APPENDIX B
AMENDED AND RESTATED
PULASKI SAVINGS BANK
1997 STOCK-BASED INCENTIVE PLAN
1. DEFINITIONS.
(a) "Affiliate" means any "subsidiary corporation" of the Bank, as such
term is defined in Section 424(f) of the Code.
(b) "Award" means, individually or collectively, a grant under the Plan
of Non-statutory Stock Options, Incentive Stock Options, Limited Rights, and
Stock Awards.
(c) "Award Agreement" means an agreement evidencing and setting forth
the terms of an Award granted under the Plan, in such form as the Committee may,
from time to time, approve.
(d) "Bank" means Pulaski Savings Bank, Springfield, New Jersey.
(e) "Board of Directors" means the board of directors of the Holding
Company or any successor or parent corporation thereto.
(f) "Change in Control" means a change in control of the Bank or
Holding Company of a nature that (i) would be required to be reported in
response to Item 1 of the current report on Form 8-K, as in effect on the date
hereof, pursuant to Sections 13 or 15(d) of the Exchange Act; (ii) results in a
"change of control" or "acquisition of control" within the meaning of the
Regulations promulgated by the Office of Thrift Supervision ("OTS") (or its
predecessor agency) found at 12 C.F.R. Part 574, as in effect on the date
hereof; provided, however, that in applying the definition of change in control
as set forth under such regulations the Board of Directors shall substitute its
judgment for that of the OTS; or (iii) without limitation Change in Control
shall be deemed to have occurred at such time as (A) any "person" (as the term
is used in Sections 13(d) and 14(d) of the Exchange Act), other than Pulaski
Bancorp, M.H.C., is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Bank or
the Holding Company representing 20% or more of the Bank's or the Holding
Company's outstanding securities except for any securities of the Bank purchased
by the Holding Company and any securities purchased by any tax-qualified
employee benefit plan of the Bank; or (B) individuals who constitute the Board
of Directors on the date hereof (the "Incumbent Board") cease for any reason to
constitute at least a majority thereof, provided that any person becoming a
director subsequent to the date hereof whose election was approved by a vote of
at least three-quarters of the directors comprising the Incumbent Board, or
whose nomination for election by the Holding Company's stockholders was approved
by a nominating committee serving under the Incumbent Board, shall be, for
purposes of this clause (B), considered as though he were a member of the
Incumbent Board; or (C) a plan of reorganization, merger, consolidation, sale of
all or substantially all the assets of the Bank or the Holding
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Company or similar transaction occurs in which the Bank or Holding Company is
not the resulting entity; or (D) a solicitation of shareholders of the Holding
Company, by someone other than the current management of the Holding Company,
seeking stockholder approval of a plan of reorganization, merger or
consolidation of the Holding Company or Bank or similar transaction with one or
more corporations, as a result of which the outstanding shares of the class of
securities then subject to the plan are exchanged for or converted into cash or
property or securities not issued by the Bank or the Holding Company; or (E) a
tender offer is made for 20% or more of the voting securities of the Bank or the
Holding Company. Notwithstanding the foregoing, a "Change in Control" of the
Bank or the Holding Company shall not be deemed to have occurred if Pulaski
Bancorp, M.H.C. ceases to own at least 51% of all outstanding shares of stock of
the Bank in connection with a conversion of Pulaski Bancorp, M.H.C. from mutual
to stock form.
(g) "Code" means the Internal Revenue Code of 1986, as amended.
(h) "Committee" means the committee designated by the Board of
Directors to administer the Plan pursuant to Section 2 of the Plan.
(i) "Common Stock" means the Common Stock of the Bank, par value, $.01
per share.
(j) "Date of Grant" means the effective date of an Award.
(k) "Disability" means any mental or physical condition with respect to
which the Participant qualifies for and receives benefits for under a long-term
disability plan of the Holding Company or an Affiliate, or in the absence of
such a long-term disability plan or coverage under such a plan, "disability"
shall mean a physical or mental condition which, in the sole discretion of the
Committee, is reasonably expected to be of indefinite duration and to
substantially prevent the Participant from fulfilling his duties or
responsibilities to the Bank or Affiliate.
(l) "Effective Date" means October 23, 1997, the effective date of the
Plan.
(m) "Employee" means any person employed by the Bank or an Affiliate.
Directors who are employed by the Bank or an Affiliate shall be considered
Employees under the Plan.
(n) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(o) "Exercise Price" means the price at which a share of Common Stock
may be purchased by a Participant pursuant to an Option.
(p) "Fair Market Value" means the market price of Common Stock,
determined by the Committee as follows:
(i) If the Common Stock was traded on the date in
question on The Nasdaq Stock Market then the Fair
Market Value shall be equal to the closing price
reported for such date;
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(ii) If the Common Stock was traded on any other stock
exchange on the date in question, then the Fair
Market Value shall be equal to the closing price
reported by the applicable composite transactions
report for such date; and
(iii) If neither of the foregoing provisions is applicable,
then the Fair Market Value shall be determined by the
Committee in good faith on such basis as it deems
appropriate.
Whenever possible, the determination of Fair Market Value by the
Committee shall be based on the prices reported in The Wall Street Journal. Such
determination shall be conclusive and binding on all persons.
(q) "Holding Company" means Pulaski Bancorp, Inc.
(r) "Incentive Stock Option" means an Option granted to a Participant
pursuant to Section 7 of the Plan that is intended to meet the requirements of
Section 422 of the Code.
(s) "Limited Right" means an Award granted to a Participant
pursuant to Section 8 of the Plan.
(t) "Non-statutory Stock Option" means a stock option granted to a
Participant pursuant to the terms of the Plan but which is not intended to be
and is not identified as an Incentive Stock Option or a stock option granted
under the Plan which is intended to be and is identified as an Incentive Stock
Option but which does not meet the requirements of Section 422 of the Code.
(u) "Option" means an Incentive Stock Option or Non-statutory Stock
Option.
(v) "Outside Director" means a member of the Board of Directors of the
Bank or an Affiliate, who is not also an Employee of the Bank or an Affiliate.
(w) "Participant" means any person who holds an outstanding Award
pursuant to the Plan.
(x) "Plan" means the Amended and Restated Pulaski Savings Bank 1997
Stock-Based Incentive Plan and upon the effective date of the Reorganization
will be referred to as the Amended and Restated Pulaski Bancorp, Inc. 1997
Stock-Based Incentive Plan.
(y) "Reorganization" means the reorganization of the Bank into a
two-tier mutual holding company structure by establishing Pulaski Bancorp, Inc.,
a federally-chartered stock holding company, which will own 100% of the Common
Stock of the Bank which will be a majority owned subsidiary of Pulaski Bancorp,
MHC, the Bank's mutual holding company parent.
(z) "Retirement" with respect to an Employee means termination of
employment which constitutes retirement under any tax qualified plan maintained
by the Bank. However,
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"Retirement" will not be deemed to have occurred for purposes of this Plan if a
Participant continues to serve as a consultant to or on the Board of Directors
of the Holding Company or its Affiliates even if such Participant is receiving
retirement benefits under any retirement plan of the Holding Company or its
Affiliates. With respect to an Outside Director, "Retirement" means the
termination of service from the Board of Directors of the Holding Company or its
Affiliates following written notice to the Board as a whole of such Outside
Director's intention to retire, except that an Outside Director shall not be
deemed to have "retired" for purposes of the Plan in the event he continues to
serve as a consultant to the Board or as an advisory director or director
emeritus, including pursuant to any retirement plan of the Holding Company or
the Bank.
(aa) "Stock Award" means an Award granted to a Participant pursuant to
Section 9 of the Plan.
(bb) "Termination for Cause" shall mean, in the case of an Outside
Director, removal from the Board of Directors or, in the case of an Employee,
termination of employment, because of a material loss to the Bank or one of its
Affiliates caused by the Participant's intentional failure to perform stated
duties, personal dishonesty, willful violation of any law, rule, regulation
(other than traffic violations or similar offenses) or final cease and desist
order, as determined by the Board of Directors. No act, or failure to act, on a
Participant's part shall be "willful" unless done, or omitted to be done, not in
good faith and without reasonable belief that the action or omission was in the
best interest of the Bank or an Affiliate.
(cc) "Trust" means a trust established by the Board of Directors in
connection with this Plan to hold Plan assets for the purposes set forth herein.
(dd) "Trustee" means any person or entity approved by the Board of
Directors to hold legal title to any of the Trust assets for the purposes set
forth under the Plan.
2. ADMINISTRATION.
(a) The Plan shall be administered by the Committee. The Committee
shall consist of the entire Board of Directors.
(b) The Committee shall (i) select the Employees and Outside Directors
who are to receive Awards under the Plan, (ii) determine the type, number,
vesting requirements and other features and conditions of such Awards, (iii)
interpret the Plan and (iv) make all other decisions relating to the operation
of the Plan. The Committee may adopt such rules or guidelines as it deems
appropriate to implement the Plan. The Committee's determinations under the Plan
shall be final and binding on all persons.
(c) Each Award shall be evidenced by a written agreement ("Award
Agreement") containing such provisions as may be approved by the Committee. Each
Award Agreement shall constitute a binding contract between the Bank or its
Affiliates and the Participant, and every Participant, upon acceptance of the
Award Agreement, shall be bound by the terms and restrictions of the Plan and of
the Award Agreement. The terms of each Award Agreement shall
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be in accordance with the Plan, but each Award Agreement may include such
additional provisions and restrictions determined by the Committee, in its
discretion, provided that such additional provisions and restrictions are not
inconsistent with the terms of the Plan. In particular, the Committee shall set
forth in each Award Agreement (i) the type of Award granted (ii) the Exercise
Price of an Option, (iii) the number of shares subject to the Award; (iv) the
expiration date of the Award, (v) the manner, time, and rate (cumulative or
otherwise) of exercise or vesting of such Award, and (vi) the restrictions, if
any, placed upon such Award, or upon shares which may be issued upon exercise of
such Award. The Chairman of the Committee and such other directors and officers
as shall be designated by the Committee are hereby authorized to execute Award
Agreements on behalf of the Bank or an Affiliate and to cause them to be
delivered to the recipients of Awards.
(d) The Committee may delegate all authority for: (i) the determination
of forms of payment to be made by or received by the Plan and (ii) the execution
of any Award Agreement. The Committee may rely on the descriptions,
representations, reports and estimate provided to it by the management of the
Bank or an Affiliate for determinations to be made pursuant to the Plan.
3. TYPES OF AWARDS AND RELATED RIGHTS.
The following Awards may be granted under the Plan:
(a) Non-statutory Stock Options
(b) Incentive Stock Options
(c) Limited Rights
(d) Stock Awards
4. STOCK SUBJECT TO THE PLAN.
Subject to adjustment as provided in Section 15 hereof, the maximum
number of shares reserved for Awards under the Plan is 133,308, which number
shall not exceed 14% of the outstanding shares of the Common Stock determined
immediately as of the Effective Date. Subject to adjustment as provided in
Section 15 hereof, the maximum number of shares reserved hereby for purchase
pursuant to the exercise of Options and Option-related Awards granted under the
Plan is 95,220, which number shall not exceed 10% of the outstanding shares of
Common Stock as of the Effective Date. The maximum number of the shares reserved
for Stock Awards is 38,088, which number shall not exceed 4% of the outstanding
shares of Common Stock as of the Effective Date. The shares of Common Stock
issued under the Plan may be either authorized but unissued shares or authorized
shares previously issued and acquired or reacquired by the Trust or the Bank,
respectively. To the extent that Options and Stock Awards are granted under the
Plan, the shares underlying such Awards will be unavailable for any other use
including future grants under the Plan except that, to the extent that Stock
Awards or Options terminate, expire, or are forfeited without having vested or
without having been exercised (in the case of Limited Rights, exercised for
cash), new Awards may be made with respect to these shares.
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5. ELIGIBILITY.
Subject to the terms of the Plan, all Employees and Outside Directors
shall be eligible to receive Awards under the Plan.
6. NON-STATUTORY STOCK OPTIONS.
The Committee may, subject to the limitations of this Plan and the
availability of shares of Common Stock reserved but unawarded under this Plan,
grant Non-statutory Stock Options upon such terms and conditions as it may
determine. Non-statutory Stock Options granted under this Plan are subject to
the following terms and conditions:
(a) Exercise Price. The Exercise Price of each Non-statutory Stock
Option shall be determined by the Committee on the Date of Grant. Such Exercise
Price shall not be less than 100% of the Fair Market Value of the Common Stock
on the Date of Grant. Shares of Common Stock underlying a Non-statutory Stock
Option may be purchased only upon full payment of the Exercise Price in a manner
provided for in Section 12 of the Plan.
(b) Terms of Non-statutory Stock Options. The term during which each
Non-statutory Stock Option may be exercised shall be determined by the
Committee, but in no event shall a Non-statutory Stock Option be exercisable in
whole or in part more than ten (10) years from the Date of Grant. Subject to
Section 21 of the Plan, the Committee shall determine the date on which each
Non-statutory Stock Option shall become exercisable and any terms or conditions
which must be satisfied prior to each Non-statutory Stock Option becoming
exercisable. The shares of Common Stock underlying each Non-statutory Stock
Option installment may be purchased in whole or in part by the Participant at
any time during the term of such Non-statutory Stock Option after such
installment becomes exercisable.
(c) Transferability. Unless otherwise determined by the Committee in
accordance with this Section 6(c), Non-statutory Stock Options shall not be
transferred, assigned, hypothecated, or disposed of in any manner by a
Participant other than by will or the laws of intestate succession. The
Committee may, however, in its sole discretion, permit transferability or
assignment of a Non-statutory Stock Option if such transfer or assignment is, in
its sole determination, for valid estate planning purposes and such transfer or
assignment is permitted under the Code and Rule 16b-3 under the Exchange Act.
For purposes of this Section 6(c), a transfer for valid estate planning purposes
includes, but is not limited to: (a) a transfer to revocable intervivos trust as
to which the Participant is both the settlor and trustee or (b) a transfer for
no consideration to: (i) any member of the Participant's Immediate Family, (ii)
any trust solely for the benefit of members of the Participant's Immediate
Family, (iii) any partnership whose only partners are members of the
Participant's Immediate Family, and (iv) any limited liability corporation or
corporate entity whose only members or equity owners are members of the
Participant's Immediate Family. For purposes of this Section 6(c), "Immediate
Family" includes, but is not necessarily limited to, a Participant's parents,
spouse, children, grandchildren and great-grandchildren. Nothing contained in
this Section 6(c) shall be construed to require the Committee to give its
approval to any transfer or assignment of any Non-statutory
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Stock Option or portion thereof, and approval to transfer or assign any
Non-statutory Stock Option or portion thereof does not mean that such approval
will be given with respect to any other Non-statutory Stock Option or portion
thereof. The transferee or assignee of any Non- statutory Stock Option shall be
subject to all of the terms and conditions applicable to such Non- statutory
Stock Option immediately prior to the transfer or assignment and shall be
subject to any conditions proscribed by the Committee with respect to such
Non-statutory Stock Option.
(d) Termination of Employment or Service (General). Unless otherwise
determined by the Committee, upon the termination of a Participant's employment
or service for any reason other than Disability, death, Retirement or
Termination for Cause, the Participant's Non-statutory Stock Options shall be
exercisable only as to those shares that were immediately exercisable by the
Participant at the date of termination and only for a period of three (3) months
following termination.
(e) Termination of Employment or Service (Retirement). Unless otherwise
determined by the Committee, in the event of a Participant's Retirement, the
Participant's Non-statutory Stock Options shall be exercisable only as to those
shares that were immediately exercisable by the Participant at the date of
Retirement and remain exercisable for a period of one (1) year; provided
however, that if the Participant is engaged by the Bank or an Affiliate as a
consultant or advisor or continues to serve the Bank or an Affiliate as a
director or advisory director all unexercisable Non-statutory Stock Options
shall become exercisable in accordance with the Award Agreement for as long as
the Participant is engaged by the Bank or an Affiliate as a consultant or
advisor or continues to serve the Bank or an Affiliate as a director or advisory
director.
(f) Termination of Employment or Service (Death or Disability). Unless
otherwise determined by the Committee, in the event of the termination of a
Participant's employment or service due to Disability or death, all
Non-statutory Stock Options held by such Participant shall immediately become
exercisable and remain exercisable for a period of one (1) year.
(g) Termination of Employment of Service (Termination for Cause).
Unless otherwise determined by the Committee, in the event of a Participant's
Termination for Cause, all rights under the Participant's Non-statutory Stock
Options shall expire immediately upon the effective date of such Termination for
Cause.
(h) Acceleration Upon a Change in Control. In the event of a Change in
Control, all Non-Statutory Stock Options held by a Participant as of the date of
the Change in Control shall immediately become exercisable and shall remain
exercisable until the expiration of the term of the Non-Statutory Stock Options.
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7. INCENTIVE STOCK OPTIONS.
The Committee may, subject to the limitations of the Plan and the
availability of shares of Common Stock reserved but unawarded under this Plan,
grant Incentive Stock Options to an Employee. Incentive Stock Options granted
pursuant to the Plan shall be subject to the following terms and conditions:
(a) Exercise Price. The Exercise Price of each Incentive Stock Option
shall be not less than 100% of the Fair Market Value of the Common Stock on the
Date of Grant. However, if at the time an Incentive Stock Option is granted, the
Employee owns or is treated as owning, for purposes of Section 422 of the Code,
Common Stock representing more than 10% of the total combined voting securities
of the Bank ("10% owner"), the Exercise Price shall not be less than 110% of the
Fair Market Value of the Common Stock on the Date of Grant. Shares of Common
Stock may be purchased only upon payment of the full Exercise Price in a manner
provided for in Section 12 of the Plan.
(b) Amounts of Incentive Stock Options. To the extent the aggregate
Fair Market Value of shares of Common Stock with respect to which Incentive
Stock Options that are exercisable for the first time by a Participant during
any calendar year under the Plan and any other stock option plan of the Bank or
an Affiliate exceeds $100,000, or such higher value as may be permitted under
Section 422 of the Code, such Options in excess of such limit shall be treated
as Non-statutory Stock Options. Fair Market Value shall be determined as of the
Date of Grant with respect to each such Incentive Stock Option.
(c) Terms of Incentive Stock Options. The term during which each
Incentive Stock Option may be exercised shall be determined by the Committee,
but in no event shall an Incentive Stock Option be exercisable in whole or in
part more than ten (10) years from the Date of Grant. If at the time an
Incentive Stock Option is granted to an Employee who is a 10% Owner, the
Incentive Stock Option granted to such Employee shall not be exercisable after
the expiration of five (5) years from the Date of Grant. Subject to Section 19
of the Plan, the Committee shall determine the date on which each Incentive
Stock Option shall become exercisable and any terms or conditions which must be
satisfied prior to the Incentive Stock Option becoming exercisable. The shares
of Common Stock underlying each Incentive Stock Option installment may be
purchased in whole or in part at any time during the term of such Incentive
Stock Option after such installment becomes exercisable.
(d) Non-Transferability. No Incentive Stock Option shall be
transferable except by will or the laws of descent and distribution and is
exercisable, during his lifetime, only by the Employee to whom it is granted.
The designation of a beneficiary does not constitute a transfer.
(e) Termination of Employment (General). Unless otherwise determined by
the Committee, upon the termination of a Participant's employment for any reason
other than Disability, death, Retirement or Termination for Cause, the
Participant's Incentive Stock Options shall be exercisable only as to those
Incentive Stock Options that were immediately exercisable
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by the Participant at the date of termination and only for a period of three (3)
months following such termination.
(f) Termination of Employment (Retirement) Unless otherwise determined
by the Committee, in the event of a Participant's Retirement, the Participant's
Incentive Stock Options shall be exercisable only as to those shares that were
immediately exercisable by the Participant at the date of Retirement and remain
exercisable for a period of one (1) year; provided however, that if the
Participant is engaged by the Bank or an Affiliate as a consultant or advisor or
continues to serve the Bank or an Affiliate as an advisory director or director
all unexercisable Incentive Stock Options shall continue to become exercisable
in accordance with the Award Agreement, for as long as the Participant is
engaged by the Bank or an Affiliate as a consultant or advisor or continues to
serve the Bank or an Affiliate as a director or advisory director.
Notwithstanding the foregoing, Incentive Stock Options exercised after three (3)
months from the Participant's Retirement Date will be treated as Non-Statutory
Stock Options under the Code.
(g) Termination of Employment (Disability or Death). Unless otherwise
determined by the Committee, in the event of the termination of a Participant's
employment for Disability or death, all unvested Incentive Stock Options held by
such shall immediately become exercisable and shall remain exercisable for one
(1) year after such termination.
(h) Termination of Employment (Cause). Unless otherwise determined by
the Committee, in the event of a Participant's Termination for Cause, all rights
under such Participant's Incentive Stock Options shall expire immediately upon
the effective date of such Termination for Cause.
(i) Acceleration Upon a Change in Control. In the event of a Change in
Control all Incentive Stock Options held by a Participant as of the date of a
Change in Control shall immediately become exercisable and shall remain
exercisable until the expiration of the term of the Incentive Stock Option. Any
Option which, by operation of this provision, does not meet the requirements of
Section 422 of the Code, shall be considered a Non-statutory Stock Option.
(j) Disqualifying Dispositions. Each Award Agreement with respect to an
Incentive Stock Option shall require the Participant to notify the Committee of
any disposition of shares of Common Stock issued pursuant to the exercise of
such Option under the circumstances described in Section 421(b) of the Code
(relating to certain disqualifying disposition) within 10 days of such
disposition.
8. LIMITED RIGHTS.
Simultaneously with the grant of any Option, the Committee may grant a
Limited Right with respect to all or some of the shares of Common Stock covered
by such Option. Limited Rights granted under this Plan are subject to the
following terms and conditions:
(a) Terms of Rights. In no event shall a Limited Right be exercisable
in whole or in part before the expiration of six (6) months from the Date of
Grant of the Limited Right. A
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Limited Right may be exercised only in the event of a Change in Control. The
Limited Right may be exercised only when the underlying Option is eligible to be
exercised, and only when the Fair Market Value of the underlying shares on the
day of exercise is greater than the Exercise Price of the underlying Option.
Upon exercise of a Limited Right, the underlying Option shall cease to be
exercisable and shall be terminated. Upon exercise or termination of an Option,
any related Limited Rights shall terminate. The Limited Right is transferable
only when the underlying Option is transferable and under the same conditions.
(b) Payment. Upon exercise of a Limited Right, the holder shall
promptly receive from the Holding Company or an Affiliate an amount of cash
equal to the difference between the Exercise Price of the underlying Option and
the Fair Market Value of the Common Stock subject such Option on the date the
Limited Right is exercised, multiplied by the number of shares with respect to
which such Limited Right is being exercised.
9. STOCK AWARDS.
The Committee may, subject to the limitations of the Plan, make Stock
Awards which shall consist of the grant of some number of shares of Common Stock
to a Participant. Stock Awards shall be made subject to the following terms and
conditions:
(a) Payment of the Stock Award. Stock Awards may only be made in whole
shares of Common Stock. Stock Awards may only be granted from shares reserved
under the Plan and available for award at the time the Stock Award is made to
the Participant.
(b) Terms of the Stock Awards. Subject to Section 19 of the Plan, the
Committee shall determine the dates on which Stock Awards granted to a
Participant shall vest and any terms or conditions which must be satisfied prior
to the vesting of any installment or portion of the Stock Award.
(c) Termination of Employment or Service (General). Unless otherwise
determined by the Committee, upon the termination of a Participant's employment
or service for any reason other than Disability, death, Retirement or
Termination for Cause, the Participant's unvested Stock Awards as of the date of
termination shall be forfeited and any rights the Participant had to such
unvested Stock Awards shall become null and void.
(d) Termination of Employment or Service (Retirement). Unless otherwise
determined by the Committee, in the event of a Participant's Retirement, the
Participant's unvested Stock Awards as of the date of Retirement shall be
forfeited and any rights the Participant had to such unvested Stock Awards shall
become null and void; provided however, that if the Participant is engaged by
the Bank or an Affiliate as a consultant or an advisor or continues to serve the
Bank or an affiliate as a director or advisory director, unvested Stock Awards
shall continue to vest in accordance with the Award Agreement for as long as the
Participant is engaged by the Bank or an Affiliate as a consultant or advisor or
continues to serve the Bank or an Affiliate as a director or advisory director.
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(e) Termination of Employment or Service (Death or Disability). Unless
otherwise determined by the Committee, in the event of a termination of the
Participant's service due to Disability or death all unvested Stock Awards held
by such Participant shall immediately vest.
(f) Termination of Employment or Service (Termination for Cause).
Unless otherwise determined by the Committee, or in the event of the
Participant's Termination for Cause, all unvested Stock Awards held by such
Participant as of the effective date of such Termination for Cause shall be
forfeited and any rights such Participant had to such unvested Stock Awards
shall become null and void.
(g) Acceleration Upon a Change in Control. In the event of a Change in
Control all unvested Stock Awards held by a Participant shall immediately vest.
(h) Non-Transferability. Except to the extent permitted by the Code,
the rules promulgated under Section 16(b) of the Exchange Act or any successor
statutes or rules:
(i) The recipient of a Stock Award shall not sell,
transfer, assign, pledge, or otherwise encumber
shares subject to the Stock Award until full vesting
of such shares has occurred. For purposes of this
section, the separation of beneficial ownership and
legal title through the use of any "swap" transaction
is deemed to be a prohibited encumbrance.
(ii) Unless determined otherwise by the Committee and
except in the event of the Participant's death or
pursuant to a domestic relations order, a Stock Award
is not transferable and may be earned in his lifetime
only by the Participant to whom it is granted. Upon
the death of a Participant, a Stock Award is
transferable by will or the laws of descent and
distribution. The designation of a beneficiary shall
not constitute a transfer.
(iii) If a recipient of a Stock Award is subject to the
provisions of Section 16 of the Exchange Act, shares
of Common Stock subject to such Stock Award may not,
without the written consent of the Committee (which
consent may be given in the Award Agreement), be sold
or otherwise disposed of within six months following
the date of grant of the Stock Award.
(i) Accrual of Dividends. Whenever shares of Common Stock underlying a
Stock Award are distributed to a Participant or beneficiary thereof under the
Plan, such Participant or beneficiary shall also be entitled to receive, with
respect to each such share distributed, a payment equal to any cash dividends
and the number of shares of Common Stock equal to any stock dividends, declared
and paid with respect to a share of the Common Stock if the record date for
determining shareholders entitled to receive such dividends falls between the
date the relevant Stock Award was granted and the date the relevant Stock Award
or installment thereof is issued. There shall also be distributed an appropriate
amount of net earnings, if any, of the Trust with respect to any dividends paid
out on the shares related to the Stock Award.
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(j) Voting of Stock Awards. After a Stock Award has been granted but
for which the shares covered by such Stock Award have not yet been vested,
earned and distributed to the Participant pursuant to the Plan, the Participant
shall be entitled to vote or to direct the Trustee to vote, as the case may be,
such shares of Common Stock which the Stock Award covers subject to the rules
and procedures adopted by the Committee for this purpose and in a manner
consistent with the Trust agreement.
10. DEFERRED PAYMENTS
Notwithstanding any other provision of this Plan, any Participant may
elect, with the concurrence of the Committee and consistent with any rules and
regulations established by the Committee, to defer the delivery of the proceeds
of the exercise of any Non-statutory Stock Option not transferred under the
provisions of Section 6(c) and Stock Awards.
11. PAYOUT ALTERNATIVES.
(a) Payments due to a Participant upon the exercise or redemption of an
Option or Stock Award shall be made in the form of shares of Common Stock.
Payments due to a Participant upon the exercise or redemption of a Limited Right
shall be made in the form of cash.
(b) Any shares of Common Stock tendered in satisfaction of an
obligation arising under this Plan shall be valued at the Fair Market Value of
the Common Stock on the day preceding the date of the issuance of such stock to
the Participant.
12. METHOD OF EXERCISE.
Subject to any applicable Award Agreement, any Option may be exercised
by the Participant in whole or in part at such time or times, and the
Participant may make payment of the Exercise Price in such form or forms,
including, without limitation, payment by delivery of cash, Common Stock or
other consideration (including, where permitted by law and the Committee,
Awards) having a Fair Market Value on the exercise date equal to the total
Exercise Price, or by any combination of cash, shares of Common Stock and other
consideration, including exercise by means of a cashless exercise arrangement
with a qualifying broker-dealer, as the Committee may specify in the applicable
Award Agreement.
13. RIGHTS OF PARTICIPANTS.
No Participant shall have any rights as a shareholder with respect to
any shares of Common Stock covered by an Option until the date of issuance of a
stock certificate for such Common Stock. Nothing contained herein or in any
Award Agreement confers on any person any right to continue in the employ or
service of the Bank or an Affiliate or interferes in any way with the right of
the Bank or an Affiliate to terminate a Participant's services.
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14. DESIGNATION OF BENEFICIARY.
A Participant may, with the consent of the Committee, designate a
person or persons to receive, in the event of death, any Award to which the
Participant would then be entitled. Such designation will be made upon forms
supplied by and delivered to the Bank and may be revoked in writing. If a
Participant fails effectively to designate a beneficiary, then the Participant's
estate will be deemed to be the beneficiary.
15. DILUTION AND OTHER ADJUSTMENTS.
In the event of any change in the outstanding shares of Common Stock by
reason of any stock dividend or split, recapitalization, merger, consolidation,
spin-off, reorganization, combination or exchange of shares, or other similar
corporate change, or other increase or decrease in such shares without receipt
or payment of consideration by the Bank, or in the event an extraordinary
capital distribution, is made, the Committee may make such adjustments to
previously granted Awards, to prevent dilution, diminution, or enlargement of
the rights of the Participant, including any or all of the following:
(a) adjustments in the aggregate number or kind of shares of Common
Stock or other securities that may underlie future Awards under
the Plan;
(b) adjustments in the aggregate number or kind of shares of Common
Stock or other securities underlying Awards already made under
the Plan;
(c) adjustments in the Exercise Price of outstanding Incentive
and/or Non-statutory Stock Options, or any Limited Rights
attached to such Options.
No such adjustments may, however, materially change the value of
benefits available to a Participant under a previously granted Award. All Awards
under this Plan shall be binding upon any successors or assigns of the Bank.
Notwithstanding the above, in the event of an extraordinary capital
distribution, any adjustment under this Section 15 shall be subject to required
OTS approval.
16. TAX WITHHOLDING.
(a) Whenever under this Plan, cash or shares of Common Stock are to be
delivered upon exercise or payment of an Award or any other event with respect
to rights and benefits hereunder, the Committee shall be entitled to require as
a condition of delivery (i) that the Participant remit an amount sufficient to
satisfy all federal, state, and local withholding tax requirements related
thereto, (ii) that the withholding of such sums come from compensation otherwise
due to the Participant or from any shares of Common Stock due to the Participant
under this Plan or (iii) any combination of the foregoing provided, however,
that no amount shall be withheld from any cash payment or shares of Common Stock
relating to an Award which was transferred by the Participant in accordance with
this Plan.
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(b) If any disqualifying disposition is made with respect to shares of
Common Stock acquired under an Incentive Stock Option granted pursuant to this
Plan, or any transfer described in Section 6(c) is made, then the person making
such disqualifying disposition, transfer, or election shall remit to the Bank or
its Affiliates an amount sufficient to satisfy all federal, state, and local
withholding taxes thereby incurred; provided that, in lieu of or in addition to
the foregoing, the Bank or its Affiliates shall have the right to withhold such
sums from compensation otherwise due to the Participant, or, except in the case
of any transfer pursuant to Section 6(c), from any shares of Common Stock due to
the Participant under this Plan.
17. AMENDMENT OF THE PLAN AND AWARDS.
(a) The Board of Directors may at any time, and from time to time,
modify or amend the Plan in any respect, prospectively or retroactively;
provided however, that provisions governing grants of Incentive Stock Options,
unless permitted by the rules and regulations or staff pronouncements
promulgated under the Code shall be submitted for shareholder approval to the
extent required by such law, regulation or interpretation.
Failure to ratify or approve amendments or modifications by
shareholders shall be effective only as to the specific amendment or
modification requiring such ratification. Other provisions of this Plan will
remain in full force and effect.
No such termination, modification or amendment may adversely affect the
rights of a Participant under an outstanding Award without the written
permission of such Participant.
(b) The Committee may amend any Award Agreement, prospectively or
retroactively; provided, however, that no such amendment shall adversely affect
the rights of any Participant under an outstanding Award without the written
consent of such Participant.
18. EFFECTIVE DATE OF PLAN.
The Plan became effective on October 23, 1997. All amendments are
effective upon approval by the Board of Directors, subject to shareholder
ratification when specifically required under the Plan or by applicable federal
or state statutes, rules or regulations. The failure to obtain shareholder
approval for such purposes will not effect the validity of other provisions of
the Plan and any Awards made under the Plan.
19. TERMINATION OF THE PLAN.
The right to grant Awards under the Plan will terminate upon the
earlier of: (i) October 23, 2007; or (ii) the issuance of a number of shares of
Common Stock pursuant to the exercise of Options or the distribution of Stock
Awards which together with the exercise of Limited Rights is equivalent to the
maximum number of shares reserved under the Plan as set forth in Section 4
hereof. The Board of Directors has the right to suspend or terminate the Plan at
any time, provided that no such action will, without the consent of a
Participant, adversely affect a Participant's vested rights under a previously
granted Award.
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20. APPLICABLE LAW.
The Plan will be administered in accordance with the laws of the State
of New Jersey and applicable federal law.
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