AMENDMENT OF FIRSTFED FINANCIAL CORP.
1997 NONEMPLOYEE DIRECTORS STOCK INCENTIVE PLAN
Whereas, the FirstFed Financial Corp. 1997 Nonemployee Directors Stock
Incentive Plan (the "Plan") is administered by the Compensation Committee of
the Board of Directors pursuant to authority delegated to such Committee by
the Board; and
Whereas, the Committee may amend the Plan under delegated authority
pursuant to Section 14 of the Plan; and
Whereas, the Committee determined that the present definition of
"Change of Control" as set forth in Section 4.2 of the Nonstatutory Stock
Option Agreements between the participants in the Plan and the Company (the
"Agreements") fails to provide an exception from acceleration for a change in
directors resulting from normal retirement, and provides for immediate
acceleration upon stockholder approval of a plan or proposal for acquisition
of the Company notwithstanding the fact that significant conditions
precedent, including but not limited to regulatory approval, would be
required for consummation of such a transaction, and is not in the best
interest of the Company as presently worded; and
Whereas, the Committee determined that the Agreement should be revised
as set forth herein;
Now, therefore, the second sentence of Section 4.2 of the form of the
Agreement, as well as all existing Agreements (to the extent agreed in
writing by the participants therein) shall be revised to read as follows:
"For the purpose of this Agreement, a "Change of Control" of the
Grantor shall be deemed to occur if: (i) any "erson"(as that term is used
in sections 13(d) and 14(d) of the Exchange Act), is or becomes the
"eneficial owner"(as that term is defined by the Securities and Exchange
Commission for purposes of Section 13(d) of the Exchange Act), directly or
indirectly, of 25% or more of the outstanding Voting Stock of the Grantor or
its successors; or (ii) at any time during any period of two consecutive
years, individuals who at the beginning of such period constitute the Board
of Directors of Grantor cease, for any reason other than death, disability or
normal retirement, to constitute at least a majority thereof, unless the
election of each director who was not a director at the beginning of the
period was approved by a vote of at least 75% of the directors still in
office who were directors at the beginning of the period; or (iii) upon any
reorganization, merger or consolidation of Grantor with one or more
corporations (other than a reorganization, merger or consolidation in which
persons who were the stockholders of Grantor immediately prior to such
reorganization, merger or consolidation, immediately thereafter, own more
than 50% of the combined voting power entitled to vote generally in the
election of directors of the reorganized, merged or consolidated company's
then outstanding voting securities); or upon the sale of all or substantially
all the assets of Grantor ."
This change shall be retroactive to the effective date of the Plan.
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