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EXHIBIT 10.1 HAVEN BANCORP, INC. 1996 STOCK INCENTIVE PLAN
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HAVEN BANCORP, INC. 1996 STOCK INCENTIVE PLAN
ADOPTED ON FEBRUARY 29, 1996
EFFECTIVE AS OF APRIL 24, 1996
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TABLE OF CONTENTS
ARTICLE I PURPOSE.....................................................1
Section 1.1 General Purpose of the Plan................................1
ARTICLE II DEFINITIONS.................................................1
Section 2.1 Administrator..............................................1
Section 2.2 Annual Retainer............................................1
Section 2.3 Appreciation Right.........................................1
Section 2.4 Award......................................................1
Section 2.5 Award Agreement............................................1
Section 2.6 Award Recipient............................................1
Section 2.7 Bank.......................................................1
Section 2.8 Beneficiary................................................1
Section 2.9 Board......................................................2
Section 2.10 Change in Control..........................................2
Section 2.11 Code.......................................................2
Section 2.12 Committee..................................................2
Section 2.13 Corporation................................................3
Section 2.14 Disinterested Board Member.................................3
Section 2.15 Dividend Equivalent Right..................................3
Section 2.16 Effective Date.............................................3
Section 2.17 Eligible Director..........................................3
Section 2.18 Eligible Individual........................................3
Section 2.19 Exercise Period............................................3
Section 2.20 Exercise Price.............................................3
Section 2.21 Fair Market Value..........................................3
Section 2.22 Haven......................................................3
Section 2.23 Incentive Stock Option.....................................3
Section 2.24 Non-Qualified Stock Option.................................3
Section 2.25 Option.....................................................4
Section 2.26 Option Holder..............................................4
Section 2.27 Person.....................................................4
Section 2.28 Plan.......................................................4
Section 2.29 Qualified Domestic Relations Order.........................4
Section 2.30 Retirement.................................................4
Section 2.31 Restricted Stock...........................................4
Section 2.32 Share......................................................4
Section 2.33 Vesting Date...............................................4
ARTICLE III ADMINISTRATION........................................5
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Section 3.1 Committee..................................................5
Section 3.2 Committee Action...........................................5
Section 3.3 Committee Responsibilities.................................5
Section 3.4 Indemnification............................................6
ARTICLE IV AVAILABLE SHARES AND AWARD AGREEMENTS......................7
Section 4.1 Available Shares...........................................7
Section 4.2 Option Agreements..........................................7
ARTICLE V STOCK OPTIONS..............................................8
Section 5.1 Options Granted to Eligible Individuals....................8
Section 5.2 Options Granted to Eligible Directors......................9
Section 5.3 Method of Exercise........................................10
Section 5.4 Limitations on Options....................................11
Section 5.5 Additional Limitations on Incentive Stock Options.........11
ARTICLE VI APPRECIATION RIGHTS.......................................12
Section 6.1 Appreciation Rights Granted to Eligible Individuals.......12
Section 6.2 Appreciation Rights Granted to Eligible Directors.........12
Section 6.3 Exercise of Appreciation Rights...........................13
Section 6.4 Effect of Exercise........................................13
ARTICLE VII RESTRICTED STOCK..........................................14
Section 7.1 Restricted Stock Granted to Eligible Individuals..........14
Section 7.2 Restricted Stock Granted to Eligible Directors............14
Section 7.3 Stock Certificates........................................15
Section 7.4 Shareholder Rights........................................15
Section 7.5 Distribution of Shares....................................15
ARTICLE VIII DIVIDEND EQUIVALENT RIGHTS................................15
Section 8.1 In General................................................15
Section 8.2 Form of Dividend Equivalents..............................16
ARTICLE IX AMENDMENT AND TERMINATION.................................16
Section 9.1 Termination...............................................16
Section 9.2 Amendment.................................................16
Section 9.3 Adjustments for Business Reorganization, Stock Split or
Stock Dividend............................................16
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ARTICLE X MISCELLANEOUS.............................................17
Section 10.1 Status as an Employee Benefit Plan........................17
Section 10.2 No Right to Continued Employment or Board Membership......17
Section 10.3 Construction of Language..................................18
Section 10.4 Governing Law.............................................18
Section 10.5 Headings..................................................18
Section 10.6 Non-Alienation of Benefits................................18
Section 10.7 Taxes.....................................................18
Section 10.8 Approval of Shareholders..................................18
Section 10.9 Notices...................................................19
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HAVEN BANCORP, INC. 1996 STOCK INCENTIVE PLAN
ARTICLE I
PURPOSE
Section 1.1 General Purpose of the Plan
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The purpose of the Plan is to advance the interests of Haven
Bancorp, Inc. and its shareholders by providing current directors, officers and
employees of Haven and its affiliates with an incentive to achieve corporate
objectives, and attracting and retaining directors, officers and employees of
outstanding competence, through the award of equity interests in Haven, and by
providing a means for the payment of compensation earned under the Columbia
Federal Savings Bank Executive Incentive Compensation Plan in the form of stock
options and awards.
ARTICLE II
DEFINITIONS
The following definitions shall apply for the purposes of this Plan,
unless a different meaning is plainly indicated by the context.
Section 2.1 Administrator means the person or persons designated by the
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Committee pursuant to Section 3.3 to assist the Committee in the administration
of the Plan.
Section 2.2 Annual Retainer means the annual retainer, if any, being paid
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to an Eligible Director for service on the Board and/or the board of directors
of the Bank.
Section 2.3 Appreciation Right means a right granted pursuant to Article
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VI which shall entitle the holder thereof to receive in accordance with the
terms of such Appreciation Right an amount of cash equal to the difference
between the Fair Market Value of the Shares subject to the Appreciation Right
and the Exercise Price applicable to such Appreciation Right. For purposes of
this Section 2.3, the Fair Market Value of a Share shall be determined on the
date the Appreciation Right is exercised.
Section 2.4 Award means the grant of an Option, Appreciation Right or
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Restricted Stock made pursuant to the Plan.
Section 2.5 Award Agreement means the written agreement evidencing the
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grant of an Option, an Appreciation Right or Restricted Stock Award made
pursuant to the Plan.
Section 2.6 Award Recipient means an Eligible Individual or Eligible
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Director who has been granted an Option, an Appreciation Right or Restricted
Stock pursuant to the Plan.
Section 2.7 Bank means Columbia Federal Savings Bank, a federally
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chartered stock savings bank and any successor thereto.
Section 2.8 Beneficiary means the person or persons designated by an
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Eligible Individual or Eligible Director in such form and manner as may be
required by the Committee or Administrator, to receive his or her Award in the
event all or any portion of such Award remains unexercised or undistributed upon
his
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or her death or, if no such Beneficiary has been designated, the legal
representative of the Eligible Individual or Eligible Director.
Section 2.9 Board means the board of directors of Haven.
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Section 2.10 Change in Control means an event of the nature that: (a)
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would be required to be reported by Haven in response to Item 1 of the current
report on Form 8-K, as in effect on the date hereof, pursuant to Sections 13 or
15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"); or (b)
results in a Change in Control of the Bank or Haven within the meaning of the
Change in Bank Control Act and the rules and regulations promulgated thereunder
by the appropriate federal banking agency, as in effect on the date hereof; or
(c) results in a transaction requiring prior Federal Reserve Board ("FRB")
approval under the Bank Holding Company Act of 1956 and the regulations
promulgated thereunder by the FRB, as in effect on the date hereof; or (d)
results in a transaction requiring prior Office of Thrift Supervision ("OTS")
approval under the Home Owners' Loan Act and the regulations promulgated
thereunder by the OTS, as in effect on the date hereof. Without limiting the
foregoing, a Change in Control shall be deemed to have occurred at such time as:
(i) any "person" (as the term is used in Section 13(d) and 14(d) of the Exchange
Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Bank or Haven
representing 20% or more of the Bank's or Haven's outstanding securities, except
for any securities of the Bank purchased by Haven in connection with the
conversion of the Bank to the stock form and any securities purchased by
employee benefit plans maintained by the Bank or Haven, or such plans' related
trusts; (ii) individuals who constitute the Board of Directors of Haven or the
Board of Directors of the Bank on the date hereof (the "Incumbent Board") cease
for any reason to constitute at least a majority thereof, provided that any
individual becoming a director subsequent to the date hereof whose election was
approved by a vote of at least three-quarters of the directors comprising the
Incumbent Board, or whose nomination for election by Haven's stockholders was
approved by the same Nominating Committee serving under an Incumbent Board,
shall be, for purposes of this clause (ii), considered as though he were a
member of the Incumbent Board, but only if such individual's election or
nomination did not result from an actual or threatened election contest (within
the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act)
or other actual or threatened solicitation of proxies or consents (within the
meaning of Rule 14a- 11 of Regulation 14A promulgated under the Exchange Act)
other than by or on behalf of the Board of Haven; (iii) a plan of
reorganization, merger, consolidation, sale of all or substantially all the
assets of the Bank or Haven becomes effective or a similar transaction occurs in
which the Bank or Haven is not the resulting entity; (iv) a plan of
reorganization, merger, consolidation, sale of all or substantially all of the
assets of the Bank or Haven or a similar transaction, which will result in the
outstanding shares of the class of securities then subject to such plan or
transaction being exchanged for or converted into cash or property or securities
not issued by the Bank or Haven, is approved by the stockholders of Haven in
response to a proxy statement that was distributed, soliciting proxies from
stockholders of Haven, by someone other than the current management of Haven, or
(v) 20% or more of the voting securities of the Bank or Haven then outstanding
are tendered and accepted by an offeror as of the closing of a tender offer for
such securities.
Section 2.11 Code means the Internal Revenue Code of 1986 (including the
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corresponding provisions of any succeeding law).
Section 2.12 Committee means the Committee described in Section 3.1.
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Section 2.13 Corporation means Haven, the Bank and any successor or
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successors thereto, and subject to the approval of, and such terms and
conditions as may be imposed by, the Board, such other savings bank, savings and
loan association, bank, corporation, financial institution or other business
organization or institution as may be or become an affiliate of Haven.
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Section 2.14 Disinterested Board Member means a member of the Board who is
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not currently an employee of the Company, is not a former employee of the
Company who receives compensation for prior services and has not at any time
previously been an officer of the Company.
Section 2.15 Dividend Equivalent Right means a right described in Article
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IX.
Section 2.16 Effective Date means the date on which the Plan is approved
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by the holders of a majority of the Shares represented in person or by proxy at
a meeting duly called and held.
Section 2.17 Eligible Director means a member of the Board or a member of
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the board of directors of the Bank who is not an employee or an officer of the
Corporation.
Section 2.18 Eligible Individual means any employee of the Corporation
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whom the Committee may select to receive an Award pursuant to the Plan,
provided, however, that no Eligible Director shall be identified as an Eligible
Individual.
Section 2.19 Exercise Period means the period during which an Option or an
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Appreciation Right may be exercised.
Section 2.20 Exercise Price means the price per Share (a) at which Shares
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subject to an Option may be purchased upon exercise of the Option granted
pursuant to Sections 5.1 or 5.2, or (b) used to determine the payment to be made
pursuant to the exercise of an Appreciation Right granted pursuant to Sections
6.1 or 6.2.
Section 2.21 Fair Market Value means, when used in connection with Shares
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on a certain date, the average of the reported bid and ask price of the Shares
as reported by the National Association of Securities Dealers Automated
Quotation System (as published by the Wall Street Journal, if published) on such
date or if the Shares were not traded on such date, on the next preceding day on
which the Shares were traded thereon or the last previous date on which a sale
is reported.
Section 2.22 Haven means Haven Bancorp, Inc., a corporation organized and
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existing under the laws of the State of Delaware, and any successor thereto.
Section 2.23 Incentive Stock Option means a right to purchase Shares that
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is granted pursuant to Section 5.1, that is designated by the Committee to be an
Incentive Stock Option and that satisfies the requirements of Section 5.5 of the
Plan and Section 422 of the Code.
Section 2.24 Non-Qualified Stock Option means a right to purchase Shares
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that is either (a) granted pursuant to Section 5.1, designated by the Committee
to be a Non-Qualified Stock Option and is not intended to satisfy the
requirements of Section 422 of the Code, or (b) granted pursuant to Section 5.2.
Section 2.25 Option means either an Incentive Stock Option or a
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Non-Qualified Stock Option granted under this Plan.
Section 2.26 Option Holder means an Eligible Individual or an Eligible
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Director who has been granted an Option under the Plan, or the Beneficiary of
such an Eligible Individual or Eligible Director.
Section 2.27 Person means an individual, a corporation, a bank, a savings
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bank, a savings and loan association, a financial institution, a partnership, an
association, a joint-stock company, a trust, an estate, an unincorporated
organization and any other business organization or institution.
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Section 2.28 Plan means the Haven Bancorp, Inc. 1996 Stock Incentive Plan,
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as amended from time to time.
Section 2.29 Qualified Domestic Relations Order means a Domestic Relations
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Order that: (a) clearly specifies (i) the name and last known mailing address of
the Option Holder and of each person given rights under such Domestic Relations
Order, (ii) the amount or percentages of the Option Holder's benefits under this
Plan to be paid to each person covered by such Domestic Relations Order, (iii)
the number of payments or the period to which such Domestic Relations Order
applies, and (iv) the name of this Plan; and (b) does not require the payment of
a benefit in a form or amount that is (i) not otherwise provided for under the
Plan, or (ii) inconsistent with a previous Qualified Domestic Relations Order.
For the purposes of this Plan, a "Domestic Relations Order" means a judgment,
decree or order (including the approval of a property settlement) that is made
pursuant to a state domestic relations or community property law and relates to
the provision of child support, alimony payments, or marital property rights to
a spouse, child or other dependent of an Option Holder.
Section 2.30 Retirement means, in the case of an Eligible Director, such
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Eligible Director's termination of service, other than for cause, upon or after
(a) completing at least 5 years of service on the Board or the board of
directors of the Bank, without regard to any breaks in such service, and (b)
attaining age 55.
Section 2.31 Restricted Stock means Shares that have been granted to an
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Eligible Individual or Eligible Director pursuant to Article VII, which Shares
shall not be transferable by the Award Recipient by means of sale, assignment,
exchange, pledge or otherwise, until the Vesting Date or Vesting Dates
applicable to such Shares.
Section 2.32 Share means a share of common stock of Haven.
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Section 2.33 Vesting Date means the date established by the Committee or
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prescribed in Sections 5.2, 6.2 or 7.2, as of which (a) an Option or
Appreciation Right may first be exercised, or (b) the restrictions relating to
Restricted Stock will lapse. By way of example and not by way of limitation, a
Vesting Date established by the Committee with respect to an Award made to an
Eligible Individual may be a fixed calendar date, the date on which individual,
group, departmental, divisional or corporate performance criteria established by
the Committee are achieved and/or the date of an Award Recipient's termination
of employment due to death, disability or retirement, or following a Change in
Control.
ARTICLE III
ADMINISTRATION
Section 3.1 Committee
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The Plan shall be administered by the Compensation Committee of the
Board (or any successor committee), or such other committee as shall be
designated by or on behalf of the Board to perform the duties set forth in this
Article III; provided, however, that all members of such Committee must be
Disinterested Board Members. If fewer than 2 members of the Compensation
Committee of the Board are Disinterested Board Members, then the Board shall
appoint to the Committee such additional Disinterested Board Members as shall be
necessary to provide for a Committee consisting of at least 2 Disinterested
Board Members.
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Section 3.2 Committee Action
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The Committee shall hold meetings, at least annually, and may make
such administrative rules and regulations as it may deem proper. A majority of
the members of the Committee shall constitute a quorum, and the action of a
majority of the members of the Committee present at a meeting at which a quorum
is present, as well as actions taken pursuant to the unanimous written consent
of all of the members of the Committee without holding a meeting, shall be
deemed to be actions of the Committee. All actions of the Committee shall be
final and conclusive and shall be binding upon the Corporation and all other
interested parties.
Section 3.3 Committee Responsibilities
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Subject to the terms and conditions of the Plan and such limitations
as may be imposed from time to time by the Board, the Committee shall be
responsible for the overall management and administration of the Plan and shall
have such authority as shall be necessary or appropriate in order to carry out
its responsibilities, including, without limitation, the authority:
(a) to interpret, construe and implement the Plan, and to
determine and resolve any and all questions that may arise under the Plan,
Awards granted pursuant to the Plan and the terms and conditions thereof, and
any such determinations, interpretations and other decisions made by the
Committee under or with respect to the Plan or any Award thereunder, shall be
final, conclusive and binding upon the Corporation, any Award Recipient or
Beneficiary and any other Person having an interest in the Plan;
(b) to adopt rules and regulations and to prescribe forms for
the operation and administration of the Plan;
(c) to appoint an officer, or officers, of Haven or the Bank,
who need not be a member of the Committee, and who shall, subject to the
responsibilities of the Committee and the Board, serve as the Administrator for
the Plan and shall have the responsibility for the day-to-day control,
management, operation and administration of the Plan, including, subject to the
Committee's discretion, the following:
(i) maintaining records necessary or appropriate for the
administration of the Plan;
(ii) giving and receiving such instructions, notices and
information as may be necessary or appropriate in the administration of the
Plan;
(iii) prescribing forms consistent with the terms of the
Plan and with the interpretations and other actions of the Committee;
(iv) determining and resolving any question arising in
connection with the Plan or an Award made thereunder, and such Administrator's
decision or action in respect thereof shall be final and conclusive and binding
upon the Corporation, the Award Recipients, Beneficiaries and any other Person
having an interest under the Plan; provided, however, that any question relating
to inconsistency or omission in the Plan, or interpretation of the provisions of
the Plan, shall be referred to the Committee by the Administrator, and the
decision of the Committee in respect thereof shall be final;
(v) discharging such other responsibilities or follow
such directions as may be assigned or given by the Committee or the Board; and
any Person dealing with the Administrator shall be fully protected in relying
upon any written notice, instruction, direction or other communication signed by
the Administrator; and
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(d) to take any other action not inconsistent with the
provisions of the Plan that it may deem necessary or appropriate.
Section 3.4 Indemnification
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No member of the Committee or an Administrator shall be liable for
any action, omission, or determination relating to the Plan, and the Corporation
shall indemnify and hold harmless each member of the Committee, the
Administrator and each other director or employee of the Corporation to whom any
duty or power relating to the administration or interpretation of the Plan has
been delegated against any cost or expense (including counsel fees) or liability
(including any sum paid in settlement of a claim with the approval of the
Committee) arising out of any action, omission or determination relating to the
Plan, unless, in either case, such action, omission or determination was taken
or made by such member, director or employee in bad faith and without reasonable
belief that it was in the best interests of the Corporation.
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ARTICLE IV
AVAILABLE SHARES AND AWARD AGREEMENTS
Section 4.1 Available Shares
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Subject to Section 9.3, the maximum aggregate number of Shares with
respect to which Options, Restricted Stock and Dividend Equivalent Rights may be
granted at any time pursuant to this Plan shall be equal to the excess of:
(a) 210,000 Shares; over
(b) the sum of:
(i) the number of Shares with respect to which Options
previously granted under this Plan may then or may in the future be exercised;
plus
(ii) the number of Shares with respect to which Options
previously granted under this Plan have been exercised; plus
(iii) the number of Shares that have been granted as
Restricted Stock under this Plan which have become or may in the future become
vested.
The Shares available pursuant to this Section 4.1 may be either authorized but
unissued Shares, or Shares previously issued and reacquired by Haven to be held
as issued but not outstanding Shares. Solely for purposes of this Section 4.1:
(A) an Option shall not be considered as having been exercised or remaining
exercisable to the extent that such Option terminates by reason other than the
purchase the related Shares, (B) the exercise of an Appreciation Right related
to an Option shall be treated as a termination, but not an exercise, of the
related Option and (C) Shares of Restricted Stock that are forfeited prior to
vesting shall be added to the number of Shares available under the Plan.
Section 4.2 Option Agreements
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Any Award granted pursuant to the Plan shall be evidenced by a
written agreement which shall:
(a) specify the number of Shares covered by or relating to the
Award;
(b) in the case of an Option, designate the Option as either an
Incentive Stock Option or a Non-Qualified Stock Option;
(c) in the case of an Option or Appreciation Right:
(i) specify the Exercise Price for the Shares subject to the
Option or Appreciation Right;
(ii) specify the Exercise Period for the Option or
Appreciation Right;
(iii) specify any Dividend Equivalent Rights relating to the
Option or Appreciation Right;
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(d) specify the Vesting Date or Vesting Dates applicable to such
Award;
(e) set forth specifically, or incorporate by reference, the
applicable provisions of the Plan; and
(f) contain such other terms and conditions not inconsistent with
the Plan as the Committee may, in its discretion, prescribe with respect to an
Award granted to an Eligible Individual.
ARTICLE V
STOCK OPTIONS
Section 5.1 Options Granted to Eligible Individuals
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(a) Subject to the limitations of the Plan, the Committee may, in
its discretion, grant to an Eligible Individual an Option to purchase Shares.
(b) Subject to Section 4.1 and such limitations as the Board may
from time to time impose, the number of Shares subject to an Option granted to
an Eligible Employee shall be determined by the Committee, in its discretion;
provided, however, that the maximum number of Shares that may be subject to an
Option granted to any Eligible Individual during the period the Plan is in
effect shall be 112,000.
(c) The Exercise Price of an Option granted to an Eligible
Individual shall be determined by the Committee, in its discretion; provided,
however, that the Exercise Price established for any Incentive Stock Option
shall be determined in accordance with Section 5.5; and further provided, that
the Exercise Price established for any Option shall not be less than the par
value of a Share on the date on which the Option is granted.
(d) The Exercise Period during which an Option granted to an
Eligible Individual may be exercised, and the Vesting Date or Vesting Dates on
and after which all or a specified portion of the Shares subject to the Option
may be purchased, shall be determined by the Committee, in its discretion.
(e) The Committee may, in its discretion, establish such other terms
and conditions with respect to an Option granted to an Eligible Employee as it
may deem necessary or appropriate, including, without limitation, the grant of
related Dividend Equivalent Rights, which terms and conditions shall be
specified in the Award Agreement evidencing such Option.
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Section 5.2 Options Granted to Eligible Directors
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(a) Subject to Section 4.1, effective as of the Effective Date, each
Eligible Director who is an Eligible Director on such date shall be granted a
Non-Qualified Stock Option to purchase 6,000 Shares. An individual who first
becomes an Eligible Director subsequent to the Effective Date shall be granted,
effective on the date he or she becomes an Eligible Director, a Non-Qualified
Stock Option to purchase 6,000 Shares.
(b) The Exercise Price of an Option granted to an Eligible Director
shall be the Fair Market Value of a Share on the date on which the Option is
granted.
(c) The Exercise Period during which an Option granted to an
Eligible Director may be exercised shall commence on the first anniversary of
the date the Option was granted and shall expire on the earliest of:
(i) the last day of the one-year period commencing on the date
the Eligible Director ceases to be an Eligible Director, other than due to a
termination for cause;
(ii) the date the Eligible Director ceases to be an Eligible
Director due to a termination for cause; and
(iii) the last day of the ten-year period commencing on the
date on which the Option was granted;
provided, however, that in the event of an Eligible Director's termination of
service due to Retirement while there is outstanding any Option granted to such
Eligible Director for which the Exercise Period has not commenced, the Exercise
Period applicable to such Option shall automatically commence as of the
effective date of such Eligible Director's Retirement; and further provided,
that in the event of a Change in Control while there is outstanding any Option
granted to an Eligible Director for which the Exercise Period has not commenced,
the Exercise Period applicable to such Option shall automatically commence on
the earliest date on which the Change in Control is deemed to have occurred.
(d) The Vesting Dates applicable to an Option granted to an Eligible
Director pursuant to this Section 5.2 shall be:
(i) the first anniversary of the date the Option was granted
with respect to 2,000 of the unvested Shares subject to the Option;
(ii) the second anniversary of the date the Option was granted
with respect to an additional 2,000 of the unvested Shares subject to the
Option; and
(iii) the third anniversary of the date the Option was granted
with respect to the remaining 2,000 unvested Shares subject to the Option;
provided, however, that in the event of an Eligible Director's termination of
service due to Retirement while there is outstanding any Option granted to such
Eligible Director for which the applicable Vesting Date or Vesting Dates
specified in this Section 5.2(d) has not occurred, such Option shall become
fully vested as of the effective date of such Eligible Director's Retirement;
and further provided, that in the event of a Change in Control while there is
outstanding any Option granted to an Eligible Director for which the applicable
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Vesting Date or Vesting Dates specified in this Section 5.2(d) has not occurred,
such Option shall become fully vested as of earliest date on which the Change in
Control is deemed to have occurred.
(e) If an Eligible Director granted an Option pursuant to this
Section 5.2 ceases to be an Eligible Director prior to a Vesting Date specified
in Section 5.2(d) for any reason other than Retirement or a termination of
service following a Change in Control, any Option granted to such Eligible
Director that has not previously become vested shall be forfeited.
Section 5.3 Method of Exercise
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(a) Subject to the limitations of the Plan and the Award Agreement
evidencing an Option, the Option Holder may, at any time during the Exercise
Period, exercise his or her right to purchase all or any part of the Shares to
which the Option relates; provided, however, that the minimum number of Shares
which may be purchased shall be 100, or, if less, the total number of Shares
relating to the Option which remain unpurchased. An Option Holder shall exercise
an Option to purchase Shares by:
(i) giving written notice to the Committee or Administrator in
such form and manner as the Committee may prescribe, of his or her intent to
exercise the Option;
(ii) delivering to the Committee or Administrator full payment
for the Shares as to which the Option is to be exercised; and
(iii) satisfying such other conditions as may be prescribed in
the Award Agreement.
Payment for Shares to be purchased upon exercise of an Option shall be made (A)
in United States dollars (by certified or bank check or such other instrument as
the Company may accept); (B) if and to the extent permitted by the Committee, in
the form of Shares already owned beneficially by the Option Holder for a period
of more than six months and having an aggregate Fair Market Value on the date
the Option is exercised equal to the aggregate Exercise Price to be paid; or (C)
by a combination of (A) and (B). Payment for any Shares to be purchased upon
exercise of an Option may also be made by delivering a properly executed
exercise notice to the Committee or Administrator, together with a copy of
irrevocable instructions to a broker to deliver promptly to Haven the amount of
sale or loan proceeds to pay the Exercise Price. To facilitate the foregoing,
Haven may enter into agreements for coordinated procedures with one or more
brokerage firms. Notwithstanding the provisions of Section 10.9, the date of
exercise shall be the earliest date practicable following the date on which the
notice referred to in this Section 5.3(a) is received by the Committee or
Administrator, but in no event more than three days after such notice is
received.
(b) When the requirements of Section 5.3(a) have been satisfied, the
Committee or Administrator shall take such action as is necessary to cause the
issuance, in the name of the Option Holder or such individual as the Option
Holder may designate, of a stock certificate evidencing the ownership of such
Shares. Except as may be provided under Article VIII with respect to Dividend
Equivalent Rights, an Option Holder shall have no right to vote or to receive
dividends, nor have any other rights with respect to the Shares, prior to the
date as of which such Shares are transferred to the Option Holder on the stock
transfer records of Haven, and no adjustments shall be made for any dividends or
other rights for which the record date is prior to the date as of which such
transfer is effected, except as may be required under Section 9.3.
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Section 5.4 Limitations on Options
----------------------
(a) No Eligible Individual shall be granted an Option unless at the
time the Option is granted, each member of the Committee is a Disinterested
Board Member.
(b) An Option by its terms shall not be transferable by the Option
Holder other than by will or by the laws of descent and distribution, or
pursuant to the terms of a Qualified Domestic Relations Order, and shall be
exercisable, during the lifetime of an Option Holder only by such Option Holder
or an alternate payee designated pursuant to a Qualified Domestic Relations
Order.
(c) The obligation of Haven to deliver Shares with respect to an
Option shall, if the Committee or Administrator so requests, be conditioned upon
the receipt of a representation as to the investment intention of the Option
Holder to whom such Shares are to be delivered, in such form as the Committee or
Administrator shall determine to be necessary or advisable to comply with the
provisions of applicable federal, state or local law. It may be provided that
any such representation shall become inoperative upon a registration of the
Shares or upon the occurrence of any other event eliminating the necessity of
such representation. Haven shall not be required to deliver any Shares under the
Plan prior to (i) the admission of such Shares to listing on any stock exchange
on which Shares may then be listed, or (ii) the completion of such registration
or other qualification under any state or federal law, rule or regulation as the
Committee or Administrator shall determine to be necessary or advisable.
Section 5.5 Additional Limitations on Incentive Stock Options
In addition to the limitations of Section 5.4, an Option designated
by the Committee to be an Incentive Stock Option shall be subject to the
following limitations:
(a) if, for any calendar year, the sum of (i) plus (ii) exceeds
$100,000, where (i) equals the Fair Market Value (determined as of the date of
the grant) of Shares subject to an Option intended to be an Incentive Stock
Option which first become available for purchase during such calendar year, and
(ii) equals the Fair Market Value (determined as of the date of grant) of Shares
subject to any other Options intended to be Incentive Stock Options and
previously granted to the same Eligible Individual which first become
exercisable in such calendar year, then that portion of the Shares granted
pursuant to such Options which cause the sum of (i) and (ii) to exceed $100,000
shall be deemed to be Shares granted pursuant to a Non-Qualified Stock Option or
Non-Qualified Stock Options, with the same terms as the Option or Options
intended to be an Incentive Stock Option;
(b) the Exercise Price established for an Option intended to be an
Incentive Stock Option shall not be less than the reported closing price of a
Share as reported by the National Association of Securities Dealers Automated
Quotation System for the date the Option is granted; and
(c) the Exercise Price established for an Option intended to be an
Incentive Stock Option that is granted to an Eligible Individual who, at the
time the Option is granted, owns Shares comprising more than 10% of the total
combined voting power of all classes of stock of Haven, shall not be less than
110% of the amount determined under Section 5.5(b) without regard to this
Section 5.5(c).
ARTICLE VI
APPRECIATION RIGHTS
Section 6.1 Appreciation Rights Granted to Eligible Individuals
---------------------------------------------------
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(a) Subject to the limitations of the Plan, the Committee may, in
its discretion, grant an Appreciation Right to an Eligible Individual. Such
Appreciation Right may, but shall not be required to, be related to all or a
portion of the Shares subject to an Option that is granted to such Eligible
Individual simultaneously with the Appreciation Right.
(b) Subject to Section 4.1 and such limitations as the Board may
from time to time impose, the number of Shares subject to an Appreciation Right
granted to an Eligible Employee shall be determined by the Committee, in its
discretion; provided, however, that the number of Shares subject to an
Appreciation Right that relates to an Option shall not exceed the number of
Shares subject to such Option.
(c) The Exercise Price of an Appreciation Right granted to an
Eligible Individual shall be determined by the Committee, in its discretion;
provided, however, that the Exercise Price established for an Appreciation Right
that relates to all or any portion of an Option shall be the Exercise Price
established for such Option.
(d) The Exercise Period during which an Appreciation Right granted
to an Eligible Individual may be exercised and the Vesting Date or Vesting
Dates, if any, on and after which all or a specified portion of the Appreciation
Right may be exercised, shall be determined by the Committee, in its discretion;
provided, however, that the Exercise Period established for an Appreciation
Right shall not commence prior to a Change in Control.
(e) The Committee may, in its discretion, establish such other terms
and conditions with respect to an Appreciation Right granted to an Eligible
Employee as it may deem necessary or appropriate, including, but not limited to,
the grant of related Dividend Equivalent Rights, which terms and conditions
shall be specified in the Award Agreement evidencing such Appreciation Right.
Section 6.2 Appreciation Rights Granted to Eligible Directors
-------------------------------------------------
Each Eligible Director who has been granted an Option pursuant to
Section 5.2 of the Plan shall, at the time the Option is granted, also be
granted an Appreciation Right relating to all of the Shares subject to such
Option, with an Exercise Price equal to the Exercise Price of the related
Option. The Exercise Period applicable to such Appreciation Right shall be the
same as for the related Option; provided, however, that such Exercise Period
shall not commence prior to the earliest date on which a Change in Control is
deemed to have occurred.
Section 6.3 Exercise of Appreciation Rights
-------------------------------
(a) An Award Recipient in possession of an Appreciation Right who
desires to exercise such Appreciation Right shall do so by delivering to the
Committee or Administrator advance written notice, in the form and manner
prescribed by the Committee or Administrator, of his or her intent to exercise
the Appreciation Right and the number of Shares with respect to which the
Appreciation Right is to be exercised. Except as provided in section 6.3(c),
within ten (10) days after the giving of such a notice, the Committee shall
cause Haven to deliver to the Award Recipient a monetary payment in an amount
per Share equal to the amount by which the Change in Control Consideration
exceeds the Exercise Price per Share of each of the Appreciation Rights being
exercised.
(b) For purposes of section 6.3(a), the term Change in Control
Consideration shall mean the greater of (i) the highest price per Share paid by
any Person who initiated or sought to effect the Change in Control for a Share
during the period of one (1) year ending on the date of the relevant Change in
Control;
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<PAGE> 18
and (ii) the average Fair Market Value of a Share over the last ten (10) trading
days preceding the date of exercise of the Appreciation Right.
(c) Notwithstanding anything herein contained to the contrary, the
Appreciation Rights granted hereunder shall be cancelled immediately prior to
the effective time of a Change in Control resulting from a transaction between
the Corporation and another party pursuant to a written agreement whereby the
consummation of the transaction is conditioned upon the availability of "pooling
of interests" accounting treatment (within the meaning of A.P.B. No. 16 or any
successor thereto); provided, however, that the cancellation of such
Appreciation Rights shall be subject to the following conditions:
(i) the existence of the Appreciation Rights would (in the
opinion of the firm of independent certified public accountants regularly
engaged to audit the Corporation's financial statements) render the transaction
ineligible for pooling of interests accounting treatment;
(ii) the cancellation of the Appreciation Rights would (in the
opinion of the firm of independent certified public accountants regularly
engaged to audit the Corporation's financial statements) render the transaction
eligible for pooling of interests accounting treatment; and
(iii) the transaction is, in fact, consummated.
Section 6.4 Effect of Exercise
------------------
The exercise of an Appreciation Right which relates to all or a
portion of an Option shall, for all purposes of the Plan other than determining
the amount of Shares available pursuant to Section 4.1, be treated as an
exercise of the related Option and a subsequent resale of the Shares acquired
thereby.
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ARTICLE VII
RESTRICTED STOCK
Section 7.1 Restricted Stock Granted to Eligible Individuals
------------------------------------------------
(a) Subject to the limitations of the Plan, the Committee may, in
its discretion, grant Restricted Stock to an Eligible Individual.
(b) Subject to Section 4.1 and such limitations as the Board may
from time to time impose, the number of Shares of Restricted Stock granted to an
Eligible Employee shall be determined by the Committee, in its discretion;
provided, however, that the maximum number of Shares that may be granted to any
Eligible Individual as Restricted Stock during the period the Plan is in effect
shall be 28,000.
(c) The Vesting Date or Vesting Dates on which all or a specified
portion of the Restricted Stock granted to an Award Recipient shall become
transferable shall be determined by the Committee, in its discretion; provided,
however, that the Vesting Date or Vesting Dates shall be at least six months
after the date of the grant of the Restricted Stock.
(d) The Committee may, in its discretion, establish such other terms
and conditions with respect to Restricted Stock granted to an Eligible Employee
as it may deem necessary or appropriate, which terms and conditions shall be
specified in the Award Agreement evidencing such Restricted Stock Award.
Section 7.2 Restricted Stock Granted to Eligible Directors
----------------------------------------------
(a) Subject to Section 4.1, effective as of the Effective Date and
as of the first business day of each of the first four calendar years beginning
after the Effective Date ("Grant Date"), each Eligible Director who is an
Eligible Director on such date shall be granted a number of Shares of Restricted
Stock in lieu of receiving one-third of the Annual Retainer that would otherwise
be paid in cash to such Eligible Director for the calendar year in which the
Grant Date occurs. The number of Shares of Restricted Stock to be granted to an
Eligible Director on each Grant Date pursuant to this Section 7.2(a) shall be
equal to the dollar value of one-third of the Eligible Director's Annual
Retainer for the calendar year in which the Grant Date occurs, divided by the
Fair Market Value of a Share on the effective date of the grant, and any
fractional Shares resulting from such calculation shall be disregarded.
(b) The Vesting Date for Restricted Stock awarded to an Eligible
Director pursuant to this Section 7.2 shall be the date that is six months after
the date the Restricted Stock is granted.
(c) If an Award Recipient granted Restricted Stock pursuant to this
Section 7.2 ceases to be an Eligible Director prior to a Vesting Date specified
in Section 7.2(b) for any reason other than a termination of service following a
Change in Control or Retirement, any Restricted Stock granted to such Award
Recipient that has not previously become vested shall be forfeited.
(d) If an Award Recipient granted Restricted Stock pursuant to this
Section 7.2 ceases to be an Eligible Director due to Retirement prior to a
Vesting Date specified in Section 7.2(b), any Restricted Stock granted to such
Award Recipient that has not previously become vested shall be deemed vested as
of the date of such Award Recipient's Retirement.
(e) If, following a Change in Control, an Award Recipient granted
Restricted Stock pursuant to this Section 7.2 ceases to be an Eligible Director
prior to a Vesting Date specified in Section 7.2(b)
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<PAGE> 20
for any reason, other than for cause, any Restricted Stock granted to such Award
Recipient that has not previously become vested shall be deemed vested as of the
date such Award Recipient ceases to be an Eligible Director.
Section 7.3 Stock Certificates
------------------
A stock certificate or stock certificates evidencing the Shares of
Restricted Stock granted pursuant to this Article VII shall be registered on
Haven's books in the name of the Award Recipient as of the date the Restricted
Stock is granted and shall bear a legend restricting the transferability of such
certificate or certificates and referring to the terms, conditions and other
restrictions, including forfeiture, applicable to such Shares. Physical
possession or custody of such certificates shall be retained by Haven until such
time as such Shares become vested.
Section 7.4 Shareholder Rights
------------------
Subsequent to the date Shares of Restricted Stock have been granted
and prior to the date such Shares have become vested and are distributed, the
Award Recipient shall be entitled to vote the Shares and receive cash dividends
declared and paid with respect to such Shares. Any stock dividends declared and
paid with respect to such Shares shall be evidenced by a stock certificate or
certificates registered in the name of the Award Recipient, retained in the
possession or custody of Haven, and made subject to the same restrictions, terms
and conditions as the Shares to which they pertain. Such stock dividends shall
become vested and be distributed at the same time as the Shares to which they
pertain.
Section 7.5 Distribution of Shares
----------------------
As soon as practicable following the Vesting Date of Shares of
Restricted Stock granted pursuant to this Article VII, Haven shall issue the
Award Recipient a stock certificate evidencing his ownership of the Shares
granted as Restricted Stock and any additional Shares attributable to stock
dividends paid on such Restricted Stock prior to vesting.
ARTICLE VIII
DIVIDEND EQUIVALENT RIGHTS
Section 8.1 In General
----------
The Committee may provide that each Eligible Individual who has been
granted an Option or Appreciation Right shall, at the time such Award is
granted, also be granted a Dividend Equivalent Right relating to all or a
portion of the Shares subject to such Option or the Shares with respect to which
the Appreciation Right relates.
Section 8.2 Form of Dividend Equivalents
----------------------------
Dividend Equivalent Rights granted under this Article VIII may take
the form of cash payments made currently or credited to a memorandum account
established for the Award Recipient to be distributed, with earnings, at a later
date, adjustments to the Exercise Price applicable, or the number of Shares
subject, to an Award, or the distribution or crediting of Shares or Share
equivalents, subject to the limitations of Section 4.1. Any Dividend Equivalent
Rights granted pursuant to this Article VIII shall be subject to such
restrictions, terms and conditions as the Committee may establish.
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<PAGE> 21
ARTICLE IX
AMENDMENT AND TERMINATION
Section 9.1 Termination
-----------
The Board may suspend or terminate the Plan in whole or in part at
any time prior to the tenth anniversary of the Effective Date by giving written
notice of such suspension or termination to the Committee. Unless sooner
terminated, the Plan shall terminate automatically on the day preceding the
tenth anniversary of the Effective Date. In the event of any suspension or
termination of the Plan, all Awards theretofore granted under the Plan that are
effective on the date of such suspension or termination of the Plan shall remain
effective under the terms of the applicable Award Agreements.
Section 9.2 Amendment
---------
The Board may amend or revise the Plan in whole or in part at any
time; provided, however, that if the amendment or revision:
(a) materially increases the benefits accruing under the Plan;
(b) materially increases the number of Shares which may be issued
under the Plan; or
(c) materially modifies the requirements as to eligibility for
Options, Appreciation Rights or Dividend Equivalent Rights under the Plan;
such amendment or revision shall be subject to approval by the shareholders of
Haven; and further provided, that sections 5.2, 6.2 and 7.2 shall not be amended
more than once every six months other than to comply with the Code or the
Employee Retirement Income Security Act of 1974, as amended, or the regulations
thereunder.
Section 9.3 Adjustments for Business Reorganization, Stock Split or Stock
-------------------------------------------------------------
Dividend
--------
(a) Subject to Section 6.3(c), in the event of any merger,
consolidation, or other business reorganization in which Haven is the surviving
entity, and in the event of any stock split, stock dividend or other event
generally affecting the number of Shares held by each Person who is then a
holder of Shares on the record date for such event, the number of Shares covered
by each outstanding Award and the number of Shares available under Section 4.1
shall be adjusted to account for such event. The adjustment to be made pursuant
to this Section 9.3 for outstanding Options and Appreciation Rights shall be
effected by multiplying the number of Shares then covered by each such
outstanding Option or Appreciation Right by an amount ("Adjustment Amount")
equal to the number of Shares that would be owned after such event by a Person
who, immediately prior to such event, was the holder of record of one Share, and
the Exercise Price for such outstanding Option or Appreciation Right shall be
adjusted by dividing the Exercise Price by the Adjustment Amount; provided,
however, that the Committee may, in its discretion, establish another
appropriate method of adjusting outstanding Options and Appreciation Rights. The
adjustment to be made to the number of Shares relating to other types of Awards
and the number of Shares available under Section 4.1 shall be effected by
multiplying the number of such Shares by the Adjustment Amount.
(b) Subject to Section 6.3(c), in the event of any merger,
consolidation, or other business reorganization in which Haven is not the
surviving entity:
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<PAGE> 22
(i) any Awards granted under the Plan which remain outstanding
may be cancelled by the Committee as of the effective date of such merger,
consolidation, business reorganization, liquidation or sale by the Board upon 30
days' written notice to each Award Recipient in advance of the effective date of
such event and the Award Recipient shall receive in consideration of such
cancellation an amount in cash equal to the excess of (A) the value, as
determined by the Committee in its absolute discretion, of the property
(including cash) received by the holder of a Share as a result of such event
over (B) the Exercise Price of such Award, if any; and
(ii) any Award which is not cancelled pursuant to Section
9.3(b)(i) shall be exchanged or adjusted in such manner as the Committee shall
deem appropriate, in its absolute discretion, to account for such merger,
consolidation or other business reorganization and, if appropriate, the
Committee may provide, in its absolute discretion, that a cash payment will be
made to the Award Recipient in connection with such exchange or adjustment of
the Award.
ARTICLE X
MISCELLANEOUS
Section 10.1 Status as an Employee Benefit Plan
----------------------------------
This Plan is not intended to satisfy the requirements for
qualification under Section 401(a) of the Code or to satisfy the definitional
requirements for an "employee benefit plan" under Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended. It is intended to be a
non-qualified incentive compensation program that is exempt from the regulatory
requirements of the Employee Retirement Income Security Act of 1974, as amended.
The Plan shall be construed and administered so as to effectuate this intent.
Section 10.2 No Right to Continued Employment or Board Membership
----------------------------------------------------
Neither the establishment of the Plan nor any provisions of the Plan
nor any action of the Board or the Committee with respect to the Plan shall be
held or construed to confer upon any Eligible Individual or Eligible Director
any right to a continuation of employment by the Corporation or continuation of
membership on the Board or board of directors of the Bank. The Corporation
reserves the right to dismiss any Eligible Individual or otherwise deal with any
Eligible Individual to the same extent as though the Plan had not been adopted.
Section 10.3 Construction of Language
------------------------
Whenever appropriate in the Plan, words used in the singular may be
read in the plural, words used in the plural may be read in the singular, and
words importing the masculine gender may be read as referring equally to the
feminine or the neuter. Any reference to an Article or Section number shall
refer to an Article or Section of this Plan unless otherwise indicated.
Section 10.4 Governing Law
-------------
The Plan shall be construed, administered and enforced according to
the laws of the State of Delaware without giving effect to the conflict of laws
principles thereof, except to the extent that such laws are preempted by federal
law.
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Section 10.5 Headings
--------
The headings of Articles and Sections are included solely for
convenience of reference. If there is any conflict between such headings and the
text of the Plan, the text shall control.
Section 10.6 Non-Alienation of Benefits
--------------------------
The right to receive a benefit under the Plan shall not be subject
in any manner to anticipation, alienation or assignment, nor shall such right be
liable for or subject to debts, contracts, liabilities, engagements or torts.
Section 10.7 Taxes
-----
The Corporation shall have the right to deduct from all amounts paid
by the Corporation in cash with respect to an Award, any taxes required by law
to be withheld with respect to such Award. Where any Person is entitled to
receive Shares pursuant to an Award, the Corporation shall have the right to
require such Person to pay the Corporation the amount of any tax which the
Corporation is required to withhold with respect to such Shares, or, in lieu
thereof, to retain, or to sell without notice, a sufficient number of Shares to
cover the amount required to be withheld. The Corporation may consider, but is
not required to grant, a request by the Person entitled to receive Shares
subject to withholding as to the manner in which such withholding shall be made.
Section 10.8 Approval of Shareholders
------------------------
All Awards granted under this Plan shall be conditioned on the
approval of the Plan by the shareholders of Haven on or prior to the date of the
first annual meeting of such shareholders immediately following the adoption of
the Plan by Haven. No Award granted under the Plan shall be effective, nor shall
any Option or Appreciation Right be exercised or any Shares issued or purchased
pursuant to the Plan, prior to such approval.
Section 10.9 Notices
-------
Any communication required or permitted to be given under the Plan,
including any notice, direction, designation, comment, instruction, objection or
waiver, shall be in writing and shall be deemed to have been given at such time
as it is delivered personally or five (5) days after mailing if mailed, postage
prepaid, by registered or certified mail, return receipt requested, addressed to
such party at the address listed below, or at such other address as one such
party may by written notice specify to the other party:
(a) If to the Committee:
Haven Bancorp, Inc.
93-22 Jamaica Avenue
Woodhaven, New York 11421
Attention: Administrator of the Haven Bancorp, Inc. 1996 Stock
Incentive Plan
(b) If to an Award Recipient, to the address as shown in the
Corporation's personnel records.
18
