<PAGE>
<PAGE>
As filed with the Securities and Exchange Commission on December
19, 1997
Registration No. 333-_______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PENNFED FINANCIAL SERVICES, INC.
(Exact name of registrant as specified in its charter)
Delaware 22-3297339
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
622 Eagle Rock Avenue, West Orange, New Jersey 07052-2989
(Address of principal executive offices) (Zip Code)
PENNFED FINANCIAL SERVICES, INC.
1994 STOCK OPTION AND INCENTIVE PLAN
(Full title of the plan)
James S. Fleischer, P.C.
Craig M. Scheer, Esq.
Silver, Freedman & Taff, L.L.P.
(a limited liability partnership including professional
corporations)
1100 New York Ave., N.W.
Washington, D.C. 20005
(Name and address of agent for service)
(202) 414-6100
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==========================================================================================
Proposed maximum Proposed maximum
Title of securities Amount to be offering price aggregate Amount of
to be registered registered(2) per share offering price registration fee
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
par value
$.01 per share(1) 240,623 shares $34.25(3) $8,241,338(3) $2,498(3)
==========================================================================================
(1) Includes one attached Right per share pursuant to the Stockholder Protection Rights
Agreement to which the Registrant is a party.
(2) Pursuant to Rule 416 under the Securities Act of 1933, as amended, this Registration
Statement covers, in addition to the number of shares set forth above, an
indeterminate number of shares which, by reason of certain events specified in the
Plan, may become subject to the Plan.
(3) Estimated in accordance with Rule 457(h), solely for the purpose of calculating the
registration fee, at $34.25 per share, which was the average of the high and low
prices per share of the Common Stock on the Nasdaq National Market on December 16,
1997.
</TABLE>
PAGE
<PAGE>
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The purpose of this Registration Statement on Form S-8 is to register
additional shares of the common stock, par value $.01 per share, of PennFed
Financial Services, Inc. (the "Company"), authorized for issuance under the
Company's 1994 Stock Option and Incentive Plan (the "Plan"). The contents
of the Company's previously filed Registration Statement on Form S-8 (File
No. 33-90822) relating to the Plan (the "Initial Registration Statement")
are incorporated herein by reference, except for Items 3 and 8 of Part II
of the Initial Registration Statement.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 3. Incorporation of Certain Documents by Reference.
-----------------------------------------------
The following documents previously or concurrently filed by PennFed
Financial Services, Inc. (the "Company") with the Commission are hereby
incorporated by reference in this Registration Statement and the Prospectus
to which this Registration Statement relates (the "Prospectus"), which
Prospectus has been or will be delivered to the participants in the Plan
covered by this Registration Statement:
(a) the Company's Annual Report on Form 10-K for the fiscal year
ended June 30, 1997 (File No. 0-24040) filed pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange
Act");
(b) all reports filed by the Company pursuant to Section 13(a) or
15(d) of the Exchange Act since the end of the fiscal year
covered by the Annual Report referred to above; and
(c) the description of the common stock, par value $.01 per share,
of the Company contained in the Company's Registration Statement
on Form 8-A (File No. 0-24040) filed with the Commission on May
5, 1994 and all amendments or reports filed for the purpose of
updating such description.
All documents subsequently filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act, after
the date hereof, and prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold, shall be deemed
incorporated by reference into this Registration Statement and the
Prospectus and to be a part hereof and thereof from the date of the filing
of such documents. Any statement contained in the documents incorporated,
or deemed to be incorporated, by reference herein or therein shall be
deemed to be modified or superseded for purposes of this Registration
Statement and the Prospectus to the extent that a statement contained
herein or therein or in any other subsequently filed document which also
is, or is deemed to be, incorporated by reference herein or therein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement and the Prospectus.
<PAGE>
The Company shall furnish without charge to each person to whom the
Prospectus is delivered, on the written or oral request of such person, a
copy of any or all of the documents incorporated by reference, other than
exhibits to such documents (unless such exhibits are specifically
incorporated by reference to the information that is incorporated).
Requests should be directed to Patrick D. McTernan, Secretary, PennFed
Financial Services, Inc., 622 Eagle Rock Avenue, West Orange, New Jersey,
07052-2989, telephone number (973) 669-7366.
All information appearing in this Registration Statement and the
Prospectus is qualified in its entirety by the detailed information,
including financial statements, appearing in the documents incorporated
herein or therein by reference.
<PAGE>
Item 8. Exhibits.
Regulation
S-K Reference to Prior
Exhibit Filing or Exhibit
Number Document Number Attached Hereto
4.1 Certificate of Incorporation Incorporated herein by
of PennFed Financial reference to Exhibit 3.1 of
Services, Inc. the Company's Registration
Statement on Form S-1
(Registration No. 33-
76854),filed March 25, 1994
4.2 Bylaws of PennFed Financial Incorporated herein by
Services, Inc. reference to Exhibit 3.2 of
the Company's Registration
Statement on Form S-1
(Registration No. 33-
76854),filed March 25, 1994
4.3 Specimen form of common Incorporated herein by
stock certificate of reference to Exhibit 4 of
PennFed Financial the Company's Registration
Services, Inc. Statement on Form S-1
(Registration No. 33-
76854), filed March 25,
1994
4.4 Stockholder Protection Incorporated herein by
Rights Agreement reference to Exhibit 1 to
the Company's Registration
Statement on Form 8-A
filed March 28, 1996
5 Opinion of Silver, Attached as Exhibit 5
Freedman & Taff, L.L.P.
23.1 Consent of Silver, Included in Exhibit 5
Freedman & Taff, L.L.P.
23.2 Consent of Deloitte & Attached as Exhibit 23.2
Touche LLP, certified
public accountants
24 Power of Attorney Contained on Signature
Page
99 PennFed Financial Attached as Exhibit 99
Services, Inc. 1994 Stock
Option and Incentive Plan
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized in the Township
of West Orange, State of New Jersey on December 19, 1997.
PENNFED FINANCIAL SERVICES, INC.
By:/s/ JOSEPH L. LAMONICA
----------------------------------
Joseph L. LaMonica, President and
Chief Executive Officer
(Duly Authorized Representative)
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Joseph L. LaMonica and Patrick D.
McTernan or either of them, his true and lawful attorneys-in-fact and
agents, with full power of substitution and re-substitution, for him and
in his name, place and stead, in any and all capacities, to sign any and
all amendments (including post-effective amendments) to this
Registration Statement, and to file the same, with all exhibits thereto,
and all other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents
full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes
as he might or could do in person, hereby ratifying and confirming all
said attorneys-in-fact and agents or their substitutes or substitute may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<PAGE>
/s/ JOSEPH L. LAMONICA /s/ WILLIAM C. ANDERSON
- ------------------------------ -------------------------------
Joseph L. LaMonica William C. Anderson
President, Chief Executive Chairman of the Board
Officer and Director
(Principal Executive Officer)
Date: December 19, 1997 Date: December 19, 1997
/s/ PATRICK D. MCTERNAN
- ------------------------------ -------------------------------
Patrick D. McTernan Amadeu L. Carvalho
Executive Vice President, Director
General Counsel, Secretary and
Director
Date: December 19, 1997
/s/ MARVIN D. SCHOONOVER
- ------------------------------ -------------------------------
Marvin D. Schoonover Mario Teixeira, Jr.
Director Director
Date: December 19, 1997
/s/ LUCY T. TINKER /s/ JEFFREY J. CARFORA
- ------------------------------ -------------------------------
Lucy T. Tinker Jeffrey J. Carfora
Executive Vice President and Senior Vice President and
Chief Operating Officer Chief Financial Officer
(Principal Financial Officer) (Principal Accounting Officer)
Date: December 19, 1997 Date: December 19, 1997
<PAGE>
[LETTERHEAD OF SILVER, FREEDMAN & TAFF, L.L.P.]
December 18, 1997
Board of Directors
PennFed Financial Services, Inc.
622 Eagle Rock Avenue
West Orange, New Jersey 07052
Members of the Board:
We have acted as counsel to PennFed Financial Services,
Inc. (the "Corporation") in connection with the preparation and filing
with the Securities and Exchange Commission of a Registration Statement
on Form S-8 under the Securities Act of 1933 (the "Registration
Statement") relating to 240,623 shares of the Corporation's Common
Stock, par value $.01 per share (the "Common Stock"), to be offered
pursuant to the 1994 Stock Option and Incentive Plan of the Corporation
(the "Plan").
In this connection, we have reviewed originals or
copies, certified or otherwise identified to our satisfaction, of the
Corporation's Certificate of Incorporation, Bylaws, resolutions of its
Board of Directors and such other documents and corporate records as we
deem appropriate for the purpose of rendering this opinion.
Based upon the foregoing, it is our opinion that:
1. The shares of Common Stock being so
registered have been duly authorized.
2. The shares of Common Stock to be offered
by the Corporation will be, when and if
issued, sold and paid for as
contemplated by the Plan, legally
issued, fully paid and non-assessable
shares of Common Stock of the
Corporation.
We hereby consent to the inclusion of our opinion as
Exhibit 5 to this Registration Statement. In giving this consent, we do
not admit that we are within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended, or
the rules and regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
/s/ SILVER, FREEDMAN & TAFF, L.L.P.
SILVER, FREEDMAN & TAFF, L.L.P.
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this
Registration Statement of PennFed Financial Services, Inc. on Form S-8
of our report dated July 31, 1997, included and incorporated by
reference in the Annual Report on Form 10-K of PennFed Financial
Services, Inc. for the year ended June 30, 1997.
/s/ DELOITTE & TOUCHE LLP
Parsippany, New Jersey
December 18, 1997
/TEXT>
<PAGE>
PENNFED FINANCIAL SERVICES, INC.
1994 STOCK OPTION AND INCENTIVE PLAN
1. Plan Purpose. The purpose of the Plan is to promote the
------------
long-term interests of the Corporation and its stockholders by providing
a means for attracting and retaining directors, officers and employees
of the Corporation and its Affiliates. It is intended that designated
Options granted pursuant to the provisions of this Plan to persons
employed by the Corporation or its Affiliates will qualify as Incentive
Stock Options. Options granted to persons who are not employees will be
Non-Qualified Stock Options.
2. Definitions. The following definitions are applicable to
-----------
the Plan:
"Affiliate" - means any "parent corporation" or "subsidiary
corporation" of the Corporation, as such terms are defined in Section
424(e) and (f), respectively, of the Code.
"Bank" - means Penn Federal Savings Bank and any successor
entity.
"Award" - means the grant of an Incentive Stock Option, a
Non-Qualified Stock Option, a Stock Appreciation Right or a Limited
Stock Appreciation Right, or any combination thereof, as provided in the
Plan.
"Code" - means the Internal Revenue Code of 1986, as
amended.
"Committee" - means the Committee referred to in Section 3
hereof.
"Continuous Service" - means the absence of any interruption
or termination of service as a director, advisory director, officer or
employee of the Corporation or an Affiliate, except that when used with
respect to persons granted an Incentive Option means the absence of any
interruption or termination of service as an employee of the Corporation
or an Affiliate. Service shall not be considered interrupted in the
case of sick leave, military leave or any other leave of absence
approved by the Corporation or in the case of transfers between payroll
locations of the Corporation or between the Corporation, its parent, its
subsidiaries or its successor. With respect to any advisory director,
continuous service shall mean availability to perform such functions as
may be required of the Bank's advisory directors.
"Corporation" - means PennFed Financial Services, Inc., a
Delaware corporation.
"Employee" - means any person, including an officer or
director, who is employed by the Corporation or any Affiliate.
"ERISA" - means the Employee Retirement Income Security Act
of 1974, as amended.
"Exercise Price" - means (i) in the case of an Option, the
price per Share at which the Shares subject to such Option may be
purchased upon exercise of such Option and (ii) in the case of a Right,
the price per Share (other than the Market Value per Share on the date
of exercise and the Offer Price per Share as defined in Section 10
hereof) which, upon grant, the Committee determines shall be utilized in
calculating the aggregate value which a Participant shall be entitled to
receive pursuant to Sections 9, 10 or 12 hereof upon exercise of such
Right.
<PAGE>
"Incentive Stock Option" - means an option to purchase
Shares granted by the Committee pursuant to Section 6 hereof which is
subject to the limitations and restrictions of Section 8 hereof and is
intended to qualify under Section 422 of the Code.
"Limited Stock Appreciation Right" - means a stock
appreciation right with respect to Shares granted by the Committee
pursuant to Sections 6 and 10 hereof.
"Market Value" - means the average of the high and low
quoted sales price on the date in question (or, if there is no reported
sale on such date, on the last preceding date on which any reported sale
occurred) of a Share on the Composite Tape for the New York Stock
Exchange-Listed Stocks, or, if on such date the Shares are not quoted on
the Composite Tape, on the New York Stock Exchange, or, if the Shares
are not listed or admitted to trading on such Exchange, on the principal
United States securities exchange registered under the Securities
Exchange Act of 1934 on which the Shares are listed or admitted to
trading, or, if the Shares are not listed or admitted to trading on any
such exchange, the mean between the closing high bid and low asked
quotations with respect to a Share on such date on the National
Association of Securities Dealers, Inc., Automated Quotations System, or
any similar system then in use, or, if no such quotations are available,
the fair market value on such date of a Share as the Committee shall
determine.
"Non-Employee Director" - means a director who a) is not
currently an officer or employee of the Corporation; b) is not a former
employee of the Corporation who receives compensation for prior services
(other than from a tax-qualified retirement plan); c) has not been an
officer of the Corporation; d) does not receive remuneration from the
Corporation in any capacity other than as a director; and e) does not
possess an interest in any other transactions or is not engaged in a
business relationship for which disclosure would be required under Item
404(a) or (b) of Regulation S-K.
"Non-Qualified Stock Option" - means an option to purchase
Shares granted by the Committee pursuant to Section 6 hereof, which
option is not intended to qualify under Section 422(b) of the Code.
"Option" - means an Incentive Stock Option or a Non--
Qualified Stock Option.
"Participant" - means any officer or employee of the
Corporation or any Affiliate who is selected by the Committee to receive
an Award and any director or advisory director of the Corporation who is
granted an Award pursuant to Section 20 hereof.
"Plan" - means the 1994 Stock Option and Incentive Plan of
the Corporation.
"Related" - means (i) in the case of a Right, a Right which
is granted in connection with, and to the extent exercisable, in whole
or in part, in lieu of, an Option or another Right and (ii) in the case
of an Option, an Option with respect to which and to the extent a Right
is exercisable, in whole or in part, in lieu thereof has been granted.
<PAGE>
"Right" - means a Limited Stock Appreciation Right or a
Stock Appreciation Right.
"Shares" - means the shares of common stock of the
Corporation.
"Stock Appreciation Right" - means a stock appreciation
right with respect to Shares granted by the Committee pursuant to
Sections 6 and 9 hereof.
"Ten Percent Beneficial Owner" - means the beneficial owner
of more than ten percent of any class of the Corporation's equity
securities registered pursuant to Section 12 of the Securities Exchange
Act of 1934.
3. Administration. The Plan shall be administered by a
--------------
Committee consisting of two or more members, each of whom shall be a
Non-Employee Director. The members of the Committee shall be appointed
by the Board of Directors of the Corporation. Except as limited by the
express provisions of the Plan, the Committee shall have sole and
complete authority and discretion to (i) select Participants and grant
Awards; (ii) determine the number of Shares to be subject to types of
Awards generally, as well as to individual Awards granted under the
Plan; (iii) determine the terms and conditions upon which Awards shall
be granted under the Plan; (iv) prescribe the form and terms of
instruments evidencing such grants; and (v) establish from time to time
regulations for the administration of the Plan, interpret the Plan, and
make all determinations deemed necessary or advisable for the
administration of the Plan.
A majority of the Committee shall constitute a quorum, and the acts
of a majority of the members present at any meeting at which a quorum is
present, or acts approved in writing by a majority of the Committee
without a meeting, shall be acts of the Committee.
4. Participation in Committee Awards. The Committee may select
---------------------------------
from time to time Participants in the Plan from those directors,
advisory directors, officers and employees of the Corporation or its
Affiliates who, in the opinion of the Committee, have the capacity for
contributing to the successful performance of the Corporation or its
Affiliates.
5. Shares Subject to Plan. Subject to adjustment by the
----------------------
operation of Section 11 hereof, the maximum number of Shares with
respect to which Awards may be made under the Plan is 835,623 shares.
The Shares with respect to which Awards may be made under the Plan may
be either authorized and unissued shares or issued shares heretofore or
hereafter reacquired and held as treasury shares. Shares which are
subject to Related Rights and Related Options shall be counted only once
in determining whether the maximum number of Shares with respect to
which Awards may be granted under the Plan has been exceeded. An Award
shall not be considered to have been made under the Plan with respect to
any Option or Right which terminates, and new Awards may be granted
under the Plan with respect to the number of Shares as to which such
termination or forfeiture has occurred.
6. General Terms and Conditions of Options and Rights. The
--------------------------------------------------
Committee shall have full and complete authority and discretion, except
as expressly limited by the Plan, to grant Options and/or Rights and to
provide the terms and conditions (which need not be identical among
Participants) thereof. In particular, the Committee shall prescribe the
following terms and conditions: (i) the Exercise Price of any Option or
Right, which shall not be less than the Market Value per Share at the
date of grant of such Option or Right, (ii) the number of Shares subject
to, and the expiration date of, any Option or Right, which expiration
date shall not exceed ten years from the date of grant, (iii) the man-
ner, time and rate (cumulative or otherwise) of exercise of such Option
or Right, and (iv) the restrictions, if any, to be placed upon such
Option or Right or upon Shares which may be issued upon exercise of such
Option or Right. The Committee may, as a condition of granting any
Option or Right, require that a Participant agree not to thereafter
exercise one or more Options or Rights previously granted to such
Participant. Notwithstanding the foregoing, no individual shall be
granted Awards with respect to more than 200,000 Shares in any calendar
year.
<PAGE>
7. Exercise of Options or Rights.
-----------------------------
(a) Except as provided herein, an Option or Right granted
under the Plan shall be exercisable during the lifetime of the
Participant to whom such Option or Right was granted only by such
Participant and, except as provided in paragraphs (c) and (d) of this
Section 7, no such Option or Right may be exercised unless at the time
such Participant exercises such Option or Right, such Participant has
maintained Continuous Service since the date of grant of such Option or
Right.
(b) To exercise an Option or Right under the Plan, the
Participant to whom such Option or Right was granted shall give written
notice to the Corporation in form satisfactory to the Committee (and, if
partial exercises have been permitted by the Committee, by specifying
the number of Shares with respect to which such Participant elects to
exercise such Option or Right) together with full payment of the
Exercise Price, if any and to the extent required. The date of exercise
shall be the date on which such notice is received by the Corporation.
Payment, if any is required, shall be made either (i) in cash (including
check, bank draft or money order) or (ii) by delivering (A) Shares
already owned by the Participant and having a fair market value equal to
the applicable exercise price, such fair market value to be determined
in such appropriate manner as may be provided by the Committee or as may
be required in order to comply with or to conform to requirements of any
applicable laws or regulations, or (B) a combination of cash and such
Shares.
(c) If a Participant to whom an Option or Right was
granted shall cease to maintain Continuous Service for any reason
(including total or partial disability and normal or early retirement,
but excluding death and termination of employment by the Corporation or
any Affiliate for cause), such Participant may, but only within the
period of three months immediately succeeding such cessation of
Continuous Service and in no event after the expiration date of such
Option or Right, exercise such Option or Right to the extent that such
Participant was entitled to exercise such Option or Right at the date of
such cessation, provided, however, that such right of exercise after
cessation of Continuous Service shall not be available to a Participant
if the Committee otherwise determines and so provides in the applicable
instrument or instruments evidencing the grant of such Option or Right.
If the Continuous Service of a Participant to whom an Option or Right
was granted by the Corporation is terminated for cause, all rights under
any Option or Right of such Participant shall expire immediately upon
the giving to the Participant of notice of such termination.
<PAGE>
(d) In the event of the death of a Participant while in
the Continuous Service of the Corporation or an Affiliate or within the
three month period referred to in paragraph (c) of this Section 7, the
person to whom any Option or Right held by the Participant at the time
of his death is transferred by will or the laws of descent and
distribution, or in the case of an Award other than an Incentive Stock
Option, pursuant to a qualified domestic relations order, as defined in
the Code or Title 1 of ERISA or the rules thereunder may, but only to
the extent such Participant was entitled to exercise such Option or
Right immediately prior to his death, exercise such Option or Right at
any time within a period of one year succeeding the date of death of
such Participant, but in no event later than ten years from the date of
grant of such Option or Right. Following the death of any Participant
to whom an Option was granted under the Plan, irrespective of whether
any Related Right shall have theretofore been granted to the Participant
or whether the person entitled to exercise such Related Right desires to
do so, the Committee may, as an alternative means of settlement of such
Option, elect to pay to the person to whom such Option is transferred by
will or by the laws of descent and distribution, or in the case of an
Option other than an Incentive Stock Option, pursuant to a qualified
domestic relations order, as defined in the Code or Title I of ERISA or
the rules thereunder, the amount by which the Market Value per Share on
the date of exercise of such Option shall exceed the Exercise Price of
such Option, multiplied by the number of Shares with respect to which
such Option is properly exercised. Any such settlement of an Option
shall be considered an exercise of such Option for all purposes of the
Plan.
8. Incentive Stock Options. Incentive Stock Options may
-----------------------
be granted only to Participants who are Employees. Any provision of the
Plan to the contrary notwithstanding, (i) no Incentive Stock Option
shall be granted more than ten years from the date the Plan is adopted
by the Board of Directors of the Corporation and no Incentive Stock
Option shall be exercisable more than ten years from the date such
Incentive Stock Option is granted, (ii) the Exercise Price of any
Incentive Stock Option shall not be less than the Market Value per Share
on the date such Incentive Stock Option is granted, (iii) any Incentive
Stock Option shall not be transferable by the Participant to whom such
Incentive Stock Option is granted other than by will or the laws of
descent and distribution, and shall be exercisable during such
Participant's lifetime only by such Participant, (iv) no Incentive Stock
Option shall be granted to any individual who, at the time such
Incentive Stock Option is granted, owns stock possessing more than ten
percent of the total combined voting power of all classes of stock of
the Corporation or any Affiliate unless the Exercise Price of such
Incentive Stock Option is at least 110 percent of the Market Value per
Share at the date of grant and such Incentive Stock Option is not
exercisable after the expiration of five years from the date such
Incentive Stock Option is granted, and (v) the aggregate Market Value
(determined as of the time any Incentive Stock Option is granted) of the
Shares with respect to which Incentive Stock Options are exercisable for
the first time by a Participant in any calendar year shall not exceed
$100,000.
9. Stock Appreciation Rights. A Stock Appreciation Right
-------------------------
shall, upon its exercise, entitle the Participant to whom such Stock
Appreciation Right was granted to receive a number of Shares or cash or
combination thereof, as the Committee in its discretion shall determine,
the aggregate value of which (i.e., the sum of the amount of cash and/or
Market Value of such Shares on date of exercise) shall equal (as nearly
as possible, it being understood that the Corporation shall not issue
any fractional shares) the amount by which the Market Value per Share on
the date of such exercise shall exceed the Exercise Price of such Stock
Appreciation Right, multiplied by the number of Shares with respect of
which such Stock Appreciation Right shall have been exercised.
<PAGE>
A Stock Appreciation Right may be Related to an Option or may be granted
independently of any Option as the Committee shall from time to time in
each case determine. At the time of grant of an Option the Committee
shall determine whether and to what extent a Related Stock Appreciation
Right shall be granted with respect thereto; provided, however, and
notwithstanding any other provision of the Plan, that if the Related
Option is an Incentive Stock Option, the Related Stock Appreciation
Right shall satisfy all the restrictions and limitations of Section 8
hereof as if such Related Stock Appreciation Right were an Incentive
Stock Option and as if other rights which are Related to Incentive Stock
Options were Incentive Stock Options. In the case of a Related Option,
such Related Option shall cease to be exercisable to the extent of the
Shares with respect to which the Related Stock Appreciation Right was
exercised. Upon the exercise or termination of a Related Option, any
Related Stock Appreciation Right shall terminate to the extent of the
Shares with respect to which the Related Option was exercised or
terminated.
10. Limited Stock Appreciation Rights. At the time of grant
---------------------------------
of an Option or Stock Appreciation Right to any Participant, the
Committee shall have full and complete authority and discretion to also
grant to such Participant a Limited Stock Appreciation Right which is
Related to such Option or Stock Appreciation Right; provided, however
and notwithstanding any other provision of the Plan, that if the Related
Option is an Incentive Stock Option, the Related Limited Stock
Appreciation Right shall satisfy all the restrictions and limitations of
Section 8 hereof as if such Related Limited Stock Appreciation Right
were an Incentive Stock Option and as if all other Rights which are
Related to Incentive Stock Options were Incentive Stock Options. Not-
withstanding any other provision of the Plan, a Limited Stock Ap-
preciation Right shall be exercisable only during the period beginning
on the first day following the date of expiration of any "offer" (as
such term is hereinafter defined) and ending on the forty-fifth day
following such date.
A Limited Stock Appreciation Right shall, upon its exercise,
entitle the Participant to whom such Limited Stock Appreciation Right
was granted to receive an amount of cash equal to the amount by which
the "Offer Price per Share" (as such term is hereinafter defined) or the
Market Value on the date of such exercise, as shall have been provided
by the Committee in its discretion at the time of grant, shall exceed
the Exercise Price of such Limited Stock Appreciation Right, multiplied
by the number of Shares with respect to which such Limited Stock
Appreciation Right shall have been exercised. Upon the exercise of a
Limited Stock Appreciation Right, any Related Option and/or Related
Stock Appreciation Right shall cease to be exercisable to the extent of
the Shares with respect to which such Limited Stock Appreciation Right
was exercised. Upon the exercise or termination of a Related Option or
Related Stock Appreciation Right, any Related Limited Stock Appreciation
Right shall terminate to the extent of the Shares with respect to which
such Related Option or Related Stock Appreciation Right was exercised or
terminated.
For the purposes of this Section 10, the term "Offer" shall mean
any tender offer or exchange offer for Shares other than one made by the
Corporation, provided that the corporation, person or other entity
making the offer acquires pursuant to such offer either (i) 25% of the
Shares outstanding immediately prior to the commencement of such offer
or (ii) a number of Shares which, together with all other Shares
acquired in any tender offer or exchange offer (other than one made by
the Corporation) which expired within sixty days of the expiration date
of the offer in question, equals 25% of the Shares outstanding
immediately prior to the commencement of the offer in question. The
term "Offer Price per Share" as used in this Section 10 shall mean the
highest price per Share paid
<PAGE>
in any Offer which Offer is in effect any time during the period
beginning on the sixtieth day prior to the date on which a Limited Stock
Appreciation Right is exercised and ending on the date on which such
Limited Stock Appreciation Right is exercised. Any securities or
property which are part or all of the consideration paid for Shares in
the Offer shall be valued in determining the Offer Price per Share at
the higher of (A) the valuation placed on such securities or property by
the corporation, person or other entity making such Offer or (B) the
valuation placed on such securities or property by the Committee.
11. Adjustments Upon Changes in Capitalization. In the event
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of any change in the outstanding Shares subsequent to the effective date
of the Plan by reason of any reorganization, recapitalization, stock
split, stock dividend, combination or exchange of shares, merger,
consolidation or any change in the corporate structure or Shares of the
Corporation, the maximum aggregate number and class of shares as to
which Awards may be granted under the Plan and the number and class of
shares with respect to which Awards theretofore have been granted under
the Plan shall be appropriately adjusted by the Committee, whose
determination shall be conclusive.
12. Effect of Merger. In the event of any merger,
----------------
consolidation or combination of the Corporation (other than a merger,
consolidation or combination in which the Corporation is the continuing
entity and which does not result in the outstanding Shares being
converted into or exchanged for different securities, cash or other
property, or any combination thereof) pursuant to a plan or agreement
the terms of which are binding upon all stockholders of the Corporation
(except to the extent that dissenting stockholders may be entitled,
under statutory provisions or provisions contained in the certificate of
incorporation, to receive the appraised or fair value of their
holdings), any Participant to whom an Option or Right has been granted
shall have the right (subject to the provisions of the Plan and any
limitation applicable to such Option or Right), thereafter and during
the term of each such Option or Right, to receive upon exercise of any
such Option or Right an amount equal to the excess of the fair market
value on the date of such exercise of the securities, cash or other
property, or combination thereof, receivable upon such merger,
consolidation or combination in respect of a Share over the Exercise
Price of such Right or Option, multiplied by the number of Shares with
respect to which such Option or Right shall have been exercised. Such
amount may be payable fully in cash, fully in one or more of the kind or
kinds of property payable in such merger, consolidation or combination,
or partly in cash and partly in one or more of such kind or kinds of
property, all in the discretion of the Committee.
13. Effect of Change in Control. If a tender offer or exchange
---------------------------
offer for Shares (other than such an offer by the Corporation) is
commenced, or if the stockholders of the Corporation shall approve an
agreement providing either for a transaction in which the Corporation
will cease to be an independent publicly owned entity or for a sale or
other disposition of all or substantially all the assets of the
Corporation or the Bank, unless the Committee shall have otherwise
provided in the instrument evidencing the grant of an Option or Stock
Appreciation Right, all Options and Stock Appreciation Rights
theretofore granted and not fully exercisable shall become exercisable
in full upon the happening of such event and shall remain so exercisable
for a period of sixty days following such date, after which they shall
revert to being exercisable in accordance with their terms; provided,
however, that no Option or Stock Appreciation Right which has previously
been exercised or otherwise terminated shall become exercisable.
<PAGE>
14. Assignments and Transfers. No Award nor any right or
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interest of a Participant under the Plan in any instrument evidencing
any Award under the Plan may be assigned, encumbered or transferred
except, in the event of the death of a Participant, by will or the laws
of descent and distribution or in the case of Awards other than
Incentive Stock Options pursuant to a qualified domestic relations
order, as defined in the Code or Title I of ERISA or the rules
thereunder.
15. Employee Rights Under the Plan. No director, officer or
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employee shall have a right to be selected as a Participant nor, having
been so selected, to be selected again as a Participant and no director,
officer, employee or other person shall have any claim or right to be
granted an Award under the Plan or under any other incentive or similar
plan of the Corporation or any Affiliate. Neither the Plan nor any
action taken thereunder shall be construed as giving any employee any
right to be retained in the employ of the Corporation or any Affiliate.
16. Delivery and Registration of Stock. The Corporation's
----------------------------------
obligation to deliver Shares with respect to an Award shall, if the
Committee so requests, be conditioned upon the receipt of a
representation as to the investment intention of the Participant to whom
such Shares are to be delivered, in such form as the Committee shall
determine to be necessary or advisable to comply with the provisions of
the Securities Act of 1933 or any other Federal, state or local
securities legislation or regulation. It may be provided that any
representation requirement shall become inoperative upon a registration
of the Shares or other action eliminating the necessity of such
representation under such Securities Act or other securities
legislation. The Corporation 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, and
(ii) the completion of such registration or other qualification of such
Shares under any state or Federal law, rule or regulation, as the Com-
mittee shall determine to be necessary or advisable.
17. Withholding Tax. The Corporation shall have the right to
---------------
deduct from all amounts paid in cash with respect to the exercise of a
Right under the Plan any taxes required by law to be withheld with re-
spect to such cash payments. Where a Participant or other person is
entitled to receive Shares pursuant to the exercise of an Option or
Right pursuant to the Plan, the Corporation shall have the right to
require the Participant or such other person to pay the Corporation the
amount of any taxes which the Corporation is required to withhold with
respect to such Shares.
18. Amendment or Termination. The Board of Directors of the
------------------------
Corporation may amend, suspend or terminate the Plan or any portion
thereof at any time, but (except as provided in Section 11 hereof) no
amendment shall be made without approval of the stockholders of the
Corporation which shall (i) materially increase the aggregate number of
Shares with respect to which Awards may be made under the Plan, (ii)
materially increase the aggregate number of Shares which may be subject
to Awards to Participants who are not Employees or (iii) change the
class of persons eligible to participate in the Plan; provided, however,
that no such amendment, suspension or termination shall impair the
rights of any Participant, without his consent, in any Award theretofore
made pursuant to the Plan.
19. Effective Date and Term of Plan. The Plan shall become
-------------------------------
effective upon its approval by the stockholders of the Corporation. It
shall continue in effect for a term of ten years unless sooner
terminated under Section 18 hereof.
<PAGE>
20. Initial Grant. By, and simultaneously with, the approval
-------------
of the Plan by the stockholders of the Corporation, each member of the
Board of Directors of the Corporation at the time of the Bank's
conversion to stock form who is not an Employee, is hereby granted a ten
year, Non-Qualified Stock Option to purchase a number of shares, at an
Exercise Price per share equal to the Market Value on the date of grant
(which shall be the date of stockholder approval of the Plan), set forth
opposite such Director's name below:
Anderson 71,400
Teixeira 35,700
Schoonover 23,800
Carvalho 23,800
In addition, each non-employee director of the Corporation elected
after the completion of the Bank's conversion to stock form is hereby
granted as of the date he or she is elected and qualified ("election
date") a ten year Non-Qualified Stock Option to purchase 100 shares at
the applicable Market Value on the election date. All options shall
vest ratably over a five-year period, beginning six months from the date
of stockholder approval or the election date, as applicable. Each such
Option shall be evidenced by a Non-Qualified Stock Option Agreement in a
form approved by the Board of Directors and shall be subject in all
respects to the terms and conditions of this Plan, which are
controlling.
