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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 4, 2000
COMMUNITY FINANCIAL CORP.
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(Exact name of registrant as specified in its charter)
Illinois 0-26292 37-1337630
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State or other (Commission (I.R.S. employer
jurisdiction of file number) identification no.)
incorporation)
240 E. Chestnut Street, Olney, Illinois 62450-2295
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Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code:(618)395-8676
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Not Applicable
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(Former name or former address, if changed since last report)
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS
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AND EXHIBITS
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The following exhibit is filed with this Current Report on
Form 8-K.
Exhibit No. Description
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10.2 Community Financial Corp. Management
Recognition Plan (as amended on July
22, 1999)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, hereunto duly authorized.
COMMUNITY FINANCIAL CORP.
DATE: April 4, 2000 By: Wayne H. Benson
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Wayne H. Benson
Chief Executive Officer
COMMUNITY FINANCIAL CORP.
MANAGEMENT RECOGNITION PLAN
ARTICLE I
ESTABLISHMENT OF THE PLAN
1.01 The Company hereby establishes this Plan upon the
terms and conditions hereinafter stated.
1.02 Through acceptance of their appointment to the
Committee, each member of the Committee hereby accepts his or
her appointment hereunder upon the terms and conditions
hereinafter stated.
ARTICLE II
PURPOSE OF THE PLAN
2.01 The purpose of the Plan is to reward and retain
personnel of experience and ability in key positions of
responsibility by providing Employees and Directors of the
Company, the Bank, and their Affiliates with a proprietary
interest in the Company, and as compensation for their past
contributions to the Bank, and as an incentive to make such
contributions in the future.
ARTICLE III
DEFINITIONS
The following words and phrases when used in this Plan with
an initial capital letter, shall have the meanings set forth
below unless the context clearly indicates otherwise. Wherever
appropriate, the masculine pronoun shall include the feminine
pronoun and the singular shall include the plural.
3.01 "Affiliate" shall mean any "parent corporation" or
"subsidiary corporation" of the Company, as such terms are
defined in Section 424(e) and (f), respectively, of the Internal
Revenue Code of 1986, as amended.
3.02 "Bank" means Community Bank & Trust, fsb (and any
successor in interest).
3.03 "Beneficiary" means the person or persons designated
by a Participant to receive any benefits payable under the Plan
in the event of such Participant's death. Such person or
persons shall be designated in writing on forms provided for
this purpose by the Committee and may be changed from time
to time by similar written notice to the Committee. In the
absence of a written designation, the Beneficiary shall be the
Participant's surviving spouse, if any or if none, his estate.
3.04 "Board" means the Board of Directors of the Company
(excluding Directors Emeritus).
3.05 "Change of Control" shall mean any one of the
following events: (1) the acquisition of ownership, holding, or
power to vote more than 25% of the Bank's or the Company's
voting stock, (2) the acquisition of the ability to control the
election of a majority of the Bank's or the Company's directors,
(3) the acquisition of a controlling influence over the
management or policies of the Bank or the Company by any person
or by persons acting as a "group" (within the meaning of Section
13(d) of the Securities Exchange Act of 1934) (provided that in
the case of (1), (2) and (3) hereof, ownership or control of the
Bank by the Company itself shall not constitute a "Change of
Control") or (4) during any period of two consecutive years,
individuals (the "Continuing Directors") who at the
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beginning of such period constitute the Board of Directors of
the Company or the Bank (the "Existing Board") cease for
any reason to constitute at least two-thirds thereof, provided
that any individual whose election or nomination for election as
a member of the Existing Board was approved by a vote of at
least two-thirds of the Continuing Directors then in office
shall be considered a Continuing Director. For purposes of this
subparagraph only, the term "person" refers to an individual
or a corporation, partnership, trust, association, joint
venture, pool, syndicate, sole proprietorship, unincorporated
organization or any other form of entity not specifically listed
herein. The decision of the Committee as to whether a Change of
Control has occurred shall be conclusive and binding.
3.06 "Committee" means the Management Recognition Plan
Committee appointed by the Board pursuant to Article IV hereof.
3.07 "Common Stock" means shares of the common stock, $.01
par value per share, of the Company.
3.08 "Company" means Community Financial Corp.
3.09 "Continuous Service" shall mean the absence of any
interruption or termination of service as an Employee or
Director of the Company or an Affiliate. Continuous Service
shall not be considered interrupted in the case of sick leave,
military leave or any other leave of absence approved by the
Company, in the case of transfers between payroll locations of
the Company or between the Company, an Affiliate or a successor,
or in the case of a Director's performance of services in an
emeritus or advisory capacity.
3.10 "Date of Conversion" means the date of the conversion
of the Bank from mutual to stock form.
3.11 "Director" means a member of the Board.
3.12 "Disability" means a physical or mental condition of
a Participant resulting from bodily injury, disease, or mental
disorder which renders him incapable of continuing any gainful
occupation and which condition constitutes total disability
under the Federal Social Security Acts.
3.13 "Effective Date" means the date on which the Plan
first becomes effective, as determined under Section 8.07
hereof.
3.14 "Employee" means any person who is employed by the
Company or an Affiliate.
3.15 "Non-Employee Director" shall mean any member of the
Board who, at the time discretion under the Plan is exercised,
is a "Non-Employee Director" within the meaning of Rule 16b-3 of
the Securities Exchange Act of 1934.
3.16 "OTS" shall mean the Office of Thrift Supervision of
the United States Department of the Treasury.
3.17 "Participant" means an Employee or Director who
holds a Plan Share Award.
3.18 "Plan" means this Community Financial Corp.
Management Recognition Plan.
3.19 "Plan Shares" means shares of Common Stock held in
the Trust which are awarded or issuable to a Participant
pursuant to the Plan.
3.20 "Plan Share Award" means a right granted under this
Plan to receive Plan Shares.
3.21 "Plan Share Reserve" means the shares of Common
Stock held by the Trustee pursuant to Sections 5.02 and 5.03.
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3.22 "Restricted Stock" means Common Stock which is
subject, under Section 7.03(b) hereof, to forfeiture,
restrictions against transfer, and such other terms and
conditions as are determined by the Committee.
3.23 "Share" means one share of Common Stock.
3.24 "Trust" and "Trust Agreement" mean that agreement
entered into pursuant to the terms hereof between the Company
and the Trustee, and "Trust" means the trust created thereunder.
3.25 "Trustee" means that person(s) or entity appointed
by the Board pursuant to the Trust Agreement to hold legal title
to the Plan assets for the purposes set forth herein.
ARTICLE IV
ADMINISTRATION OF THE PLAN
4.01 ROLE AND POWERS OF THE COMMITTEE. The Plan shall be
administered and interpreted by the Committee, which shall
consist of not less than three non-employee members of the Board
who are Disinterested Persons. In the absence at any time of a
duly appointed Committee, the Plan shall be administered by
those members of the Board who are Disinterested Persons, and by
the Board if there are less than three Disinterested Persons.
The Committee shall have all of the powers allocated to it
in this and other Sections of the Plan. Except as limited by
the express provisions of the Plan or by resolutions adopted by
the Board, the Committee shall have sole and complete authority
and discretion, subject to applicable OTS regulations
(i) to make Plan Share Awards to such Employees as the Committee
may select, (ii) to determine the form and content of Plan Share
Awards to be issued under the Plan, (iii) to interpret the Plan,
(iv) to prescribe, amend and rescind rules and regulations
relating to the Plan, and (v) to make other determinations
necessary or advisable for the administration of the Plan. The
Committee shall have and may exercise such other power and
authority as may be delegated to it by the Board from time to
time. Subject to Section 4.02, the interpretation and
construction by the Committee of any provisions of the Plan
or of any Plan Share Award granted hereunder shall be final and
binding. The Committee shall act by vote or written consent of
a majority of its members, and shall report its actions and
decisions with respect to the Plan to the Board at appropriate
times, but in no event less than one time per calendar year.
The Committee may recommend to the Board one or more persons or
entity to act as Trustee(s) in accordance with the provisions of
this Plan and the Trust.
4.02 ROLE OF THE BOARD. The members of the Committee
shall be appointed or approved by, and will serve at the
pleasure of, the Board. The Board may in its discretion from
time to time remove members from, or add members to, the
Committee. The Board shall have all of the powers allocated
to it in this and other Sections of the Plan, may take any
action under or with respect to the Plan which the Committee is
authorized to take, and may reverse or override any action taken
or decision made by the Committee under or with respect to the
Plan, provided, however, that the Board may not take any action
that would constitute a violation of OTS regulations or revoke
any Plan Share Award already made or impair a participant's
vested rights under a Plan Share Award, except as provided in
Section 8.02 herein. Members of the Board who are eligible for
or who have been granted Plan Share Awards (other than pursuant
to Section 6.04) may not vote on any matters affecting the
administration of the Plan or the grant of Plan Shares or Plan
Share Awards (although such members may be counted in
determining the existence of a quorum at any meeting of the
Board during which actions with regard thereto are taken).
Further, with respect to all actions taken by the Board in
regard to the Plan, such action shall be taken by a majority of
the Board where such a majority of the directors acting in the
matter are Disinterested Persons.
4.03 LIMITATION ON LIABILITY. No member of the Board or
the Committee or the Trustee(s) shall be liable for any
determination made in good faith with respect to the Plan or any
Plan Shares or Plan Share Awards granted under it. In addition
to such other rights of indemnification as they may have, the
members of the Committee shall be indemnified by the Company in
connection with any claim, action, suit or proceeding relating
to any action taken
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or failure to act under or in connection with the Plan or any
Award, granted hereunder to the full extent provided for under
the Company's governing instruments with respect to the
indemnification of Directors.
ARTICLE V
CONTRIBUTIONS; PLAN SHARE RESERVE
5.01 AMOUNT AND TIMING OF CONTRIBUTIONS. The Board shall
determine the amounts (or the method of computing the amounts)
to be contributed by the Company to the Trust. Such amounts
shall be paid to the Trustee at the time of contribution and
shall not exceed amounts permitted under OTS regulations. No
contributions to the Trust by Employees shall be permitted.
5.02 INVESTMENT OF TRUST ASSETS. The Trustee shall invest
Trust assets only in accordance with the Trust Agreement;
provided that the Trust shall not purchase more than four
percent (4%) of the number of shares of Common Stock issued on
the Date of Conversion. Such shares may either be shares held
in treasury or shares repurchased by the Plan or Trust on the
open market.
5.03 EFFECT OF ALLOCATIONS, RETURNS AND FORFEITURES UPON
PLAN SHARE RESERVES. Upon the allocation of Plan Share Awards
under Section 6.02, the Plan Share Reserve shall be reduced by
the number of Shares subject to the Awards so allocated. Any
Shares subject or attributable to an Award which may not be
earned because of a forfeiture by the Participant pursuant to
Section 7.01 shall be added to the Plan Share Reserve.
ARTICLE VI
ELIGIBILITY; ALLOCATIONS
6.01 ELIGIBILITY. Only Employees shall be eligible to
receive discretionary Plan Share Awards. In selecting those
Employees to whom Plan Share Awards will be granted and the
number of shares covered by such Awards, the Committee shall
consider the position, duties and responsibilities of the
eligible Employees, the value of their services to the Company
and its Affiliates, and any other factors the Committee may deem
relevant. Notwithstanding the foregoing, (i) the Committee
shall automatically make the Plan Share Awards specified in
Sections 6.04 and 6.05 hereof; and (ii) no Employee shall
receive Plan Share Awards relating to more than 25% of the Plan
Shares reserved under Section 5.02, and no non-employee Director
shall receive Plan Share Awards relating to more than 5% of the
Plan Shares reserved under Section 5.02, with all non-employee
Directors as a group receiving Plan Share Awards relating to no
more than 30% of the Plan Shares reserved under Section 5.02.
6.02 ALLOCATIONS. The Committee will determine which of
the Employees referenced in Section 6.01 above will be granted
Plan Share Awards, and the number of Shares covered by each Plan
Share Award provided that in no event shall any Awards be made
which will violate the Charter, Bylaws or Plan of Conversion of
the Bank or its Subsidiaries or any applicable federal or state
law or regulation. In the event Plan Shares are forfeited for
any reason or additional shares of Common Stock are purchased by
the Trustee, the Committee may, from time to time, determine
which of the Employees referenced in Section 6.01 above will be
granted additional Plan Share Awards to be awarded from the
forfeited or acquired Plan Shares. In selecting those Employees
to whom Plan Share Awards will be granted and the number of
shares covered by such Awards, the Committee shall consider the
position, duties and responsibilities of the eligible Employees,
the value of their services to the Company and its Subsidiaries,
and any other factors the Committee may deem relevant.
6.03 FORM OF ALLOCATION. As promptly as practicable after
a determination is made pursuant to Section 6.02 that a Plan
Share Award is to be made, the Committee shall notify the
Participant in writing of the grant of the Award, the number of
Plan Shares covered by the Award, and the terms upon which the
Plan Shares subject to the Award
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may be earned. The date on which the Committee so notifies the
Participant shall be considered the date of grant of the Plan
Share Awards. The Committee shall maintain records as to all
grants of Plan Share Awards under the Plan.
6.04 AUTOMATIC GRANTS TO NON-EMPLOYEE DIRECTORS.
Notwithstanding any other provisions of this Plan, each Director
who is not an Employee but is a Director on the Effective Date
shall receive, on said date, a Plan Share Award for a number of
Shares equal to the lesser of 5% of the number of Plan Shares
which the Trust is authorized to purchase pursuant to Section
5.02 of the Plan or the quotient obtained by dividing --
(i) thirty percent (30%) of the number of Plan Shares
which the Trust is authorized to purchase pursuant to
Section 5.02 of the Plan, by
(ii) the number of Directors entitled to receive Plan Share
Awards on the Effective Date, pursuant to this Section
6.04.
Each Director who joins the Board after the Effective Date shall
receive, on said date, a Plan Share Award of two percent (2%) of
the number of Plan Shares which the Trust is authorized to
purchase pursuant to Section 5.02 of the Plan (or such lesser
number as are available hereunder for Plan Share Awards). Plan
Share Awards received under the provisions of this Section shall
become vested and nonforfeitable according to the general rules
set forth in subsections (a) and (b) of Section 7.01. Unless
otherwise inapplicable or inconsistent with the provisions of
this Section, the Plan Share Awards to be granted hereunder
shall be subject to all other provisions of this Plan.
6.05 AUTOMATIC GRANTS TO EMPLOYEES. On the Effective
Date, each of the following individuals shall receive a Plan
Share Award as to the number of Plan Shares listed below,
provided that such award shall not be made to an individual who
is not an Employee on the Effective Date:
Percentage of Plan Shares Obtained
Employee by the MRP on the Effective Date
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Shirley B. Kessler 14.7
Wayne Benson 11.9
Doug Tompson 11.9
Donna Berry 4.2
Jeff Wilson 4.2
Kevin Washburn 4.2
Janet Prosser 4.2
Steve Walser 2.94
Anita Spillman 2.94
Paula Fritschle 2.94
Deb Keller 2.94
Deb Waxler 2.94
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Total 70%
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Plan Share Awards received under the provisions of this
Section shall become vested and nonforfeitable according to the
general rules set forth in subsections (a) and (b) of Section
7.01. Unless otherwise inapplicable or inconsistent with the
provisions of this Section, the Plan Share Awards to be
granted hereunder shall be subject to all other provisions of
this Plan.
6.06 ALLOCATIONS NOT REQUIRED. Notwithstanding anything
to the contrary in Sections 6.01 and 6.02, but subject to
Sections 6.04 and 6.05, no Employee or Director shall have any
right or entitlement to receive a Plan Share Award hereunder,
such Awards being at the total discretion of the Committee, nor
shall any Employees or Directors
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as a group have such a right. The Committee may, with the
approval of the Board (or, if so directed by the Board) return
all Common Stock in the Plan Share Reserve to the Company at any
time, and cease issuing Plan Share Awards.
ARTICLE VII
EARNINGS AND DISTRIBUTION OF PLAN SHARES; VOTING RIGHTS
7.01 EARNING PLAN SHARES; FORFEITURES.
(a) General Rules. Twenty percent (20%) of the Plan
Shares subject to a Plan Share Award shall be earned and become
non-forfeitable by a Participant upon his or her completion of
each of five Years of Service. For purposes of this paragraph,
with respect to each Plan Share Award, "Year of Service" means
a full twelve-month period, measured from the date of a Plan
Share Award and each annual anniversary of that date, during
which the Participant has continuously been an Employee or
Director of the Company or an Affiliate.
(b) Exception for Terminations Due to Death, Disability,
Change in Control or Retirement. Notwithstanding the general
rule contained in Section 7.01(a) above, all Plan Shares subject
to a Plan Share Award held by a Participant whose service with
the Company or an Affiliate terminates due to the Participant's
death or Disability, a Change in Control, or a Participant's
retirement at attainment of age 62 and 15 Years of Service,
shall be deemed earned as of the Participant's last day of
service with the Company or an Affiliate and shall be
distributed as soon as practicable thereafter.
(c) Discretionary Acceleration of Vesting. In its sole
discretion and absolute discretion, the Committee may at any
time, with respect to any Participant, accelerate the schedule
according to which the Participant's Plan Share Award is earned
and becomes non-forfeitable.
7.02 ACCRUAL OF DIVIDENDS. Whenever Plan Shares are paid
to a Participant or Beneficiary under Section 7.03, such
Participant or Beneficiary shall also be entitled to receive,
with respect to each Plan Share paid an amount equal to any cash
dividends and a number of shares of Common Stock equal to any
stock dividends, declared and paid with respect to a share of
Common Stock between the date the relevant Plan Share Award was
initially granted to such Participant and the date the Plan
Shares are being distributed. There shall also be distributed
an appropriate amount of net earnings, if any, of the Trust with
respect to any cash dividends so paid out.
7.03 DISTRIBUTION OF PLAN SHARES.
(a) Timing of Distributions: General Rule. Except as
provided in Subsections (c), (d) and (e) below, the Trustee
shall distribute Plan Shares and accumulated cash from dividends
and interest to the Participant or his Beneficiary, as the case
may be, as soon as practicable after they have been earned. No
fractional shares shall be distributed.
(b) Form of Distribution. The Trustee shall distribute
all Plan Shares, together with any shares representing stock
dividends, in the form of Common Stock. One share of Common
Stock shall be given for each Plan Share earned. Payments
representing cash dividends (and earnings thereon) shall be made
in cash.
(c) Withholding. The Trustee shall withhold from any cash
payment made under this Plan sufficient amounts to cover any
applicable withholding and employment taxes, and if the amount
of such cash payment is not sufficient, the Trustee shall
require the Participant or Beneficiary to pay to the Trustee the
amount required to be withheld as a condition of delivering the
Plan Shares. The Trustee shall pay over to the Company or
Affiliate which employs or employed such Participant any such
amount withheld from or paid by the Participant or Beneficiary.
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(d) Timing: Exception for 10% Shareholders.
Notwithstanding Subsections (a) and (b) above, no Plan Shares
may be distributed prior to the date which is five (5) years
from the Date of Conversion to the extent the Participant or
Beneficiary, as the case may be, would after receipt of such
Shares own in excess of ten percent (10%) of the issued and
outstanding shares of Common Stock unless such action is
approved in advance by a majority vote of disinterested
directors of the Board. To the extent this limitation would
delay the date on which a Participant receives Plan Shares, the
Participant may elect to receive from the Trust, in lieu of such
Plan Shares, the fair market value thereof, as determined by the
Committee. Any Plan Shares remaining undistributed solely by
reason of the operation of this Subsection (d) shall be
distributed to the Participant or his Beneficiary on the date
which is five years from the Date of Conversion, provided that
the Participant is vested as to those Plan Shares pursuant to
Section 7.01 hereof.
(e) Regulatory Exceptions. No Plan Shares shall be
distributed unless and until all of the requirements of all
applicable law and regulation shall have been fully complied
with, including the receipt of approval of the Plan by the
stockholders of the Company by such vote, if any, as may be
required by applicable law and regulation.
7.04 VOTING OF PLAN SHARES. All shares of Common Stock
held by the Trust (whether or not subject to a Plan Share Award)
shall be voted by the Trustee in the same proportion as the
trustee of the Company's Employee Stock Ownership Plan votes
Common Stock held in the trust associated therewith, and in the
absence of any such voting, shall be voted in the manner
directed by the Board.
7.05 CASH BONUS FOR TAX LIABILITY. On the vesting date for
a Plan Share Award (or such other data as a Participant
recognizes income for federal tax purposes with respect to a
Plan Share Award), the Company shall pay to the Participant who
receives the Plan Share Award an amount in cash (the "Cash
Bonus") equal to 40% of the fair market value of the Plan Shares
vesting (or recognized as income for federal tax purposes) on
such date exclusive of the cash bonus payable pursuant to this
Section 7.05. The Cash Bonus shall become earned and
nonforfeitable in accordance with Section 7.01, and shall be
payable to the Participant within 30 days following the date on
which the Participant recognizes ordinary income from a Plan
Share Award (or July 23, 1996 in the case of Plan Share Awards
that had previously resulted in the Participant's recognition of
ordinary income). In no event, however, may a cash bonus be
paid before the Participant's satisfaction of the withholding
obligation with respect to such compensation income. The Cash
Bonus, or a portion thereof, may, at the election of the
Participant, be withheld in complete or partial satisfaction of
any withholding tax payable by the Participant with respect to
his Plan Share Award.
ARTICLE VIII
MISCELLANEOUS
8.01 ADJUSTMENTS FOR CAPITAL CHANGES.
(a) Recapitalizations; Stock Splits, Etc. The number and
kind of shares which may be purchased under the Plan, and the
number and kind of shares subject to outstanding Plan Share
Awards, shall be proportionately adjusted for any increase,
decrease, change or exchange of shares of Common Stock for a
different number or kind of shares or other securities of the
Company which results from a merger, consolidation,
recapitalization, reorganization, reclassification, stock
dividend, split-up, combination of shares, or similar event in
which the number or kind of shares is changed without the
receipt or payment of consideration by the Company.
(b) Transactions in which the Company is Not the Surviving
Entity. In the event of (i) the liquidation or dissolution of
the Company, (ii) a merger or consolidation in which the Company
is not the surviving entity, or (iii) the 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"), all
outstanding Plan Share Awards shall be proportionately adjusted
for any increase,
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decrease, change or exchange of shares of Common Stock for a
different number or kind of shares or other securities of the
Company which results from the Transaction.
(c) Conditions and Restrictions on New, Additional, or
Different Shares or Securities. If, by reason of any adjustment
made pursuant to this Section, a Participant becomes entitled to
new, additional, or different shares of stock or securities,
such new, additional, or different shares of stock or securities
shall thereupon be subject to all of the conditions and
restrictions which were applicable to the shares pursuant to the
Plan Share Award before the adjustment was made. In addition,
the Committee shall have the discretionary authority to impose
on the Shares subject to Plan Share Awards such restrictions as
the Committee may deem appropriate or desirable, including but
not limited to a right of first refusal, or repurchase option,
or both of these restrictions.
(d) Other Issuances. Except as expressly provided in this
Section, the issuance by the Company or an Affiliate of shares
of stock of any class, or of securities convertible into shares
of Common Stock or stock of another class, for cash or property
or for labor or services either upon direct sale or upon the
exercise of rights or warrants to subscribe therefor, shall not
affect, and no adjustment shall be made with respect to, the
number or class of shares of Common Stock then subject to Plan
Share Awards or reserved for issuance under the Plan.
8.02 AMENDMENT AND TERMINATION OF PLAN. The Board may, by
resolution, at any time amend or terminate the Plan; provided
that no amendment or termination of the Plan shall, without the
written consent of a Participant, impair any rights or
obligations under a Plan Share Award theretofore granted to the
Participant.
The power to amend or terminate the Plan in accordance with
this Section 8.02 shall include the power to direct the Trustee
to return to the Company all or any part of the assets of the
Trust, including shares of Common Stock held in the Plan Share
Reserve. However, the termination of the Trust shall not affect
a Participant's right to earn Plan Share Awards and to receive a
distribution of Common Stock relating thereto, including
earnings thereon, in accordance with the terms of this Plan and
the grant by the Committee or the Board.
8.03 NONTRANSFERABILITY. Awards may not be sold, pledged,
assigned, hypothecated, transferred or disposed of in any manner
other than by will or by the laws of descent and distribution.
Notwithstanding the foregoing, or any other provision of this
Plan, a Participant who holds Awards may transfer such Awards
(but not Incentive Stock Options) 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. Awards so
transferred may thereafter be transferred only to the
Participant who originally received the grant or to an
individual or trust to whom the Participant could have initially
transferred the Awards pursuant to this Paragraph. Awards which
are transferred pursuant to this Paragraph shall be exercisable
by the transferee according to the same terms and conditions as
applied to the Participant.
8.04 NO EMPLOYMENT OR OTHER RIGHTS. Neither the Plan nor
any grant of a Plan Share Award or Plan Shares hereunder nor any
action taken by the Trustee, the Committee or the Board in
connection with the Plan shall create any right, either express
or implied, on the part of any Employee or Director to continue
in the service of the Bank, or an Affiliate thereof.
8.05 VOTING AND DIVIDEND RIGHTS. No Participant shall
have any voting or dividend rights or other rights of a
stockholder in respect of any Plan Shares covered by a Plan
Share Award, except as expressly provided in Section 7.02 above,
prior to the time said Plan Shares are actually distributed to
him.
8.06 GOVERNING LAW. The Plan and Trust shall be governed
and construed under the laws of the State of Illinois to the
extent not preempted by Federal law.
8.07 EFFECTIVE DATE. The Plan shall become effective
immediately upon its approval by a favorable vote of
stockholders of the Company who hold at least a majority of the
total votes eligible to be cast at a duly called meeting of the
Company's stockholders held in accordance with applicable laws,
provided that the Plan
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shall not be submitted for such approval within the six-month
period after the Date of Conversion. In no event shall Plan
Share Awards be made prior to the Effective Date.
8.08 TERM OF PLAN. This Plan shall remain in effect until
the earlier of (i) termination by the Board, or (ii) the
distribution of all assets of the Trust. Termination of the
Plan shall not affect any Plan Share Awards previously granted,
and such Awards shall remain valid and in effect until they have
been earned and paid, or by their terms expire or are forfeited.
8.09 TAX STATUS OF TRUST. It is intended that (i) the
Trust associated with the Plan be treated as a grantor trust of
the Company under the provisions of Section 671 et seq. of the
Internal Revenue Code, as the same may be amended from time to
time, and (ii) that in accordance with Revenue Procedure 92-65,
Participants have the status of general unsecured creditors of
the Company, the Plan constitutes a mere unfunded promise to
make benefit payments in the future, the Plan is unfunded for
tax purposes and for purposes of Title I of the Employee
Retirement Income Security Act of 1974, as amended, and the
Trust has been and will continue to be maintained in conformity
with Revenue Procedure 92-64.
9
