<PAGE> 1
================================================================================
SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
Evans Bancorp, Inc.
- -------------------------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
- --------------------------------------------------------------------------------
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) or Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
================================================================================
<PAGE> 2
March 10, 1999
To Our Shareholders:
On behalf of the Board of Directors, I cordially invite you to attend the
1999 Annual Meeting of Shareholders of Evans Bancorp, Inc. The annual meeting
this year will be held at Romanello's South Restaurant, 5793 South Park Avenue,
Hamburg, New York, on TUESDAY, APRIL 27, 1999 at 12:30 P.M. The formal Notice of
the Annual Meeting is set forth on the next page.
The enclosed Notice and Proxy Statement contain details concerning the
business to come before the 1999 Annual Meeting. The Board of Directors of the
Company recommends a vote "FOR" the re-election of Robert W. Allen, William F.
Barrett, and David C. Koch as Directors and a vote "FOR" the approval of the
Evans Bancorp, Inc. 1999 Stock Option Plan.
TO VOTE:
The vote of each shareholder is important, regardless of whether or not
you attend the Annual Meeting. I urge you to sign, date, and return the enclosed
Proxy Card as promptly as possible. In this way, you can be sure that your
shares will be voted at the meeting. Simply remove the white Proxy Card from the
bottom of the mailing form and return it in the postage-paid envelope provided.
If you are voting "FOR" the re-election of the nominated directors and "FOR" the
approval of the Evans Bancorp, Inc. 1999 Stock Option Plan, you need only sign
the Proxy Card.
VOTING IS TABULATED BY AN INDEPENDENT FIRM; THEREFORE, TO ENSURE THAT
YOUR VOTE IS RECEIVED IN A TIMELY MANNER, PLEASE MAIL THE WHITE PROXY CARD IN
THE ENVELOPE PROVIDED - DO NOT RETURN THE PROXY CARD TO THE BANK.
TO ATTEND THE ANNUAL MEETING:
A luncheon for our shareholders will follow the Annual Meeting, and a
cash bar will be available. To ensure that our reservation count will be
accurate, if you plan to attend the meeting and luncheon, please complete the
yellow postage-paid reservation card that is included with your proxy material
and return it to the Bank.
IF YOU WILL BE ATTENDING THE ANNUAL MEETING, THE YELLOW RESERVATION
POSTCARD MUST BE RETURNED TO THE BANK.
PLEASE NOTE THAT, DUE TO LIMITED SEATING, WE WILL NOT BE ABLE TO ACCOMMODATE
GUESTS OF OUR SHAREHOLDERS AT THE MEETING OR THE LUNCHEON, AND MUST LIMIT
ATTENDANCE TO SHAREHOLDERS ONLY.
Thank you for your confidence and support.
Sincerely,
Richard M. Craig
<PAGE> 3
EVANS BANCORP, INC.
14 - 16 NORTH MAIN STREET
ANGOLA, NEW YORK 14006
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 27, 1999
The Eleventh Annual Meeting of Shareholders of Evans Bancorp, Inc., a
New York corporation (the "Company"), will be held on TUESDAY, APRIL 27, 1999 at
12:30 P.M. at Romanello's South Restaurant, 5793 South Park Avenue, Hamburg,
New York, for the following purpose:
(1) To elect three Directors of the Company, such Directors to hold
office for the term of three years and until the election and
qualification of their successors;
(2) To approve the Evans Bancorp, Inc. 1999 Stock Option Plan; and
(3) To act upon such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 10, 1999
as the record date for the determination of the Shareholders entitled to notice
of and to vote at the Annual Meeting.
A copy of the Company's Annual Report to Shareholders is enclosed for
your reference.
Please complete, sign, and return the enclosed proxy in the accompanying
postage-paid, addressed envelope as soon as you have an opportunity to review
the attached Proxy Statement.
By Order of the Board of Directors
Robert W. Allen
Secretary
Angola, New York
March 10, 1999
<PAGE> 4
EVANS BANCORP, INC.
14 - 16 North Main Street
Angola, New York 14006
PROXY STATEMENT
Dated March 10, 1999
For the Annual Meeting of Shareholders
to be Held April 27, 1999
GENERAL INFORMATION
This Proxy Statement is furnished to the shareholders of Evans Bancorp,
Inc., a New York corporation (the "Company"), in connection with the
solicitation of proxies for use at the Eleventh Annual Meeting of Shareholders
(the "Annual Meeting") to be held at Romanello's South Restaurant, 5793 South
Park Avenue, Hamburg, New York, on TUESDAY, APRIL 27, 1999 at 12:30 P.M. and at
any adjournments thereof. The enclosed proxy is being solicited by the Board of
Directors of the Company.
If a proxy in the accompanying form is duly executed and returned, the
shares represented thereby will be voted and, where a specification is made by
the shareholder as provided therein, will be voted in accordance with such
specification. A shareholder giving the enclosed proxy has the power to revoke
it at any time before it is exercised by giving written notice to the Company
bearing a later date than the proxy, by the execution and delivery to the
Company of a subsequently dated proxy, or by voting in person at the Annual
Meeting. Any shareholder may vote in person at the Annual Meeting, whether or
not he or she has previously given a proxy.
This Proxy Statement and the enclosed proxy are first mailed to
shareholders on or about March 10, 1999.
VOTING SECURITIES
Only holders of shares of Common Stock of record at the close of business
on March 10, 1999 will be entitled to notice of and to vote at the meeting and
at all adjournments thereof. At the close of business on March 10, 1999, the
Company had outstanding 1,697,598 shares of Common Stock. For all matters to be
voted on at the Annual Meeting, holders of Common Stock have one vote per share.
A majority of such shares, present in person or represented by proxy, shall
constitute a quorum for the transaction of business at the Annual Meeting.
Shares of Common Stock represented by the proxies in the form enclosed,
properly executed, will be voted in the manner designated, or if no instructions
are indicated, in favor of the Directors named therein and for the other
proposals. The proxy given by the enclosed proxy card may be revoked at any time
before it is voted by delivering to the Secretary of the Company a written
revocation or a duly executed proxy bearing a later date or by attending the
Annual Meeting and voting in person.
Page 1
<PAGE> 5
Under the Company's by-laws and the laws of the State of New York,
directors of the Company are elected by a plurality of the votes cast in the
election. The approval of the Evans Bancorp, Inc. 1999 Stock Option Plan and any
other matters to be considered as set forth in the Notice for the Annual Meeting
are to be decided by the vote of the holders of a majority of the votes
represented by the shares present in person or represented by proxy at the
Annual Meeting.
With regard to the election of directors, votes may be cast in favor or
withheld; votes that are withheld will be excluded entirely from the vote and
will have no effect. Accordingly, abstentions and broker non-votes will not
affect the outcome of the election.
With regard to the approval of the Evans Bancorp, Inc. 1999 Stock
Option Plan, proxies will be voted in favor of the resolution, unless otherwise
instructed by the Shareholder. Abstentions and shares not voted by brokers and
other entities holding shares on behalf of beneficial owners will have the same
effect as votes cast against the resolution, provided such shares are properly
present at the meeting in person or by proxy.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of January 31, 1999, the number
(rounded to the nearest whole share) of outstanding shares of Common Stock
beneficially owned by (i) each shareholder known by the Company to beneficially
own more than 5% of the Company's Common Stock, (ii) all directors and nominees
of the Company individually, and (iii) by all executive officers and directors
as a group:
<TABLE>
<CAPTION>
Nature and Amount of Percent of
Name Beneficial Ownership Class
- ---- -------------------- -----
<S> <C> <C>
Robert W. Allen (1) 29,944 1.8%
William F. Barrett (2) 161,345 9.5%
Phillip Brothman (3) 23,810 1.4%
Richard M. Craig (4) 8,123 .5%
LaVerne G. Hall (5) 54,380 3.2%
David C. Koch (6) 25,793 1.5%
Richard C. Stevenson (7) 55,324 3.3%
David M. Taylor (8) 6,840 .4%
Thomas H. Waring, Jr. 509 .03%
Directors and Officers
as a Group (11 persons)
(1)(2)(3)(4)(5)(6)(7)(8)(9)(10) 367,580 21.6%
</TABLE>
(1) Includes 2,764 shares owned by Mr. Allen's wife.
(2) Includes 12,850 shares owned by Mr. Barrett's wife, 30,940 shares owned
jointly by Mr. Barrett and his wife and 6,345 shares held for Mr. Barrett's
son, as to which he disclaims beneficial ownership.
Page 2
<PAGE> 6
(3) Includes 1,480 shares owned by Mr. Brothman's wife and 2,713 shares held by
a pension plan of which Mr. Brothman is a trustee and a participant.
(4) Includes 5,415 shares owned jointly by Mr. Craig and his wife and 168
shares owned by Mr. Craig's daughter, as to which he disclaims beneficial
ownership.
(5) Includes 23,230 shares owned by Mr. Hall's wife.
(6) Includes 1,485 shares owned jointly by Mr. Koch and his wife, and 775
shares owned by Mr. Koch's son, as to which he disclaims beneficial
ownership.
(7) Includes 3,669 shares owned by Mr. Stevenson's wife, and also 12,635 shares
held by Mr. Stevenson as conservator for Evelyn Simonsen and 1,060 shares
held in a trust for F. Evelyn Beardsley as to which he disclaims beneficial
ownership.
(8) Includes 300 shares owned jointly by Mr. Taylor and his wife.
(9) Includes 426 shares owned by Mr. James Tilley, Assistant Secretary of Evans
Bancorp, Inc., 10 shares held by Mr. Tilley in trust for his grandson, and
76 shares owned jointly by Mr. Tilley and his mother.
(10) Includes 1,000 shares owned by Mr. William Glass, Treasurer of Evans
Bancorp, Inc., held jointly with his wife.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and persons who beneficially own
more than ten percent of the Company's stock, to file initial reports of
ownership and reports of changes in ownership with the Securities and Exchange
Commission. Executive officers, directors and greater than ten percent
beneficial owners are required by SEC regulations to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely on a review of the copies of such forms furnished to the
Company and written representations from the Company's executive officers and
directors, the Company believes that during 1998 all Section 16(a) filing
requirements applicable to its executive officers, directors and greater than
ten percent beneficial owners were complied with by such persons.
ELECTION OF DIRECTORS
It is intended that proxies solicited by the Board of Directors will,
unless otherwise directed, be voted to elect the three nominees for Directors
who are: Robert W. Allen, William F. Barrett, and David C. Koch.
The nominees proposed for election to the Board of Directors are all
presently members of the Board.
The nominees named herein, if elected as Directors, will hold office for
three years until the Annual Meeting of Shareholders in 2002 and until their
successors are duly elected and qualified. In the event that any nominee for
Director becomes unavailable and a vacancy exists, it is intended that the
persons named in the proxy may vote for a substitute who will be recommended by
the remaining Directors.
Page 3
<PAGE> 7
INFORMATION REGARDING DIRECTORS
The following table sets forth the names, ages and positions of the
Directors of the Company.
<TABLE>
<CAPTION>
NAME TERM
NOMINEES FOR DIRECTORS: AGE POSITION EXPIRES
- ----------------------- --- -------- -------
<S> <C> <C> <C>
Robert W. Allen 73 Secretary, Director 1999
William F. Barrett 57 Director 1999
David C. Koch 63 Director 1999
DIRECTORS:
----------
Phillip Brothman 60 Director 2001
Richard M. Craig 61 Chairman of Board, President, 2000
CEO, Director
LaVerne G. Hall 61 Director 2000
Richard C. Stevenson 90 Director 2000
David M. Taylor 48 Director 2001
Thomas H. Waring, Jr. 41 Director 2001
</TABLE>
Each Director is elected to hold office for a three year term and until
his successor is elected and qualified.
Mr. Allen has been a Director since 1960. He was the Executive Vice
President of the Bank until his retirement in 1988.
Mr. Barrett has been a Director since 1971. He is currently self employed
as a property and investment manager and the former President of Carl E.
Barrett, Ltd., an insurance agency.
Mr. Koch has been a Director since 1979 and is Chairman and Chief
Executive Officer of New Era Cap Co., Inc.
Mr. Brothman has been a Director since 1976 and is a partner in the law
firm of Hurst, Brothman & Yusick.
Mr. Craig joined Evans National Bank (the "Bank") in 1987 and has served
as President and Director since 1988. In 1989 he was appointed Chief Executive
Officer, and was, in January 1998, also elected Chairman of the Board.
Previously, he was the Administrative Vice President of M&T Bank.
Mr. Hall has been a Director since 1981. He is the former Chairman of the
Board of L.G. Hall Building Contractors, Inc.
Mr. Stevenson has been a Director since 1958 and is President of
Stevenson Realtors and Chairman of the
Page 4
<PAGE> 8
Board of Evans Land Corp.
Mr. Taylor has been a Director since 1986 and is President of Concord
Nurseries, Inc.
Mr. Waring has been a Director since 1998. He is the principal of Waring
Financial Group, an insurance and financial services firm.
The committees of the Board of Directors, which are nominated by the Chairman of
the Board and approved by the Board of Directors, are as follows:
LOAN COMMITTEE:
William F. Barrett, Chairman Robert W. Allen Richard M. Craig
David C. Koch Thomas H. Waring, Jr.
The Loan Committee met eleven times during 1998. Its purpose is to review
and approve loans exceeding $300,000 or loans that are non-conventional.
INVESTMENT COMMITTEE:
Richard M. Craig, Chairman Robert W. Allen David M. Taylor
The Investment Committee met once in 1998. The Investment Committee meets
a minimum of once a year to review the liquidity of the investment portfolio and
discuss investment strategies.
PLANNING COMMITTEE:
LaVerne G. Hall, Chairman William F. Barrett Richard M. Craig
David C. Koch Thomas H. Waring, Jr.
The Planning Committee met three times in 1998. The Planning Committee is
responsible for reviewing the strategic plan of the Bank and actions taken to
obtain those objectives.
LOAN REVIEW COMMITTEE:
Phillip Brothman, Chairman Richard M. Craig LaVerne G. Hall
David M. Taylor
The Loan Review Committee met four times during 1998. Its purpose is to
insure the Bank's provision and reserve for credit losses are adequate. The Loan
Review Committee meets quarterly with the Bank's Loan Review Officer, who
independently conducts the loan review. As a result of her recommendations,
loans are graded based upon payment history, credit strength of borrower and
other factors. This information is then aggregated to determine the overall
adequacy of the credit loss reserve.
AUDIT COMMITTEE:
Phillip Brothman, Chairman Richard M. Craig David C. Koch
David M. Taylor
The Audit Committee met five times in 1998. The members of the Audit
Committee receive from the internal auditor a quarterly report which describes
findings for the prior quarter. The function of the Audit Committee
Page 5
<PAGE> 9
is to insure that the Bank's activities are being conducted in accordance with
law, banking rules and regulations, other regulatory and supervisory
authorities, and the Bank's internal policies. In addition, the Audit Committee
recommends to the Board of Directors the services of a reputable certified
public accounting firm. The Committee receives and reviews the reports of the
certified public accounting firm and presents them to the Board of Directors
with comments and recommendations.
INSURANCE COMMITTEE:
William F. Barrett, Chairman Robert W. Allen Richard M. Craig
Richard C. Stevenson
The Insurance Committee met once during 1998. This committee reviews the
coverage of insurance policies of the Bank and monitors costs.
HUMAN RESOURCE COMMITTEE:
LaVerne G. Hall, Chairman William F. Barrett Richard M. Craig
David C. Koch Richard C. Stevenson Thomas H. Waring, Jr.
The Human Resource Committee met twice during 1998. Its purpose is to
review management's recommendation as it relates to job classification, salary
ranges and annual merit increases. The committee also reviews fringe benefits.
The Human Resource Committee also establishes the compensation of the Executive
Officers of the Company. See "Human Resource Committee Report on Executive
Compensation".
The Board of Directors of the Company met twelve times during 1998. Each
incumbent director of the Company, except for Mr. Koch and Mr. Waring, attended
at least 75% of the aggregate of all the meetings of the Board of Directors and
the Committees of which they were members.
COMPENSATION OF DIRECTORS
For the year 1998, members of the Board of Directors were compensated at
the rate of $750 per meeting, with the Secretary receiving $800 per meeting.
Total directors' fees during 1998 amounted to $140,145 (including committee fees
and $36,915 of deferred compensation).
PROPOSAL TO APPROVE EVANS BANCORP, INC.
1999 STOCK OPTION PLAN
The Board of Directors has adopted, subject to shareholder approval, the
Evans Bancorp, Inc. 1999 Stock Option Plan (the "1999 Plan"). The 1999 Plan
provides a means for the Company to grant to eligible persons options to acquire
shares of the Company's common stock, stock appreciation rights, or an
opportunity to purchase shares of common stock subject to restrictions.
PURPOSE OF THE PLAN.
The purpose of the 1999 Plan is to enable the Company and its
subsidiaries to continue to attract, retain and reward eligible persons by
offering them an opportunity to have a greater ownership interest in and closer
identity with the Company and with its financial success.
Page 6
<PAGE> 10
SUMMARY OF KEY FEATURES OF THE PLAN.
The following is a summary of the key features of the 1999 Plan. The full
text of the 1999 Plan is attached to this Proxy Statement as Exhibit A. Please
refer to Exhibit A for a more complete description of the terms of the 1999
Plan.
ELIGIBLE PARTICIPANTS.
The Committee appointed to administer the 1999 Plan consists of Messrs.
Allen, Barrett, Brothman, Hall, Koch, Stevenson, Taylor, and Waring. The
Committee has authority to determine which employees and consultants, if any, of
the Company will receive options or other awards under the 1999 Plan. The
Committee also has the authority to determine the amount, terms and conditions
of any stock options or other awards granted under the 1999 Plan. At the present
time, the number of employees and consultants, if any, who may participate in
the 1999 Plan is unknown.
MAXIMUM NUMBER OF SHARES.
Up to 85,000 shares of common stock of Evans Bancorp, Inc. may be granted
under the 1999 Plan. This number will be adjusted for changes in the Company's
capital structure, such as a stock split. Shares delivered under the 1999 Plan
may be in the form of authorized and unissued shares or treasury shares.
TYPES OF AWARDS.
The 1999 Plan permits the granting of the following types of awards:
- Stock options.
- Stock appreciation rights.
- Restricted stock.
STOCK OPTIONS.
The Committee will determine the exercise or purchase price per share of
any stock option granted under the 1999 Plan, but the exercise price may not be
less than 100% of the fair market value of the common stock on the date of the
grant. Options granted may be either incentive stock options ("ISOs") or
nonqualified stock options. The Committee will fix the term of each option.
Options will be exercisable at such time or times as determined by the
Committee, and will expire no later than ten years from the date the option is
granted. Options may be exercised by paying the purchase price and applicable
withholding taxes, either in cash, or in stock of the Company, at the discretion
of the Committee. The Committee may provide that an optionee who surrenders
shares of common stock in payment of an option shall be granted a new
nonqualified stock option covering a number of shares equal to the number so
surrendered.
STOCK APPRECIATION RIGHTS.
The Committee is authorized to grant stock appreciation rights, which
entitle recipients to receive payments in cash, shares or a combination, or an
amount representing the appreciation in the market value of a specified number
of shares of Common Stock from the date of grant until the date of exercise.
RESTRICTED STOCK AWARDS.
The Committee is also authorized to sell or grant to participants, either
alone or in addition to other awards granted under the 1999 Plan, shares of
restricted common stock of the Company, subject to such restrictions and other
conditions as the Committee may designate. The Committee is authorized to
determine the persons to whom Restricted Stock Awards are to be made, the times
at which such awards are to be made, the number
Page 7
<PAGE> 11
of shares to be sold or granted under such awards and all other terms,
restrictions and conditions of such awards. The provisions of Restricted Stock
Awards are not required to be uniform with respect to all recipients. Stock
granted as Restricted Stock Awards may be issued for no cash consideration or
for such consideration as may be determined by the Committee.
TAX CONSEQUENCES OF THE PLAN.
The grant of a stock option will not result in taxable income at the time
of the grant for the optionee or the Company. If the optionee satisfies the
applicable holding period requirements, the optionee will have no taxable income
upon exercising an ISO (except that the alternative minimum tax may apply), and
the Company will receive no deduction when an ISO is exercised. Upon exercising
a nonqualified stock option, the optionee will recognize ordinary income in the
amount by which the fair market value exceeds the option price; the Company will
be entitled to a deduction for the same amount. The treatment to an optionee of
a disposition of shares acquired through the exercise of an option is dependent
upon the length of time the shares have been held and on whether such shares
were acquired by exercising an ISO or a nonqualified stock option. Generally,
there will be no tax consequences to the Company in connection with the
disposition of shares acquired under an option except that the Company may be
entitled to a deduction in the case of a disposition of shares acquired upon
exercise of an ISO before the applicable ISO holding periods have been
satisfied.
With respect to other awards granted under the 1999 Plan that are settled
either in cash or in stock or other property that is either transferable or not
subject to a substantial risk or forfeiture, the participant must recognize
ordinary income equal to the cash or fair market value of the shares or other
property received. The Company will be entitled to a deduction for the same
amount. For awards that are settled in stock or other property that is
restricted as to the transferability and subject to substantial risk of
forfeiture, the participant must recognize ordinary income equal to the fair
market value of the share or other property received at the first time the
shares or other property become transferable or not subject to substantial risk
of forfeiture, whichever occurs earlier; the Company will be entitled to a
deduction for the same amount.
AMENDMENTS.
The Board and the Committee are authorized to amend the 1999 Plan, except
that shareholder approval is required for any amendment that would (1)
materially increase the number of shares available under the 1999 Plan or (2)
allow stock options to be granted at less than 100 percent of a fair market
value on the date of grant.
FUTURE GRANTS AND AWARDS.
At present, the Committee does not have definitive plans for granting of
awards under the 1999 Plan. No determination has been made as to the number of
stock options, stock appreciation rights or Restricted Stock Awards to be
granted, or the number or identity of optionee or recipients of awards.
STOCK PRICE INFORMATION.
The Company's Common Stock is not currently traded on an organized public
market. As of February 22, 1999, the price at which shares of the Common Stock
had last sold was $45, based upon information provided to the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE EVANS
BANCORP, INC. 1999 STOCK OPTION PLAN.
EXECUTIVE COMPENSATION
Page 8
<PAGE> 12
There is shown below information concerning the annual and long-term
compensation for service in all capacities to the Company for the years 1998,
1997, and 1996 of the Chief Executive Officer, the Senior Vice President of
Administration, and the Senior Vice President of the Loan Division. No other
executive officer earned in excess of $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------- ----------------------------------------
AWARDS PAYOUTS
NAME OF AND STOCK LONG-TERM
PRINCIPAL OPTION INCENTIVE ALL OTHER
POSITION YEAR SALARY BONUS OTHER(1) (SHARES) PAYOUTS COMPENSATION
- -------- ---- ------ ----- -------- -------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Richard M. Craig 1998 $160,308 $20,000 $3,206 -0- -0- -0-
President & CEO 1997 $151,308 $14,013 $3,026 -0- -0- -0-
1996 $142,385 $13,840 $2,848 -0- -0- -0-
James Tilley 1998 $109,335 $14,000 $2,187 -0- -0- -0-
Senior Vice 1997 $103,059 $9,991 $2,061 -0- -0- -0-
President 1996 $97,095 $9,875 $1,942 -0- -0- -0-
William R. Glass 1998 $102,945 $14,000 $2,059 -0- -0- -0-
Senior Vice 1997 $96,630 $9,868 $1,933 -0- -0- -0-
President 1996 $90,235 $9,743 $1,805 -0- -0- -0-
</TABLE>
(1) Includes the Bank's contribution to the Employee Savings Plan made for the
benefit of Mr. Craig of $3,206 in 1998, $3,026 in 1997, and $2,848 in 1996;
for the benefit of Mr. Tilley of $2,187 in 1998, $2,061 in 1997, and $1,942
in 1996; and for the benefit of Mr. Glass of $2,059 in 1998, $1,933 in 1997,
and $1,805 in 1996. See "EMPLOYEE SAVINGS PLAN". Does not include personal
benefits which did not exceed 10% of Mr. Craig's, Mr. Tilley's, or
Mr. Glass' salary and bonus in any year.
EMPLOYMENT AGREEMENTS
Mr. Richard Craig, Mr. James Tilley, and Mr. William Glass have each
entered into an Employment Agreement with the Bank which runs through
December 31, 2002. Each Employment Agreement provides that salary will be set
annually by the Board of Directors. If the Bank terminates the Employment
Agreement without cause, the Bank is obligated to continue to pay base salary
for the longer of three months or the remainder of the term of the Employment
Agreement.
PENSION PLAN
The Bank maintains a defined benefit pension plan for all eligible
employees. An employee becomes vested in a pension benefit after five years of
service. Upon retirement at age 65, vested participants are entitled to receive
a monthly benefit. Prior to a May 1, 1994 amendment to the plan, the monthly
benefit under the pension plan was 3% of average monthly compensation multiplied
by years of service up to a maximum of fifteen years of service. In 1994, the
pension plan was amended to change the benefit to 1% of average monthly
compensation multiplied by years of service up to a maximum of thirty years of
service. However, the benefits already accrued by employees prior to this
amendment were not reduced by the amendment. Mr. Craig, Mr. Tilley, and Mr.
Glass are participants in the pension plan, and as of December 31, 1998, Mr.
Craig had ten years of credited service and $13,264 of average monthly
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<PAGE> 13
compensation; Mr. Tilley had nine years of credited service and $8,949 of
average monthly compensation; and Mr. Glass had five years of credited service
and $8,375 of average monthly compensation.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLANS
In 1995, the Bank entered into non-qualified Supplemental Executive
Retirement Plans ("SERPs") with both Mr. Craig and Mr. Tilley to provide
retirement benefits to supplement their benefits under the Bank's pension plan
and replace the benefits reduced by the 1994 amendment to the Pension Plan. See
"PENSION PLAN". In 1998, Mr. Craig's SERP was amended and the benefits
increased. In 1999, the Bank amended Mr. Tilley's agreement increasing his
benefit, and also entered into an agreement with Mr. Glass. Under the SERPs, as
amended, Mr. Craig, Mr. Tilley, and Mr. Glass are entitled to additional annual
pension payments of $92,766, $66,943, and $30,000, respectively, for 20 years
after retirement at age 65, unless their employment is terminated earlier. The
SERPs also provide death benefits in the same annual amounts in the event the
executive dies prior to age 65, which are payable over 10 years. The Bank has
purchased a life insurance policy on both Mr. Craig and Mr. Tilley to assist in
recovering the amounts of any benefits paid in the future under the SERPs.
EMPLOYEE SAVINGS PLAN
The Bank also maintains a 401(k) salary deferral plan to assist employees
in saving for retirement.
All employees are eligible to participate on the first of the month
following one year of service, provided they have completed 1,000 hours of
service. Eligible employees can contribute up to a maximum of 15% of their base
pay. An automatic 1% of base pay contribution is made by the Bank and in
addition, the Bank makes a matching contribution at a rate of 25% of the first
4% contributed by a participant. Participants are always 100% vested in their
own contributions and the Bank's matching contribution is also 100% vested.
Individual account earnings will depend on the performance of the
investment funds in which the participant invests. Specific guidelines govern
adjustments to contribution levels, investment decisions and withdrawals from
the plan. The benefit is paid as an annuity unless the employee elects one of
the optional forms of payment available under the plan. See "Summary
Compensation Table" for a summary of the amounts contributed by the Bank to this
Plan for the benefit of Mr. Craig, Mr. Tilley, and Mr. Glass.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The Human Resources Committee of the Board of Directors serves as the
Compensation Committee of the Company. The members of the Human Resource
Committee are: LaVerne G. Hall, William F. Barrett, Richard M. Craig, David C.
Koch, Richard C. Stevenson, and Thomas H. Waring, Jr. Mr. Craig is the Chairman
of the Board, President, and CEO of the Company and the Bank. Mr. Waring is the
principal of Waring Financial Group, which has assisted the Corporation in the
purchase of life insurance policies. See "Certain Transactions."
There are no Compensation Committee Interlocks required to be disclosed
in this Proxy Statement.
HUMAN RESOURCE COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
The Human Resource Committee has the responsibility of reviewing the
overall compensation policies for the employees of the Bank and also establishes
the compensation of Mr. Craig, Mr. Tilley, and Mr. Glass, who are referred to in
this Report as the Named Executives of the Company.
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The Bank uses a base salary/hourly rate and a bonus program to compensate
its employees, including the Named Executives.
The Bank uses a system of salary grades and corresponding salary ranges
to set base salary/hourly rates. Positions are assigned a salary grade on the
basis of job descriptions and comparisons to benchmark positions in the
industry. Annually, the Bank participates in a number of salary surveys provided
by or endorsed by various bank trade association groups. The surveys summarize
compensation information on a national, regional, and local basis, with data
furnished based upon bank asset size and geographic region. In January of each
year, management presents recommendations to the Human Resource Committee to
adjust the salary ranges based upon this information and also recommended salary
adjustments for the employees. Compensation recommendations are determined based
upon individual job performance, experience, and position within the salary
range. Mr. Craig, as the Chief Executive Officer, makes recommendations for the
Compensation levels of the Senior Vice-Presidents, including Mr. Tilley and
Mr. Glass. The Human Resource Committee (excluding Mr. Craig) develops
recommendations for Mr. Craig's salary based upon the same approach.
Also, in January of each year, the Human Resource Committee establishes a
bonus pool for the Bank's employees based upon the financial performance of the
Bank for the previous year, including such factors as the operating results
compared to the operating budget, net income, the return on average assets, the
return on average equity and the earnings per share, growth in loans, and growth
in deposits. The Human Resource Committee (excluding Mr. Craig) then determines
what amount of the bonus pool will be paid to each of Mr. Craig and the Senior
Vice Presidents, including Mr. Tilley and Mr. Glass, based upon their evaluation
of each person's performance and contributions to the financial results of the
Bank for the prior year. Management then allocates the remainder of the bonus
pool among other employees of the Bank based upon management's evaluation of
individual job performance and contributions to the Bank.
HUMAN RESOURCE COMMITTEE:
LaVerne G. Hall, Chairman William F. Barrett
Richard M. Craig Richard C. Stevenson
David C. Koch Thomas H. Waring, Jr.
The report of the Human Resource Committee and the Performance Graph
shall not be deemed to be incorporated by reference as a result of any general
incorporation by reference of this proxy statement or any part thereof in the
Company's Annual Report on Form 10-K.
CERTAIN TRANSACTIONS
The Bank has had, and in the future, expects to have banking and
fiduciary transactions with Directors and Executive Officers of the Company and
some of their affiliates. All such transactions have been in the ordinary course
of business and on substantially the same terms (including interest rates on
loans) as those prevailing at the time for comparable transactions with others.
Mr. Phillip Brothman is a partner of the law firm of Hurst, Brothman &
Yusick which served as general counsel to the Company and received legal fees.
In 1998, the Company paid approximately $77,000 in life insurance
premiums to Massachusetts Mutual. Waring Financial Group, which is owned by
Thomas H. Waring, Jr., received commissions on such premium payments.
PERFORMANCE GRAPH
The following Performance Graph compares the Company's cumulative total
stockholder return on its
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Common Stock for a five-year period (December 31, 1993 to December 31, 1998)
with the cumulative total return of the Standard & Poor's 500 ("S & P 500")
stock index and Standard & Poors Banks (Major Regional)-500 Stock Index ("Banks
(Major Regional)-500"). As the Company's stock is not traded on a public market,
the price information is based upon stock prices in private transactions as
disclosed to the Company for the periods indicated. The comparison for each of
the periods assumes that $100 was invested on December 31, 1993 in each of the
Company's common stock, the stocks included in the Banks (Major Regional-500)
Index, and the stocks included in the S & P 500 Index and that all dividends
were reinvested.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
AMONG EVANS BANCORP, INC.,
S&P INDEX AND S&P GROUP INDEX
---------------FISCAL YEAR ENDING---------------
COMPANY/INDEX/MARKET 1993 1994 1995 1996 1997 1998
Evans Bancorp Inc. 100.00 111.32 182.89 239.85 338.62 404.48
S&P Group Index 100.00 94.65 149.04 203.64 306.21 338.32
S&P 500 Index 100.00 101.32 139.40 171.41 228.59 293.92
ASSUMES $100 INVESTED ON DECEMBER 31, 1993
AND ALL DIVIDENDS REINVESTED
FISCAL YEAR ENDING DEC. 31, 1998
The current composition of S&P Industry Group 815 - Banks Major Regional -
is as follows:
BANK OF NEW YORK CO INC
BANK ONE CORP
BANKAMERICA CORPORATION
BANKBOSTON CORP
COMERICA INC
FIFTH THIRD BANCORP
FIRST UNION CORP
FIRSTAR CORP
FLEET FINANCIAL GROUP
HUNTINGTON BANCSHARES
KEYCORP
MELLON BANK CORP
MERCANTILE BANCORP
NATIONAL CITY CORP
NORTHERN TRUST CORP
PNC BANK CORP
REGIONS FINANCIAL CORP
REPUBLIC NY CORP
STATE STREET CORP
SUMMIT BANCORP
SUNTRUST BANKS INC
SYNOVUS FINANCIAL CORP
UNION PLANTERS CORP
US BANCORP
WACHOVIA CORP
WELLS FARGO & CO NEW
SOURCE: MEDIA GENERAL FINANCIAL SERVICES
P.O. BOX 85333
RICHMOND, VA 23293
PHONE: 1-(800) 448-7922
FAX: 1-(804) 649-6626
OTHER MATTERS
The cost of solicitation of proxies will be borne by the Company.
Solicitation, other than by mail, may be made by directors, officers or by
regular employees of the Company who will receive no additional compensation
therefor, by personal or telephone solicitation, the cost of which is expected
to be nominal.
Deloitte & Touche, LLP were the auditors for the Company for the year
ended December 31, 1998. Representatives of that firm will be present at the
annual meeting to respond to appropriate questions that may be raised, and they
will have the opportunity to make a statement, if they so desire.
It is not contemplated or expected that any business other than that
pertaining to the subjects referred to in this Proxy Statement will be brought
up for action at the meeting. At the time this Proxy Statement went to press,
the Board of Directors did not know of any other matter which may properly be
presented for
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action at the meeting.
DEADLINE FOR SHAREHOLDER PROPOSALS FOR
2000 ANNUAL MEETING
Proposals of shareholders intended to be presented at the Twelfth Annual
Meeting of Shareholders must be received by the Secretary, Evans Bancorp, Inc.
14 - 16 North Main Street, Angola, New York, 14006, no later than November 11,
1999. If a shareholder intends to present a proposal at the 2000 Annual Meeting,
but has not sought the inclusion of such proposal in the Company's proxy
materials, such proposal must be received by the Company prior to January 25,
2000 or the Company's management proxies for the 2000 Annual Meeting will be
entitled to use their discretionary voting authority to vote on such proposal,
without any discussion of the matter in the Company's proxy materials. In
accordance with the Company's By-Laws, shareholder nominations for directors to
be elected at an annual meeting of shareholders must be submitted to the
Secretary of the Company in writing not less than 14 days nor more than 50 days
immediately preceding the date of the annual meeting. If less than 21 days
notice of the annual meeting is given to shareholders, nominations shall be
mailed or delivered to the Secretary of the Company not later than the close of
business on the seventh day following the day on which the notice of meeting was
mailed. Such notification shall contain the following information to the extent
known by the notifying shareholder: (a) name and address of each proposed
nominee; (b) the principal occupation of each proposed nominee; (c) the total
number of shares of common stock of the Company that will be voted for each
proposed nominee; (d) the name and residence address of the notifying
shareholder; and (e) the number of shares of Common Stock of the Company owned
by the notifying shareholder. Under the current bylaws of the Company, in order
to be eligible to be nominated as a new director of the Company, the proposed
nominee must hold at least $10,000 aggregate market value of stock of the
Company and be less than 70 years of age. Nominations not made in accordance
with the bylaws of the Company may, in his discretion, be disregarded by the
presiding officer of the meeting, and upon his instruction, the vote tellers may
disregard all votes cast for each such nominee. In the event that the same
person is nominated by more than one shareholder, the nomination shall be
honored, and all shares of Common Stock of the Company shall be counted if at
least one nomination for that person complies herewith.
By order of the Board of Directors,
EVANS BANCORP, INC.
Robert W. Allen
Secretary
Angola, New York
March 10, 1999
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<PAGE> 17
EXHIBIT A
EVANS BANCORP, INC. 1999 STOCK OPTION PLAN
1. PURPOSE.
Evans Bancorp, Inc., a New York corporation (the "Corporation"), has
adopted the Evans Bancorp, Inc. Stock Option Plan, effective as of January 19,
1999.
The purpose of the Evans Bancorp, Inc. Stock Option Plan (the "Plan") is to
enable the Corporation and its subsidiaries to attract, retain, and reward
employees and consultants ("Eligible Persons") by offering them an opportunity
to have a greater proprietary interest in and closer identity with the
Corporation and with its financial success. An option granted under the Plan to
an Eligible Person to purchase shares of the Corporation's common stock, $.01
par value ("Common Stock"), may be an incentive stock option ("ISO") as defined
in Section 422 of the Internal Revenue Code of 1986 as heretofore or hereafter
amended ("Code") or a nonqualified stock option ("NSO") (collectively referred
to as "Options") and may be accompanied by stock appreciation rights ("SARs").
An Option that is not an ISO shall be an NSO. Shares of Common Stock
("Restricted Stock") may be granted or offered for sale to Eligible Persons
either separately from or in tandem with the grant of an Option. Grants of
Options and SARs, and grants of Restricted Stock to Eligible Persons, shall be
collectively referred to as "Awards." Proceeds received by the Corporation from
the sale of Restricted Stock, or shares of Common Stock pursuant to Options
granted under the Plan, shall be used for general corporate purposes.
2. ADMINISTRATION.
The Plan shall be administered by a committee ("Committee") appointed by
the Board. The Committee shall be composed of not fewer than two members. The
Committee Members shall not be eligible to receive Awards under the Plan.
Subject to the express provisions of the Plan, the Committee may interpret the
Plan, prescribe, amend and rescind rules and regulations relating to it,
determine the terms and provisions of Awards to Eligible Persons under the Plan
(which need not be identical), and make such other determinations as it deems
necessary and advisable for the administration of the Plan. The Committee may
delegate decisions with respect to Awards to Eligible Persons who are not
elected officers or directors of the Corporation or its subsidiaries to such
elected officer or officers of the Corporation as the Committee determines. The
decisions of the Committee under the Plan shall be conclusive and binding. No
member of the Board or the Committee shall be liable for any action taken or
determination made hereunder in good faith. Service on the Committee shall
constitute service as a director of the Corporation so that the members of the
Committee shall be entitled to indemnification and reimbursement as directors of
the Corporation pursuant to its bylaws.
3. ELIGIBILITY.
Eligible Persons who have been selected by the Committee to receive an
Award shall participate in the Plan. (Eligible Persons who participate in the
Plan shall be referred to as "Participants"). SARs may be granted only to an
Eligible Person to whom an Option has been granted. Shares of Restricted Stock
may be granted or sold to Eligible Persons. ISO's may be granted only to an
employee of the Corporation ("Employee"). The Committee shall determine, within
the limits of the express provisions of the Plan, those Eligible Persons to
whom, and the time or times at which Awards shall be granted. The Committee
shall also determine, with respect to Awards to Eligible Persons, the number of
shares of Common Stock to be subject to each such Award; the type of Options
(ISO or NSO); the duration of each Option; the exercise price under each Option;
the time or times within which (during the term of the Option) all or portions
of each Option may be exercised; whether cash, Common Stock, Options or other
property may be accepted in full or partial payment upon exercise of an Option;
whether an Option shall include SARs and the terms of the SARs; the base price
with respect to each Nontandem SAR
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(hereinafter defined); the restrictions to be imposed on shares of Restricted
Stock; whether the shares of Restricted Stock shall be granted or sold; and any
other terms and conditions of such Awards. In making such determinations, the
Committee may take into account the nature of the services rendered by the
Eligible Person, his present and potential contributions to the Corporation's
success and such other factors as the Committee in its discretion shall deem
relevant.
4. COMMON STOCK.
The total number of shares of Common Stock that may be subject to Awards
(including ISOs) under the Plan shall be 85,000 shares. Such total number of
shares shall be adjusted in accordance with the provisions of Section 12 hereof,
and a share of Common Stock subject to an Option and its related Tandem SAR
(hereinafter defined) shall only be counted once. Such shares may be either
authorized but unissued shares or reacquired shares. In the event that (a) any
Option granted under the Plan expires unexercised or is terminated, surrendered
or canceled (other than in connection with the exercise of a Tandem SAR) without
being exercised, in whole or in part, for any reason, or (b) any Nontandem SAR
granted under the Plan expires unexercised or is terminated, surrendered or
canceled without being exercised, in whole or in part, for any reason, or
(c) any Restricted Stock granted under the Plan is forfeited or reacquired by
the Corporation in connection with the violation of any restrictions imposed
upon such shares pursuant to the Plan, then the number of shares of Common Stock
theretofore subject to such Option, or SAR, or constituting such Restricted
Stock, or the unexercised, terminated, surrendered, forfeited, canceled or
reacquired portion thereof shall be added to the remaining number of shares of
Common Stock that may be made subject to Awards under the Plan. Such Awards
include Awards to former holders of such Options, SARs, or Restricted Stock and,
with respect to Awards to Eligible Persons, upon such terms and conditions as
the Committee shall determine, which terms may be more or less favorable than
those applicable to such former holders of Options, SARs or Restricted Stock.
5. OPTIONS.
The following provisions shall apply to each Option granted to an Eligible
Person:
(a) Options may be granted to Eligible Persons at any time and from time to
time as shall be determined by the Committee. The Committee shall have complete
discretion in determining the number of shares of Common Stock subject to
Options granted to each Eligible Person. The Committee may grant any type of
Option to purchase Common Stock that is permitted by law at the time of the
grant, including ISOs. Unless otherwise expressly provided at the time of grant,
Options granted under the Plan will not be ISOs.
(b) Each Option shall be evidenced by a written agreement specifying the
type of Option granted, the Option exercise price, the terms for payment of the
exercise price, the duration of the Option, the number of shares of Common Stock
to which the Option pertains and the terms of related SARs, if any (the "Option
Agreement"). An Option Agreement may also contain a vesting schedule, a
noncompetition agreement, a confidentiality provision, provisions for forfeiture
in the event of termination of the Eligible Person's employment by the
Corporation and such restrictions and conditions and other terms as the
Committee shall determine. Option Agreements need not be identical.
(c) The Committee, in its discretion, shall have the power to accelerate
the dates for exercise of any or all Options, or any part thereof, granted to an
Eligible Person under the Plan.
(d) In the discretion of the Committee, the grant of any Option may be
accompanied by a Reload Option. A Reload Option may be granted to an Eligible
Person who is an Option holder and who satisfies all or part of the exercise
price of the Option with shares of Common Stock. The Reload Option represents an
additional Option to acquire the same number of shares of Common Stock as is
used by the Eligible Person to pay for the original Option. A Reload Option is
subject to all of the same terms and conditions as the original Option except
that (i) the exercise price of the shares of Common Stock subject to the Reload
Option will be determined at the time the original Option is exercised and (ii)
such Reload Option will conform to all provisions of the Plan at the time the
original Option is exercised.
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<PAGE> 19
6. REQUIRED TERMS AND CONDITIONS OF ISOS.
The provisions of each ISO granted to an Employee under this Section 6
shall be interpreted in a manner consistent with Section 422 of the Code and
with all regulations issued thereunder. Each ISO granted to an Employee shall be
in such form and subject to such restrictions and conditions and other terms as
the Committee may determine at the time of grant, subject to the general
provisions of the Plan, Section 422 of the Code, the applicable Option Agreement
and the following specific rules:
(a) EXERCISE PRICE. Except as otherwise provided, the per share exercise
price of each ISO shall be at least 100% of the Fair Market Value of the Common
Stock at the time such ISO is granted, provided that in the case of an ISO
granted to an Employee who at the time of grant owns (as defined in Section
424(d) of the Code) stock of the Corporation or its parent or subsidiaries
possessing more than 10% of the total combined voting power of all classes of
stock of any such corporation, the exercise price shall be at least 110% of the
Fair Market Value of the Common Stock subject to the ISO at the time such ISO is
granted and the ISO by its terms shall not be exercisable after the expiration
of five years from the date the ISO is granted. In no event may the exercise
price be less than the par value of the Common Stock subject to such ISO.
(b) MAXIMUM TERM. Subject to earlier termination as provided in Section 8,
each ISO shall expire on the date determined in the applicable Option Agreement
at the time the ISO is granted, provided that no ISO shall be exercisable after
the expiration of 10 years from the date it is granted, except as otherwise
provided in subsection (a) next above.
(c) TIME OF EXERCISE. The Committee shall specify in the Option Agreement,
at the time each ISO is granted, the duration of each ISO and the time or times
within which (during the term of the ISO) all or portions of each ISO may be
exercised, except to the extent that other terms of exercise are specifically
provided by other provisions of the Plan.
(d) VALUE OF SHARES. The aggregate Fair Market Value (determined at the
time of grant) of Common Stock with respect to which ISOs are exercisable for
the first time by an Employee during any calendar year (under all option plans
of the Corporation or of a corporation which, at the time such ISO was granted,
is a parent or subsidiary of the Corporation, or is a predecessor corporation of
any such corporation) shall not exceed $100,000. If the aggregate Fair Market
Value (determined at the time of grant) of the stock subject to an Option, which
first becomes exercisable in any calendar year and during this period exceeds
the limitation of this subsection, so much of the Option that does not exceed
the applicable dollar limit shall be an ISO and the remainder shall be an NSO;
but in all other respects, the original Option Agreement shall remain in full
force and effect.
(e) CONVERSION. The Committee may, in its sole discretion, cause the
Corporation to convert an ISO to an NSO upon such terms and conditions and in
such manner as the Committee deems equitable.
7. REQUIRED TERMS AND CONDITIONS OF NSOs.
Each NSO granted to an Eligible Person shall be in such form and subject to
such restrictions and conditions and other terms as the Committee may determine
at the time of grant, subject to the general provisions of the Plan, the
applicable Option Agreement, and the following specific rules:
(a) EXERCISE PRICE. The number of shares of Common Stock subject to each
NSO and the per share exercise price of each NSO shall be determined by the
Committee at the time the NSO is granted, provided that such exercise price
shall not be less than 100% of the Fair Market Value of the Common Stock on the
date the NSO is granted. In no event may the exercise price be less than the par
value of the Common Stock subject to such NSO.
(b) MAXIMUM TERM. Subject to earlier termination as provided in Section 8,
each such NSO shall expire on the date determined in the applicable Option
Agreement at the time the NSO is granted, provided that such date shall not be
more than ten years after the date of grant.
(c) TIME OF EXERCISE. The Committee shall specify in the Option Agreement
at the time each NSO is
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granted, the duration of each NSO and the time or times within which (during the
term of the NSO) all or portions of each NSO may be exercised, except to the
extent that other terms of exercise are specifically provided by other
provisions of the Plan.
8. EXPIRATION OF OPTIONS GRANTED TO ELIGIBLE PERSONS; TERMINATION OF
EMPLOYMENT, DISABILITY OR DEATH, OR RETIREMENT.
(a) GENERAL RULE. Except with respect to Options expiring pursuant to
subsection 8(b), (c) or (d) below, each Option granted to an Eligible Person
shall, expire on the expiration date or dates set forth in the applicable Option
Agreement. Each Option expiring pursuant to subsection 8(b), (c) or (d) below
shall expire on the date set forth in subsection 8(b), (c) or (d)
notwithstanding any restrictions and conditions that may be contained in an
Eligible Person's Option Agreement.
(b) EXPIRATION UPON TERMINATION OF EMPLOYMENT. An Option granted to an
Eligible Person shall expire on the first to occur of (i) the applicable date or
dates determined pursuant to subsection 8(a) or (ii) the date that the
employment or period of service of the Eligible Person with the Corporation and
its subsidiaries terminates for any reason other than death or disability
pursuant to subsection 8(c) or retirement pursuant to subsection 8(d).
Notwithstanding the preceding provisions of this subsection 8(b), the Committee,
in its sole discretion, may permit an Eligible Person (i) to exercise an Option
that is exercisable immediately prior to the termination of employment or
termination of his period of service, notwithstanding any restrictions and
conditions that may be contained in his Option Agreement during a period not to
exceed one month following his termination of employment, and/or (ii) to
exercise an Option that becomes exercisable after termination of employment or
termination of his period of service and prior to the termination of such one
month period, during such period. In no event, however, may the Committee permit
such Eligible Person to exercise an Option under this subsection 8(b) after the
expiration date or dates set forth in the applicable Option Agreement.
(c) EXPIRATION UPON DISABILITY OR DEATH. If the employment or period of
service of an Eligible Person with the Corporation and its subsidiaries
terminates by reason of disability (as determined by the Committee) or death,
his unexpired Options or portions thereof, if any, held on the date of
disability or death that would expire pursuant to the terms of his Option
Agreement during the 12-month period commencing on the date of disability or
death, shall expire on the last day of such 12-month period. During such
12-month period, any such Option or portion thereof referred to in the preceding
sentence may be exercised by such Eligible Person, or the person specified in
Section 9, with respect to the same number of shares and in the same manner and
to the same extent as if the Eligible Person had continued as a full-time
employee or consultant of the Corporation or its subsidiaries during such
12-month period. Any unexpired Option or portion thereof held by the Eligible
Person on the date of disability or death, that would expire pursuant to the
terms of his Option Agreement on a date more than 12 months after the date of
disability or death, shall expire unexercised on the date of disability or
death.
(d) EXPIRATION UPON RETIREMENT. If the employment of an Eligible Person
with the Corporation and its subsidiaries terminates due to retirement under any
qualified retirement plan maintained by the Corporation and/or any of its
subsidiaries, his Option shall expire on the earlier to occur of (i) the
applicable expiration date or dates set forth in the applicable Option
Agreement(s) or (ii) the first anniversary of the date of such termination of
employment. If an Eligible Person who has so retired dies prior to exercising in
full an Option that has not expired pursuant to the preceding sentence, then
notwithstanding the preceding sentence, such Option shall expire on the first
anniversary of the date of the Eligible Person's death. During the period
commencing on the date of retirement or death, as the case may be, and ending on
the applicable later expiration date, the Options may be exercised by such
Eligible Person, or the person specified in Section 9, with respect to the same
number of shares and in the same manner and to the same extent as if the
Eligible Person had continued as a full-time employee of the Corporation or its
subsidiaries during such period.
9. METHOD OF EXERCISE OF OPTIONS.
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Any Option granted under the Plan may be exercised by the Participant, by a
legatee or legatees of such Option under the Participant's last will, by his
executors, personal representatives or distributees, or by his assignee or
assignees as provided in Section 14 below, by delivering to the Secretary of the
Corporation written notice of the number of shares of Common Stock with respect
to which the Option is being exercised, accompanied by full payment to the
Corporation of the exercise price of the shares being purchased under the
Option, and by satisfying all other conditions provided for in the Plan. Except
as otherwise provided in the Plan or in any Option Agreement, the exercise price
of Common Stock upon exercise of any Option by an Eligible Person shall be paid
in full (i) in cash, (ii) in Common Stock valued at its Fair Market Value on the
date of exercise, (iii) in cash by a broker-dealer to whom the holder of the
Option has submitted an exercise notice consisting of a fully endorsed Option,
(iv) by agreeing to surrender SARs then exercisable by him valued pursuant to
subsection 10(b) below on the date of exercise, (v) by agreeing to surrender
Options then exercisable by him valued at the excess of the aggregate Fair
Market Value of the Common Stock subject to such Options on the date of exercise
over the aggregate option price of such Common Stock, (vi) by directing the
Corporation to withhold such number of shares of Common Stock otherwise issuable
upon exercise of such Option having an aggregate Fair Market Value on the date
of exercise equal to the exercise price of the Option, or (vii) by such other
medium of payment as the Committee, in its discretion, shall authorize, or by
any combination of (i), (ii), (iii), (iv), (v) and (vi), at the discretion of
the Committee or in any manner provided in the Option Agreement. In the case of
payment pursuant to (ii), (iii), (iv), (v) or (vi) above, the Participant's
election must be made on or prior to the date of exercise of the Option and must
be irrevocable. In lieu of a separate election governing each exercise of an
Award, a Participant may file a blanket election which shall govern all future
exercises of Awards until revoked by the Participant. The Corporation shall
issue, in the name of the Participant (or, if applicable, the legatee(s),
executor(s), personal representative(s), or distributee(s) of a deceased
Participant, or the assignee(s) as provided in Section 14), stock certificates
representing the total number of shares of Common Stock issuable pursuant to the
exercise of any Option as soon as reasonably practicable after such exercise,
provided that any Common Stock purchased by an Eligible Person through a
broker-dealer pursuant to clause (iii) above shall be delivered to such
broker-dealer in accordance with 12 CFR 220.3(e)(4).
10. REQUIRED TERMS OF STOCK APPRECIATION RIGHTS.
If deemed by the Committee to be in the best interests of the Corporation,
an Eligible Person who receives an Option may also be granted a SAR. Each SAR
shall be granted subject to such restrictions and conditions and other terms as
the Committee may specify in the Option Agreement at the time the Option is
granted, or as the Committee may determine at the time of grant, subject to the
general provisions of the Plan, and the following specific rules:
(a) GRANT OF SARs. SARs will be granted, if at all, at the time of granting
of an Option and may be granted either in addition to the related Option
("Nontandem SAR") or in tandem with the related Option ("Tandem SAR"). At the
time of grant of a Nontandem SAR, the Committee shall specify the base price of
Common Stock to be used in connection with the calculation described in
subsection (b)(i) below. The base price of a Nontandem SAR shall not be less
than 80% of the Fair Market Value of a share of Common Stock on the date of
grant, provided that the Board shall approve any base price that is less than
100% of the Fair Market Value of the Common Stock on the date of grant. The
number of shares of Common Stock subject to a Tandem SAR shall not exceed one
for each share of Common Stock subject to the Option. The number of shares of
Common Stock subject to a Nontandem SAR shall be one for each share of Common
Stock subject to the Option. No Tandem SAR may be granted to an Eligible Person
in connection with an ISO in a manner that will disqualify the ISO under Section
422 of the Code unless the Eligible Person consents thereto.
(b) VALUE OF SARs. Upon exercise, a SAR shall entitle the Eligible Person
to receive from the Corporation the number of shares of Common Stock having an
aggregate Fair Market Value equal to the following:
(i) In the case of a Nontandem SAR, the excess of the Fair Market
Value of one share of Common Stock as of the date on which the SAR is
exercised over the base price specified in such SAR, multiplied by the
number of shares of Common Stock then subject to the SAR, or the portion
thereof being
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<PAGE> 22
exercised.
(ii) In the case of a Tandem SAR, the excess of the Fair Market Value
of one share of Common Stock as of the date on which the SAR is exercised
over the exercise price per share specified in such Option, multiplied by
the number of shares then subject to the Option, or the portion thereof as
to which the SAR is being exercised.
Cash shall be delivered in lieu of any fractional shares. The Committee, in
its discretion, shall be entitled to cause the Corporation to elect to settle
any part or all of its obligation arising out of the exercise of a SAR by the
payment of cash in lieu of all or part of the shares of Common Stock it would
otherwise be obligated to deliver in an amount equal to the Fair Market Value of
such shares on the date of exercise.
(c) EXERCISE OF TANDEM SARs. A Tandem SAR shall be exercisable during such
time, and be subject to such restrictions and conditions and other terms, as the
Committee shall specify in the applicable Option Agreement at the time such
Tandem SAR is granted. Notwithstanding the preceding sentence, the Tandem SAR
shall be exercisable only at such time as the Option to which it relates is
exercisable and shall be subject to the restrictions and conditions and other
terms applicable to such Option. Upon the exercise of a Tandem SAR, the
unexercised Option, or the portion thereof to which the exercised portion of the
Tandem SAR is related, shall expire. The exercise of any Option shall cause the
expiration of the Tandem SAR related to such Option, or portion thereof, that is
exercised.
(d) EXERCISE OF NONTANDEM SARs.
(i) A Nontandem SAR granted under the Plan shall be exercisable during
such time, and be subject to such restrictions and conditions and other
terms, as the Committee shall specify in the Option Agreement at the time
the Nontandem SAR is granted, which restrictions and conditions and other
terms need not be the same for all Eligible Persons. Without limiting the
generality of the foregoing, the Committee may specify a minimum number of
full shares with respect to which any exercise of a Nontandem SAR must be
made.
(ii) Subject to earlier termination as provided in the last sentence
of this paragraph (ii), a Nontandem SAR granted under the Plan shall expire
on the date specified by the Committee in the Option Agreement, provided
that such date shall not be more than ten years after the date of grant.
The Committee shall specify in the Option Agreement at the time each
Nontandem SAR is granted, the time during which the Nontandem SAR may be
exercised prior to its expiration and other provisions relevant to the SAR.
The Committee, in its discretion, shall have the power to accelerate the
dates for exercise of any or all Nontandem SARs or any part thereof,
granted under the Plan. Notwithstanding the foregoing, any Nontandem SAR
granted to an Eligible Person under the Plan shall expire, notwithstanding
any restrictions and conditions that may be contained in his applicable
Option Agreement, following a termination of his employment with the
Corporation and its subsidiaries in the same manner as an Option held by
such Eligible Person would expire pursuant to the provisions of Section 8.
(e) PARTIES ENTITLED TO EXERCISE SARs. A SAR may be exercised only by the
Eligible Person (or by a legatee or legatees of such SAR under his last will, by
his executors, personal representatives or distributees, or by an assignee or
assignees pursuant to Section 14 below).
(f) SETTLEMENT OF SARs. As soon as is reasonably practicable after the
exercise of a SAR, the Corporation shall (i) issue, in the name of the Eligible
Person, stock certificates representing the total number of full shares of
Common Stock to which the Eligible Person is entitled pursuant to subsection (b)
hereof and cash in an amount equal to the Fair Market Value, as of the date of
exercise, or any resulting fractional shares, and (ii) if the Committee causes
the Corporation to elect to settle all or part of its obligations arising out of
the exercise of the SAR in cash, deliver to the Eligible Person an amount in
cash equal to the Fair Market Value, as of the date of exercise, of the shares
of Common Stock it would otherwise be obligated to deliver.
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11. RESTRICTED STOCK AWARDS TO ELIGIBLE PERSONS.
The Committee may from time to time cause the Corporation to grant, or sell
for such amount of cash, Common Stock or such other consideration as the
Committee deems appropriate (which amount may be less than the Fair Market Value
of the Common Stock on the date of grant or sale), shares of Restricted Stock
under the Plan to such Eligible Persons, and subject to such restrictions and
conditions and other terms as the Committee may determine at the time of grant
or sale, subject to the general provisions of the Plan, the applicable
Restricted Stock Agreement, and the following specific rules:
(a) GRANT OR SALE. Restricted Stock may be granted or sold to an Eligible
Person either separately from, or in tandem with, the grant of an Option (with
or without SARs) to Eligible Persons. In the case of Restricted Stock granted or
sold in tandem with the grant of an Option: (i) the exercise of the Option shall
cause the forfeiture (or sale at the purchase price paid for the Restricted
Stock) to the Corporation of the Restricted Stock related to the Option, or
portion thereof that is exercised, and (ii) the lapse of restrictions applicable
to such Restricted Stock shall cause the expiration of the unexercised Option,
or pro rata portion thereof, related to such Restricted Stock. Restricted Stock
not granted or sold in tandem with the grant of an Option shall have no effect
on, and shall not be affected by, the exercise of any Option by the holder of
such Restricted Stock.
(b) RESTRICTED STOCK AGREEMENTS. Shares of Restricted Stock issued to an
Eligible Person under the Plan shall be governed by a Restricted Stock Agreement
which shall specify whether the shares of Restricted Stock are granted or sold
to the Eligible Persons and whether such Restricted Stock is issued separate
from, or in tandem with, the grant of an Option and such other provisions as the
Committee shall determine.
(c) ISSUANCE OF RESTRICTED STOCK. The Corporation shall issue, in the name
of the Eligible Person, stock certificates representing the total number of
shares of Restricted Stock granted or sold to the Eligible Person, as soon as
may be reasonably practicable after such grant or sale, which shall be held by
the Secretary of the Corporation as provided in subsection (h) hereof.
(d) RIGHTS OF STOCKHOLDERS. Subject to the provisions of subsections (c)
and (e) hereof and subsection 13(b), and the restrictions set forth in the
related Restricted Stock Agreement, the Eligible Persons receiving a grant of or
purchasing Restricted Stock shall thereupon be a stockholder with respect to all
of the shares represented by such certificate or certificates and shall have the
rights of a stockholder with respect to such shares, including the right to vote
such shares and to receive dividends and other distributions paid with respect
to such shares.
(e) RESTRICTIONS; FORFEITURE OR RESALE. Any share of Restricted Stock
granted to an Eligible Person pursuant to the Plan shall be forfeited, and any
share of Restricted Stock sold to an Eligible Person pursuant to the Plan shall,
at the Corporation's option, be resold to the Corporation for an amount equal to
the value of the cash and/or property paid therefor, and, in either case, such
shares shall revert to the Corporation, if (i) the Eligible Person violates a
non-competition or confidentiality agreement or other condition set forth in the
Restricted Stock Agreement, (ii) the Eligible Person's employment with the
Corporation or its subsidiaries terminates prior to a date or dates for
expiration of the forfeiture or resale provisions set forth in his Restricted
Stock Agreement, which date shall not be earlier than the first anniversary of
such grant or sale, (iii) the date the Eligible Person's employment with the
Corporation terminates for cause, or (iv) the date there occurs a violation of
any provision of the applicable Restricted Stock Agreement. The Corporation
shall exercise its right to require a forfeiture, and exercise its right to
require a resale of the Restricted Stock pursuant to this subsection (e), by
giving notice to the Eligible Persons at any time within the 30-day period
following (i) the date that the Corporation acquires knowledge of his violation
of a noncompetition or confidentiality agreement or other condition, or (ii) his
termination of employment with the Corporation or its subsidiaries prior to such
date set forth in the Restricted Stock Agreement. Upon receipt of such notice,
the Secretary of the Corporation shall promptly cancel shares of Restricted
Stock that are forfeited or resold to the Corporation, and the Corporation shall
make payment therefor, if applicable, as soon as reasonably practicable after
the date of said surrender.
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(f) ACCELERATION. The Committee, in its discretion, shall have the power to
accelerate the date on which the restrictions of this Section 11 or contained in
any Restricted Stock Agreements shall lapse with respect to any or all shares of
Restricted Stock granted or sold under the Plan that have been outstanding for
at least one year.
(g) TERMINATION OF EMPLOYMENT. Notwithstanding the foregoing, if the
Eligible Person's employment terminates (i) upon the Eligible Person's
retirement [as described in subsection 10(d)], (ii) because of his death or
disability (as determined by the Committee), or (iii) under circumstances
described in subsection 10(e), any restrictions of this Section 11 or in any
Restricted Stock Agreement shall lapse.
(h) RESTRICTED STOCK CERTIFICATES. The Secretary of the Corporation shall
hold the certificate or certificates representing shares of Restricted Stock
issued under the Plan on behalf of each Participant who holds such shares,
whether by grant or sale, until such time as the Restricted Stock is forfeited,
resold to the Corporation, or the restrictions lapse.
(i) TERMS AND CONDITIONS. The Committee may prescribe such other
restrictions and conditions and other terms applicable to the shares of
Restricted Stock issued to an Eligible Person under the Plan that are neither
inconsistent with nor prohibited by the Plan or any Restricted Stock Agreement,
including, without limitation, terms providing for a lapse of the restrictions
of this Section 11 or in any Restricted Stock Agreement, in installments.
12. ADJUSTMENTS.
(a) Appropriate adjustment in the maximum number of shares of Common Stock
issuable pursuant to the Plan, the number of shares subject to Awards under the
Plan, the exercise price with respect to Options and Tandem SARs and the base
price with respect to Nontandem SARs, shall be made to give effect to any
increase or decrease in the number of shares of issued Common Stock resulting
from a subdivision or consolidation of shares whether through reorganization,
recapitalization, stock split, reverse stock split, spin-off, split off,
spin-out, or other distribution of assets to stockholders, stock distributions
or combination of shares, assumption and conversion of outstanding Awards due to
an acquisition by the Corporation of the stock or assets of any other
corporation, payment of stock dividends, other increase or decrease in the
number of such shares outstanding effected, without receipt of consideration by
the Corporation, or any other occurrence for which the Committee determines an
adjustment is appropriate; provided, however, that no adjustment in the number
of shares with respect to which Awards may be granted under the Plan, or in the
number of shares subject to outstanding Awards, shall be made except in the
event, and then only to the extent that such adjustment together with all
respective prior adjustments which were not made as a result of this provision,
involve a net change of more than ten percent (i) from the number of shares of
Common Stock with respect to which Awards may be granted under the Plan, or
(ii) with respect to each outstanding Option, from the respective number of
shares of Common Stock subject thereto on the date of grant thereof. Without
limiting the generality of the foregoing provisions of this paragraph, any such
adjustment shall be deemed to have prevented any dilution and enlargement of an
Eligible Person's rights, if such Eligible Person receives in any such
adjustment, rights that are substantially similar (after taking into account the
fact that the Eligible Person has not paid the applicable exercise price) to the
rights the Eligible Person would have received had he exercised his outstanding
Awards, and become a stockholder of the Corporation immediately prior to the
event giving rise to such adjustment. Adjustments under this paragraph shall be
made by the Committee whose decision as to the amount and timing of any such
adjustment shall be conclusive and binding on all persons.
(b) In the event that:
(i) Any person (as such term is used in Section 12 of the Securities
Exchange Act of 1934 and the rules and regulations thereunder and including
any Affiliate or Associate of such person, as defined in Rule 12b-2 under
said Act, and any person acting in concert with such person) directly or
indirectly acquires or otherwise become entitled to vote more than 50
percent of the voting power entitled to be cast
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at elections for directors ("Voting Power") of the Corporation; or
(ii) There occurs any merger or consolidation of the Corporation, or
any sale, lease or exchange of all or any substantial part of the
consolidated assets of the Corporation and its subsidiaries to any other
person and (A) in the case of a merger or consolidation, the holders of
outstanding stock of the Corporation entitled to vote in elections of
directors immediately before such merger or consolidation hold less than
50% of the Voting Power of the survivor of such merger or consolidation or
its parent; or (B) in the case of any such sale, lease or exchange, the
Corporation does not own at least 50% of the Voting Power of the other
person;
The Committee may, in its discretion, revise, alter, amend or modify any Option
Agreement or Restricted Stock Agreement with an Eligible Person and any then
outstanding and unexercised Option granted to an Eligible Person, any SAR, and
any share of Restricted Stock granted or sold to an Eligible Person, in any
manner that it deems appropriate, including, but not limited to, any of the
following respects:
(A) The Option and SAR may be deemed to pertain to and apply to the
securities to which a holder of the number of shares of Common Stock
subject to the unexercised portion of the Option would be entitled if he
actually owned such shares immediately prior to the record date or other
time any such event became effective, and the number of SARs may be
adjusted as necessary to maintain the ratio between the number of SARs and
the securities, cash and other property subject to the Option; and
(B) Subject to subsection 6(d), the dates upon which outstanding and
unexercised Options may be exercised may be advanced (without regard to
installment exercise limitations, if any);
(C) The dates upon which restrictions and conditions applicable to
outstanding Restricted Stock shall lapse may be advanced (without regard to
any installment limitations); and
(D) Shares of Restricted Stock may be surrendered in a merger,
consolidation or share exchange involving the Corporation, notwithstanding
any restrictions and conditions applicable to such shares, provided that
the securities and/or other consideration received in exchange therefor
shall be subject to the restrictions and conditions applicable to the
Restricted Stock at the time of surrender and that the surrendering
Eligible Persons agrees to any reasonable provisions requested by the
Corporation to assure that any consideration received as a result of such
surrender is subject to the same restrictions and conditions as those
imposed on the Restricted Stock surrendered and that the consideration
cannot be transferred in violation of any such restrictions.
If the Committee believes that any such event is reasonably likely to
occur, the Committee may so revise, alter, amend or modify as set forth
above at any time before and contingent upon the consummation of such an
event.
(c) In the case of dissolution of the Corporation, (i) every Option and SAR
granted to an Eligible Person outstanding hereunder shall terminate
notwithstanding any restrictions and conditions that may be contained in his
Option Agreement and (ii) the restrictions and conditions on Restricted Stock
held by an Eligible Person shall lapse and the holders of such Restricted Stock
shall have all the rights of a stockholder with respect to participation in the
dissolution. Each such Option and SAR holder shall have 30 days prior written
notice of such event, during which time he shall have a right, subject to
subsection 7(d), to exercise his partly or wholly unexercised Option and SAR
(without regard to installment exercise limitations, if any).
(d) On the basis of information known to the Corporation, the Committee
shall make all determinations relating to the applicability and interpretation
of this Section 12, and all such determinations shall be conclusive and binding.
13. TERMS AND CONDITIONS OF AWARDS.
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<PAGE> 26
(a) Each Eligible Person shall agree to such restrictions and conditions
and other terms in connection with the exercise of an Option or SAR, or the
grant or sale of Restricted Stock, including restrictions and conditions on the
disposition of the Common Stock acquired upon the exercise, grant or sale
thereof, as the Committee may deem appropriate. The certificates delivered to a
Participant or to the Secretary of the Corporation evidencing the shares of
Common Stock acquired upon exercise of an Option may, and in the case of a grant
or a sale of Restricted Stock to a Participant shall, bear a legend referring to
the restrictions and conditions and other terms contained in the respective
Option Agreement or Restricted Stock Agreement and the Plan, and the Corporation
may place a stop transfer order with its transfer agent against the transfer of
such shares. Each Eligible Person shall execute a written instrument stating
that he is purchasing the Common Stock for investment and not with any present
intention to sell the same.
(b) The obligation of the Corporation to sell and deliver Common Stock
under the Plan shall be subject to all applicable laws, regulations, rules and
approvals, including, but not by way of limitation, the effectiveness of a
registration statement under the Securities Act of 1933, if deemed necessary or
appropriate by the Committee, of the Common Stock, Options, SARs and other
securities reserved for issuance or that may be offered under the Plan. A
Participant shall have no rights as a stockholder with respect to any shares
covered by an Option granted to, or exercised by, him until the date of delivery
of a stock certificate to him for such shares, or with respect to Restricted
Stock granted or sold to him, until the date of delivery of a stock certificate
representing such Restricted Stock to the Secretary of the Corporation on his
behalf. No adjustment other than pursuant to Section 12(a) hereof shall be made
for dividends or other rights for which the record date is prior to the date
such stock certificate is delivered.
14. NONTRANSFERABILITY.
(a) Except as provided in subsection 12(b)(iii)(D) and in subsection
(b) next below, or in connection with unrestricted Common Stock issued pursuant
to an Award, Awards granted under the Plan and any rights and privileges
pertaining thereto, may not be transferred, assigned, pledged or hypothecated in
any manner, by operation of law or otherwise, other than by will or by the laws
of descent and distribution and shall not be subject to execution, attachment or
similar process. The granting of an Option or SAR shall impose no obligation
upon the applicable Participant to exercise such Option or SAR.
(b) Notwithstanding the provisions of subsection (a) above, a Participant,
at any time prior to his death, may assign all or any portion of an Award
granted to him (other than an ISO) to (i) his spouse or lineal descendant, (ii)
the trustee of a trust for the primary benefit of his spouse or lineal
descendant, (iii) a partnership of which his spouse and lineal descendants are
the only partners, or (iv) a tax exempt organization as described in Section
501(c)(3) of the Code. In such event, the spouse, lineal descendant, trustee,
partnership or tax exempt organization will be entitled to all of the rights of
the Participant with respect to the assigned portion of such Award, and such
portion of the Award will continue to be subject to all of the terms, conditions
and restrictions applicable to the Award, as set forth herein and in the related
Option Agreement or Restricted Stock Agreement immediately prior to the
effective date of the assignment. Any such assignment will be permitted only if
(i) the Participant does not receive any consideration therefore, and (ii) the
assignment is expressly permitted by the applicable Option Agreement or
Restricted Stock Agreement as approved by the Committee. Any such assignment
shall be evidenced by an appropriate written document executed by the
Participant, and a copy thereof shall be delivered to the Corporation on or
prior to the effective date of the assignment.
15. INDEMNIFICATION OF THE COMMITTEE.
In addition to such other rights of indemnification as they may have as
members of the Board, or as members of the Committee, or as its delegatees, the
members of the Committee and its delegatees shall be indemnified by the
Corporation against (a) the reasonable expenses (as such expenses are incurred),
including attorneys' fees actually and necessarily incurred in connection with
the defense of any action, suit or proceeding (or
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<PAGE> 27
in connection with any appeal therein), to which they or any of them may be a
party by reason of any action taken or failure to act under or in connection
with the Plan, any Option or SAR granted hereunder or any grant or sale of
shares of Restricted Stock; and (b) against all amounts paid by them in
settlement thereof (provided such settlement is approved by independent legal
counsel selected by the Corporation) or paid by them in satisfaction of a
judgment in any such action, suit or proceeding, except in relation to matters
as to which it shall be adjudged in such action, suit or proceeding that such
Committee member or delegatee is liable for gross negligence or misconduct in
the performance of his duties; provided that within 60 days after institution of
any such action, suit or proceeding a Committee member or delegatee shall in
writing offer the Corporation the opportunity, at its own expense, to handle and
defend the same.
16. NO CONTRACT OF EMPLOYMENT.
Neither the adoption of the Plan nor the grant of any Award shall be deemed
to obligate the Corporation or any subsidiary to continue the employment or
period of service of any Eligible Person for any particular period, nor shall
the granting of an Award constitute a request or consent to postpone the
retirement date of any Eligible Person.
17. TERMINATION AND AMENDMENT OF PLAN.
(a) No ISOs shall be granted under the Plan more than ten years after the
first to occur of (i) the date the Plan was adopted by the Board, or (ii) the
date the Plan was approved by the stockholders of the Corporation. The Board may
at any time terminate, suspend or modify the Plan without the authorization of
stockholders to the extent allowed by law, including, with respect to ISOs,
Section 422 of the Code and regulations issued thereunder.
(b) No termination, suspension or modification of the Plan shall adversely
affect any right acquired by any Participant under an Award granted before the
date of such termination, suspension or modification, unless such Participant
shall consent; but it shall be conclusively presumed that any adjustment for
changes in capitalization as provided for herein does not adversely affect any
such right. Any member of the Board who is an officer or employee of the
Corporation shall be without vote on any proposed amendment to the Plan, or on
any other matter which might affect that member's individual interest under the
Plan.
18. EFFECTIVE DATE OF PLAN.
The Plan shall become effective upon adoption by the Board; provided,
however, that it shall be submitted for approval by either written consent of
all of holders of the outstanding Common Stock or by the holders of a majority
of the outstanding shares of Common Stock of the Corporation present, or
represented, and entitled to vote at a stockholders' meeting held within 12
months thereafter, and Awards granted prior to such stockholder approval shall
become null and void if such stockholder approval is not obtained.
19. WITHHOLDING TAXES.
Whenever the Corporation proposes or is required to issue or transfer
shares of Common Stock to a Participant under the Plan, the Corporation shall
have the right to require the Participant to remit to the Corporation an amount
sufficient to satisfy all federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for such shares. If
such certificates have been delivered prior to the time a withholding obligation
arises, the Corporation shall have the right to require the Participant to remit
to the Corporation an amount sufficient to satisfy all federal, state or local
withholding tax requirements at the time such obligation arises and to withhold
from other amounts payable to the Participant, as compensation or otherwise, as
necessary. Whenever payments under the Plan are to be made to a Participant in
cash, such payments shall be net of any amounts sufficient to satisfy all
federal, state and local withholding tax requirements. In connection with an
Award in the form of shares of Common Stock, a Participant may elect to satisfy
his tax withholding obligation incurred with respect to the Taxable Date of the
Award by (a) directing the Corporation to withhold a portion of the shares of
Common Stock otherwise distributable to the Participant, or (b) by transferring
to the Corporation a certain number of shares (either subject to a restricted
Stock Award or previously owned), such shares being valued
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at the Fair Market Value thereof on the Taxable Date. Notwithstanding any
provisions of the Plan to the contrary, a Participant's election pursuant to the
preceding sentence (a) must be made on or prior to the Taxable Date with respect
to such Award, and (b) must be irrevocable. In lieu of a separate election on
each Taxable Date of an Award, a Participant may make a blanket election with
the Committee that shall govern all future Taxable Dates until revoked by the
Participant. If the holder of shares of Common Stock purchased in connection
with the exercise of an ISO disposes of such shares within two years of the date
such ISO was granted or within one year of such exercise, he shall notify the
Corporation of such disposition and remit an amount necessary to satisfy
applicable withholding requirements including those arising under federal income
tax laws. If such holder does not remit such amount, the Corporation may
withhold all or a portion of any salary then or in the future owed to such
holder as necessary to satisfy such requirements. Taxable Date means the date a
Participant recognizes income with respect to an Award under the Code or any
applicable state income tax law.
20. LEAVES OF ABSENCE.
The Committee shall be entitled to make such rules, regulations and
determinations as it deems appropriate under the Plan regarding any leave of
absence taken by an Eligible Person who is the recipient of any Award. Without
limiting the generality of the foregoing, the Committee shall be entitled to
determine (a) whether or not any such leave of absence shall constitute a
termination of employment within the meaning of the Plan, and (b) the impact, if
any, of any such leave of absence on Awards under the Plan theretofore made to
any Eligible Person who takes such leave of absence.
21. GOVERNING LAW.
The Plan, and all agreements hereunder, shall be construed in accordance
with and governed by the laws of the State of New York and, in the case of ISOs,
Section 422 of the Code and regulations issued thereunder.
22. FAIR MARKET VALUE.
"Fair Market Value" as of a given date for all purposes of the Plan and any
Option Agreement or Restricted Stock Agreement means (a) if the Common Stock is
listed on a national securities exchange, the average of the closing prices of
the Common Stock on the Composite Tape for the 10 consecutive trading days
immediately preceding such given date; (b) if the Common Stock is traded on an
exchange or market in which prices are reported on a bid and asked price, the
average of the mean between the bid and the asked price for the Common Stock at
the close of trading for the ten consecutive trading days immediately preceding
such given date; and (c) if the Common Stock is not listed on a national
securities exchange nor traded on the over-the-counter market, such value as the
Committee, in good faith, shall determine. Notwithstanding any provision of the
Plan to the contrary, no determination made with respect to the Fair Market
Value of Common Stock subject to an ISO shall be inconsistent with Section 422
of the Code or regulations issued thereunder.
23. SUCCESSORS.
In the event of a sale of substantially all of the assets of the
Corporation, or a merger, consolidation or share exchange involving the
Corporation, all obligations of the Corporation under the Plan with respect to
Awards granted hereunder shall be binding on the successor to the transaction.
Employment or continuation of service of an Eligible Person with such a
successor shall be considered employment or period of service of the Eligible
Person with the Corporation for purposes of the Plan.
24. NOTICES.
Notices given pursuant to the Plan shall be in writing and shall be deemed
received when personally delivered or five days after mailed by United States
registered or certified mail, return receipt requested, addressee only, postage
prepaid. Notice to the Corporation shall be directed to:
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Evans Bancorp, Inc.
14 - 16 N. Main Street
Angola, New York 14006
Notices to or with respect to a Participant shall be directed to the
Participant, or the executors, personal representatives or distributees of a
deceased Participant, at the Participant's home address on the records of the
Corporation.
As adopted by the Board of Directors on January 19, 1999.
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[EVANS NATIONAL BANK LOGO]
INDEPENDENT COMMUNITY BANKING SINCE 1920
ANGOLA
DERBY
EVANS
FORESTVILLE
HAMBURG
NORTH BOSTON
WEST SENECA
- -------------------------------------------------------------------------------
PROXY FOR ELEVENTH ANNUAL MEETING OF SHAREHOLDERS
EVANS BANCORP, INC.
14-16 NORTH MAIN STREET
ANGOLA, NEW YORK 14006
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Phillip Brothman and Richard M. Craig as
Proxies, each with the power to appoint his substitute, and hereby authorizes
either of them to represent and to vote, as designated below, all the shares of
Common Stock of Evans Bancorp, Inc. held of record by either of the undersigned
on March 10, 1999, at the Eleventh Annual Meeting of Shareholders to be held on
April 27, 1999, or any adjournments thereof.
PROPOSAL 1. ELECTION OF DIRECTORS
[ ] FOR all three nominees listed below (except for any
nominee whose name has been written in the space provided).
[ ] WITHHOLD AUTHORITY to vote for all three nominees.
Robert W. Allen William F. Barrett David C. Koch
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
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PROPOSAL 2. APPROVAL OF 1999 STOCK OPTION PLAN
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(continued and to be dated and signed on the other side)
<PAGE> 31
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c/o Corporate Trust Services
Mail Drop 10AT66-4129
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Cincinnati, Ohio 45263
fold and detach here
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In his discretion, upon such other matters as may properly come before the
meeting or any adjournment.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. If no direction is made, this proxy will be
voted FOR both Proposal 1 and 2.
PLEASE MARK, DATE, SIGN AND RETURN THE PROXY PROMPTLY, USING THE ENCLOSED
ENVELOPE.
DATED: _______________________, 1999
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(Signature of Stockholder)
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(Signature of Stockholder)
Please sign exactly as name appears
on the stock certificate. When
shares are held by joint tenants,
both are required to sign. When
signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such. If a
corporation, please sign in full
corporate name for and by its
President or other authorized
officer. If a partnership, please
sign in partnership name by
authorized person.
