Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Ipswich Bancshares, Inc.
(Exact name of issuer as specified in its charter)
Massachusetts 04-3459169
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
23 Market Street, Ipswich, Massachusetts 01938
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(Address of principal executive offices) (Zip Code)
Deferred Stock Compensation Plan for Directors of Ipswich Savings Bank
Savings Banks Employees Retirement Association 401(k) Plan as adopted by
Ipswich Savings Bank
Ipswich Savings Bank 1998 Stock Incentive Plan
Ipswich Savings Bank 1996 Stock Incentive Plan
Ipswich Savings Bank 1992 Incentive and Nonqualified Stock Incentive Plan
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(Full title of the plans)
David L. Grey
President and Chief Executive Officer
Ipswich Bancshares, Inc.
23 Market Street
Ipswich, Massachusetts 01938
(978) 356-7777
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(Name and address, including zip code, and
telephone number, including area code, of agent for service)
WITH A COPY TO:
Deborah Drosnin, Esquire
Foley, Hoag & Eliot LLP
One Post Office Square
Boston, Massachusetts 02109
(617) 832-1000
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================
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> <C>
Common Stock (par value $.10) 296,698 shares $9.9075 $2,939,535.44 $ 817.19
- --------------------------------- --------------------- --------------------- --------------------- ----------------
</TABLE>
<PAGE>
(1) Maximum number of shares issuable under the Ipswich Savings Bank
1998 Stock Incentive Plan (100,000), the Ipswich Savings Bank 1996
Stock Incentive Plan (111,775), the Ipswich Savings Bank 1992
Incentive and Nonqualified Stock Option Plan (11,323), the
Deferred Stock Compensation Plan for Directors of Ipswich Savings
Bank (23,600) and the Savings Banks Employees Retirement
Association 401(k) Plan as adopted by Ipswich Savings Bank
(50,000), and such additional number of shares of the Company's
common stock as may be required in the event of a stock dividend,
stock split, split-up, recapitalization or other similar event. 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 401(k)
Plan.
<PAGE>
(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 July __, 1999, as reported on the Nasdaq Stock Market.
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 has not previously filed any annual or quarterly reports
with the Securities and Exchange Commission pursuant to Section 13(a) or 15(d)
of the Securities Act of 1934, as amended (the "Exchange Act"). The Registrant
hereby incorporates by reference (i) the Annual Report on Form 10-K for the
fiscal year ended December 31, 1998 filed by its predecessor, Ipswich Savings
Bank, with the Federal Deposit Insurance Corporation and (ii) all other reports
filed by Ipswich Savings Bank with the Federal Deposit Insurance Corporation
since December 31, 1998 pursuant to Section 13(a) of the Exchange Act.
The Registrant hereby incorporates by reference the Company's
Current Report on Form 8-K (including the description of the Company's Common
Stock) filed with the Commission on July 9, 1999, 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 Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or 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.
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<PAGE>
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.
Article VI of the By-Laws of the Company provides that directors and
officers of the Company shall be indemnified by the Company (and non-officer
employees of the Company may be so indemnified, at the discretion of the Board
of Directors) against all expenses incurred in connection with any proceedings
as a result of serving or having served as a director, officer or employee of
the Company or any of its wholly owned subsidiaries, or 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 By-laws of the Company provide that
such indemnification shall not be provided if it is determined that the action
giving rise to the liability was not taken in good faith in the reasonable
belief that the action was in the best interests of the Company. The Company
also has a policy of directors' and officers' liability insurance to indemnify
its directors and officers against certain liabilities incurred in their
capacities as such.
The Articles of Organization 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 Massachusetts General Laws, 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 Massachusetts General Laws 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.
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
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<PAGE>
23.1 Consent of Foley, Hoag & Eliot LLP (included in Exhibit 5)
23.2 Consent of Baker Newman & Noyes LLC
24 Power of Attorney (contained on the signature page)
99.1 Ipswich Savings Bank 1992 Incentive and Nonqualified Stock Incentive
Plan
99.2 Ipswich Savings Bank 1996 Stock Incentive Plan
99.3 Ipswich Savings Bank 1998 Stock Incentive Plan
99.4 Deferred Stock Compensation Plan for Directors of Ipswich Savings Bank
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 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
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<PAGE>
(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 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.
* * *
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<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 Ipswich, Massachusetts, on July 21, 1999.
<PAGE>
IPSWICH BANCSHARES, INC.
By: /s/ Francis Kenney
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Francis Kenney
Senior Vice President, Treasurer
and Chief Financial Officer
<PAGE>
LIB_18/S-8.WPD
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each individual whose signature
appears below constitutes and appoints David L. Grey and Francis Kenney 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.
* * *
<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.
Signature Title
- --------- -----
/s/ DAVID L. GREY President, Chief Executive Officer July 21, 1999
- -------------------------- and Director (Principal Executive
David Grey Officer)
/s/ FRANCIS KENNEY Senior Vice President, Treasurer July 21, 1999
- -------------------------- and Chief Financial Officer
Francis Kenney (Principal Financial and
Accounting Officer)
/s/ WILLIAM M. CRAFT Director July 21, 1999
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William M. Craft
/s/ THOMAS A. ELLSWORTH Director July 21, 1999
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Thomas A. Ellsworth
/s/ WILLIAM E. GEORGE Director July 21, 1999
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William E. George
/s/ MARK L. KLAMAN Director July 21, 1999
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Mark L. Klaman
/s/ JOHN H. MORROW Director July 21, 1999
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John H. Morrow
/s/ LAWRENCE J. PSZENNY Director July 21, 1999
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Lawrence J. Pszenny
/s/ WILLIAM J. TINTI Director July 21, 1999
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William J. Tinti
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<PAGE>
The 401(k) Plan. Pursuant to the requirements of the Securities Act of
1933, the trustee of the Savings Banks Employees Retirement Association 401(k)
Plan as adopted by Ipswich Savings Bank has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Woburn, Massachusetts on July 21, 1999.
SAVINGS BANKS EMPLOYEES RETIREMENT
ASSOCIATION 401(k) PLAN AS ADOPTED BY
IPSWICH SAVINGS BANK
By: /s/ Thomas Forese, Jr.
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Plan Administrator
<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 Baker Newman & Noyes LLC
24 Power of Attorney (contained on the signature page)
99.1 Ipswich Savings Bank 1992 Incentive and Nonqualified Stock Incentive
Plan
99.2 Ipswich Savings Bank 1996 Stock Incentive Plan
99.3 Ipswich Savings Bank 1998 Stock Incentive Plan
99.4 Deferred Stock Compensation Plan for Directors of Ipswich Savings Bank
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
July 22, 1999
Ipswich Bancshares, Inc.
23 Market Street
Ipswich, Massachusetts 01938
Ladies and Gentlemen:
We are familiar with the Registration Statement on Form S-8 (the "S-8
Registration Statement") filed today by Ipswich Bancshares, Inc., 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 shares (the
"Shares") of its common stock, $.10 par value per share ("Common Stock")
issuable pursuant to the following plans (the "Plans"):
o 100,000 shares of Common Stock issuable pursuant to the Ipswich
Savings Bank 1998 Stock Incentive Plan.
o 111,775 shares of Common Stock issuable pursuant to the Ipswich
Savings Bank 1996 Stock Incentive Plan.
o 11,323 shares of Common Stock issuable pursuant to the Ipswich
Savings Bank 1992 Incentive and Nonqualified Stock Incentive Plan.
o 23,600 shares of Common Stock issuable pursuant to the Ipswich
Savings Bank Deferred Stock Compensation Plan for Directors.
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;
<PAGE>
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;
3. The Plans.
Based upon the foregoing, it is our opinion that:
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/ David W. Walker
----------------------
David W. Walker
A Partner
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated January 15, 1999 with respect to the
consolidated financial statements of Ipswich Savings Bank included in its Form
10-K for the year ended December 31, 1998.
/s/ Baker Newman & Noyes
- ------------------------
Baker Newman & Noyes
BAKER NEWMAN & NOYES
Portland, Maine
July 19, 1999
IPSWICH SAVINGS BANK
1992 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN
1. Purpose. The purpose of this Plan is to advance the
interests of the lpswich Savings Bank (the "Bank") by providing an opportunity
to key employees of the Bank and certain affiliated corporations to purchase
stock of the Bank through the exercise of options granted under this Plan. It is
intended that this purpose will be effected by the granting of both "incentive
stock options" ("incentive options") as described in Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code") and nonqualified stock options
("nonqualified options"). To reflect the formation of Ipswich Bancshares, Inc.
(the "Holding Company") as the holding company of the Bank on July 1, 1999, the
term "Shares" shall mean the common stock, par value $.10 per share, of the
Holding Company, and references to the "Bank" shall include the Holding Company.
2. Effective Date. This Plan becomes effective on the date on
which the process of converting the Bank from a mutual-form, savings bank to a
stock-form, savings bank is consummated, provided that the Plan is approved by
the stockholders of the Bank within one (1) year from such date. Although
options may be granted before such stockholder approval, no option may be
exercised until such approval is obtained and such options will be null and void
if such approval is not obtained.
3. Stock Subject to the Plan. The aggregate number of shares
of $.10 par value, common stock of the Bank (the "Shares") with respect to which
options may be granted under this Plan shall not exceed the greater of 30,000 or
10% of the number of shares sold in connection with conversion of the Bank from
a mutual-form, savings bank to a stock-form, savings bank. Any Shares subject to
an option which for any reason expires or is terminated unexercised as to such
Shares may again be the subject of an option under the Plan. In addition, any
Shares purchased by an optionee upon exercise of an option which are
subsequently reacquired by the Bank pursuant to the terms of such option may
again be the subject of an option under the Plan. The Shares delivered upon
exercise of options under this Plan may, in whole or in part, be either
authorized but unissued Shares or issued Shares reacquired by the Bank.
4. Administration. This Plan shall be administered by the
Board of Directors of the Bank or, to the extent delegated by the Board of
Directors, the Executive Committee or a compensation or stock option committee.
Subject to the provisions of this Plan, the Board of Directors or such a
committee shall have full power to construe and interpret the Plan and to
establish, amend and rescind rules and regulations for its administration. Any
decisions made with respect thereto shall be final and binding on the Bank, the
optionees and all other persons.
5. Eligible Participants. Both incentive options and
nonqualified options may be granted to such-key employees of the Bank, its
parent (in existence at the time of grant) or any of its subsidiaries (in
existence at the time of grant), including members of the Board of Directors who
are also employees of the Bank, its parent (in existence at the time of grant)
or any of its
<PAGE>
subsidiaries (in existence at the time of grant), as are selected by the Board
of Directors of the Bank (or a committee to which it has delegated such
authority).
6. Duration of the Plan. This Plan shall terminate ten (10)
years from the effective date hereof, unless terminated earlier pursuant to
Paragraph 12 hereafter, and no options may be granted thereafter.
7. Restrictions on Incentive Options. Incentive options
granted under this Plan shall be subject to the following restrictions:
(a) Limitation on Number of shares. The aggregate fair
market value, determined as of the date the incentive option is granted, of the
Shares with respect to which incentive options are exercisable for the first
time by any optionee during any calendar year shall not exceed $100,000. In the
event that, in a given calendar year, such optionee may exercise for the first
time an incentive stock option granted under any other incentive stock option
plan(s) of the Bank or its parent or a subsidiary which is (are) also intended
to comply with the provisions of-Section 422 of the Code, such annual limitation
shall apply to the aggregate number of Shares with respect to which incentive
stock options are exercisable for the first time by such Eligible Participant
under all such plans.
(b) 10% Stockholder. If any employee to whom an
incentive option is granted pursuant to the provisions of the Plan is on the
date of grant the stock owner (as determined under Section 424 (d) of the Code)
possessing more than 10% of the total combined voting power of all classes of
stock of the Bank or its parent or subsidiaries, then the following special
provisions shall be applicable to the incentive option granted to such
individual:
(i) The option price per Share subject to such incentive
option shall not be less than 110% of the fair
market value of one Share on the date of grant; and
(ii) The incentive option shall not have a term in excess
of I five (5) years from the date of grant.
8. Terms and Conditions of Options. Options granted under this
Plan shall be evidenced by stock option agreements in such form and containing
such terms and conditions as the Board of Directors of the Bank (or a committee
to which it has delegated such authority) shall determine; provided, however,
that such agreements shall evidence among their terms and conditions the
following:
(a) Price. Subject to the condition of subparagraph (b)
of Paragraph 7, if applicable, the purchase price per Share payable upon the
exercise of each option granted hereunder shall be determined by the Board of
Directors of the Bank (or a committee to which it
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<PAGE>
has delegated such authority) at the time the option is granted and shall not be
less than 100% of the fair market value of one Share on the date of the grant.
(b) Number of Shares. Each option agreement shall
specify the number of shares to which it pertains.
(c) Exercise of Options. Each option shall be
exercisable for the full amount or for any part thereof and at such intervals or
in such installments or at such periods of service as the Board of Directors of
the Bank (or a committee to which it has delegated such authority) may determine
at the time it grants such option; provided, however, that no option shall be
exercisable with respect to any Shares either (a) later than ten (10) years
after the date of the grant of such option or (b) if and to the extent required
by law without the approval of the Commissioner of Banks of The Commonwealth of
Massachusetts.
(d) Notice of Exercise and Payment. An option shall be
exercisable only by delivery of a written notice to the Bank's Treasurer, or any
other officer of the Bank designated by the Board of Directors of the Bank (or a
committee to which it has delegated such authority) to accept such notices on
its behalf, specifying the number of Shares for which, and the date on which, it
is to be exercised. If the offering of said Shares is, at that time, both
subject to the registration requirements of the Securities Act of 1933 and not
effectively registered under the securities Act of 1933, as amended, the
optionee shall include with such notice a letter, in form and substance
satisfactory to the Bank, confirming that the Shares are being purchased for the
optionee's own account for investment and not with a view to distribution, and
acknowledging that the optionee is familiar with any restrictions on the resale
of the Shares under applicable securities laws. Payment shall be made in full at
the time the option is exercised. Payment shall be made either (i) in cash, (ii)
by cashier's or certified check, (iii) if permitted by the Board of Directors of
the Bank (or a committee to which it has delegated such authority), by delivery
and assignment to the Bank of shares of Bank stock having a fair market value
(as determined by the Board of Directors of the Bank [or a committee to which it
has delegated such authority]) equal to the exercise price, or (iv) by a
combination of (i), (ii), or (iii).
(e) Non-Transferability. No option shall be transferable
by the optionee (or any subsequent holder) otherwise than by will or the laws of
descent or distribution, and each option shall be exercisable during the
lifetime of the optionee by the optiones only.
(f) Termination of Options Granted to Employees. Each
incentive option and each nonqualified option granted to an employee of the
Bank, its parent or a subsidiary, shall terminate and may no longer be exercised
if the optionee ceases for any reason to be an employee of or ceases to render
services for the Bank, its Parent, or a subsidiary, in accordance with the
following provisions:
(i) If the optionees employment shall have terminated by
resignation or other voluntary action (other than
retirement), or if such employment shall have
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<PAGE>
been terminated involuntarily for cause, the option
shall terminate and may no longer be exercised;
(ii) If the optionee employment shall have been
terminated for any reason other than for cause,
resignation or other voluntary action before he
becomes disabled or dies or is eligible to retire,
the optionee may, at any time within a period of
three (3) months after such termination of
employment, exercise the option to the extent it was
exercisable on the date of termination of the
optionee's employment;
(iii) If the optionee's employment shall have been
terminated because of disability (within the
meaning-of Section 22 (e) (3) of the Code), the
optionee may, at any time within a period of one (1)
year after such termination of employment, exercise
the option the extent that the option was
exercisable on the date of termination of the
optionee's employment; and
(iv) If the optionee's employment shall have been
terminated because of death, the option, to the
extent that the optionee was entitled to exercise it
on the date of death, may be exercised within a
period of one (1) year after the optionee's death by
the person or persons to whom the optionee's rights
under the option shall Pass by will or by the laws
of descent and distribution;
provided, however, that no option may be exercised to any extent by anyone after
the date of expiration of the option.
(g) Rights as Stockholder. The optionee shall have no
rights as a stockholder with respect to any Shares covered by his option until
the date on which the optionee becomes legally entitled to have a stock
certificate issued to him for such Shares.
(h) Repurchase of Shares by the Company. Any Shares
purchased by an optionee upon exercise of an option may in the discretion of the
Board of Directors (or a committee to which the Board of Directors has delegated
such authority) be subject to repurchase by the Company ft and to the extent
specifically set forth in the option agreement pursuant to which the shares were
purchased.
9. Stock Dividends; Stock Splits; Stock Combination;
Recapitalizations. Appropriate adjustment shall be made by the Board of
Directors of the Bank (or a committee to which it has delegated such authority)
in the maximum number of Shares subject to the Plan and in the number, , kind,
and option price of Shares covered by outstanding options granted hereunder to
give effect to any stock dividends, stock splits, stock combinations,
recapitalizations and other similar changes in the capital structure of the Bank
after the effective date of the Plan.
-4-
<PAGE>
10. Merger; sale of Assets; Dissolution. In the event of a
change of the Shares resulting from a merger, the formation of a holding
company, or a similar reorganization as to which the Bank is the surviving
corporation, the number and kind of shares which thereafter may be optioned and
sold under the Plan, and the number and kind of shares then subject to options
granted hereunder and the option price per share thereof shall be appropriately
adjusted in such manner as the Board of Directors of the Bank (or a committee to
which it has delegated such authority) may deem equitable to prevent substantial
dilution or enlargement of the rights available or granted hereunder. Except as
otherwise determined by the Board of Directors of the Bank, a merger or a
similar reorganization which the Bank does not survive, or a sale of all or
substantially all of the assets of the Bank, shall cause every option
outstanding hereunder to terminate, to the extent not then exercised, unless any
surviving entity agrees to assume the obligations hereunder.
11. Definitions.
(a) The term "employee" shall have, for purposes of this
Plan, the meaning ascribed to it under Section 3401(c) of the code and the
regulations promulgated thereunder; the term "key employees" refers to those
employees who are determined by the Board of Directors of the Bank (or a
committee to which it has delegated such authority) to be eligible for options
under this Plan.
(b) The term "option" means either an incentive option
or a nonqualified option. The term "options" refers to both incentive options
and/or nonqualified options.
(c) The term "optionee" means a key employee to whom an
option is granted under this Plan.
(d) The term "parent" shall have, for purposes of this
Plan, the meaning ascribed to it under Section 424.(e) of the code and the
regulations promulgated thereunder.
(e) The term "subsidiary" shall have, for purposes of
this Plan, the meaning ascribed to it under Section 424(f) of the code and the
regulations promulgated thereunder.
(f) The term "Board of Directors" shall mean, for
periods prior to the consummation of the conversion of the-Bank from a
mutual-form, savings bank to a stock-form, savings bank, the Board of Trustees
of the Bank.
12. Termination or Amendment of Plan. The Board of Directors
may at any time terminate the Plan or make such changes in or additions to the
Plan as it deems advisable without further action on the part of the
stockholders of the Bank, provided:
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(a) that no such termination or amendment shall
adversely affect or impair any then outstanding option without the consent of
the optionee holding such option; and
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(b) that no such amendment which increases the maximum
number of Shares subject to this Plan or the employees eligible to participate
in this Plan shall be effective unless it is approved by the stockholders of the
Bank within twelve (12) months before or after the adoption of said amendment.
Adopted this 23rd day of September, 1992
IPSWICH SAVINGS BANK
By its President
David L. Grey
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IPSWICH SAVINGS BANK.
1996 STOCK INCENTIVE PLAN
SECTION 1. General Purpose of the Plan; Definitions
The name of the plan is the Ipswich Savings Bank 1996 Stock Incentive
Plan (the "Plan"). The purpose of the Plan is to encourage and enable the
officers, directors and employees of Ipswich Savings Bank (the "Company") and
its wholly-owned subsidiaries ("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. To reflect the formation
of Ipswich Bancshares, Inc. (the "Holding Company") as the holding company of
the Company on July 1, 1999, the term "Stock" shall mean the common stock, par
value $.10 per share, of the Holding Company and references to the "Company"
shall include the Holding 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 and Stock Appreciation Rights.
"Board" means the Board of Directors of the Company.
"Change of Control" shall have the meaning set forth in Section 15.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.
"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 17.
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"Eligible Person" shall have the meaning set forth in Section 4.
"Fair Market Value" on any given date means the closing bid price per
share of the Stock on 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 Board.
"Incentive Stock Option" means any Stock Option designated and qualified
as an "incentive stock option" as defined in Section 422 of the Code.
o "Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
"Normal Retirement" means retirement from active employment with, or from
the Board of Directors of, 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.
"Performance Share Award" means an Award granted pursuant to Section 8.
"Stock" means the Common Stock, $.10 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.
"Unrestricted Stock Award" means an Award granted pursuant to Section 7.
SECTION 2. Administration of Plan
(a) The Plan shall be administered by the full Board of Directors of the
Company. The Board 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 other employees of 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 Shares and Stock Appreciation
Rights, or any combination of the foregoing, granted to any one or more
participants;
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(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 Board) 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.
(b) Decisions Binding. All decisions and interpretations of the Board
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 with respect
to which Awards (including Stock Appreciation Rights) may be granted under the
Plan shall be 59,000. 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. 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.
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(b) Stock Dividends, Mergers, etc. In the event that after approval of
the Plan by the stockholders of the Company in accordance with Section 17, the
Company effects a stock dividend, stock split or similar change in
capitalization affecting the Stock, the Board 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
limitation set forth in Section 3(a) 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 Board 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 Board deems
equitable in the circumstances), subject, however, to the provisions of Section
15.
(c) Substitute Awards. The Board 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, "Merger"). The
Board may direct that the substitute awards be granted on such terms and
conditions as the Board 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 only to directors, officers or other key employees
of the Company or its Subsidiaries ("Eligible Persons").
SECTION 5. Stock Options.
Any Stock Option granted under the Plan shall be in such form as the
Board 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.
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(a) Grant of Stock Options. The Board in its discretion may determine the
effective date of Stock Options, provided, however, that 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 Board 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 Board 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 Board 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 Board at or after the grant
date. The Board may at any time 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 Board;
(B) If permitted by the Board, in its discretion, in the
form of shares of Stock that are not then subject to restrictions
under any Company plan. Such
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<PAGE>
surrendered shares shall be valued at Fair Market Value on the
exercise date; or
(C) 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 Board 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) 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 Board) which the
Board 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. No Stock Option shall be
transferable other than by will or by the laws of descent and
distribution, and all Stock Options shall be exercisable, during the
optionee's lifetime, only by the optionee.
(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.
(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 Board, Options granted under
Section 5(a) may include a so-called "reload" feature pursuant to which an
optionee exercising an 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
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<PAGE>
expiration date as the original Option being exercised, and with such other
terms as the Board may provide) to purchase that number of shares of Stock equal
to the number delivered to exercise the original Option.
SECTION 6. Conditioned Stock Awards.
(a) Nature of Conditioned Stock Award. The Board 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 Board, shares of Stock subject to such restrictions and
conditions as the Board may determine at the time of grant ("Conditioned
Stock"). Conditions may be based on continuing employment and/or achievement of
pre-established performance goals and objectives. In addition, a Conditioned
Stock Award may be granted to an employee by the Board 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 Board 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 Board 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 Board 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 Board 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 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 Board, 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 (unless otherwise specified, in the written instrument evidencing the
Conditioned Award).
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(e) Vesting of Conditioned Stock. The Board 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 Board at any time may accelerate such date or
dates and otherwise waive or, subject to Section 13, 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 Board 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
Board. 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 Board 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 Board 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 Board 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.
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<PAGE>
(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 Board).
(d) Termination. Except as may otherwise be provided by the Board at any
time prior to termination of employment, a participant's rights in all
Performance Share Awards shall 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 Board may in its sole discretion accelerate,
waive or, subject to Section 13, amend any or all of the goals, restrictions or
conditions imposed under any Performance Share Award.
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SECTION 9. Stock Appreciation Rights
(a) The Board 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 Board. 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 Board.
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(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 Board 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 Board 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 Board
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.
(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 Board 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 Board shall disapprove such Request, such Request shall be deemed
to be an exercise of such Stock Appreciation Right for Stock.
(f) If the Board 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 Board. 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. Termination of Stock Options and Stock Appreciation Rights.
(a) Stock Options:
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(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 Board 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.
(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 one year from the date of such termination
of employment or directorship (or such longer period as the Board 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 Board 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 Board at the time of grant, the death of a
participant during a period provided in this Section 10(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 date of such
termination of employment or directorship (or such longer period as the
Board 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 Board 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 Board at the time of
grant, the death of a participant during a period provided in this
Section 10(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.
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(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 seven days from the last day of the
optionee's employment or, in the case of a director, for a period of
seven 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 Board
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 Board may, in
its sole discretion, provide that such Stock Option can be exercised for
a period of up to thirty (30) days from the date of termination of
employment (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 directorship or until the
expiration of the stated term of the Stock Option, if earlier. The Board
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
Board, 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, for three months from the last day of the optionee's
employment or directorship (or such longer period as the Board 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.
(b) Stock Appreciation Rights. Any Stock Appreciation Right granted under
the Plan shall contain such terms and conditions with respect to its termination
as the Board, in its discretion, may from time to time determine.
SECTION 11. 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
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Company, or make arrangements satisfactory to the Board 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
Board, to have such tax withholding obligation satisfied, in whole or in part,
by (i) 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, or (ii) transferring to the Company
shares of Stock owned by the participant with an aggregate Fair Market Value (as
of the date the withholding is effected) that would satisfy the withholding
amount due.
SECTION 12. 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 Board
otherwise so provides in writing.
SECTION 13. Amendments and Termination.
The Board may at any time amend or discontinue the Plan and the Board 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 14. Status of Plan.
With respect to the portion of any Award which has not been exercised and
any
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payments in cash, Stock or other consideration not received by a participant, a
participant shall have no rights greater than those of a general creditor of the
Company unless the Board shall otherwise expressly determine in connection with
any Award or Awards. In its sole discretion, the Board 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 15. Change of Control Provisions.
(a) In the event of a Change of Control while unexercised Stock Options,
Conditional Stock Awards, Performance Share Awards or Stock Appreciation Rights
remain outstanding under the Plan, then (i) the time for exercise of all
unexercised and unexpired Awards shall be automatically accelerated, effective
as of the effective time of the Change of Control (or such earlier date as may
be specified by the Board), and (ii) after the effective time of such Change of
Control, unexercised Stock Options, Conditional Stock Awards, Performance Share
Awards or Stock Appreciation Rights shall remain outstanding and shall be
exercisable in full for shares of Stock (or consideration based upon the Fair
Market Value of Stock) or, if applicable, for shares of such securities, cash or
property (or consideration based upon shares of such securities, cash or
property) as the holders of shares of Stock received in connection with such
Change of Control.
(b) "Change of Control" shall mean the occurrence of any one of the
following events:
(i) any "person" (as such term is used in Sections 13(d) and
14(d)(2) of the Act) becomes a "beneficial owner" (as such term is
defined in Rule 13d-3 promulgated under the Act) (other than the Company,
any trustee or other fiduciary holding securities under an employee
benefit plan of the Company, or any corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company), directly or
indirectly, of securities of the Company representing thirty-five percent
(35%) or more of the combined voting power of the Company's then
outstanding securities; or
(ii) persons who, as of January 1, 1997, constituted the Company's
Board (the "Incumbent Board") cease for any reason, including without
limitation as a result of a tender offer, proxy contest, merger or
similar transaction, to constitute at least a majority of the Board,
provided that any person becoming a director of the Company subsequent to
January 1, 1997 whose election was approved by, or who was nominated with
the approval of, at least a majority of the directors then comprising the
Incumbent Board shall, for purposes of this Plan, be considered a member
of the Incumbent Board; or
(iii) the stockholders of the Company approve a merger or
consolidation of the
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Company with any other corporation or other entity, other than a merger
or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than sixty-five percent (65%) of
the combined voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation; or
(iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by
the Company of all or substantially all of the Company's assets.
SECTION 16. General Provisions.
(a) No Distribution; Compliance with Legal Requirements. The Board 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 Board 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.
SECTION 17. 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 and the
Commissioner of Banks of the Commonwealth of Massachusetts shall have approved
the Plan within twelve months following the adoption of the Plan by the Board.
SECTION 18. Governing Law.
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<PAGE>
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.
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IPSWICH SAVINGS BANK
1998 STOCK INCENTIVE PLAN
SECTION 1. General Purpose of the Plan; Definitions
The name of the plan is the Ipswich Savings Bank 1998 Stock Incentive
Plan (the "Plan"). The purpose of the Plan is to encourage and enable the
officers, directors and employees of Ipswich Savings Bank (the "Company") and
its wholly owned subsidiaries ("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. To reflect the formation
of Ipswich Bancshares, Inc. (the "Holding Company") as the holding company of
the Company on July 1, 1999, the term "Stock" shall mean the common stock, par
value $.10 per share, of the Holding Company and references to the "Company"
shall include the Holding 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 and Stock Appreciation Rights.
"Board" means the Board of Directors of the Company.
"Change of Control" shall have the meaning set forth in Section 15.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.
"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 17.
"Eligible Person" shall have the meaning set forth in Section 4.
"Fair Market Value" on any given date means the closing bid price per
share of the Stock on 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
<PAGE>
Stock as determined by the Board.
"Incentive Stock Option" means any Stock Option designated and qualified
as an "incentive stock option" as defined in Section 422 of the Code.
"Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
"Normal Retirement" means retirement from active employment with, or from
the Board of Directors of, 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.
"Performance Share Award" means an Award granted pursuant to Section 8.
"Stock" means the Common Stock, $.10 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.
"Unrestricted Stock Award" means an Award granted pursuant to Section 7.
SECTION 2. Administration of Plan
(a) The Plan shall be administered by the full Board of Directors of the
Company. The Board 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 other employees of 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 Shares and Stock Appreciation
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;
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<PAGE>
(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 Board) 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.
(b) Decisions Binding. All decisions and interpretations of the Board
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 with respect
to which Awards (including Stock Appreciation Rights) may be issued under the
Plan shall be equal to 100,000. 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 or any
prior plan of the Company, 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) Stock Dividends, Mergers, etc. In the event that after approval of
the Plan by the stockholders of the Company in accordance with Section 17, the
Company effects a stock dividend, stock split or similar change in
capitalization affecting the Stock, the Board 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
limitation set forth in Section 3(a) above), (ii) the number and kind of shares
remaining subject to
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<PAGE>
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 Board 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 Board deems equitable in the circumstances), subject,
however, to the provisions of Section 15.
(c) Substitute Awards. The Board 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, "Merger"). The
Board may direct that the substitute awards be granted on such terms and
conditions as the Board 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 only to directors, officers or other key employees
of the Company or its Subsidiaries ("Eligible Persons").
SECTION 5. Stock Options.
Any Stock Option granted under the Plan shall be in such form as the
Board 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 Board in its discretion may determine the
effective date of Stock Options, provided, however, that 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 Board shall deem desirable.
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<PAGE>
(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 Board 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 Board 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 Board at or after the grant
date. The Board may at any time 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 Board;
(B) If permitted by the Board, 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) 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 Board 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
<PAGE>
the exercise price; or
(D) 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 Board) which the Board 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 the 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 distribution, and all Stock
Options shall be exercisable, during the optionee's lifetime, only
by the optionee.
(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.
(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 Board, Options granted under
Section 5(a) may include a so-called "reload" feature pursuant to which an
optionee exercising an 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
Board may provide) to purchase that number of shares of Stock equal to the
number delivered to exercise the original Option.
SECTION 6. Conditioned Stock Awards.
(a) Nature of Conditioned Stock Award. The Board 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 Board, shares of Stock subject to such restrictions and
conditions as the Board may determine at the time of grant ("Conditioned
Stock"). Conditions may be based on continuing employment
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<PAGE>
and/or achievement of pre-established performance goals and objectives. In
addition, a Conditioned Stock Award may be granted to an employee by the Board
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 Board 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 Board 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 Board 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 Board 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 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 Board, 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 (unless otherwise specified, in the written instrument evidencing the
Conditioned Award).
(e) Vesting of Conditioned Stock. The Board 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 Board at any time may accelerate such date or
dates and otherwise waive or, subject to Section 13, 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.
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<PAGE>
SECTION 7. Unrestricted Stock Awards.
(a) Grant or Sale of Unrestricted Stock. The Board 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
Board. 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 Board 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 Board 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 Board 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 Board).
(d) Termination. Except as may otherwise be provided by the Board at any
time prior to termination of employment, a participant's rights in all
Performance Share Awards shall 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 Board may in its sole discretion accelerate,
waive or, subject to Section 13,
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amend any or all of the goals, restrictions or conditions imposed under any
Performance Share Award.
SECTION 9. Stock Appreciation Rights
(a) The Board 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 Board. 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 Board.
(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 Board 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 Board 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 Board
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.
(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 Board shall, in its sole
discretion, either consent to or
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<PAGE>
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 Board shall
disapprove such Request, such Request shall be deemed to be an exercise of such
Stock Appreciation Right for Stock.
(f) If the Board 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 Board. 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. Termination of Stock Options and Stock Appreciation Rights.
(a) 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 Board 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.
(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 one year from the date of such termination
of employment or directorship (or such longer period as the Board 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 Board shall
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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 Board at the time of grant, the death
of a participant during a period provided in this Section 10(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 date of such
termination of employment or directorship (or such longer period as the
Board 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 Board 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 Board at the time of
grant, the death of a participant during a period provided in this
Section 10(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 Board 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 Board may, in
its sole discretion, provide that such Stock Option can be exercised for
a period of up to seven (7) days from the date of termination of
employment (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 directorship or until the
expiration of the stated term of the Stock Option, if earlier. The Board
shall have sole
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<PAGE>
authority and discretion to determine whether a participant's employment
has been terminated for cause.
(vi) Termination Without Cause. Unless otherwise determined by the
Board, 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
Board 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.
(b) Stock Appreciation Rights. Any Stock Appreciation Right granted under
the Plan shall contain such terms and conditions with respect to its termination
as the Board, in its discretion, may from time to time determine.
SECTION 11. 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 Board 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
Board, to have such tax withholding obligation satisfied, in whole or in part,
by (i) 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, or (ii) transferring to the Company
shares of Stock owned by the participant with an aggregate Fair Market Value (as
of the date the withholding is effected) that would satisfy the withholding
amount due.
SECTION 12. 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
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<PAGE>
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 Board otherwise so provides in
writing.
SECTION 13. Amendments and Termination.
The Board may at any time amend or discontinue the Plan and the Board 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 14. 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 rights greater than those of a general
creditor of the Company unless the Board shall otherwise expressly determine in
connection with any Award or Awards. In its sole discretion, the Board 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 15. Change of Control Provisions.
(a) In the event of a Change of Control while unexercised Stock Options,
Conditional Stock Awards, Performance Share Awards or Stock Appreciation Rights
remain outstanding under the Plan, then (i) the time for exercise of all
unexercised and unexpired Awards shall be automatically accelerated, effective
as of the effective time of the Change of Control (or such earlier date as may
be specified by the Board), and (ii) after the effective time of such Change of
Control, unexercised Stock Options, Conditional Stock Awards, Performance Share
Awards or Stock Appreciation Rights shall remain outstanding and shall be
exercisable in full for shares of Stock (or consideration based upon the Fair
Market Value of Stock) or, if applicable, for shares of such securities, cash or
property (or consideration based upon shares of such securities, cash or
property) as the holders of shares of Stock received in connection with such
Change of Control.
(b) "Change of Control" shall mean the occurrence of any one of the
following events:
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(i) any "person" (as such term is used in Sections 13(d) and
14(d)(2) of the Act) becomes a "beneficial owner" (as such term is
defined in Rule 13d-3 promulgated under the Act) (other than the Company,
any trustee or other fiduciary holding securities under an employee
benefit plan of the Company, or any corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company), directly or
indirectly, of securities of the Company representing thirty-five percent
(35%) or more of the combined voting power of the Company's then
outstanding securities; or
(ii) persons who, as of January 1, 1999, constituted the Company's
Board (the "Incumbent Board") cease for any reason, including without
limitation as a result of a tender offer, proxy contest, merger or
similar transaction, to constitute at least a majority of the Board,
provided that any person becoming a director of the Company subsequent to
January 1, 1999 whose election was approved by, or who was nominated with
the approval of, at least a majority of the directors then comprising the
Incumbent Board shall, for purposes of this Plan, be considered a member
of the Incumbent Board; or
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation or other entity,
other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than
sixty-five percent (65%) of the combined voting power of the voting
securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; or
(iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by
the Company of all or substantially all of the Company's assets.
SECTION 16. General Provisions.
(a) No Distribution; Compliance with Legal Requirements. The Board 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 Board 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.
SECTION 17. 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 and the
Commissioner of Banks of the Commonwealth of Massachusetts shall have approved
the Plan within twelve months following the adoption of the Plan by the Board.
SECTION 18. 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.
DEFERRED COMPENSATION PLAN FOR DIRECTORS
OF
IPSWICH SAVINGS BANK
The Deferred Compensation Plan For Directors of Ipswich Savings Bank
("IpswichBank") is effective as of July 1, 1997. To reflect the formation of
Ipswich Bancshares, Inc. as the holding company (the "Holding Company") for
IpswichBank on July 1, 1999, references to the "Corporation" shall include the
Holding Company and the term "Stock" shall mean the common stock, par value $.10
per share, of the Holding Company.
1. Eligibility. Any member of the Board of Directors of IpswichBank or
any of its subsidiaries (each such entity being referred to herein as the
"Corporation") who is not an employee of IpswichBank or any of its subsidiaries
may elect to defer, in accordance with this Plan, payment of all or a portion of
the compensation payable to him for service as such Director.
2. Election to Defer. A Director's election to defer payments shall be
made in writing and shall be effective upon receipt and acceptance by the
Corporation. An election to defer shall be made no later than
(i) with respect to the first year of the Plan, five (5) days
after the date of adoption of this Plan by the Board of Directors, such
election to apply to deferral of compensation to be earned in such
calendar year after the date of such election to defer.
(ii) with respect to each subsequent year of the Plan, ten
(10) days preceding commencement of each calendar year, such election
to apply to deferral of compensation to be earned in such year.
(iii) with respect to new Directors, thirty (30) days after
the date such person becomes a Director, such election to apply to
deferral of compensation to be earned in the calendar year after the
date of such election to defer.
Any election may be revoked in writing and such revocation shall be
effective upon receipt by the Corporation, but only as to compensation to be
earned at and after commencement of the next succeeding calendar month. Any
election may be changed in writing and shall be effective upon receipt by the
Corporation, but only as to compensation to be earned at and after commencement
of the next succeeding calendar year.
3. Cash Deferral Account; Crediting of Interest. A Director's election
may specify that such Director elects to have all or a portion of his deferred
compensation during the next calendar year credited to a cash account on the
books of the Corporation. The Corporation shall maintain a book account to which
the cash portion of each participating Director's deferred compensation shall be
credited as of the end of each calendar month after such compensation is earned
(the "Cash Deferral Account"). As of the end of each calendar month, the
Corporation shall also credit each Cash Deferral Account with interest on the
amount then
<PAGE>
standing in the Account, exclusive of any deferred compensation first credited
to the Account as of such date. The rate to be used for this purpose shall be
the prime rate of interest as published in the Wall Street Journal from time to
time. This rate of interest shall change from time to time upon the change in
the published prime rate.
4. Stock Units.
(a) In lieu of deferring compensation into his Cash Deferral
Account, a Director's election to defer compensation for any calendar year may
specify that such Director elects to have all or a portion of his deferred
compensation during the next calendar year converted into stock units equivalent
in value to shares of common stock of IpswichBank ("Stock"). The Corporation
shall maintain a book account to which the stock unit portion of each
participating Director's deferred compensation shall be credited as of the end
of each calendar month after such compensation is earned ("Stock Unit Deferral
Account").
(b) The conversion of deferred compensation into stock units
will be made on the basis of the fair market value of the Stock on the date the
compensation would otherwise be paid. For this purpose, fair market value of the
Stock on any given date shall mean the closing bid price reported for the Stock
on the NASDAQ National Market System on the immediately preceding trading date,
or, if no sales were reported on such date, for the last date preceding such
date for which a sale was reported.
(c) During the term of the deferral, each Director's Stock
Unit Deferral Account will be credited with additional stock units to reflect
any payment of dividends (other than dividends payable only in shares of Stock).
Each Account will be credited with a number of whole and fractional shares of
stock units determined by multiplying the dividend value per share of Stock by
the number of units in the account on the record date and dividing the result by
the fair market value of the Stock (as defined in Paragraph 4(b) above) on the
date the dividend is paid.
(d) In the event of a stock dividend, stock split or similar
change in capitalization affecting the Stock, appropriate adjustments shall be
made in the number of stock units credited to each Director's Stock Unit
Deferral Account.
5. Time and Method of Payment
(a) Amounts credited to a Director's deferred compensation
account(s) shall be paid, or commenced to be paid, on the January 15 coincident
with or next following the date on which the Director ceases to be a member of
the Board of Directors of the Corporation for any reason whatsoever. In the case
of semi-annual installments, payments shall be made on each July 15.
(b) Payments of deferred compensation may be made either in a
single lump sum or in annual, or semi-annual, installments over a period of ten
(10) years, as the Director may have irrevocably specified before the
compensation is earned. In the absence of an effective election, payment shall
be made in a single lump sum. In the case of installment
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payments, interest or dividend equivalents shall continue to be credited in
accordance with Paragraph 3 or 4 during the payment period. The amount of each
installment payment shall be equal to the amount credited to the deferred
compensation account as of the preceding June 30 or December 31, as the case may
be, divided by the number of payments remaining to be made, including the
current payment. Payments from each Director's Cash Deferral Account shall be
payable only in cash. On and after the date that the Commissioner of Banks
approves the Bank's issuance of stock under this Plan, payments from each
Director's Stock Unit Deferral Account shall be payable only in the form of
whole shares of Stock, with any fractional share payable in cash. Prior to such
date, payments, if any, from a Stock Unit Deferral Account shall be made only in
cash, determined based on the fair market value of the Stock underlying the
stock units as of the date of payment.
(c) Elections by a Director of a method of payment under
sub-paragraph (b) shall be made in writing, effective upon receipt and
acceptance by the Corporation, and applicable only to compensation to be earned
after the effective date of the election. Such elections may also be changed by
a Director, subject to the same restrictions.
(d) Payments of deferred compensation shall be made as they
become due to the Director if then living, otherwise to a beneficiary or
beneficiaries designated by the Director in writing to the Corporation prior to
the Director's death, or failing such designation, to the Director's estate.
(e) Notwithstanding any provision hereof to the contrary, if a
Director, or after a Director's death the Director's beneficiary, believes he is
suffering from financial hardship, an application may be made to the Board of
Directors of the Corporation for an acceleration of payments from the deferred
compensation account of the Director. A "financial hardship" shall mean a need
for financial assistance due to the occurrence of an unanticipated emergency
caused by an event beyond the Director's control. The need for financial
assistance must be such that the Director, any member of the Director's
immediate family or, after the Director's death, a designated beneficiary will
be subject to substantial hardship if the acceleration is not permitted. If the
Board of Directors of the Corporation determines, in its sole discretion, that a
hardship exists, the Corporation may accelerate payment to the Director or the
designated beneficiary of only so much of the deferred compensation account as
the Board of Directors of the Corporation may determine is required to alleviate
such hardship, and the deferred compensation account shall be charged with said
amount upon payment.
6. Change in Control.
(a) In the event of a Change in Control of the Corporation
while Stock Units remain outstanding under the Plan, then all Stock Units shall
be cancelled as of the effective time of the Change in Control and the
participating Directors shall receive, for each Stock Unit so cancelled, (i) one
share of Common Stock of the Corporation (in the case of a Change in Control
that does not result in any change in the Common Stock of the Corporation), or
(ii) such securities, cash or property as the holders of each share of Common
Stock received in connection with such Change of Control (in the case of a
Change in Control that results in a change in the Common Stock of the
Corporation or a conversion of such Common Stock into
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<PAGE>
other securities, cash or property).
(b) In the event of a Change in Control of the Corporation,
the Corporation shall pay to each participating Director, as of the effective
time of the Change in Control, an amount in cash equal to the balance of such
Director's Cash Deferral Account.
(c) "Change in Control" shall mean the occurrence of any one
of the following events:
(i) any "person" (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act) becomes a "beneficial owner" (as such
term is defined in Rule 13d-3 promulgated under the Exchange Act)
(other than the Corporation, any trustee or other fiduciary holding
securities under an employee benefit plan of the Corporation, or any
corporation owned, directly or indirectly, by the stockholders of the
Corporation in substantially the same proportions as their ownership of
stock of the Corporation), directly or indirectly, of securities of the
Corporation representing thirty-five percent (35%) or more of the
combined voting power of the Corporation 's then outstanding
securities; or
(ii) persons who, as of January 1, 1997, constituted the
Corporation's Board (the "Incumbent Board") cease for any reason,
including without limitation as a result of a tender offer, proxy
contest, merger or similar transaction, to constitute at least a
majority of the Board, provided that any person becoming a director of
the Corporation subsequent to January 1, 1997 whose election was
approved by, or who was nominated with the approval of, at least a
majority of the directors then comprising the Incumbent Board shall,
for purposes of this Plan, be considered a member of the Incumbent
Board; or
(iii) the Corporation merges or consolidates with any other
corporation or other entity, other than a merger or consolidation which
would result in the voting securities of the Corporation outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity) more than fifty percent (50%) of the combined voting
power of the voting securities of the Corporation or such surviving
entity outstanding immediately after such merger or consolidation; or
(iv) the stockholders of the Corporation approve a plan of
complete liquidation of the Corporation or an agreement for the sale or
disposition by the Corporation of all or substantially all of the
Corporation's assets.
7. Merger without Change of Control. After a merger or consolidation of
the Corporation with another corporation in which the stockholders of the
Corporation immediately prior to such merger or consolidation continue to own
after such merger or consolidation shares representing at least fifty percent of
the voting power of the Corporation, each Stock Unit shall be automatically
converted into a stock unit representing the number and class of shares of stock
or other securities into which such Stock Unit would have been
<PAGE>
converted if, immediately prior to such merger or consolidation, such Stock Unit
had been paid out in shares of Common Stock of the Corporation.
8. Limitation on Rights of Directors. No action taken pursuant to this
Plan shall create or be deemed to create a trust or fiduciary relationship of
any kind between the Corporation and the Directors. Although the Corporation
shall have no obligation to establish any separate fund, reserve or to invest in
any specific asset to provide security with respect to any deferred amounts
during the deferral period, the Corporation may elect to do so and, in such
event, the Directors shall not have any interest in such assets and all such
assets shall continue for all purposes to be a part of the general assets of the
Corporation, with the title to the beneficial ownership of such assets remaining
at all times in the Corporation. Each Director, his legal representative or any
of his beneficiaries shall not have any right, other than the right of an
unsecured general creditor of the Corporation, in respect to the deferred
compensation account(s) established hereunder, and such persons shall have no
property interest in any specific assets of the Corporation.
9. Nonforfeitable. The right of each Director to the payment of
deferred compensation under this Plan shall be nonforfeitable and no action or
failure to act by the Director, the Corporation or any other person shall
deprive the Director of, or excuse the Corporation from its obligations to pay,
the amounts due hereunder.
10. Withholding Tax. The Corporation shall have the right to deduct
from all deferred amounts or payments hereunder any federal or state taxes
required by law to be withheld with respect to such deferred amounts or
payments.
11. Non-Assignable. The deferred compensation payable under this Plan
shall not be subject to alienation, assignment, garnishment, execution or levy
of any kind, and any attempt to cause any compensation to be so subjected shall
not be recognized.
12. Termination and Amendment. This Plan may be amended at any time or
may be terminated, in whole or in part, at any time, and from time to time, by
IpswichBank. The foregoing provisions of this Paragraph notwithstanding, no
amendment or termination of this Plan shall, without the consent of a Director,
adversely affect the amounts payable hereunder on account of compensation
deferred prior to the effective date of such amendment or termination.
13. Notices. All notices, elections or designations by a Director to
the Corporation shall be delivered in person or by registered mail, postage
prepaid, and noted to be brought to the attention of the Treasurer, IpswichBank.
14. Governing Law. This Plan, and all actions taken hereunder, shall be
governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts, except as such laws may be superseded by any applicable federal
law.
15. Shares Issuable. The aggregate maximum number of shares of Stock
reserved and available for issuance under the Plan shall be 11,800, subject to
appropriate adjustments in the
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<PAGE>
event of a stock dividend, stock split, or similar change in capitalization
affecting the Stock. Shares subject to the Plan are authorized but unissued
shares or Treasury shares.
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<PAGE>
IPSWICH SAVINGS BANK
DEFERRED COMPENSATION PLAN FOR DIRECTORS
Election to Participate Form
------------------------------------------------------------------------
----------------------------------- ----------------------------
Name (Please Print) Social Security Number
1. Election to Defer. In accordance with the Ipswich Savings Bank
Deferred Compensation Plan for Directors (the "Plan"), a copy of which has been
provided to me, I hereby elect under the Plan to defer ____________% of any cash
compensation that would otherwise be payable to me by the Bank during the year
ended December 31, _______.
In accordance with the terms of the above election, I hereby elect that
the aggregate amount of cash compensation deferred be limited to:
[ ] $------------------
[ ] No Limit.
2. Deferral to Cash or Stock Unit Deferral Account. I hereby elect that
the compensation deferred hereunder be credited to the following type of
deferral account:
[ ] Cash Deferral Account
[ ] Stock Unit Deferral Account
3. Designation of Time of Payment. I hereby irrevocably elect that the
compensation deferred hereunder be distributed as follows:
[ ] In a single lump sum on the January 15 coincident with or next
following the date on which I cease to be a member of the Board of
Directors of the Bank for any reason whatsoever.
[ ] In annual installments over a period of ten (10) years, commencing
on the January 15 coincident with or next following the date on
which I cease to be a member of the Board of Directors of the Bank
for any reason whatsoever.
[ ] In semi-annual installments, payable on January 15 and July 15,
over a period of ten (10) years, commencing on the January 15
coincident with or next following the date on which I cease to be
a member of the Board of Directors of the Bank for any reason
whatsoever.
<PAGE>
4. Designation of Beneficiary. In the event that I die before all amounts
deferred under the Plan shall have been distributed to me, I designate the
following person(s) or legal entity(ies) as my beneficiary(ies) for purposes of
the Plan:
<TABLE>
<CAPTION>
- -------------------------------------------------------------- ----------- --------------------
Name and Address Percent Relationship
<S> <C> <C>
- -------------------------------------------------------------- ----------- --------------------
- -------------------------------------------------------------- ----------- --------------------
- -------------------------------------------------------------- ----------- --------------------
- -------------------------------------------------------------- ----------- --------------------
- -------------------------------------------------------------- ----------- --------------------
Name and Address of Secondary Beneficiaries (if any)
- -------------------------------------------------------------- ----------- --------------------
- -------------------------------------------------------------- ----------- --------------------
- -------------------------------------------------------------- ----------- --------------------
- -------------------------------------------------------------- ----------- --------------------
- -------------------------------------------------------------- ----------- --------------------
</TABLE>
If more than one person is named in either of the above beneficiary
classifications, distributions under the Plan will be made to all surviving
persons named in the classifications in the relative proportions indicated under
"percent" (unless otherwise indicated in writing). Distributions to secondary
beneficiaries will be made only if there is no surviving primary beneficiary. If
none of the above named beneficiaries survives me, my beneficiary will be my
estate.
5. Acknowledgment. I hereby acknowledge that I have received and
reviewed a copy of the Plan. I understand that this election may be revoked in
writing and such revocation shall be effective upon receipt by the Bank, but
only as to compensation to be earned at and after commencement of the next
succeeding calendar month. I further understand that this election may be
changed in writing and shall be effective upon receipt by the Bank, but only as
to compensation to be earned at and after commencement of the next succeeding
calendar year. As to all amounts credited to my Cash Deferral Account/Stock Unit
Deferral Account pursuant to this election, this election is irrevocable and the
amounts credited to such Account shall be paid to me on the date I have elected
hereunder regardless of any future action I may take. I further understand that
I may not assign any payments or the rights of any payments under the Plan.
- -------------------- -------------------------------------
Date Signature of Participant
