<PAGE>
<PAGE>
As filed with the Securities and Exchange Commission
on April 25, 1997.
Registration No. 33-_____
_________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________________
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
_____________________________________________
PROGRESSIVE BANK, INC.
- ---------------------------------------------------------------
(Exact name of Registrant as Specified in Its Charter)
New York 14-1682661
- ---------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1301 Route 52, P.O. Box 7000
Fishkill, New York 12524-7000
(914) 897-7400
- -----------------------------------------------------------------
(Address of Principal Executive Offices)
Progressive Bank, Inc.
1997 Stock Option Plan
- -----------------------------------------------------------------
(Full Title of the Plan)
J. Mark Poerio, Esquire
Joel E. Rappoport, Esquire
Housley Kantarian & Bronstein, P.C.
1220 19th Street N.W., Suite 700
Washington, D.C. 20036
- -----------------------------------------------------------------
(Name and Address of Agent For Service)
(202) 822-9611
- ----------------------------------------------------------------
(Telephone number, including area code, of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===================================================================================
<S> <C> <C> <C> <C>
Title of each Proposed Maximum Proposed Maximum Amount of
class of Securities Amount to be Offering Price Aggregate Offering Registration
to be registered registered Per Share Price Fee
- ------------------------------------------------------------------------------------
Common Stock,
$1.00 par value 375,000 (1) $ (2) $8,886,125 (2) $2,409.19
=====================================================================================
<FN>
(1) Maximum number of shares issuable under Progressive Bank, Inc. 1997
Employee Stock Option Plan, as such amounts may be increased in accordance
with said plan in the event of a merger, consolidation, recapitalization or
similar event involving the Registrant.
(2) Under Rule 457(h) the registration fee may be calculated, inter alia, based
upon the price at which the options may be exercised. 375,000 shares are
being registered hereby, of which 40,250 are under option at a weighted
average exercise price of $23.25 per share ($935,812.50 in the aggregate).
The remainder of such shares, which are not presently subject to option
(334,750 shares), are being registered based upon the last sale price of the
common stock of the Registrant as reported on the National Association of
Securities Dealers Automated Quotation, National Market System ("NMS") on
April 24, 1997 of $23.75 per share ($7,950,312.50 in the aggregate).
Therefore, the total amount of the offering being registered herein is
$8,886,125.
</FN>
/TABLE
<PAGE>
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION
10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION*
- ------
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL
- ------ INFORMATION*
*Documents containing the information required by Part I of
this Registration Statement will be sent or given to participants
in the Progressive Bank, Inc. 1997 Employee Stock Option Plan
(the "Plan") in accordance with Rule 428(b)(1). In accordance
with Note to Part I of Form S-8, such documents are not filed
with the Securities and Exchange Commission (the "Commission")
either as part of this Registration Statement or as prospectuses
or prospectus supplements.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
- ------
Progressive Bank, Inc. (the "Company") is subject to the
informational requirements of the Securities Exchange Act of 1934
(the "1934 Act") and, accordingly, files periodic reports and
other information with the Commission. Reports, proxy statements
and other information concerning the Company filed with the
Commission may be inspected and copies may be obtained (at
prescribed rates) at the Commission's Public Reference Section,
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549. The
Commission also maintains a Web site that contains reports, proxy
and information statements and other information regarding
registrants that file electronically with the Commission,
including the Company. The address for the Commission's Web site
is "http://www.sec.gov".
The following documents are incorporated by reference in
this Registration Statement:
(a) The Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996 as filed with the Commission
on March 20, 1997 (Commission File No. 0-15025).
(b) The description of the Company's securities as
contained in the Company's Registration Statement on Form 8-A as
declared effective by the Commission on October 17, 1986.
ALL DOCUMENTS FILED BY THE COMPANY PURSUANT TO SECTIONS
13(A), 13(C), 14, AND 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 AFTER THE DATE HEREOF AND PRIOR TO THE TERMINATION OF THE
OFFERING OF THE SHARES OF COMMON STOCK, PAR VALUE $1.00 PER SHARE
("COMMON STOCK") SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE
IN THIS REGISTRATION STATEMENT, AND TO BE A PART HEREOF FROM THE
DATE OF FILING OF SUCH DOCUMENTS.
ITEM 4. DESCRIPTION OF SECURITIES
- ------
Not applicable, as the Common Stock is registered under
Section 12 of the Securities Exchange Act of 1934.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
- ------
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
- ------
Section 5(b) of the Company's Certificate of Incorporation
provides that the directors of the Company are not liable to the
corporation or its shareholders for any breach of fiduciary duty
as a director unless the actions or omissions were in bad faith
or involved intentional misconduct or a knowing violation of law
or unless the director personally gained in fact a financial
profit or other advantage to which he or she was not legally
entitled or that the director's acts violated New York Business
Corporation Law Section 719.<PAGE>
<PAGE>
Pursuant to Section 11 of Article III of the By-laws of the
Company, directors, officers and employees of the Company are
indemnified by the Company against certain liabilities, which may
include liabilities under the 1933 Act. The registrant has
entered into agreements with each member of its Board of
Directors providing for indemnification to each director to the
fullest extent permitted by law. Sections 721 through 726 of the
New York Business Corporation Law set forth circumstances under
which directors and officers may be indemnified against liability
incurred in their capacity as such. Section 721 provides in
effect that no director or officer can be indemnified if a
judgment or other final adjudication adverse to the director or
officer establishes that his or her acts were committed in bad
faith or were the result of action and deliberate dishonesty and
were material to the cause of action so adjudicated, or that he
or she personally gained in fact a financial profit or other
advantage to which he or she was not legally entitled.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
- ------
Not Applicable.
ITEM 8. EXHIBITS
- ------
For a list of all exhibits filed or included as part of
this Registration Statement, see "Index to Exhibits" at the end
of this Registration Statement.
ITEM 9. UNDERTAKINGS
- ------
1. 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 of 1933;
(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) 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.
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(i) and (a)(ii) do not
apply if the registration statement is on Form S-3, Form S-8, and
the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports
filed by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(b) That, for the purpose of determining any liability
under the Securities Act of 1934, to treat each post-effective
amendment as a new registration statement relating to the
securities offered, and the offering of the securities at that
time to be the initial bona fide offering.
(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.
<PAGE>
<PAGE>
(d) If the registrant is a foreign private issuer, to
file a post-effective amendment to the registration statement to
include any financial statements required by Rule 3-19 of
Regulation S-X at the start of any delayed offering or throughout
a continuous offering.
2. The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
3. The undersigned registrant hereby undertakes to deliver
or cause to be delivered with the prospectus, to each person to
whom the prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the
prospectus and furnished pursuant to and meeting the requirements
of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be
presented by Article 3 of Regulation S-X is not set forth in the
prospectus, to deliver, or cause to be delivered to each person
to whom the prospectus is sent or given, the latest quarterly
report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
4. Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than 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.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
as amended, 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 the City of Fishkill, State of New York, on
April 24, 1997.
PROGRESSIVE BANK, INC.
By: /s/Peter Van Kleeck
------------------------
Peter Van Kleeck
President and Chief Executive Officer
(Duly Authorized Representative)
POWER OF ATTORNEY
We, the undersigned Directors of Progressive Bank, Inc.,
hereby severally constitute and appoint Peter Van Kleeck, with
full power of substitution, our true and lawful attorney and
agent, to do any and all things in our names in the capacities
indicated below which said Peter Van Kleeck may deem necessary or
advisable to enable Progressive Bank, Inc. to comply with the
Securities Act of 1933, as amended, and any rules, regulations
and requirements of the Securities and Exchange Commission, in
connection with the registration of Progressive Bank, Inc. common
stock, including specifically, but not limited to, power and
authority to sign for us in our names in the capacities indicated
below, the registration statement and any and all amendments
(including post-effective amendments) thereto; and we hereby
ratify and confirm all that said Peter Van Kleeck shall do or
cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- ----------- ----- -----
<S> <C> <C>
/s/Peter Van Kleeck President & Chief Executive April 24, 1997
- ------------------------- Officer
Peter Van Kleeck
/s/Robert A. Gabrielsen Treasurer (Principal Financial April 24, 1997
- ------------------------- and Accounting Officer)
Robert A. Gabrielsen
/s/Thomas C. Aposporos Director and Chairman of the April 24, 1997
- ------------------------- Board
Thomas C. Aposporos
/s/Elizabeth P. Alleny Director April 24, 1997
- -------------------------
Elizabeth P. Allen
/s/George M. Coulter Director April 24, 1997
- -------------------------
George M. Coulter
/s/Richard T. Hazzard Director April 24, 1997
- -------------------------
Richard T. Hazzard
/s/Richard Novik Director April 24, 1997
- -------------------------
Richard Novik
/s/John J. Page Director April 24, 1997
- -------------------------
John J. Page
/s/Archibald A. Smith Director April 24, 1997
- ------------------------
Archibald A. Smith
/s/Roger W. Smith Director April 24, 1997
- ------------------------
Roger W. Smith
/s/David A. Swinden Director April 24, 1997
- ------------------------
David A. Swinden
/TABLE
<PAGE>
<PAGE>
INDEX TO EXHIBITS
Exhibit Description
- ------- -----------
5 Opinion of Housley Kantarian & Bronstein, P.C.
as to the validity of the Common Stock being
registered
23.1 Consent of Housley Kantarian & Bronstein, P.C.
(appears in their opinion filed as Exhibit 5)
23.2 Consent of Independent Certified Public Accountants
24 Power of Attorney (contained in the signature page
to this registration statement)
99.1 Progressive Bank, Inc. 1997 Employee Stock Option
Plan
99.2 Form of Stock Option Agreement to be entered into
with Optionees with respect to Incentive Stock
Options granted under the Progressive Bank, Inc. 1997
Employee Stock Option Plan
99.3 Form of Stock Option Agreement to be entered into
with Optionees with respect to Non-Incentive Stock
Options granted under the Progressive Bank, Inc. 1997
Employee Stock Option Plan
99.4 Form of Agreement to be entered into with Optionees
with respect to Stock Appreciation Rights granted
under the Progressive Bank, Inc. 1997 Employee Stock
Option Plan
April 25, 1997
Board of Directors
Progressive Bank, Inc.
1301 Route 52, P.O. Box 7000
Fishkill, New York 12524-7000
Re: Registration Statement on Form S-8
--------------------------------------------------
Progressive Bank, Inc. 1997 Employee Stock Option Plan
Dear Board Members:
We have acted as special counsel to Progressive Bank, Inc.,
a New York corporation (the "Company"), in connection with the
preparation of the Registration Statement on Form S-8 filed with
the Securities and Exchange Commission (the "Registration
Statement") under the Securities Act of 1933, as amended,
relating to shares of common stock, par value $1.00 per share
(the "Common Stock") of the Company which may be issued pursuant
to the Progressive Bank, Inc. 1997 Employee Stock Option Plan
(the "Plan"), all as more fully described in the Registration
Statement. You have requested the opinion of this firm with
respect to certain legal aspects of the proposed offering.
We have examined such documents, records and matters of law
as we have deemed necessary for purposes of this opinion and
based thereon, we are of the opinion that the Common Stock when
issued pursuant to and in accordance with the terms of the Plan
will be duly and validly issued, fully paid, and nonassessable.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement on Form S-8 and to
references to our firm included under the caption "Legal Opinion"
in the Prospectus which is part of the Registration Statement.
Very truly yours,
Housley Kantarian & Bronstein, P.C.
By: /s/J. Mark Poerio
-----------------------
J. Mark Poerio, Esquire
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Progressive Bank, Inc.
We consent to the incorporation by reference in this registration
statement on Form S-8 of Progressive Bank, Inc. related to the
Progressive Bank, Inc. 1997 Employee Stock Option Plan of our
report dated January 21, 1997, relating to the consolidated
balance sheets of Progressive Bank, Inc. and subsidiary as of
December 31, 1996 and 1995, and the related consolidated
statements of income, stockholders' equity, and cash flows for
each of the years in the three-year period ended December 31,
1996, which reports appears in the December 31, 1996 annual
report on Form 10-K of Progressive Bank, Inc. We also consent to
the reference to our firm under the heading "Experts" in the
prospectus.
/s/KPMG Peat Marwick LLP
Stamford, Connecticut
April 25, 1997
<PAGE>
PROGRESSIVE BANK, INC.
1997 EMPLOYEE STOCK OPTION PLAN
1. PURPOSE OF THE PLAN.
The purpose of this Plan is to advance the interests of the
Company through providing select Employees of the Bank, the
Company, and their Affiliates with the opportunity to acquire
Shares. By encouraging such stock ownership, the Company seeks
to attract, retain and motivate the best available personnel for
positions of substantial responsibility and to provide additional
incentives to Employees of the Company or any Affiliate to
promote the success of the Company.
2. DEFINITIONS.
As used herein, the following definitions shall apply.
(a) "Account" shall mean a bookkeeping account
maintained by the Company in the name of a Participant who has
received an Award of Phantom Stock.
(b) "Affiliate" shall mean any "parent corporation" or
"subsidiary corporation" of the Company, as such terms are
defined in Section 424(e) and (f), respectively, of the Code.
(c) "Agreement" shall mean a written agreement entered
into in accordance with Paragraph 5(c).
(d) "Awards" shall mean, collectively, Options, SARs,
Phantom Stock, and Restricted Stock unless the context clearly
indicates a different meaning.
(e) "Bank" shall mean Pawling Savings Bank.
(f) "Board" shall mean the Board of Directors of the
Company.
(g) "Change in Control" shall mean any one of the
following events: (i) the acquisition of ownership, holding or
power to vote more than 25% of the voting stock of the Bank or
the Company, (ii) the acquisition of the ability to control the
election of a majority of the Bank's or the Company's directors,
(iii) the acquisition of a controlling influence over the
management or policies of the Bank or of the Company by any
person or by persons acting as a "group" (within the meaning of
Section 13(d) of the Securities Exchange Act of 1934), or (iv)
during any period of two consecutive years, individuals (the
"Continuing Directors") who at the beginning of such period
constitute the Board of Directors of the Bank or of the Company
(the "Existing Board") cease for any reason to constitute at
least two-thirds thereof, provided that any individual whose
election or nomination for election as a member of the Existing
Board was approved by a vote of at least two-thirds of the
Continuing Directors then in office shall be considered a
Continuing Director. Notwithstanding the foregoing, the
Company's ownership of the Bank shall not of itself constitute a
Change in Control for purposes of the Agreement. For purposes of
this paragraph only, the term "person" refers to an individual or
a corporation, partnership, trust, association, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization
or any other form of entity not specifically listed herein.
(h) "Code" shall mean the Internal Revenue Code of
1986, as amended.
(i) "Committee" shall mean either the Stock Option
Committee appointed by the Board in accordance with Paragraph
5(a) hereof, or the Board itself (which may act, at any time and
from time to time, in lieu of the Stock Option Committee).
(j) "Common Stock" shall mean the common stock of the
Company.
<PAGE>
(k) "Company" shall mean Progressive Bank, Inc.
(l) "Continuous Service" shall mean the absence of any
interruption or termination of service as an Employee of the
Company or an Affiliate. Continuous Service shall not be
considered interrupted in the case of sick leave, military leave
or any other leave of absence approved by the Company, in the
case of transfers between payroll locations of the Company or
between the Company, an Affiliate or a successor.
(m) "Director" shall mean any member of the Board and
any member of the board of directors of any Affiliate.
(n) "Disability" shall mean a physical or mental
condition, which in the sole and absolute discretion of the
Committee, is reasonably expected to be of indefinite duration
and to substantially prevent a Participant from fulfilling his or
her duties or responsibilities to the Company or an Affiliate.
(o) "Effective Date" shall mean the date specified in
Paragraph 16 hereof.
(p) Employee" shall mean any person employed by the
Company, the Bank, or an Affiliate.
(q) "Exercise Price" shall mean the price per Optioned
Share at which an Option or SAR may be exercised.
(r) "ISO" shall mean an option to purchase Common
Stock which meets the requirements set forth in the Plan, and
which is intended to be and is identified as an "incentive stock
option" within the meaning of Section 422 of the Code.
(s) "Market Value" shall mean the fair market value of
the Common Stock, as determined under Paragraph 7(b) hereof.
(t) "Non-Employee Director" shall have the meaning
provided in Rule 16b-3.
(u) "Non-ISO" means an option to purchase Common Stock
which meets the requirements set forth in the Plan but which is
not intended to be and is not identified as an ISO.
(v) "Option" means an ISO and/or a Non-ISO.
(w) "Optioned Shares" shall mean Shares subject to an
Award granted pursuant to this Plan.
(x) "Participant" shall mean any person who receives
an Award pursuant to the Plan.
(y) "Phantom Stock" shall mean an award pursuant to
Paragraph 10 hereof.
(z) "Plan" shall mean the Progressive Bank, Inc. 1997
Employee Stock Option Plan.
(aa) "Restricted Stock" means Common Stock which is
subject to restrictions against transfer and forfeiture and such
other terms and conditions determined by the Committee, as
provided in Paragraph 11.
(bb) "Rule 16b-3" shall mean Rule 16b-3 of the General
Rules and Regulations under the Securities Exchange Act of 1934,
as amended.
(cc) "Share" shall mean one share of Common Stock.
2
<PAGE>
<PAGE>
(dd) "SAR" (or "Stock Appreciation Right") means a
right to receive the appreciation in value, or a portion of the
appreciation in value, of a specified number of shares of Common
Stock.
(ee) "Year of Service" shall mean a full twelve-month
period, measured from the date of an Award and each annual
anniversary of that date, during which a Participant has not
terminated Continuous Service for any reason.
3. TERM OF THE PLAN AND AWARDS.
(a) Term of the Plan. The Plan shall continue in
effect for a term of ten (10) years from the Effective Date,
unless sooner terminated pursuant to Paragraph 18 hereof. No
Award shall be granted under the Plan after ten (10) years from
the Effective Date.
(b) Term of Awards. The term of each Award granted
under the Plan shall be established by the Committee, but shall
not exceed ten years; provided, however, that in the case of an
Employee who owns Shares representing more than 10% of the
outstanding Common Stock at the time an ISO is granted, the term
of such ISO shall not exceed five years.
4. SHARES SUBJECT TO THE PLAN.
(a) General Rule. Except as otherwise required under
Paragraph 13, the aggregate number of Shares deliverable pursuant
to Awards shall not exceed 375,000 Shares. Such Shares may
either be authorized but unissued Shares, Shares held in
treasury, or Shares held in a grantor trust created by the
Company. If an Award should expire, become unexercisable, be
forfeited, or be cancelled for any reason without having resulted
in the issuance of Shares, the Shares subject to the Award shall,
unless the Plan has been terminated, become available for the
grant of additional Awards under the Plan.
(b) Special Rule for SARs. The number of Shares with
respect to which an SAR is granted, but not the number of Shares
which the Company delivers or could deliver to an Employee or
individual upon exercise of an SAR, shall be charged against the
aggregate number of Shares remaining available under the Plan;
provided, however, that in the case of an SAR granted in
conjunction with an Option, under circumstances in which the
exercise of the SAR results in termination of the Option and vice
versa, only the number of Shares subject to the Option shall be
charged against the aggregate number of Shares remaining
available under the Plan. The Shares involved in an Option as to
which option rights have terminated by reason of the exercise of
a related SAR, as provided in Paragraph 9 hereof, shall not be
available for the grant of further Options under the Plan.
5. ADMINISTRATION OF THE PLAN.
(a) Composition of the Committee. The Plan shall be
administered by the Committee, which shall consist of not less
than two (2) members of the Board who are Non-Employee Directors.
Members of the Committee shall serve at the pleasure of the
Board. In the absence at any time of a duly appointed Committee,
the Plan shall be administered by the Board.
(b) Powers of the Committee. Except as limited by the
express provisions of the Plan or by resolutions adopted by the
Board, the Committee shall have sole and complete authority and
discretion (i) to select Participants and grant Awards, (ii) to
determine the form and content of Awards to be issued in the form
of Agreements under the Plan, (iii) to interpret the Plan, (iv)
to prescribe, amend and rescind rules and regulations relating to
the Plan, and (v) to make other determinations necessary or
advisable for the administration of the Plan. The Committee
shall have and may exercise such other power and authority as may
be delegated to it by the Board from time to time. A majority of
the entire Committee shall constitute a quorum and the action of
a majority
3
<PAGE>
<PAGE>
of the members present at any meeting at which a quorum is
present, or acts approved in writing by a majority of the
Committee without a meeting, shall be deemed the action of the
Committee.
(c) Agreement. Each Award shall be evidenced by a
written agreement containing such provisions as may be approved
by the Committee. Each such Agreement shall constitute a binding
contract between the Company and the Participant, and every
Participant, upon acceptance of such Agreement, shall be bound by
the terms and restrictions of the Plan and of such Agreement.
The terms of each such Agreement shall be in accordance with the
Plan, but each Agreement may include such additional provisions
and restrictions determined by the Committee, in its discretion,
provided that such additional provisions and restrictions are not
inconsistent with the terms of the Plan. In particular, the
Committee shall set forth in each Agreement (i) the Exercise
Price of an Option or SAR, (ii) the number of Shares subject to
the Award, and its expiration date, (iii) the manner, time, and
rate (cumulative or otherwise) of exercise or vesting of such
Award, and (iv) the restrictions, if any, to be placed upon such
Award, or upon Shares which may be issued upon exercise of such
Award. The Chairman of the Committee and such other Directors
and officers as shall be designated by the Committee are hereby
authorized to execute Agreements on behalf of the Company and to
cause them to be delivered to the recipients of Awards.
(d) Effect of the Committee's Decisions. All deci-
sions, determinations and interpretations of the Committee shall
be final and conclusive on all persons affected thereby.
(e) Indemnification. In addition to such other rights
of indemnification as they may have, the members of the Committee
shall be indemnified by the Company in connection with any claim,
action, suit or proceeding relating to any action taken or
failure to act under or in connection with the Plan or any Award,
granted hereunder to the full extent provided for under the
Company's governing instruments with respect to the
indemnification of Directors.
6. GRANTING OF AWARDS.
(a) General Rule. Key Employees of the Company, the
Bank, or an Affiliate shall be eligible to receive discretionary
Awards. In selecting those key Employees to whom Awards will be
granted and the number of shares covered by such Awards, the
Committee shall consider the position, duties and
responsibilities of the eligible key Employees, the value of
their services to the Company and its Affiliates, and any other
factors the Committee may deem relevant. Notwithstanding the
foregoing, the Committee shall automatically make the Awards
specified in Paragraphs 6(b), 6(d), and 6(e).
(b) Automatic Grants to Employees. On the Effective
Date, each of the Employees listed in Exhibit "A" hereof shall
receive an Option (in the form of an ISO, to the extent
permissible under the Code) to purchase the number of Shares
listed in Exhibit "A" at an Exercise Price per Share equal to the
Market Value of a Share on the Effective Date; provided that such
grant shall not be made to an Employee whose Continuous Service
terminates on or before the Effective Date. Each of the Options
granted hereunder (i) shall vest in accordance with the general
rule set forth in Paragraph 8(a) of the Plan, (ii) shall have a
term of ten (10) years from the Effective Date, and (iii) shall
be subject to the general rule set forth in Paragraph 8(c) with
respect to the effect of a Participant's termination of
Continuous Service on the Participant's right to exercise his
Options.
(c) Special Rules for ISOs. The aggregate Market
Value, as of the date the Option is granted, of the Shares with
respect to which ISOs are exercisable for the first time by an
Employee during any calendar year (under all incentive stock
option plans, as defined in Section 422 of the Code, of the
Company or any present or future Affiliate of the Company) shall
not exceed $100,000. Notwithstanding the foregoing, the
Committee may grant Options in excess of the foregoing
limitations, in which case Options granted in excess of such
limitation shall be Non-ISOs.
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(d) Discounted Non-ISOs. Notwithstanding any provision
of this Plan to the contrary, the Committee may, at the election
of an Employee selected by the Committee, grant Non-ISOs to such
Employee in lieu of cash compensation otherwise payable by the
Company or an Affiliate. An Employee's election pursuant to this
Paragraph 6(d) shall be made prior to the calendar year for which
such election will be deemed effective, and in accordance with
regulations prescribed by the Committee. Elections shall be
approved or disapproved in the discretion of the Committee and in
accordance with the terms of the Plan. Changes to a
Participant's election pursuant to this Paragraph 6(d) shall be
prospective only. Pursuant to an election accepted and approved
by the Committee, a Participant may elect to forgo the receipt of
cash compensation otherwise expected from the Company or the Bank
and instead receive, as of the last day of the calendar year,
Non-ISOs with an aggregate difference between the Market Value of
the underlying Shares and the Exercise Price (determined as of
the first day of the calendar year) equal to the amount of cash
compensation foregone by the Participant pursuant to an election
covering the calendar year. Such Non-ISOs will be at all times
fully exercisable following their date of grant, and shall
otherwise be subject to the terms of the underlying Agreement and
this Plan. In no event however, may a Non-ISO be granted
pursuant to this Paragraph 6(d) either (i) with an Exercise Price
which is less than 50% of the Market Value of the underlying
Shares on the date of grant, or (ii) with respect to more than
10,000 Shares per calendar year for all Employees, who shall
receive cash reimbursement of their deferrals (done on a pro rata
basis) to the extent this limitation caps the Options awarded
hereunder.
A Participant's interest in receiving Non-ISOs pursuant to
this Paragraph 6(d) shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, or charge; and the Company shall not be obligated to
make any Awards to persons other than as specifically provided in
the Plan. A Participant shall not have a secured claim against
the assets of the Company, and such Participant shall rely solely
on the unsecured promise of the Company for the payment of any
compensation deferred through an election to receive a Non-ISO
pursuant to the Plan. Nothing herein shall be construed to give
any person any right, title, interest, or claim in or to any
specific asset, fund, reserve, account, or property of any kind
whatsoever owned by them or in which it may have any right, title
or interest now or in the future; but such persons shall have the
right to enforce his or her claim against the Company in the same
manner as any unsecured creditor.
(e) Reload of Options. The Committee may provide in
the grant of an Option that the Participant will receive a new
Option for Shares that are purchased upon the exercise of an
Option, upon the terms determined by the Committee in its
discretion, provided that grants of reload Options shall be made
only to the extent there are still Shares remaining from total
number of Shares authorized under paragraph 4(a) (on the day in
which the Shares authorized under the Plan in paragraph 4(a) are
fully depleted, any Participants exercising Options and
determined to be entitled to a grant of reload Options will have
their reload Options reduced pro rata among those Participants
exercising on that day), provided that the Participant is
employed when the initial Option is exercised. The Exercise
Price for the "reload" Option would be the Market Value of the
underlying Shares on the grant date of the reload Option. The
exercise of a reload Option would not trigger another Option
grant.
(f) Special Rule for Phantom Stock. A Phantom Stock
Award shall be invalid ab initio if the recipient is an Employee
who is not one of a "select group of management or highly
compensated employees" within the meaning of the Employee
Retirement Income Security Act, as amended.
7. EXERCISE PRICE FOR OPTIONS.
(a) Limits on Committee Discretion. The Exercise
Price as to any particular Option shall not be less than 50% of
the Market Value of the Optioned Shares on the date of grant. In
the case of an Employee who owns Shares representing more than
10% of the Company's outstanding Shares of Common Stock at the
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time an ISO is granted, the Exercise Price shall not be less than
110% of the Market Value of the Optioned Shares at the time the
ISO is granted.
(b) Standards for Determining Exercise Price. If the
Common Stock is listed on a national securities exchange
(including the NASDAQ National Market System) on the date in
question, then the Market Value per Share shall be the closing
sale price on such exchange on such date, or if there were no
sales on such date, then the Exercise Price shall be the mean
between the closing bid and asked price on such date. If the
Common Stock is traded otherwise than on a national securities
exchange on the date in question, then the Market Value per Share
shall be the mean between the bid and asked price on such date,
or, if there is no bid and asked price on such date, then on the
next prior business day on which there was a closing bid and
asked price. If no such bid and asked price is available, then
the Market Value per Share shall be its fair market value as
determined by the Committee, in its sole and absolute discretion.
8. EXERCISE OF OPTIONS.
(a) Generally. The Committee shall specify in each
Agreement the period of years over which the underlying Option
shall become exercisable. Notwithstanding the foregoing, an
Option shall become fully (100%) exercisable immediately upon
termination of the Participant's Continuous Service due to
Disability, death, or retirement, or upon a Change in Control.
(b) Procedure for Exercise. A Participant may
exercise Options, subject to provisions relative to its
termination and limitations on its exercise, only by (1) written
notice of intent to exercise the Option with respect to a
specified number of Shares, and (2) payment to the Company
(contemporaneously with delivery of such notice) in cash, in
Common Stock, or a combination of cash and Common Stock, of the
amount of the Exercise Price for the number of Shares with
respect to which the Option is then being exercised. Each such
notice (and payment where required) shall be delivered, or mailed
by prepaid registered or certified mail, addressed to the
Corporate Secretary of the Company at its executive offices. If
a Participant elects to pay for Optioned Shares by delivering
Shares of Common Stock already owned, such Shares shall be valued
at their Market Value on the business day immediately prior to
exercise of the Option. In addition, a Participant may also elect
to pay all or part of the Exercise Price of the Optioned Shares
by having the Company withhold from the Optioned Shares a number
of Shares having a Market Value, as of the day immediately prior
to the date of exercise, equal to the Exercise Price being paid
through such withholding. An Option may not be exercised for a
fractional Share.
(c) Period of Exercisability. Except to the extent
otherwise provided in the terms of an Agreement, an Option may be
exercised by a Participant only while he has maintained
Continuous Service from the date of the grant of the Option, or
within one year after termination of such Continuous Service (but
not later than the date on which the Option would otherwise
expire), except if the Participant's Continuous Service
terminates by reason of --
(1) "Just Cause" which for purposes hereof shall
have the meaning set forth in any unexpired employment or
severance agreement between the Participant and the Bank and/or
the Company (and, in the absence of any such agreement, shall
mean termination because of the Participant's personal
dishonesty, incompetence, willful misconduct, breach of fiduciary
duty involving personal profit, intentional failure to perform
stated duties, willful violation of any law, rule or regulation
(other than traffic violations or similar offenses) or final
cease-and-desist order), then the Participant's rights to
exercise such Option shall expire on the date of such
termination; or
(2) death, then to the extent that the
Participant would have been entitled to exercise the Option
immediately prior to his death, such Option of the deceased
Participant may be exercised within two years from the date of
his death (but not later than the date on which the Option would
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otherwise expire) by the personal representatives of his estate
or person or persons to whom his rights under such Option shall
have passed by will or by laws of descent and distribution.
(d) Effect of the Committee's Decisions. The
Committee's determination whether a Participant's Continuous
Service has ceased, and the effective date thereof, shall be
final and conclusive on all persons affected thereby.
(e) Mandatory Six-Month Holding Period.
Notwithstanding any other provision of this Plan to the contrary,
common stock of the Company that is purchased upon exercise of an
Option or SAR may not be sold within the six-month period
following the grant of that Option or SAR.
9. SARS (STOCK APPRECIATION RIGHTS)
(a) Granting of SARs. In its sole discretion, the
Committee may from time to time grant SARs either in conjunction
with, or independently of, any Options granted under the Plan.
An SAR granted in conjunction with an Option may be an
alternative right wherein the exercise of the Option terminates
the SAR to the extent of the number of Shares purchased upon
exercise of the Option and, correspondingly, the exercise of the
SAR terminates the Option to the extent of the number of Shares
with respect to which the SAR is exercised. Alternatively, an
SAR granted in conjunction with an Option may be an additional
right wherein both the SAR and the Option may be exercised. An
SAR may not be granted in conjunction with an ISO under
circumstances in which the exercise of the SAR affects the right
to exercise the ISO or vice versa, unless the SAR, by its terms,
meets all of the following requirements:
(1) The SAR will expire no later than the ISO;
(2) The SAR may be for no more than the
difference between the Exercise Price of the ISO and the Market
Value of the Shares subject to the ISO at the time the SAR is
exercised;
(3) The SAR is transferable only when the ISO is
transferable, and under the same conditions;
(4) The SAR may be exercised only when the ISO
may be exercised; and
(5) The SAR may be exercised only when the Market
Value of the Shares subject to the ISO exceeds the Exercise Price
of the ISO.
(b) Exercise Price. The Exercise Price as to any
particular SAR shall not be less than the Market Value of the
Optioned Shares on the date of grant.
(c) Exercise of SARs. The provisions of Paragraph
8(c) regarding the period of exercisability of Options are
incorporated by reference herein, and shall determine the period
of exercisability of SARs. An SAR granted hereunder shall be
exercisable at such times and under such conditions as shall be
permissible under the terms of the Plan and of the Agreement
granted to a Participant, provided that an SAR may not be
exercised for a fractional Share. Upon exercise of an SAR, the
Participant shall be entitled to receive, without payment to the
Company except for applicable withholding taxes, an amount equal
to the excess of (or, in the discretion of the Committee if
provided in the Agreement, a portion of) the then aggregate
Market Value of the number of Optioned Shares with respect to
which the Participant exercises the SAR, over the aggregate
Exercise Price of such number of Optioned Shares. This amount
shall be payable by the Company, in the discretion of the
Committee, in cash or in Shares valued at the then Market Value
thereof, or any combination thereof.
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(d) Timing of Exercise. Any election by a Participant
to exercise SARs shall be made during the period beginning on the
3rd business day following the release for publication of
quarterly or annual financial information and ending on the 12th
business day following such date. This condition shall be deemed
to be satisfied when the specified financial data is first made
publicly available. In no event, however, may an SAR be
exercised within the six-month period following the date of its
grant.
(e) Procedure for Exercising SARs. To the extent not
inconsistent herewith, the provisions of Paragraph 8(b) as to the
procedure for exercising Options are incorporated by reference,
and shall determine the procedure for exercising SARs.
10. PHANTOM STOCK AWARDS.
Any Phantom Stock Awards that the Committee may grant shall
be subject to the following terms and conditions, and to such
other terms and conditions as are either applicable generally to
Awards, or are prescribed by the Committee in an Agreement with
the Participant.
(a) Awards Generally. With respect to each Phantom
Stock Award, the Company shall establish an Account in the
Participant's name, and shall credit that Account with the number
of Shares specified in the Agreement effecting the Award.
(b) Vesting Restrictions. At any time, the Committee
may at its discretion impose a restriction period for the Phantom
Stock (the "Restriction Period"). The Restriction Period may
differ among Participants and may have different expiration dates
with respect to Shares covered by the Award. The Committee shall
determine the restrictions applicable to the award of Phantom
Stock, including, but not limited to, requirements of Continuous
Service for a specified term, or the attainment of specific
corporate, divisional or individual performance standards or
goals, which restrictions may differ with respect to each
Participant. The Agreement shall provide for forfeiture of
Shares covered thereby if the specified restrictions are not met
during the Restriction Period, and may provide for early
termination of any Restriction Period in the event of
satisfaction of the specified restrictions prior to expiration of
the Restricted Period.
(c) Acceleration of Vesting. Phantom Stock shall vest
automatically in the Participant in the event of his death,
Disability, or retirement prior to the expiration of the
Restriction Period or the satisfaction of the restrictions
applicable to an award of Phantom Stock. Notwithstanding the
Restriction Period and the restrictions imposed on the Phantom
Stock, as set forth in any Agreement, the Committee may shorten
the Restriction Period or waive any restrictions, if the
Committee concludes that it is in the best interests of the
Company to do so.
(d) Payment of Awards. As soon as practicable after
termination of a Participant's Continuous Service, the
Participant shall receive the vested portion of his Account. The
Company shall make such payment in cash, and in a lump sum unless
the Participant has elected, more than six months before first
becoming vested in any portion of the Phantom Stock Award, to
receive all or part of his vested Account -- (i) in unrestricted
whole Shares, with cash paid in lieu of fractional shares, and/or
(ii) in substantially equal annual installments over a period of
up to five years, beginning with the year in which the
Participant's Continuous Service ends.
(e) Forfeiture of Stock. Each Agreement shall provide
for forfeiture of any Phantom Stock which is not vested in the
Participant or for which the restrictions have not been satisfied
during the Restriction Period.
11. RESTRICTED STOCK AWARDS.
Any Share of Restricted Stock which the Committee may grant
shall be subject to the following terms and conditions, and to
such other terms and conditions as are either applicable
generally to Awards, or prescribed by the Committee in an
Agreement with the Participant.
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(a) Vesting Restrictions. At any time, the Committee
may at its discretion impose a Restriction Period for the
Restricted Stock. The Restriction Period may differ among
Participants and may have different expiration dates with respect
to portions of shares of Restricted Stock covered by the same
award. The Committee shall determine the restrictions applicable
to the award of Restricted Stock, including, but not limited to,
requirements of Continuous Service for a specified term, or the
attainment of specific corporate, divisional or individual
performance standards or goals, which restrictions may differ
with respect to each Participant. The Agreement shall provide
for forfeiture of Shares covered thereby if the specified
restrictions are not met during the Restriction Period, and may
provide for early termination of any Restriction Period in the
event of satisfaction of the specified restrictions prior to
expiration of the Restricted Period.
(b) Accelerated Vesting. The Committee shall set
forth in the Agreement the percentage of the award of Restricted
Stock which shall vest in the Participant in the event of death,
Disability, or retirement prior to the expiration of the
Restriction Period or the satisfaction of the restrictions
applicable to an award of Restricted Stock. Notwithstanding the
Restriction Period and the restrictions imposed on the Restricted
Stock, as set forth in any Agreement, the Committee may shorten
the Restriction Period or waive any restrictions, if the
Committee concludes that it is in the best interests of the
Company to do so.
(c) Ownership; Voting. Stock certificates shall be
issued in respect of Restricted Stock awarded hereunder and shall
be registered in the name of the Participant, whereupon the
Participant shall become a stockholder of the Company with
respect to such Restricted Stock and shall, to the extent not
inconsistent with express provisions of the Plan, have all the
rights of a stockholder, including but not limited to the right
to receive all dividends paid on such Shares and the right to
vote such Shares. Said stock certificates shall be deposited
with the Company or its designee, together with a stock power
endorsed in blank, and the following legend shall be placed upon
such certificates reflecting that the shares represented thereby
are subject to restrictions against transfer and forfeiture:
"The transferability of this certificate and the
shares of stock represented thereby are subject to the terms
and conditions (including forfeiture) contained in the 1997
Stock Option Plan of Progressive Bank, Inc., and an
agreement entered into between the registered owner and
Progressive Bank, Inc. Copies of such Plan and Agreement are
on file in the offices of the Secretary of Progressive Bank,
Inc., 1301 Route 52, P.O. Box 7000, Fishkill, New York
12524-7000"
(d) Lapse of Restrictions. At the expiration of the
Restricted Period applicable to the Restricted Stock, the Company
shall deliver to the Participant, or the legal representative of
the Participant's estate, or if the personal representative of
the Participant's estate shall have assigned the estate's
interest in the Restricted Stock, to the person or persons to
whom his rights under such Stock shall have passed by assignment
pursuant to his will or to the laws of descent and distribution,
the stock certificates deposited with it or its designee and as
to which the Restricted Period has expired and the requirements
of the restrictions have been met. If a legend has been placed
on such certificates, the Company shall cause such certificates
to be reissued without the legend.
(e) Forfeiture of Restricted Stock. The Agreement
shall provide for forfeiture of any Restricted Stock which is not
vested in the Participant or for which the restrictions have not
been satisfied during the Restriction Period.
12. CHANGE OF CONTROL.
The terms of any Award which provide for its exercise or
vesting in installments shall immediately and permanently lapse
on the date of a Change in Control. Consequently, all Options,
SARs, Phantom Stock Awards, and Restricted Stock Awards shall
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become immediately exercisable and fully vested on the date of
the Change in Control. With respect to Options and SARs, at the
time of a Change in Control, the Participant shall, at the
discretion of the Committee, be entitled to receive cash in an
amount equal to the excess of the Market Value of the Common
Stock subject to such Option over the Exercise Price of such
Shares, in exchange for the cancellation of such Options or SARs
by the Participant.
13. EFFECT OF CHANGES IN COMMON STOCK SUBJECT TO THE PLAN.
(a) Recapitalizations; Stock Splits, Etc. The number
and kind of Shares reserved for issuance under the Plan, and the
number and kind of shares subject to outstanding Awards, and the
Exercise Price thereof, shall be proportionately adjusted for any
increase, decrease, change or exchange of Shares for a different
number or kind of shares or other securities of the Company which
results from a merger, consolidation, recapitalization,
reorganization, reclassification, stock dividend, split-up,
combination of shares, or similar event in which the number or
kind of shares is changed without the receipt or payment of
consideration by the Company.
(b) Transactions in which the Company is Not the
Surviving Entity. In the event of (i) the liquidation or
dissolution of the Company, (ii) a merger or consolidation in
which the Company is not the surviving entity, or (iii) the sale
or disposition of all or substantially all of the Company's
assets (any of the foregoing to be referred to herein as a
"Transaction"), all outstanding Awards, together with the
Exercise Prices thereof, shall be equitably adjusted for any
change or exchange of Shares for a different number or kind of
shares or other securities which results from the Transaction.
(c) Special Rule for ISOs. Any adjustment made
pursuant to subparagraphs (a) or (b)(1) hereof shall be made in
such a manner as not to constitute a modification, within the
meaning of Section 424(h) of the Code, of outstanding ISOs.
(d) Conditions and Restrictions on New, Additional, or
Different Shares or Securities. If, by reason of any adjustment
made pursuant to this Paragraph, a Participant becomes entitled
to new, additional, or different shares of stock or securities,
such new, additional, or different shares of stock or securities
shall thereupon be subject to all of the conditions and
restrictions which were applicable to the Shares pursuant to the
Award before the adjustment was made.
(e) Other Issuances. Except as expressly provided in
this Paragraph, the issuance by the Company or an Affiliate of
Shares of stock of any class, or of securities convertible into
Shares or stock of another class, for cash or property or for
labor or services either upon direct sale or upon the exercise of
rights or warrants to subscribe therefor, shall not affect, and
no adjustment shall be made with respect to, the number, class,
or Exercise Price of Shares then subject to Awards or reserved
for issuance under the Plan.
14. NON-TRANSFERABILITY OF AWARDS.
Awards may not be sold, pledged, assigned, hypothecated,
transferred or disposed of in any manner other than by will or by
the laws of descent and distribution. Notwithstanding the
foregoing, or any other provision of this Plan, a Participant who
holds Awards may transfer such Awards (but not ISOs) to his or
her spouse, lineal ascendants, lineal descendants, or to a duly
established trust for the benefit of one or more of these
individuals. Awards so transferred may thereafter be transferred
only to the Participant who originally received the grant or to
an individual or trust to whom the Participant could have
initially transferred the Awards pursuant to this Paragraph 14.
Awards which are transferred pursuant to this Paragraph 14 shall
be exercisable by the transferee according to the same terms and
conditions as applied to the Participant.
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15. TIME OF GRANTING AWARDS.
The date of grant of an Award shall, for all purposes, be
the later of the date on which the Committee makes the determina-
tion of granting such Award, and the Effective Date. Notice of
the determination shall be given to each Participant to whom an
Award is so granted within a reasonable time after the date of
such grant.
16. EFFECTIVE DATE.
The Plan became effective on February 11, 1997, subject to
approval of the Plan by a favorable vote of stockholders owning
at least a majority of the total votes cast at a duly called
meeting of the Company's stockholders held in accordance with
applicable laws. Any Awards made prior to approval of the Plan by
the stockholders of the Company shall be contingent on such
approval.
17. MODIFICATION OF AWARDS.
At any time, and from time to time, the Board may authorize
the Committee to direct execution of an instrument providing for
the modification of any outstanding Award, provided no such
modification shall confer on the holder of said Award any right
or benefit which could not be conferred on him by the grant of a
new Award at such time, or impair the Award without the consent
of the holder of the Award.
18. AMENDMENT AND TERMINATION OF THE PLAN.
The Board may from time to time amend the terms of the Plan
and, with respect to any Shares at the time not subject to
Awards, suspend or terminate the Plan. No amendment, suspension
or termination of the Plan shall, without the consent of any
affected holders of an Award, alter or impair any rights or
obligations under any Award theretofore granted.
19. CONDITIONS UPON ISSUANCE OF SHARES.
(a) Compliance with Securities Laws. Shares of Common
Stock shall not be issued with respect to any Award unless the
issuance and delivery of such Shares shall comply with all
relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the rules and regulations
promulgated thereunder, any applicable state securities law, and
the requirements of any stock exchange upon which the Shares may
then be listed.
(b) Special Circumstances. The inability of the
Company to obtain approval from any regulatory body or authority
deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder shall relieve the
Company of any liability in respect of the non-issuance or sale
of such Shares. As a condition to the exercise of an Option or
SAR, the Company may require the person exercising the Option or
SAR to make such representations and warranties as may be
necessary to assure the availability of an exemption from the
registration requirements of federal or state securities law.
(c) Committee Discretion. The Committee shall have
the discretionary authority to impose in Agreements such
restrictions on Shares as it may deem appropriate or desirable,
including but not limited to the authority to impose a right of
first refusal or to establish repurchase rights or both of these
restrictions.
20. RESERVATION OF SHARES.
The Company, during the term of the Plan, will reserve and
keep available a number of Shares sufficient to satisfy the
requirements of the Plan.
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21. WITHHOLDING TAX.
The Company's obligation to deliver cash or Shares upon
vesting of Phantom Stock, Shares upon vesting of Restricted
Stock, or upon exercise of Options and/or SARs shall be subject
to the Participant's satisfaction of all applicable federal,
state and local income and employment tax withholding
obligations. Each Participant may satisfy the obligation, in
whole or in part, by irrevocably electing to have the Company
withhold Shares, or to deliver to the Company Shares that he
already owns, having a value equal to the amount required to be
withheld. The value of the Shares to be withheld, or delivered
to the Company, shall be based on the Market Value of the Shares
on the date the amount of tax to be withheld is to be determined.
As an alternative, the Company may retain, or sell without
notice, a number of such Shares sufficient to cover the amount
required to be withheld.
22. NO EMPLOYMENT OR OTHER RIGHTS.
In no event shall an Employee's eligibility to participate
or participation in the Plan create or be deemed to create any
legal or equitable right of the Employee or any other party to
continue service with the Company, the Bank, or any Affiliate of
such corporations. Except to the extent provided in Paragraph
6(b), no Employee shall have a right to be granted an Award or,
having received an Award, the right to again be granted an Award.
However, an Employee who has been granted an Award may, if
otherwise eligible, be granted an additional Award or Awards.
23. NONEXCLUSIVITY OF THE PLAN
Neither the adoption of the Plan by the Board nor the
submission of the Plan to the stockholders of the Company for
approval shall be construed as creating any limitations on the
power of the Board to adopt such other incentive arrangements as
it may deem desirable, including, without limitation, the
granting of stock options otherwise than under this Plan, and
such arrangements may be either applicable generally or only in
specific cases.
24. GOVERNING LAW
The Plan shall be governed by and construed in accordance
with the laws of the State of New York, except to the extent that
federal law shall be deemed to apply.
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Exhibit A
PROGRESSIVE BANK, INC.
1997 EMPLOYEE STOCK OPTION PLAN
OPTION GRANTS
Level I Peter Van Kleeck 15,000
Level II Robert Gabrielsen 7,500
John Eickman 3,000
Level III William Charlebois 1,500
Christopher Dannen 2,000
Robert Apple 1,500
Kurt Steiger 500
Michael Naughton 2,000
Timothy Every 1,250
Robert Ward 1,875
Daniel Driscoll 1,750
Rosemary Hyland 500
Wayne Zanetti 1,875
<PAGE>
STOCK OPTION AGREEMENT
FOR INCENTIVE STOCK OPTIONS UNDER SECTION 422
OF THE INTERNAL REVENUE CODE
PURSUANT TO THE
PROGRESSIVE BANK, INC.
1997 EMPLOYEE STOCK OPTION PLAN
STOCK OPTION for a total of ___________ shares of Common
Stock, par value $1.00 per share, of Progressive Bank, Inc. (the
"Company"), which Option is intended to qualify as an incentive
stock option under Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), is hereby granted to ____________
(the "Optionee") at the price set forth herein, and in all
respects subject to the terms, definitions and provisions of the
Progressive Bank, Inc. 1997 Employee Stock Option Plan (the
"Plan") which was adopted by the Company and which is
incorporated by reference herein, receipt of which is hereby
acknowledged.
1. Option Price. The option price is $_______ for each
share, being ___% */ of the fair market value, as determined by
the Committee, of the Common Stock on the date of grant of this
Option.
2. Exercises of Option. This Option shall be exercisable
in accordance with provisions of the Plan as follows, but shall
under no circumstances become exercisable in the absence of
stockholder approval of the Plan:
(i) Schedule of rights to exercise.
Percentage of Total Shares
Years of Continuous Employment Subject to Option Which
After Date of Grant of Option May Be Exercised
- ------------------------------ ---------------------------
Upon Grant ____
______________ ____
______________ ____
______________ ____
______________ ____
_______________
*/ 110% in the case of an Optionee who owns representing more
than 10% of the outstanding common stock of the Company on the
date of grant of this Option.
<PAGE>
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(ii) Method of Exercise. This Option shall be exercisable
by a written notice by the Optionee which shall:
(a) state the election to exercise the Option, the
number of shares with respect to which it is being exercised, the
person in whose name the stock certificate or certificates for
such shares of Common Stock is to be registered, his address and
Social Security Number (or if more than one, the names, addresses
and Social Security Numbers of such persons);
(b) contain such representations and agreements as
to the holder's investment intent with respect to such shares of
Common Stock as may be satisfactory to the Company's counsel;
(c) be signed by the person or persons entitled to
exercise the Option and, if the Option is being exercised by any
person or persons other than the Optionee, be accompanied by
proof, satisfactory to counsel for the Company, of the right of
such person or persons to exercise the Option; and
(d) be in writing and delivered in person or by
certified mail to the Corporate Secretary of the Company.
Payment of the purchase price of any shares with respect to
which the Option is being exercised shall be by certified check,
Common Stock, or such combination of cash and Common Stock as the
Optionee elects. In addition, the Optionee may elect to pay for
all or part of the exercise price of the shares by having the
Company withhold a number of shares having a fair market value
equal to the exercise price. The certificate or certificates for
shares of Common Stock as to which the Option shall be exercised
shall be registered in the name of the person or persons
exercising the Option.
(iii) Restrictions on exercise. This Option may not be
exercised if the issuance of the shares upon such exercise would
constitute a violation of any applicable federal or state
securities or other law or valid regulation. As a condition to
the Optionee's exercise of this Option, the Company may require
the person exercising this Option to make any representation and
warranty to the Company as may be required by any applicable law
or regulation.
3. Withholding. The Optionee hereby agrees that the
exercise of the Option or any installment thereof will not be
effective, and no shares will become transferable to the
Optionee, until the Optionee makes appropriate arrangements with
the Company for such tax withholding as may be required of the
Company under federal, state, or local law on account of such
exercise.
4. Non-transferability of Option. This Option may not be
transferred in any manner otherwise than by will or the laws of
descent or distribution, or pursuant to a "qualified domestic <PAGE>
<PAGE>
relations order" (within the meaning of Section 414(p) of the
Code and the regulations and rulings thereunder). The terms of
this Option shall be binding upon the executors, administrators,
heirs, successors and assigns of the Optionee.
5. Term of Option. This Option may not be exercisable for
more than ten **/ years from the date of grant of this Option, as
stated below, and may be exercised during such term only in
accordance with the Plan and the terms of this Option.
PROGRESSIVE BANK, INC.
1997 EMPLOYEE STOCK
OPTION PLAN COMMITTEE
By ________________________
______________________
Date of Grant
Attest: ___________________(Seal)
___________________
**/ Five years in the case of an Optionee who owns shares
representing more than 10% of the outstanding common stock of the
Company on the date of grant of this Option.<PAGE>
<PAGE>
INCENTIVE STOCK OPTION EXERCISE FORM
PURSUANT TO THE
PROGRESSIVE BANK, INC.
1997 EMPLOYEE STOCK OPTION PLAN
____________________
Date
Corporate Secretary
Progressive Bank, Inc.
1301 Route 52, P.O. Box 7000
Fishkill, New York 12524-7000
Re: Progressive Bank, Inc. 1997 Employee Stock Option Plan
------------------------------------------------------
Dear Sir:
The undersigned elects to exercise the Incentive Stock Option
to purchase _________ shares, par value $1.00, of Common Stock of
Progressive Bank, Inc. under and pursuant to a Stock Option
Agreement dated ___________, 199___.
Delivered herewith is a certified or bank cashier's or
teller's check and/or shares of Common Stock valued at _____% of
the fair market value of the stock on the date of exercise, as
set forth below.
$________ of certified check
$________ in the form of _______ shares of Common
Stock, valued at $____ per share
$________ in the form of the Company's withholding
of _______ shares of Common Stock,
valued at $ ____ per share, that are
subject to this Option
$ TOTAL
=======
The name or names to be on the stock certificate or
certificates and the address and Social Security Number of such
person(s) is as follows:
Name __________________________________________________________
Address _______________________________________________________
Social Security Number ________________________________________
Very truly yours,
_____________________________
<PAGE>
STOCK OPTION AGREEMENT
FOR NON-INCENTIVE STOCK OPTIONS
PURSUANT TO THE
PROGRESSIVE BANK, INC.
1997 EMPLOYEE STOCK OPTION PLAN
STOCK OPTION for a total of ___________ shares of Common
Stock, par value $1.00 per share, of Progressive Bank, Inc. (the
"Company") is hereby granted to _____________ (the "Optionee") at
the price set forth herein, and in all respects subject to the
terms, definitions and provisions of the Progressive Bank, Inc.
1997 Employee Stock Option Plan (the "Plan") which has been
adopted by the Company and which is incorporated by reference
herein, receipt of which is hereby acknowledged. Such Stock
Options do not comply with Options granted under Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code").
1. Option Price. The option price is $____________ for
each share, being _____% of the fair market value, as determined
by the Committee, of the Common Stock on the date of grant of
this Option.
2. Exercises of Option. This Option shall be exercisable in
accordance with provisions of the Plan as follows, but shall
under no circumstances become exercisable in the absence of
stockholder approval of the Plan:
(i) Schedule of rights to exercise.
------------------------------
Percentage of Total Shares
Years of Continuous Employment Subject to Option Which
After Date of Grant of Option May Be Exercised
- ------------------------------ ---------------------------
Upon Grant ____
______________ ____
______________ ____
______________ ____
______________ ____
(ii) Method of Exercise. This Option shall be exercisable
by a written notice which shall:
(a) state the election to exercise the Option, the
number of shares with respect to which it is being exercised, the
person in whose name the stock certificate or certificates for
such shares of Common Stock is to be registered, his address and
Social Security Number (or if more than one, the names, addresses
and Social Security Numbers of such persons);
<PAGE>
<PAGE>
(b) contain such representations and agreements as to
the holders' investment intent with respect to such shares of
Common Stock as may be satisfactory to the Company's counsel;
(c) be signed by the person or persons entitled to
exercise the Option and, if the Option is being exercised by any
person or persons other than the Optionee, be accompanied by
proof, satisfactory to counsel for the Company, of the right of
such person or persons to exercise the Option; and
(d) be in writing and delivered in person or by
certified mail to the Corporate Secretary of the Company.
Payment of the purchase price of any shares with respect to
which the Option is being exercised shall be by certified check,
Common Stock, or such combination of cash and Common Stock as the
Optionee elects. In addition, the Optionee may elect to pay for
all or part of the exercise price of the shares by having the
Company withhold a number of shares having a fair market value
equal to the exercise price. The certificate or certificates for
shares of Common Stock as to which the Option shall be exercised
shall be registered in the name of the person or persons
exercising the Option.
(iii) Restrictions on exercise. The Option may not be
exercised if the issuance of the shares upon such exercise would
constitute a violation of any applicable federal or state
securities or other law or valid regulation. As a condition to
his exercise of this Option, the Company may require the person
exercising this Option to make any representation and warranty to
the Company as may be required by any applicable law or
regulation.
3. Withholding. The Optionee hereby agrees that the
exercise of the Option or any installment thereof will not be
effective, and no shares will become transferable to the
Optionee, until the Optionee makes appropriate arrangements with
the Company for such tax withholding as may be required of the
Company under federal, state, or local law on account of such
exercise.
4. Non-transferability of Option. This Option may not be
transferred in any manner otherwise than by will or the laws of
descent or distribution, or pursuant to a "qualified domestic
relations order" (within the meaning of Section 414(p) of the
Code and the regulations and rulings thereunder). The terms of
this Option shall be binding upon the executors, administrators,
heirs, successors and assigns of the Optionee. Notwithstanding
any other terms of this agreement, this Option may be transferred
to the Optionee's spouse, lineal ascendants, lineal descendants,
or to a duly established trust, provided that such transferee
shall be permitted to exercise this Option subject to the same
terms and conditions applicable to the Optionee.
5. Term of Option. This Option may not be exercisable for
more than ten years from the date of grant of this Option, as set
forth below, and may be exercised during such term only in
accordance with the Plan and the terms of this Option.
PROGRESSIVE BANK, INC.
1997 EMPLOYEE STOCK
OPTION PLAN COMMITTEE
By ________________________
______________________
Date of Grant
Attest: ___________________(Seal)
<PAGE>
<PAGE>
NON-INCENTIVE STOCK OPTION EXERCISE FORM
PURSUANT TO THE
PROGRESSIVE BANK, INC.
1997 EMPLOYEE STOCK OPTION PLAN
______________________
Date
Corporate Secretary
Progressive Bank, Inc.
1301 Route 52, P.O. Box 7000
Fishkill, New York 12524-7000
Re: Progressive Bank, Inc. 1997 Employee Stock Option Plan
------------------------------------------------------
Dear Sir:
The undersigned elects to exercise his Non-Incentive Stock
Option to purchase ____________ shares, par value $1.00, of
Common Stock of Progressive Bank, Inc. under and pursuant to a
Stock Option Agreement dated ________________, 199__.
Delivered herewith is a certified or bank cashier's or
tellers check and/or shares of Common Stock valued at ____% of
the fair market value of the stock on the date of exercise, as
set forth below.
$__________ of certified check
$__________ in the form of ______ shares of Common
Stock, valued at $____ per share
$__________ in the form of the Company's withholding
of _______ shares of Common Stock, valued
at $ ____ per share, that are subject to
this Option
$ TOTAL
==========
The name or names to be on the stock certificate or
certificates and the address and Social Security Number of such
person is as follows:
Name __________________________________________________________
Address _______________________________________________________
Social Security Number ________________________________________
Very truly yours,
_____________________________
PROGRESSIVE BANK, INC.
1997 EMPLOYEE STOCK OPTION PLAN
Stock Appreciation Rights Agreement
Not In Tandem with Stock Option
On the date of grant specified below, the Stock Option
Committee of Progressive Bank, Inc. (the "Company") hereby grants
to ________________ (the "Optionee") a total of _______ Stock
Appreciation Rights ("SARs"), subject to the terms and conditions
set forth in the Progressive Bank, Inc. 1997 Employee Stock
Option Plan (the "Plan") (a copy of which is available to the
Optionee upon request). The terms and conditions of the Plan are
incorporated herein by reference.
(a) The exercise price is $____ for each share, such
price being 100% of the fair market value, as determined by the
Committee, of the Common Stock on the date of grant of this
option.
(b) The SAR shall be exercisable to the extent
permitted in the Plan.
(c) The SAR shall be accepted for surrender by the
Optionee in consideration for the payment by the Company of an
amount equal to the excess of the fair market value on the date
of exercise of the Shares of Common Stock subject to such SAR
over the exercise price specified in Paragraph (a) hereof.
(d) Payment hereunder shall be made in shares of
Common Stock or in cash as provided in the Plan.
(e) The SAR is nontransferable, except in accordance
with Section 14 of the Plan.
(f) The SAR may be exercised only in accordance with
Sections 8 and 9 of the Plan, and only when there is a positive
spread, i.e., when the market price of the Common Stock subject
to the SAR exceeds the exercise price of the SAR.
(g) In the event of any inconsistency or conflict
between this Agreement and the Plan, the Plan shall be
controlling and supercede any conflicting or inconsistent
provision of the Agreement.
PROGRESSIVE BANK, INC.
1997 EMPLOYEE STOCK
OPTION PLAN COMMITTEE
By ________________________
______________________
Date of Grant
Attest: ___________________(Seal)
