in
any respect, prospectively or retroactively; provided however, that provisions
governing grants of Incentive Stock Options shall be submitted for shareholder
approval to the extent required by such law, regulation or otherwise. Failure to
ratify or approve amendments or modifications by shareholders shall be effective
only as to the specific amendment or modification requiring such ratification.
Other provisions of this Plan will remain in full force and effect. No such
termination, modification or amendment may adversely affect the rights of a
Participant under an outstanding Award without the written permission of such
Participant.
(b) Except as provided in paragraph (c) of this Section 16, the Committee
may amend any Award Agreement, prospectively or retroactively; PROVIDED,
HOWEVER, that no such amendment shall
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adversely affect the rights of any Participant under an outstanding Award
without the written consent of such Participant.
(c) In no event shall the Board of Directors amend the Plan or shall the
Committee amend an Award Agreement in any manner that has the effect of:
(i) Allowing any Option to be granted with an exercise below the
Fair Market Value of the Common Stock on the Date of Grant.
(ii) Allowing the exercise price of any Option previously granted
under the Plan to be reduced subsequent to the Date of Award.
(d) Notwithstanding anything in this Plan or any Award Agreement to the
contrary, if any Award or right under this Plan would, in the opinion of the
Holding Company's accountants, cause a transaction to be ineligible for pooling
of interest accounting that would, but for such Award or right, be eligible for
such accounting treatment, the Committee, at its discretion, may modify, adjust,
eliminate or terminate the Award or right so that pooling of interest accounting
is available.
17. EFFECTIVE DATE OF PLAN
The Plan shall become effective upon approval by the Holding Company's
shareholders in accordance with OTS and Internal Revenue Service ("IRS")
regulations or December 30, 1999, whichever is earlier. The failure to obtain
shareholder approval for such purposes will not effect the validity of the Plan
and any Awards made under the Plan; PROVIDED, HOWEVER, that if the Plan is not
approved by stockholders in accordance with IRS regulations, the Plan shall
remain in full force and effect, and any Incentive Stock Options granted under
the Plan shall be deemed to be Non-Statutory Stock Options.
18. TERMINATION OF THE PLAN
The right to grant Awards under the Plan will terminate upon the earlier
of: (i) ten (10) years after the Effective Date; (ii) the issuance of a number
of shares of Common Stock pursuant to the exercise of Options or the
distribution of Stock Awards (is equivalent to the maximum number of shares
reserved under the Plan as set forth in Section 4 hereof). The Board of
Directors has the right to suspend or terminate the Plan at any time, provided
that no such action will, without the consent of a Participant, adversely affect
a Participant's vested rights under a previously granted Award.
19. APPLICABLE LAW
The Plan will be administered in accordance with the laws of the state of
Delaware to the extent not pre-empted by applicable federal law.
20. TREATMENT OF UNVESTED, UNEXERCISED, OR NON-EXERCISABLE AWARDS
UPON A CHANGE IN CONTROL
(a) In the event of a Change in Control where the Holding Company or the
Association is not the surviving entity, the Board of Directors of the Holding
Company and/or the Association, as applicable, shall require that the successor
entity take one of the following actions with respect to all Awards held by
Participants at the date of the Change in Control:
13
<PAGE> 15
(i) Assume the Awards with the same terms and conditions as
granted to the Participant under this Plan; or
(ii) Replace the Awards with comparable Awards, subject to the same
or more favorable terms and conditions as the Award granted to
the Participant under this Plan, whereby the Participant will
be granted common stock or the option to purchase common stock
of the successor entity; or, only if the Committee determines
that neither of the alternatives set forth in clauses (i) or
(ii) are legally available,
(iii) Replace the Awards with a cash payment under an incentive
plan, program, or other arrangement of the successor entity
that preserves the economic value of the Awards and makes any
such cash payment subject to the same vesting or
exercisability schedule applicable to such Awards.
(b) The determination of comparability of Awards offered by a successor
entity under clause (ii) above shall be made by the Committee, and the
Committee's determination shall be conclusive and binding.
21. COMPLIANCE WITH OFFICE OF THRIFT SUPERVISION REGULATIONS
Notwithstanding any other provision contained in this Plan:
(a) No Award under the Plan shall be made which would be prohibited by 12
CFR ss.563b.3(g)(4);
(b) Unless the Plan is approved by a majority vote of the outstanding
shares of the total votes eligible to be cast at a duly called meeting of
stockholders to consider the Plan, as required by 12 CFR ss.563b.3(g)(4)(vii),
the Plan shall not become effective or implemented prior to one year from the
date of the Association's conversion from mutual to stock form of organization
("Conversion").
(c) No Option or Stock Award granted prior to one year from the date of
the Association's Conversion shall become vested or exercisable 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 Awards shall become
fully vested or immediately exercisable in the event of a Participant's
termination of service due to death or Disability;
(d) No Option or Stock Award granted to any individual Employee prior to
one year from the date of the Association's Conversion may exceed 25% of the
total amount of Stock Awards or Options (whichever may be the case) which may be
granted under the Plan;
(e) No Option or Stock Award granted to any individual Outside Director
prior to one year from the date of the Association's Conversion may exceed 5% of
the total amount of Stock Awards or Options (whichever may be the case) which
may be granted under the Plan; and
(f) The aggregate amount of Option or Stock Award granted to all Outside
Directors prior to one year from the date of the Association's Conversion may
not exceed 30% of the total amount of Stock Awards or Options (whichever may be
the case) which may be granted under the Plan.
14
<PAGE> 1
EXHIBIT 5.0 OPINION OF MULDOON, MURPHY & FAUCETTE LLP RE: LEGALITY
<PAGE> 2
DRAFT
August 9, 1999
Board of Directors
Grand Central Financial Corp.
601 Main Street
Wellsville, OH 43968
Re: Grand Central Financial Corp. 1999 Stock-Based Incentive Plan
Gentlemen:
We have been requested by Grand Central Financial Corp. (the "Company") to
issue a legal opinion in connection with the registration under the Securities
Act of 1933 on Form S-8 of 271,441 shares of the Company's Common Stock, $.01
par value (the "Shares") that may be issued under the Grand Central Financial
Corp. 1999 Stock-Based Incentive Plan (the "Plan").
We have made such legal and factual examinations and inquiries as we
deemed advisable for the purpose of rendering this opinion. In our examination,
we have assumed and have not verified (1) the genuineness of all signatures, (2)
the authenticity of all documents submitted to us as originals, (3) the
conformity with the originals of all documents supplied to us as copies, and (4)
the accuracy and completeness of all corporate records and documents and of all
certificates and statements of fact, in each case given or made available to us
by the Company or its subsidiary, Central Federal Savings Bank of Wellsville.
Based on the foregoing and limited in all respects to Delaware law, it is
our opinion that the Shares reserved under the Plan have been duly authorized
and upon payment for and issuance of the Shares in the manner described in the
Plan, will be legally issued, fully paid and nonassessable.
The following provisions of the Certificate of Incorporation may not be
given effect by a court applying Delaware law, but in our opinion the failure to
give effect to such provisions will not affect the duly authorized, validly
issued, fully paid and nonassessable status of the Common Stock:
<PAGE> 3
Board of Directors
August 6, 1999
Page 2
(a) Subsections C.3 and C.6 of Article FOURTH and Section D of Article
EIGHTH, which grant the Board the authority to construe and apply the provisions
of those Articles, subsection C.4 of Article FOURTH, to the extent that
subsection obligates any person to provide to the Board the information such
subsection authorizes the Board to demand, and the provision of subsection C.7
of Article EIGHTH authorizing the Board to determine the fair market value of
property offered or paid for the Company's stock by an interested stockholder,
in each case to the extent, if any, that a court applying Delaware law were to
impose equitable limitations upon such authority; and
(b) Article NINTH of the Certificate of Incorporation, which authorizes
the Board to consider the effect of any offer to acquire the Company on
constituencies other than stockholders in evaluating any such offer.
We note that, although certain portions of the registration statement on
Form S-8 (the financial statements and schedules) have been included therein
(through incorporation by reference) on the authority of "experts" within the
meaning of the Securities Act, we are not experts with respect to any portion of
the Registration Statement, including without limitation the financial
statements or schedules or the other financial information or data included
therein.
We hereby consent to the filing of this opinion as an exhibit to, and the
reference to this firm in, the Company's registration statement on Form S-8.
Sincerely,
/s/ Muldoon, Murphy & Faucette LLP
MULDOON, MURPHY & FAUCETTE LLP
<PAGE> 1
EXHIBIT 23.2 CONSENT OF CROWE, CHIZEK AND COMPANY, LLP
<PAGE> 2
CONSENT OF CERTIFIED PUBLIC ACCOUNTANTS
---------------------------------------
We consent to the incorporation by reference in this registration statement of
Grand Central Financial Corp. on Form S-8, of our report dated March 19, 1999 on
the consolidated financial statements of Grand Central Financial Corp. as of
December 31, 1998 and for the year then ended, appearing in the Form 10-KSB
Report filed by Grand Central Financial Corp. with the Securities and Exchange
Commission on March 31, 1999.
Crowe, Chizek and Company LLP
/s/ Crowe, Chizek and Company LLP
Cleveland, Ohio
August 6, 1999
<PAGE> 1
EXHIBIT 23.3 CONSENT OF ROBB, DIXON, FRANCIS, DAVIS, ONESON AND COMPANY
<PAGE> 2
CONSENT OF CERTIFIED PUBLIC ACCOUNTANTS
---------------------------------------
We have issued our report dated March 18, 1998, accompanying the consolidated
financial statements of Central Federal Savings and Loan Association of
Wellsville, appearing in the Form 10-KSB Report filed by Grand Central Financial
Corp. with the Securities and Exchange Commission on March 31, 1999, which is
incorporated by reference in this Registration Statement. We consent to the
incorporation by reference in this Registration Statement of the aforementioned
report.
Robb, Dixon, Francis, Davis, Oneson & Co.
/s/ Robb, Dixon, Francis, Davis, Oneson & Co.
Granville, OH
August 6, 1999
