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EXHIBIT 4(a)
UNITED COMMUNITY FINANCIAL CORP.
1999 LONG-TERM INCENTIVE PLAN
SECTION 1
PURPOSE OF THE PLAN
1.1 The purpose of the United Community Financial Corp. 1999 Long-Term
Incentive Plan is to attract and retain qualified directors,
directors emeritus and employees and to strengthen the mutuality of
interests between such directors, directors emeritus and employees
and the Corporation's shareholders by providing directors, directors
emeritus and employees with a proprietary interest in pursuing the
long-term growth, profitability and financial success of the
Corporation.
SECTION 2
DEFINITIONS
2.1 Unless the context indicates otherwise, the following terms, when
used in this Plan, shall have the meanings set forth in this
Section:
a) "AFFILIATE" means (i) a member of a controlled group of
corporations of which the Corporation is a member or (ii) an
unincorporated trade or business which is under common control
with the Corporation as determined in accordance with Section
414(c) of the Code, and the regulations issued thereunder. For
purposes hereof, a "controlled group of corporations" shall
have the meaning set forth in Section 1563(a) of the Code
determined without regard to Sections 1563(a)(4) and (e)(3)(c)
of the Code.
b) "AWARD" means a grant or award under this Plan in the form of
an Option, an SAR, Restricted Shares, a Performance Award or
any other stock-based incentive award.
c) "BOARD" means the Board of Directors of the Corporation.
d) "CHANGE OF CONTROL" means an event defined in Section 16 of
this Plan.
e) "CODE" means the Internal Revenue Code of 1986, as amended,
and related Treasury Regulations.
f) "COMMITTEE" means any Committee comprised of two or more
Outside Directors designated by the Board to administer the
Plan in accordance with Section 4 of this Plan.
g) "COMMON SHARES" means the common shares, without par value,
of the Corporation.
h) "CORPORATION" means UCFC.
i) "DEFERRED SHARES" means an award made pursuant to Section 11
of this Plan of the right to receive Common Shares in lieu of
cash thereof at the end of a specified time period.
j) "DIRECTOR" means any member of the Board of Directors of the
Corporation or the Board of Directors of a Subsidiary.
k) "DIRECTOR EMERITUS" means any director emeritus of the
Corporation or a Subsidiary.
l) "DISABILITY" means permanent and total disability within the
meaning of Section 22(e)(3) of the Code.
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m) "EFFECTIVE DATE" means the date defined in Section 21.1 of
this Plan.
n) "EMPLOYEE" means any full-time employee of the Corporation or
any of its Subsidiaries (including Directors or Directors
Emeritus who are employed on a full-time basis by the
Corporation or any of its Subsidiaries).
o) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
p) "FAIR MARKET VALUE" of a Common Share on a given date shall be
based upon the last sales price or, if unavailable, the
average of the closing bid and asked prices of a Common Share
on such date (or, if there was no trading or quotation in the
Common Shares on such date, on the next preceding date on
which there was trading or quotation) if the Common Shares are
listed on a national securities exchange or quoted on an
interdealer quotation system. If the Common Shares are not
listed on a national securities exchange or quoted on an
interdealer quotation system, the Fair Market Value of a
Common Share shall be determined by the Committee in good
faith based upon the best available facts and circumstances at
the time.
q) "GRANTEE" means a person granted an Award under this Plan.
r) "IMMEDIATE FAMILY" means, with respect to a given Grantee,
that Grantee's spouse, children or grandchildren (including
adopted children or grandchildren).
s) "ISO" means an Award that is intended to qualify as an
incentive stock option under Section 422 of the Code, as now
or hereafter constituted.
t) "NON-EMPLOYEE DIRECTOR" means a Director or Director Emeritus
of the Corporation or a Subsidiary who is not an Employee nor
has been an Employee at any time during the prior one-year
period.
u) "NQSO" means an Award that is not intended to qualify as an
incentive stock option under Section 422 of the Code, as now
or hereafter constituted.
v) "OPTIONS" refers collectively to NQSOs and ISOs issued under
this Plan.
w) "OTS" means the Office of Thrift Supervision, Department of
the Treasury.
x) "OUTSIDE DIRECTOR" means a non-employee Director or Director
Emeritus within the meaning of Rule 16b-3(b)(3) under the
Exchange Act, or any successor thereto, who is also an
"outside director" within the meaning of Section 162(m) of the
Code and the regulations thereunder.
y) "PERFORMANCE AWARD" means an Award under the Plan, payable in
cash, Common Shares, other securities or other awards, which
confers on the holder thereof the right to receive payments
upon the achievement of certain performance goals during the
performance periods established by the Committee.
z) "PERMITTED TRANSFEREE" means any individual or entity as
defined in Section 18.2 of this Plan.
aa) "PLAN" means this 1999 Long-Term Incentive Plan as set forth
herein and as amended from time to time.
bb) "RESTRICTED SHARES" means an Award of Common Shares subject to
restrictions on transfer and/or any other restrictions on
incidents of ownership as the Committee may determine.
cc) "RETIREMENT" means the retirement of a Grantee between ages 60
and 64 with 15 or more years of service to the Corporation or
a Subsidiary, or the retirement of a Grantee at or after age
65.
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dd) "RULES" means Rule 16(b)(3) and any successor provisions
promulgated by the Securities and Exchange Commission under
Section 16 of the Exchange Act.
ee) "SAR" means an Award constituting the right to receive, upon
surrender of the right, but without payment, an amount payable
in cash.
ff) "SUBSIDIARY OR SUBSIDIARIES" means any entity or entities in
which the Corporation owns a majority of the voting power.
gg) "TEN PERCENT SHAREHOLDER" means any Grantee who owns more than
10% of the combined voting power of all classes of stock of
the Corporation, within the meaning of Section 422 of the
Code.
hh) "TERMINATED FOR CAUSE" means any removal of a Director or
discharge of an employee for the personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform
stated duties, willful violation of a material provision of
any law, rule or regulation (other than traffic violations or
similar offenses) or a material violation of a final
cease-and-desist order or for any other action of a director
or employee which results in a substantial financial loss to
the Corporation or a Subsidiary.
SECTION 3
TYPES OF AWARDS COVERED
3.1 Awards granted under this Plan may be:
a) Options which may be designated as:
(i) NQSOs; or
(ii) ISOs;
b) SARs;
c) Restricted Shares;
d) Performance Awards; or
e) other forms of stock-based incentive awards.
SECTION 4
ADMINISTRATION
4.1 This Plan shall be administered by the Committee. The members of the
Committee shall be appointed from time to time by the Board. Members
of the Committee shall serve at the pleasure of the Board, and the
Board may from time to time remove members from, or add members to,
the Committee. Subject to the provisions of this Plan and applicable
law, the Committee shall have full discretion and the exclusive
power:
a) to select the Employees, Directors and Directors Emeritus who
will participate in the Plan and to make Awards to such
Employees and Directors;
b) to determine the times at which Awards shall be granted and
any terms and conditions with respect to Awards as shall not
be inconsistent with the provisions of this Plan; and
c) to resolve all questions relating to the administration of
this Plan and applicable law.
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4.2 The interpretation of, and application by, the Committee of any
provision of this Plan shall be final and conclusive. The Committee,
in its sole discretion, may establish rules and guidelines relating
to this Plan as it may deem appropriate.
4.3 A majority of the members of the Committee shall constitute a quorum
for the transaction of business. An action in writing by all members
of the Committee then serving shall be fully as effective as if the
action had been taken by unanimous vote at a meeting duly called and
held.
4.3 The Committee may employ such legal counsel, consultants, and agents
as it may deem desirable for the administration of this Plan and may
rely upon any opinion received from any retained counsel or
consultant and any computation received from any retained consultant
or agent. The Committee shall keep minutes of its actions under this
Plan.
4.4 No member of the Board or the Committee shall be liable for any
action or determination made in good faith with respect to this Plan
or any Awards. If a member of the Board or of the Committee is a
party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of anything done or not
done by such member in such capacity under or with respect to this
Plan, the Corporation shall indemnify such member against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such member in
connection with such action, suit or proceeding if such member acted
in good faith and in a manner such member reasonably believed to be
in or not opposed to the best interests of the Corporation and its
Subsidiaries and, with respect to any criminal action or proceeding,
had no reasonable cause to believe such member's conduct was
unlawful.
SECTION 5
ELIGIBILITY
5.1 The individuals who shall be eligible to participate in this Plan
shall be Directors, Directors Emeritus, officers, management, and
such other key Employees of the Corporation and the Subsidiaries as
the Committee may from time to time determine.
SECTION 6
SHARES OF STOCK SUBJECT TO THE PLAN
6.1 Awards may be granted with respect to the Common Shares.
6.2 Shares delivered upon exercise of an Award, at the election of the
Board, may be Common Shares that are authorized but previously
unissued, or Common Shares reacquired by the Corporation, or both.
6.3 The maximum number of Common Shares that may be issued pursuant to
Awards granted under this Plan, subject to adjustment as provided in
Section 17 of this Plan, shall be 3,471,562 Common Shares. For the
purpose of computing the total number of Common Shares available for
Awards under this Plan, there shall be counted against the foregoing
limitation the number of Common Shares subject to issuance upon
exercise of Awards as of the dates on which such Awards are granted.
If any Awards are forfeited, terminated or exchanged for other
Awards, or expire unexercised, the Common Shares which were
theretofore subject to such Awards shall again be available for
Awards under this Plan to the extent of such forfeiture, termination
or expiration of such Awards.
6.4 Notwithstanding any other provision of this Plan to the contrary,
subject to adjustment as provided in Section 17 of this Plan, the
maximum number of Common Shares that may be issued to any individual
during the term of this Plan pursuant to Options granted under this
Plan shall be 25% of the number of Common Shares that may be issued
pursuant to this Plan.
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6.5 Any Common Shares subject to an Award which, for any reason, expires
or is terminated unexercised, shall again be available for the grant
of other Awards under this Plan; provided, however, that forfeited
shares or other securities shall not be available for further Awards
if the Grantee has realized any benefits of ownership from such
shares.
SECTION 7
STOCK OPTIONS
7.1 The Committee may grant Options, as follows, which shall be evidenced
by a stock option agreement and may be designated as NQSOs or ISOs:
a) NQSOs
(i) A NQSO is a right to purchase a specified number of Common
Shares during a period determined by the Committee, not to
exceed ten years, at a price determined by the Committee
that is not less than the Fair Market Value of the Common
Shares on the date the Option is granted.
(ii) The exercise price of the NQSO may be paid in cash. At the
discretion of the Committee, the exercise price may also
be paid by the tender of Common Shares to the Corporation
or through a combination of Common Shares and cash or
through such other means as the Committee determines are
consistent with the purpose of this Plan and applicable
law. No fractional Common Shares will be issued or
accepted by the Corporation.
(iii) No NQSO may be exercised more than ten years after the
date the NQSO is granted.
(iv) The Committee may permit the person exercising the NQSO,
either on a selective or an aggregate basis, to
simultaneously exercise the NQSO and sell the Common
Shares acquired, pursuant to a brokerage or similar
arrangement approved in advance by the Committee, and use
the proceeds from the sale as payment of the exercise
price of the NQSO.
(b) ISOs
(i) No ISO may be granted under this Plan to a Non-Employee
Director.
(ii) To the extent the aggregate Fair Market Value (determined
at the time of the grant of the Award) of the number of
Common Shares with respect to which ISOs are exercisable
under all plans of the Corporation or a Subsidiary for the
first time by a Grantee during any calendar year exceeds
$100,000, or such other limit as may be required by the
Code, such ISOs shall be treated as NQSOs to the extent of
such excess.
(iii) No ISO may be exercisable more than:
A) ten years after the date the ISO is granted in the
case of a Grantee who is not a Ten Percent
Shareholder on the date the ISO is granted;
and
B) five years after the date the ISO is granted in the
case of a Grantee who is a Ten Percent Shareholder
on the date the ISO is granted.
(iv) The exercise price of any ISO shall be determined by the
Committee and shall not be less than:
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A) the Fair Market Value of the Common Shares subject
to the ISO on the date of grant in the case of a
Grantee who is not a Ten Percent Shareholder on
the date the ISO is granted; and
B) 110 percent of the Fair Market Value of the Common
Shares subject to the ISO on the date of grant in the
case of a Grantee who is a Ten Percent Shareholder on
the date the ISO is granted.
(v) The Committee may provide that the exercise price under an
ISO may be paid by one or more of the methods available
for paying the exercise price of an NQSO under Section
7.1(a)(iv) of this Plan.
SECTION 8
STOCK APPRECIATION RIGHTS
8.1 The amount payable with respect to each SAR shall be equal in value
to the applicable percentage of the excess, if any, of the Fair
Market Value of a Common Share on the exercise date over the exercise
price of the SAR. The exercise price of the SAR shall be determined
by the Committee and shall not be less than the Fair Market Value of
a Common Share on the date the SAR is granted. SARs may be granted in
tandem with an Option in which event the Grantee has the right to
elect to exercise either the SAR or the Option. Upon the election to
exercise one of these Awards, the other Award is subsequently
terminated. An SAR may also be granted as an independent Award.
8.2 In the case of an SAR granted in tandem with an ISO to an Employee
who is a Ten Percent Shareholder on the date of such grant, the
amount payable with respect to each SAR shall be equal in value to
the applicable percentage of the excess, if any, of the Fair Market
Value of a Common Share on the exercise date over the exercise price
of the SAR, which exercise price shall not be less than 110 percent
of the Fair Market Value of a Common Share on the date the SAR is
granted.
8.3 The applicable percentage, exercise price and exercise period of a
SAR shall be established by the Committee at the time the SAR is
granted.
SECTION 9
RESTRICTED STOCK
9.1 Restricted Shares are Common Shares that are issued to a Grantee at a
price determined by the Committee, which price may be zero, and is
subject to restrictions on transfer and/or such other restrictions on
incidents of ownership as the Committee may determine.
9.2 The Committee shall specify in the restricted share award agreement
the terms upon which Restricted Shares shall vest; provided, however
that the Grantee continues to be employed by the Corporation on the
vesting date.
9.3 The Committee may, in its discretion, provide for accelerated vesting
of Restricted Shares upon the achievement of specified performance
goals to be determined by the Committee.
9.4 A Grantee may make the election under Section 83(b) of the Code.
SECTION 10
PERFORMANCE AWARDS
10.1 A Performance Award granted under this Plan:
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a) may be denominated or payable in cash, Common Shares,
Restricted Shares, other securities or other Awards; and
b) shall confer on the holder thereof the right to receive
payments, in whole or in part, upon the achievement of such
performance goals during such performance periods as the
Committee shall establish.
10.2 Subject to the terms of this Plan and any applicable Award agreement,
the performance goals to be achieved during any performance period,
the length of any performance period, the amount of any Performance
Award granted and the amount of any payment or transfer to be made
pursuant to any Performance Award shall be determined by the
Committee.
SECTION 11
OTHER STOCK-BASED INCENTIVE AWARDS
11.1 The Committee may from time to time grant Awards under this Plan that
provide a Grantee the right to purchase Common Shares or units that
are valued by reference to the Fair Market Value of the Common Shares
(including, but not limited to, phantom securities or dividend
equivalents) or to receive Deferred Shares. Such Awards shall be in a
form determined by the Committee (and may include terms contingent
upon a Change of Control); provided that such Awards shall not be
inconsistent with the terms and purposes of this Plan.
SECTION 12
EXERCISE OF OPTIONS
12.1 The Committee may provide for the exercise of Options in installments
and upon such terms, conditions and restrictions as it may determine
subject to applicable law and the other requirements of this Plan.
12.2 Except in the event of the death, Disability or Retirement of a
Grantee, upon the resignation or removal from the board of directors
of any Grantee who is a Director or upon the termination of
employment of a Grantee who is not a Director, any Option which has
not yet become exercisable shall thereupon terminate and be of no
further force or effect, and, unless the Committee shall specifically
state otherwise at the time an Option is granted, any Option which
has become exercisable shall terminate if it is not exercised within
three months of such resignation, removal or termination of
employment or directorship.
12.3 Unless the Committee shall specifically state otherwise at the time
an Option is granted, in the event the employment or the directorship
of a Grantee is Terminated for Cause, any Option that has not been
exercised shall thereupon terminate and be of no further force or
effect.
12.4 An Option granted hereunder shall be exercisable, in whole or in
part, only by written notice delivered in person or by mail to the
Secretary of the Corporation at its principal office, specifying the
number of Common Shares to be purchased and accompanied by payment
thereof and otherwise in accordance with the stock option award
agreement pursuant to which the Option was granted.
SECTION 13
RIGHTS IN EVENT OF DEATH, DISABILITY OR RETIREMENT
13.1 If a Grantee dies, becomes subject to a Disability or enters
Retirement prior to termination of his or her right to exercise an
Option in accordance with the provisions of his or her stock option
award agreement without having totally exercised the Option, the
stock option award agreement may provide that the
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Option shall become exercisable in full on the date of the Grantee's
death, Disability or Retirement, (i) in the event of the Grantee's
death, by the Grantee's estate or by the person who acquired the
right to exercise the Option by bequest or inheritance (ii) in the
event of the Grantee's Disability, by the Grantee or his or her
personal representative or (iii) in the event of a Grantee's
Retirement, by the Grantee.
13.2 In the event of the Grantee's death, Disability or Retirement the
Option, if it has become exercisable in full, shall not be
exercisable after the date of its expiration or more than twelve
months from the date of the Grantee's death, Disability or
Retirement, whichever first occurs.
13.3 The date of Disability of a Grantee shall be determined by the
Committee.
SECTION 14
AWARD AGREEMENTS
14.1 Each Award granted under this Plan shall be evidenced by an award
agreement, as the Committee may deem appropriate, between the Grantee
to whom the Award is granted and the Corporation, setting forth the
number of Common Shares, SARs, or units subject to the Award and such
other terms and conditions applicable to the Award not inconsistent
with this Plan.
14.2 The award agreement for an Option shall also be referred to as a
stock option award agreement.
SECTION 15
TAX WITHHOLDING
15.1 The Committee may establish such rules and procedures as it considers
desirable in order to satisfy any obligation of the Corporation to
withhold federal income taxes or other taxes with respect to any
Award made under this Plan. Such rules and procedures may provide:
a) in the case of Awards paid in Common Shares, the Corporation
may withhold Common Shares otherwise issuable upon exercise of
such Award in order to satisfy withholding obligations, unless
otherwise instructed by the Grantee or unless the Committee
determines otherwise at the time of Grant; and
b) in the case of an Award paid in cash, that the withholding
obligation shall be satisfied by withholding the applicable
amount and paying the net amount in cash to the Grantee;
provided that the requirements of the Rules, to the extent
applicable, must be satisfied with regard to any withholding
pursuant to clause (a).
SECTION 16
CHANGE OF CONTROL
16.1 For the purpose of this Plan, a "Change of Control" of the
Corporation means a change of control of a nature that:
(i) would be required to be reported in response to Item 1(a) of
the current report on Form 8-K, as in effect on the date
hereof, pursuant to Section 13 or 15(d) of the Exchange Act;
or
(ii) results in a Change of Control of the Corporation within the
meaning of the Home Owners' Loan Act of 1933, as amended, and
the Rules and Regulations promulgated by the OTS, as in
effect on the Effective Date (provided, that in applying the
definition of change of control as set forth under the rules
and regulations of the OTS, the Board shall substitute its
judgment for that of the OTS); or
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(iii) without limitation, such a Change of Control shall be deemed
to have occurred at such time as;
(a) any "person" (as the term is used in Sections 13(d)
and 14(d) of the Exchange Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of
securities of the Corporation representing 20% or
more of the Corporation's outstanding securities
ordinarily having the right to vote at the election
of directors;
(b) individuals who constitute the Board on the date
hereof (the "Incumbent Board") cease for any reason
to constitute at least a majority thereof, provided
that any person becoming a director subsequent to the
date hereof whose election was approved by a vote of
a least 75% of the directors comprising the Incumbent
Board, or whose nomination for election by the
Corporation's shareholders was approved by the same
Nominating Committee serving under an Incumbent Board
shall be, for purposes of this clause (b), considered
as though he were a member of the Incumbent Board;
(c) a plan of reorganization, merger, consolidation, sale
of all or substantially all the assets of the
Corporation or similar transaction occurs in which
the Corporation is not the resulting entity or;
(d) the approval by shareholders of a proxy statement
proposal soliciting proxies from shareholders of the
Corporation, by someone other than the current
management of the Corporation; seeking shareholder
approval of a plan of reorganization, merger or
consolidation of the Corporation or similar
transaction with one or more corporations as a result
of which the outstanding shares of the class of
securities then subject to the plan or transaction
are exchanged for or converted into cash or property
or securities not issued by the Corporation; or
(e) a tender offer is made and completed for 20% or more
of the voting securities of the Corporation.
16.2 In the event of a Change of Control affecting the Corporation, then,
notwithstanding any provision of this Plan or of any provisions of
any Award agreements entered into between the Corporation and any
Grantee to the contrary, all Awards that have not expired and which
are then held by any Grantee (or the person or persons to whom any
deceased Grantee's rights have been transferred) shall, as of such
Change of Control, become fully and immediately vested and
exercisable and may be exercised for the remaining term of such
Awards; provided, however, that in the event that any exercise or
receipt of an Award in connection with a Change of Control alone, or
in the aggregate with other payments to a Grantee, would result in
the imposition of a penalty tax pursuant to Section 280G of the Code,
such exercise or receipt would remain subject to any vesting schedule
set forth in an Award.
SECTION 17
DILUTION OR OTHER ADJUSTMENT
17.1 If the Corporation is a party to any merger or consolidation, or
undergoes any merger, consolidation, separation, reorganization,
liquidation or the like, the Committee shall have the power to make
arrangements, which shall be binding upon the holders of unexpired
Awards, for the substitution of new Awards for, or the assumption by
another corporation of, any unexpired Awards then outstanding
hereunder.
17.2 In the event of any change in capitalization affecting the Common
Shares, such as a stock split, stock dividend, recapitalization,
merger, consolidation, spin-off, split-up, combination or exchange of
shares or other form of reorganization, or any other change affecting
the Common Shares, including a distribution
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(other than normal cash dividends) of Corporation assets to
shareholders, the Committee shall conclusively determine the
appropriate adjustment in the option prices of outstanding Options,
and the number and kind of shares or other securities as to which
outstanding Awards shall be exercisable, and the aggregate number of
shares with respect to which Awards may be granted.
17.3 The existence of this Plan and the Options granted hereunder shall
not affect or restrict in any way the right or power of the Board or
the shareholders of the Corporation to make or authorize the
following: any adjustment, recapitalization, reorganization or other
change in the Corporation's capital structure or its business; any
merger, acquisition or consolidation of the Corporation; any issuance
of bonds, debentures, preferred or prior preference stocks ahead of
or affecting the Corporation's capital stock or the rights thereof;
the dissolution or liquidation of the Corporation or any sale or
transfer of all or any part of its assets or business; or any other
corporate act or proceeding, including any merger or acquisition
which would result in the exchange of cash, stock of another company
or options to purchase the stock of another company for any Option
outstanding at the time of such corporate transaction or which would
involve the termination of all Options outstanding at the time of
such corporation transaction.
SECTION 18
TRANSFERABILITY
18.1 Except as set forth in Section 18.2 of this Plan, no Award shall be
sold, pledged, assigned, transferred, or encumbered by a Grantee
other than by will or by the laws of descent and distribution.
18.2 Only an NQSO may be pledged, assigned, or transferred by a Grantee to
another individual provided that the NQSO is pledged, assigned, or
transferred without consideration by a Grantee, subject to such rules
as the Committee may adopt, to (i) a member of the Grantee's
immediate family, (ii) a trust solely for the benefit of the Grantee
and his or her immediate family or (iii) a partnership or limited
liability company whose only partners or members are the Grantee and
his or her Immediate Family (hereinafter referred to as the Permitted
Transferee); provided that the Committee is notified in advance in
writing of the terms and conditions of any proposed pledge,
assignment or transfer and the Committee determines that such pledge,
assignment or transfer complies with the requirements of this Plan
and the applicable Award agreement.
18.3 Any pledge, assignment or transfer of an Award that does not comply
with the provisions of this Plan and the applicable Award agreement
shall be void and unenforceable against the Corporation.
18.4 All terms and conditions of a pledged, assigned or transferred Award
shall apply to the beneficiary, executor, administrator, and
Permitted Transferee, whether one or more, of the Grantee (including
the beneficiary, executor and administrator of a permitted
transferee), including the right to amend the applicable Award
agreement; PROVIDED that the permitted transferee shall not pledge,
assign or transfer an Award other than by will or by the laws of
descent and distribution.
SECTION 19
AMENDMENT, TERMINATION OR MODIFICATION
19.1 Without further approval of the shareholders of the Corporation, the
Board may at any time terminate this Plan, or may amend it from time
to time in such respects as the Board may deem advisable, except that
the Board may not, without approval of the shareholders, make any
amendment which would (i) increase the aggregate number of Common
Shares that may be issued under this Plan, except for adjustments
pursuant to Section 17 of this Plan, (ii) materially modify the
requirements as to eligibility for participation in this Plan, or
(iii) materially increase the benefits accruing under this Plan. The
above notwithstanding, the Board may amend this Plan to take into
account changes in applicable securities, federal income tax and
other applicable laws.
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19.2 The Board may authorize the Committee to direct the execution of an
instrument providing for the modification of any outstanding Option
which the Board believes to be in the best interests of the
Corporation; provided, however, that no such modification, extension
or renewal shall confer on the holder of such Option any right or
benefit which could not be conferred on him by the grant of a new
Option at such time and shall not materially decrease the holder's
benefits under the Option without the consent of the holder of the
Option, except as otherwise permitted under this Plan.
SECTION 20
GENERAL PROVISIONS
20.1 No Awards may be exercised by a Grantee if such exercise, and the
receipt of cash or stock thereunder, would be, in the opinion of
counsel selected by the Corporation, contrary to law or the
regulations of any duly constituted authority having jurisdiction
over this Plan.
20.2 A bona fide leave of absence approved by a duly constituted officer
of the Corporation shall not be considered interruption or
termination of service of any Grantee for any purposes of this Plan
or Awards granted thereunder, except that no Awards may be granted to
an Employee while he or she is on a bona fide leave of absence.
20.3 No Grantee shall have any rights as a shareholder with respect to any
shares subject to Awards granted to him or her under this Plan prior
to the date as of which he or she is actually recorded as the holder
of such shares upon the stock records of the Corporation.
20.4 Nothing contained in this Plan or in an Award agreement granted
thereunder shall confer upon any Grantee any right to (i) continue in
the employ of the Corporation or any of its Subsidiaries or continue
serving on the Board or (ii) interfere in any way with the right of
the Corporation or any of its Subsidiaries to terminate the Grantee's
employment at any time or service on the Board.
20.5 Any Award agreement may provide that shares issued upon exercise of
any Awards may be subject to such restrictions, including, without
limitation, restrictions as to transferability and restrictions
constituting substantial risks of forfeiture as the Committee may
determine at the time such Award is granted.
SECTION 21
PLAN EFFECTIVE DATE
21.1 This Plan shall become effective on the date of its adoption by the
Board subject to approval of this Plan by the shareholders of the
Corporation within twelve (12) months after the date of this Plan's
adoption by the Board (the "Effective Date"). In the event of the
failure to obtain such shareholder approval, this Plan and any Awards
granted thereunder, shall be null and void and the Corporation shall
have no liability thereunder.
21.2 No Award granted under this Plan shall be exercisable until such
shareholder approval has been obtained.
SECTION 22
PLAN TERMINATION
22.1 No Award may be granted under this Plan on or after the date which is
ten years following the effective date specified in Section 21, but
Awards previously granted may be exercised in accordance with their
terms.
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SECTION 23
GOVERNING LAW
23.1 This Plan and all actions taken hereunder shall be governed by and
construed in accordance with the laws of the State of Ohio, except to
the extent federal law shall be deemed applicable.
