PVF CAPITAL CORP.
2000 INCENTIVE STOCK OPTION PLAN
SECTION I
PURPOSE
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The purpose of PVF Capital Corp. 2000 Incentive Stock Option Plan (the
"Plan") is to promote the interest of PVF Capital Corp. ("Company") and its
stockholders by providing a method whereby key executives (as determined by
the Committee in its sole discretion) and directors ("Optionees") of the
Company and its subsidiaries may be encouraged to invest in the Company's
Common Stock, thereby increasing their proprietary interest in its
business, providing them with additional incentive to remain in the employ
of the Company and increasing their personal interest in its continued
success and progress. These employees will be granted options ("Options")
to purchase shares of the common stock, $.01 par value, of the Company
("Common Stock"). It is intended that Options issued hereunder will
constitute Incentive Stock Options ("ISOs") within the meaning of Section
422A of the Internal Revenue Code of 1986, as amended from time to time
(the "Code"). Non-employee directors are not eligible for Incentive Stock
Options and therefore are granted nonqualified stock options ("non-ISOs").
SECTION II
ADMINISTRATION
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2.1 The Committee. The Plan shall be administered by a Committee of the
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Board of Directors of the Company (the "Committee"). The Committee
shall consist of not less than two non-employee directors within the
meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as
amended, and shall be appointed by the Board of Directors. A majority
of the members of the Committee shall constitute a quorum. All
decisions of the Committee shall be made by not less than a majority of
its members. Any decision or determination reduced to writing and
signed by all the members of the Committee shall be fully as effective
as if it had been made by a majority vote at a meeting duly called and
held. The Committee may appoint a chairman from among the members and a
secretary (who need not be a member) and may make such rules and
regulations for the conduct of its business as it shall deem advisable.
No member of the Committee shall be liable, in the absence of bad
faith, for any act or omission with respect to his or her service on
the Committee. Service on the Committee shall constitute service as a
Director of the Company so that members of the committee shall be
entitled to indemnification and reimbursement as Directors of the
Company.
2.2 Authority of the Committee. Subject to the express provisions of the
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Plan, the Committee shall have plenary authority to determine, in its
discretion, the employees and directors to whom, and the time or times
within which (during the term of the Option) all or a portion
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of such Options may be exercised. In making such determination, the
Committee may take into account the nature of the services rendered or
expected to be rendered by the respective employees and directors, their
present and potential contributions to the Company's success, the
anticipated number of years of effective service remaining and such other
factors as the Committee in its discretion shall deem relevant. Subject to
the express provisions of the Plan, Section 422A of the Code and any
regulations or rulings thereunder, the Committee shall also have plenary
authority to interpret the Plan, to prescribe, amend and rescind rules and
regulations relating to it, to determine the terms and conditions of the
respective Options (which terms and conditions need not be the same in each
case), to impose restrictions on any shares issued upon the exercise of an
Option and to determine the manner in which such restrictions may be
removed, and to make all other determinations deemed necessary or advisable
in administering the Plan. The Committee may specify in the original terms
of any Option, or, if not so specified, shall determine whether any
authorized leave of absence or absence on military or governmental service
or for any other reason shall constitute a termination of employment for
purposes of the Plan. The determination of the Committee on the matters
referred to in the Plan shall be conclusive; provided that it shall be the
Board of Directors of the Company which shall determine whether un-issued
or treasury shares shall be issued upon the exercise of any Option.
2.3 Option Agreement. Each Option shall be evidenced by an option agreement
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which shall contain such terms and conditions as may be approved by the
Committee, and the said agreement shall be signed by an officer of the
Company and the Optionee.
SECTION III
SHARES SUBJECT TO THE PLAN
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An aggregate of 250,000 shares of Common Stock shall be subject to the
Plan, subject to adjustment in accordance with Section 8 hereof. Such shares may
be either authorized but un-issued shares or shares now or hereafter held in the
treasury of the Company.
In the event that any Option under the Plan expires unexercised or is
terminated, surrendered or cancelled, the shares subject to such Option, or the
unexercised portion thereof, shall again become available for Option under the
Plan, including to the former holder of such Option, upon such terms as the
Committee shall determine in accordance with the Plan and which terms may be
more or less favorable than those applicable to such former Option.
SECTION IV
GRANTING DATE
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The action of the Committee with respect to the granting of an Option shall
take place on such date as a majority of the members of the Committee at a
meeting shall make a determination with respect to the granting of an
Option or, in the absence of a meeting, on
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such date as of which written designation covering such Option shall have
been executed by all members of the Committee. The effective date of the
grant of an Option (the "Granting Date") shall be the date specified by the
Committee in its determination or designation relating to the award of such
Option or, in the absence of such a specification, the date on which the
action of the Committee relating to the award of such Option took place.
However, the Granting Date shall not be later than the termination date of
Section 9.2.
SECTION V
ELIGIBILITY
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Options may be granted to key executives (which term shall be deemed to
include among others, the president, any vice president, secretary, treasurer or
any manager in charge of a principal business unit, division or function (such
as sales, administration or finance), any other officer who performs a policy
making function, or any other person who performs similar policy making
functions for the Company or any of its subsidiaries) and who on the Granting
Date are in the employ of the company or one of its then subsidiary
corporations, as defined in Section 425 of the Code (the "subsidiaries"). Also,
Options may be granted to any Director of the Company or of a subsidiary
corporation who is not also such an employee or officer of the Company or of one
of its subsidiary corporations on the Granting Date. Subject to adjustment as
set forth in Section VIII, the maximum number of shares for which Options may be
granted to any individual participant during any calendar year shall be 10,000
shares.
SECTION VI
TERMS AND CONDITIONS OF OPTIONS
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6.1 Option Price. Subject to the provision of Section 6.5 below, the purchase
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price of the Common Stock under each option shall be determined by the
Committee as of the Granting Date, but shall not be less than 100% of the
fair market value of the stock on the Granting Date. The fair market value
of the stock shall be, for purposes of the Plan, determined in accordance
with the requirements of Section 422A of the Code.
6.2 Terms. Subject to the provisions of Section 6.5 below, the term of each
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Option granted under the Plan shall be for a period not exceeding ten years
from the Granting Date. Each Option granted under the Plan may be exercised
by the Optionee as stated in his or her individual option agreement, but in
no event may any option be exercised before one year of continued
employment with the Company, or a subsidiary, immediately following the
Granting Date.
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6.3 Restrictions on Transfer and Exercise.
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(a) Except as hereinafter provided, no Option granted pursuant to the Plan
may be exercised at any time unless the holder thereof is then an
employee or director of the Company or of a subsidiary. Options
granted under the Plan shall not be affected by any change of
employment so long as the Optionee continues to be an employee or
director of the Company or of a subsidiary corporation.
(b) The Option of any Optionee whose employment is terminated for any
reason, other than for death, disability (as defined in Section
22(e)(3) of the Code) or discharge for cause (as defined in Section
6.3(d) below), shall be exercisable or payable to the extent provided
therein, through the earlier of the date which is three months after
termination of employment or the date that such Option expires in
accordance with its terms, and shall expire thereafter.
(c) In the event of the death of an Optionee (1) while an employee of the
Company or a subsidiary corporation, or (2) within three months after
the termination of employment of the Optionee for other than cause, or
in the event of the termination of employment by an Optionee for
permanent disability, the Option may be exercised as follows:
(i) In the event of the death of an Optionee during employment or the
death of the Optionee within three months after the termination
of employment for other than cause, each Option granted to such
Optionee shall be exercisable or payable to the extent provided
therein but not later than one year after his or her death (but
not beyond the stated duration of the Option). Any such exercise
or payment shall be made only: (1) by or to the executor or
administrator of the estate of the deceased Optionee or person or
persons to whom the deceased Optionee's rights under the Option
shall pass by will or the laws of descent and distribution; and
(2) to the extent, if any, that the deceased Optionee was
entitled at the date of his or her death.
(ii) In the case of an Optionee who becomes disabled, the Option shall
be exercisable or payable to the extent provided therein on the
earlier of one year after termination of employment or the date
that such Option expires in accordance with its terms. During
such period, the Option may be exercised by an Optionee who
becomes disabled with respect to the same number of shares. in
the same manner and to the same extent as if the Optionee had
continued employment during such period.
(d) Any unexercised Options shall lapse immediately upon termination of
employment of the Optionee through discharge for "cause". "Cause"
shall mean, in the good faith determination of the Company's Board of
Directors, the Optionee's personal dishonesty, incompetence, willful
misconduct, breach of
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fiduciary duty involving personal profit, intentional failure to
perform stated duties, or willful violation of any law, rule or
regulation (other than traffic violations or similar offenses) or
final cease-and-desist order. No act, or failure to act, on the
Optionee's part shall be considered "willful" unless he has acted, or
failed to act, with an absence of good faith and without a reasonable
belief that his action or failure to act was in the best interest of
the Company or its subsidiaries.
(e) Each Option granted under the Plan shall, by its terms, not be
transferable otherwise than by will or the laws of descent and
distribution. Notwithstanding the foregoing, or any other provision of
this Plan, an Optionee who holds Options may transfer such Options
(but not ISOs) to his or her spouse, lineal ascendants, lineal
descendants, or to a duly established trust for the benefit of one or
more of these individuals. Options so transferred may thereafter be
transferred only to the Optionee who originally received the grant or
to an individual or trust to whom the Optionee could have initially
transferred the Options pursuant to this Section 6.3(e). Options which
are transferred pursuant to this Section 6.3(e) shall be exercisable
by the transferee according to the same terms and conditions as
applied to the Optionee.
(f) For the purposes of this Section, Options granted to directors may be
exercised at any time prior to the expiration date of the Option. In
the event of the death of the director, Options may be exercised at
any time prior to the expiration date of the option. Any such exercise
or payment shall be made only: (A) by or to the executor or
administrator of the estate of the deceased Director or person or
persons to whom the deceased Director's rights under the Option shall
pass by will or the laws of descent and distribution; and (B) to the
extent, if any, that the deceased Director was entitled at the date of
his or her death.
6.4 Manner of Exercise. An Option shall be exercised by giving a written
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notice to the President of the Company stating the number of shares of
stock with respect to which the Option is being exercised and
containing such other information as the President may request and by
tendering payment therefore with a cashier's check, certified check, or
with existing holdings of Common Stock held for more than six months.
6.5 Limitations on Options.
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(a) In the case of Options intended to qualify as ISO's,
notwithstanding the provision of Sections 6.1 and 6.2 above, if
an Optionee, at the time of Option is granted, owns (as defined
in Section 424(d) of the Code) Common Stock possessing more than
10% of the total combined voting power of all classes of stock of
the Company, any subsidiary thereof or of the Company's parent
(if any), the option price for such Option shall be at least 110%
of the fair market value of the stock subject to such Option, and
such Option by its term shall not be exercisable after the
expiration of five years from the date such Option is granted.
(b) In the case of Options intended to qualify as ISOs, if the
aggregate fair market value (determined as of the time the Option
is granted) with respect to which Options are exercisable for the
first time by Employee during any calendar year
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(under this Plan or any other plan of the Company and its parent
and subsidiary corporations) exceeds $100,000, such Options in
excess of $100,000 shall be treated as Options which are not
Incentive Stock Options as defined in Section 422A of the Code.
(c) For the purposes of this Section, parts (a) and (b) shall not
apply to options granted to non-employee Directors.
SECTION VII
STOCKHOLDER AND EMPLOYMENT RIGHTS
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A holder of an Option shall have none of the rights of a stockholder
with respect to any of the shares subject to Option until such shares shall be
issued upon the exercise of the Option.
Nothing in the Plan or in any Option granted pursuant to the Plan
shall, in the absence of an express provision to the contrary, confer on any
individual any right to be or to continue in the employ of the Company or any of
its subsidiaries or shall interfere in any way with the right to the Company or
any of its subsidiaries to terminate the employment of any individual at any
time.
SECTION VIII
ADJUSTMENTS TO COMMON STOCK
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The aggregate number of shares of Common Stock of the Company on which
Options may be granted hereunder, the number of shares thereof covered by each
outstanding Option, the maximum number of shares for which Options may be
granted to any individual during any calendar year and the price per share
thereof in each such Option will all be appropriately adjusted for any increase
or decrease in the number of shares of stock of the Company resulting from a
subdivision or consolidation of shares whether through reorganization,
recapitalization, stock split-up or combination of shares, or the payment of a
stock dividend or other increase or decrease in such shares effected without
receipt of consideration by the Company. No fractional shares of stock shall be
issued upon exercise of an Option by reason of a stock dividend or otherwise,
and the grantee holding such Option shall not be entitled to exercise it with
respect to such fractional share.
Subject to any required action by the stockholders, if the Company
shall be the surviving corporation in any merger or consolidation, any Option
granted hereunder shall pertain to and apply to the securities to which a holder
of the number of shares of stock subject to the Option would have been entitled.
Upon a dissolution of the Company, a merger or consolidation in which the
Company is not the surviving corporation, or sale or disposition of all or
substantially all of the Company's assets (any of the foregoing to be referred
to herein as a "Transaction"), every Option outstanding hereunder together with
the exercise price thereof shall be equitably
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adjusted for any changes or exchange of Common Stock for a different number of
kind of shares or other securities which results from the Transaction.
SECTION IX
EFFECTIVE DATE AND TERMINATION EFFECTIVE DATE
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9.1 Effective Date. The Plan shall become operative and in effect on the
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date the Plan is approved by a vote of a majority of all members of the
Board of Directors provided, however. that the Plan shall be submitted
to the stockholders of the Company for approval within twelve months of
the date of adoption of the Plan, and if such approval shall not be
obtained within that period by a vote of the holders of a majority of
the total outstanding capital stock of the Company entitled to vote,
voting as a single class, the Plan shall be null and void and all
Options, if any, granted thereunder shall automatically be cancelled.
9.2 Termination Effective Date. The Plan shall remain in effect until and
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shall terminate within 10 years from the date the Plan is adopted or
the Plan was approved by the shareholders, whichever is earlier, but it
may be terminated at an earlier date by action of the Board of
Directors. Except as provided in paragraph 9.1 above, termination of
this Plan shall not affect the rights of grantees under Options
theretofore granted to purchase stock under the Plan, and, all such
Options shall continue in force and operation after termination of the
Plan. except as provided in subparagraph A above and except as may be
terminated through death or other termination of employment in
accordance with the terms of the Plan.
SECTION X
AMENDMENTS
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The Board of Directors shall have complete power and authority to amend
the Plan, provided, however, that except as expressly permitted in the Plan, the
Board of Directors shall not, without the affirmative vote of the holders of a
majority of the voting stock of the Company, make any amendment which would (a)
abolish the Committee without designating such other committee, change the
qualifications of its members, or withdraw the administration of the Plan from
its supervision, (b) increase the maximum number of shares for which options may
be granted under the Plan, (c) amend the formula for determination of the
purchase price of shares on which options may be granted, (d) extend the terms
of the Plan or (e) amend the requirements as to the employees eligible to
receive Options.
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SECTION XI
GOVERNMENT AND OTHER REGULATIONS
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The obligation of the Company to sell or deliver shares under Options
granted pursuant to the Plan shall be subject to all applicable laws, rules
and regulations, and to such approvals by and registrations with any
governmental agencies as may be required.
SECTION XII
LOAN AGREEMENTS
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Each Option shall be subject to the condition that the Company shall
not be obliged to issue or transfer any of its stock to a holder of an Option,
in the exercise thereof, if at any time the Committee or the Board of Directors
shall determine that the issuance or transfer of such stock would be in
violation of any covenant in any of the Company's loan agreements or other
contracts.
The Company hereby agrees to the provisions of this Plan, and in Witness
Thereof, the Company causes this Agreement to be executed on this ________day of
____________, 2000.
PVF CAPITAL CORP
By: ______________________
President
ATTEST:
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Secretary
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