EXHIBIT 4.2
Form of Advisory Board Option Agreement by and between Astoria Financial
Corporation and Former Director of The Greater New York Savings Bank
dated September 30, 1997.
EXHIBIT 4.2
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ADVISORY BOARD OPTION AGREEMENT
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This OPTION AGREEMENT ("Agreement") is made and entered into
as of the ____ day of September, 1997 by and between ASTORIA FINANCIAL
CORPORATION, a corporation organized and existing under the laws of the State of
Delaware and having an office at Xxx Xxxxxxx Xxxxxxx Xxxxx, Xxxx Xxxxxxx, Xxx
Xxxx 00000-0000 ("Corporation") and _________________ residing at
____________________________________________ ("Advisory Director").
W I T N E S S E T H :
WHEREAS, pursuant to an Agreement and Plan of Merger dated as
of March 29, 1997 by and among the Corporation, Astoria Federal Savings and Loan
Association ("Association") and The Greater New York Savings Bank ("Merger
Agreement"), the Corporation will purchase all of the outstanding common stock
of The Greater New York Savings Bank ("Seller") and will cause the Seller to be
merged with and into the Association; and
WHEREAS, pursuant to the Merger Agreement, the Corporation has
agreed to cause certain members of the Seller's board of directors as of March
29, 1997 who are willing to serve to be elected or appointed as members of a
newly formed advisory board of the Corporation and to provide compensation for
such services in part through a grant of options as hereinafter provided; and
WHEREAS, the Advisory Director was a member of the Seller's
board of directors as of March 29, 1997 and is willing to serve in such
position;
NOW, THEREFORE, the Advisory Director and the Corporation
agree as follows:
SECTION 1. GRANT OF OPTION.
The Corporation hereby grants, and the Advisory Director
hereby accepts the Corporation's grant of, an Option, on the terms and
conditions hereinafter set forth, to purchase 4,000 shares of the Corporation's
common stock, par value $.01 per share (each, an "Optioned Share") at an
exercise price equal to the final sale price for a share of the Corporation's
Common Stock on the NASDAQ Stock Market System on September 30, 1997 as reported
in the New York City edition of the Wall Street Journal ("Exercise Price"). It
is not intended that any of the Options granted hereunder qualify as incentive
stock options described in section 422 of the Internal Revenue Code of 1986
("Code").
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SECTION 2. TERM AND EXERCISE OF OPTIONS.
(a) Each Option shall be exercisable as to an Optioned Share
at any time beginning on the date of this Agreement and ending on the date ten
years after the date of this Agreement ("Expiration Date").
(b) The Option shall be exercisable in whole or in part;
PROVIDED, HOWEVER, that no partial exercise of the Option shall be for an
aggregate Exercise Price of less than One Thousand Dollars ($1,000). The partial
exercise of an Option shall not cause the expiration, termination or
cancellation of the remaining portion thereof. Upon the partial exercise of the
Option, this Agreement, marked with any notations deemed appropriate by the
Corporation, shall be returned to the Advisory Director together with the
delivery of the certificates described in section 2(e) hereof.
(c) The Option shall be exercised by delivering notice to the
Corporation's principal office, to the attention of its Corporate Secretary, no
less than three (3) business days in advance of the effective date of the
proposed exercise. Such notice shall be accompanied by this Agreement, shall
specify the number of Optioned Shares with respect to which the Option is being
exercised and the effective date of the proposed exercise, and shall be signed
by the Advisory Director. The Advisory Director may withdraw such notice at any
time prior to the close of business on the business day immediately preceding
the effective date of the proposed exercise, in which case the Agreement shall
be returned to him. Payment for Optioned Shares purchased upon the exercise of
the Option shall be made on the effective date of such exercise either (i) in
cash, by certified check, bank cashier's check or wire transfer or (ii) subject
to the approval of the Corporation, in shares of common stock of the Corporation
("Common Stock") owned by the Option Holder and valued at their Fair Market
Value (as defined in section 8 hereof) on the effective date of such exercise,
or partly in shares of Common Stock with the balance in cash, by certified
check, bank cashier's check or wire transfer. Any payment in shares of Common
Stock shall be effected by the delivery of such shares to the Corporate
Secretary of the Corporation, duly endorsed in blank or accompanied by stock
powers duly executed in blank, together with any other documents and evidences
as the Corporate Secretary of the Corporation shall require from time to time.
(d) During the life of the Advisory Director, the Option shall
be exercisable only by him. The Option shall not be assignable or transferable
otherwise than by will or by the laws of descent and distribution.
(e) Certificates for shares of Common Stock purchased upon the
exercise of the Option shall be issued in the name of the Advisory Director and
delivered to the Advisory Director as soon as practicable following the
effective date on which the Option is exercised.
(f) The exercise of all or any portion of the Option shall
have the effect of reducing the number of Optioned Shares by the number of
shares of Common Stock acquired upon such exercise. At the close of business on
the Expiration Date, the number of Optioned Shares available for purchase shall
be reduced to zero.
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SECTION 3. CERTAIN ADJUSTMENTS IN THE OPTION.
(a) Subject to any required action by the shareholders of the
Corporation, in the event of any increase or decrease in the number of issued
shares of Common Stock resulting from a subdivision or consolidation of shares
of Common Stock or the payment of a stock dividend (but only on the shares of
Common Stock), or any other increase or decrease in the number of such shares
effected without receipt of consideration by the Corporation, the Corporation
shall proportionally adjust the number of shares of Common Stock subject to the
Option and the Exercise Price per Optioned Share.
(b) Subject to any required action by the shareholders of the
Corporation, in the event that the Corporation shall be the surviving
corporation in any merger or consolidation (except a merger or consolidation as
a result of which the holders of shares of Common Stock receive securities of
another corporation), the Option, to the extent outstanding on the date of such
merger or consolidation, shall pertain to and apply to the securities which a
holder of the number of shares of Common Stock subject to such Option on such
date would have received in such merger or consolidation, and an appropriate
adjustment shall be made in the Exercise Price.
(c) In the event of (i) a dissolution or liquidation of the
Corporation, (ii) a sale of all or substantially all of the Corporation's
assets, (iii) a merger or consolidation involving the Corporation in which the
Corporation is not the surviving corporation or (iv) a merger or consolidation
involving the Corporation in which the Corporation is the surviving corporation
but the holders of shares of Common Stock receive securities of another
corporation and/or other property, including cash, the Corporation shall either:
(A) cancel, effective immediately prior to the occurrence of
such event, the Option and, in full consideration of such cancellation,
pay to the Advisory Director an amount in cash, for each Optioned Share
then subject to the Option, equal to the excess of (I) the value, as
determined by the Corporation in its absolute discretion, of the
property (including cash) received by the holder of a share of Common
Stock as a result of such event over (II) the Exercise Price; or
(B) provide for the exchange of the Option for an option on
some or all of the property for which the Common Stock of the
Corporation is exchanged and, incident thereto, make an equitable
adjustment as determined by the Corporation in its absolute discretion
in the Exercise Price, or the number of shares or amount of property
subject to the Option, or both, or, if appropriate, provide for a cash
payment to the Advisory Director in partial consideration for the
exchange of the Option.
The Corporation shall take the same action under this section 3(c) as it takes
under any similar provision of the stock options granted to executive officers
of the Corporation.
(d) In the event of any change in the capitalization of the
Corporation or corporate change other than those specifically referred to in
sections 3(a), (b), or (c) hereof, the
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Corporation shall make such adjustments in the number and class of shares
subject to the Option outstanding on the date on which such change occurs and in
the Exercise Price as is appropriate to prevent dilution or enlargement of
rights.
(e) Except as expressly provided herein, the Advisory Director
shall have no rights by reason of any subdivision or consolidation of shares of
stock of any class, the payment of any dividend, any increase or decrease in the
number of shares of stock of any class or any dissolution, liquidation, merger
or consolidation of the Corporation or any other corporation. Except as
expressly provided herein, no issuance by the Corporation of shares of stock of
any class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number of Optioned Shares.
SECTION 4. RIGHTS AS A STOCKHOLDER.
No person shall have any rights as a stockholder with respect
to any shares of Common Stock covered by or relating to the Option until the
date of the issuance of a stock certificate with respect to such shares. Except
as otherwise expressly provided in section 3 hereof, no adjustment to the Option
shall be made for dividends or other rights for which the record date occurs
prior to the date such stock certificate is issued.
SECTION 5. WITHHOLDING TAXES.
(a) Whenever shares of Common Stock are to be issued upon the
exercise of the Option, the Corporation shall have the right to require the
Advisory Director to remit to the Corporation in cash an amount sufficient to
satisfy federal, state and local withholding tax requirements, if any,
attributable to such exercise payment prior to the delivery of any certificate
or certificates for such shares.
(b) At the election of the Advisory Director, but subject to
the approval of the Corporation, when shares of Common Stock are to be issued
upon the exercise of the Option, in lieu of the remittance required by section
5(a) hereof, the Advisory Director may tender to the Corporation a number of
shares of Common Stock determined by him, the Fair Market Value (as defined in
section 8 hereof) of which at the tender date the Corporation determines to be
sufficient to satisfy the federal, state and local withholding tax requirements,
if any, attributable to such exercise, occurrence or grant and not greater than
the Advisory Director's estimated total federal, state and local tax obligations
associated with such exercise.
(c) At the election of the Advisory Director, but subject to
the approval of the Corporation, when shares of Common Stock are to be issued
upon the exercise of the Option, in lieu of the remittance required by section
5(a) hereof, the Corporation shall withhold a number of such shares determined
by the Advisory Director, the Fair Market Value (as defined in section 8 hereof)
of which at the exercise date the Corporation determines to be sufficient to
satisfy the federal, state and local withholding tax requirements, if any,
attributable to such exercise and not
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greater than the Advisory Director's estimated total federal, state and local
tax obligations associated with such exercise.
SECTION 6. NO OBLIGATION TO EXERCISE.
The grant to the Advisory Director of the Option shall impose
no obligation to exercise such Option.
SECTION 7. TRANSFERS UPON DEATH.
Upon the death of the Advisory Director, the Option may be
exercised only by the executors or administrators of the Advisory Director's
estate or by any person or persons who shall have acquired such right to
exercise by will or by the laws of descent and distribution. No transfer by will
or the laws of descent and distribution shall be effective to bind the
Corporation unless the Corporation shall have been furnished with (a) written
notice thereof and with a copy of the will and/or such evidence as the
Corporation may deem necessary to establish the validity of the transfer and (b)
an agreement by the transferee to comply with all the terms and conditions of
the Option that are or would have been applicable to the Advisory Director and
to be bound by the acknowledgements made by the Advisory Director in connection
with the grant of the Option. Except as provided in this section 7, the Option
shall not be transferable and may only be exercised during the Advisory
Director's lifetime by the Advisory Director.
SECTION 8. DEFINITION OF FAIR MARKET VALUE.
The "Fair Market Value" of a share of Common Stock with
respect to any day shall be (a) the closing sales price on the immediately
preceding business day of a share of Common Stock as reported on the principal
securities exchange on which shares of Common Stock are then listed or admitted
to trading (including as a securities exchange for this purpose the NASDAQ
National Market System) or (b) if not so reported, the average of the closing
bid and ask prices on the immediately preceding business day as reported on the
National Association of Securities Dealers, Inc. Automated Quotations System or
(c) if not so reported, as furnished by any member of the National Association
of Securities Dealers, Inc., selected by the Corporation. In the event that the
price of a share of Common Stock shall not be so reported, the Fair Market Value
of a share of Common Stock shall be determined by the Corporation in its
absolute discretion.
SECTION 9. REGISTRATION AND DELIVERY OF OPTIONED SHARES.
The Corporation's obligation to deliver shares of Common Stock
under this Agreement shall, if the Corporation so requests, be conditioned upon
the receipt of a representation as to the investment intention of the person to
whom such shares are to be delivered, in such form as the Corporation shall
determine to be necessary or advisable to comply
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with the provisions of applicable federal, state or local law. It may be
provided that any such representation shall become inoperative upon a
registration of the shares of Common Stock or upon the occurrence of any other
event eliminating the necessity of such representation. The Corporation shall
not be required to deliver any shares of Common Stock under this Agreement prior
to (a) the admission of such shares of Common Stock to listing on any stock
exchange on which Common Stock may then be listed, or (b) the completion of such
registration or other qualification under any state or federal law, rule or
regulations as the Corporation shall determine to be necessary or advisable. In
the event that the Corporation refuses, pursuant to the preceding sentence, to
deliver shares of its Common Stock upon the exercise of the Option, the
Corporation shall pay to the Advisory Director in a lump sum in cash not later
than the proposed exercise date an amount, for each share of Common Stock with
respect to which the Option was proposed to be exercised, in cancellation of
such Option with respect to such share, equal to the excess of (i) the Fair
Market Value (determined pursuant to section 8) of a share of Common Stock on
the proposed exercise date over (ii) the Exercise Price of the Option.
SECTION 10. REGISTRATION RIGHTS.
At or as soon as practicable following the effective date
provided for in the Merger Agreement, the Corporation shall prepare and file
with the Securities and Exchange Commission on Form S-8 (or another
substantially equivalent form promulgated by the Securities and Exchange
Commission and available to the Corporation) a registration statement covering
the issuance of the Optioned Shares in compliance with applicable laws, rules
and regulations. Following such filing, the Corporation shall take such actions
as are necessary to maintain the effectiveness of such registration through the
Expiration Date or, if earlier, the date on which no Optioned Shares remain
available for purchase hereunder. Notwithstanding anything contained herein to
the contrary, the Corporation's obligations under this section will not require
the Corporation to incur any unreasonable expenses.
SECTION 11. NOTICES.
Any communication required or permitted to be given hereunder,
including any notice, direction, designation, comment, instruction, objection or
waiver, shall be in writing and shall be deemed to have been given at such time
as it is delivered personally or five (5) days after mailing if mailed, postage
prepaid, by registered or certified mail, return receipt requested, addressed to
such party at the address listed below, or at such other address as one such
party may by written notice specify to the other party:
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(a) If to the Corporation
Astoria Financial Corporation
Xxx Xxxxxxx Xxxxxxx Xxxxx
Xxxx Xxxxxxx, Xxx Xxxx 00000-0000
Attention: CORPORATE SECRETARY
(b) If to the Advisory Director, to the Advisory
Director's address first above written.
No notice given to any party shall be deemed effective as to such party until
actually received.
SECTION 12. SUCCESSORS AND ASSIGNS.
This Agreement shall inure to the benefit of and shall be
binding upon the Corporation and the Advisory Director and their respective
heirs, successors and assigns.
SECTION 13. CONSTRUCTION OF LANGUAGE.
Whenever appropriate in the Agreement, words used in the
singular may be read in the plural, words used in the plural may be read in the
singular, and words importing the masculine gender may be read as referring
equally to the feminine or the neuter. Any reference to a section shall be a
reference to a section of this Agreement, unless the context clearly indicates
otherwise. The headings of sections in this Agreement are for convenience of
reference only and are not intended to qualify the meaning of any section.
SECTION 14. AMENDMENT.
This Agreement may be amended, in whole or in part, at any
time and from time to time, by written agreement between the Corporation and the
Advisory Director.
SECTION 15. SEVERABILITY.
A determination that any provision of this Agreement, in whole
or in part, is invalid or unenforceable shall not affect the validity or
enforceability of any other provision hereof or of any part of the provision in
question not determined to be unenforceable.
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SECTION 16. WAIVER.
Failure to insist upon strict compliance with any of the
terms, covenants or conditions hereof shall not be deemed a waiver of such term,
covenant, or condition. A waiver of any provision of this Agreement must be made
in writing, designated as a waiver, and signed by the party against whom its
enforcement is sought. Any waiver or relinquishment of any right or power
hereunder at any one or more times shall not be deemed a waiver or
relinquishment of such right or power at any other time or times.
SECTION 17. COUNTERPARTS.
This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, and all of which shall
constitute one and the same Agreement.
SECTION 18. GOVERNING LAW.
This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of New York without giving effect to
the conflict of law principles of such laws.
SECTION 19. ENTIRE AGREEMENT.
This instrument contains the entire agreement of the parties
relating to the subject matter hereof, and supersedes in its entirety any and
all prior agreements, understandings or rep resentations relating to the subject
matter hereof.
SECTION 20. DISPUTE RESOLUTION.
Any controversy or claim arising out of or relating to this
Agreement, or the breach hereof, shall be settled by arbitration in accordance
with the Commercial Rules of the American Arbitration Association, and judgment
upon the award rendered by the arbitral tribunal may be entered in any court
having jurisdiction thereof. The arbitration shall be held in Nassau County, New
York, or at such other place as may be selected by mutual agreement. The
arbitration shall be conducted before a panel of three neutral arbitrators, all
of whom shall be members of the Bar of the State of New York, actively engaged
in practice of law for at least ten (10) years. Within fifteen (15) days after
the commencement of the arbitration, each party shall select one person to act
as arbitrator, and the two selected shall select a third arbitrator within ten
(10) days after their appointment; if the arbitrators selected by the parties
hereto are unable or fail to agree upon the third arbitrator, the third
arbitrator shall be selected by the President of the American Arbitration
Association or his designee. Either party may, without inconsistency with this
Agreement, seek from a court any interim or provisional relief that may be
necessary to protect the rights or
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property of that party pending the arbitral tribunal's determination of the
merits of the controversy. Neither party nor the arbitrators may disclose the
existence, content, or results of any arbitration hereunder without the prior
written consent of both parties. The prevailing party shall be entitled to an
award of reasonable attorneys' fees.
SECTION 21. ACCEPTANCE BY OPTION HOLDER.
By executing this Agreement and returning a fully executed
copy hereof to the Corporation at the address specified in section 11, the
Option Holder signifies his acceptance of the terms and conditions of this
Option. If a fully executed copy of this Agreement is not received by the
Corporation within forty-five (45) days after the date first above written, the
Corporation may revoke the Option granted, and thereby avoid all obligations,
hereunder.
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IN WITNESS WHEREOF, the Advisory Director has executed, and
the Corporation has caused its duly authorized representative to execute, this
Agreement as of the date first above written.
ASTORIA FINANCIAL CORPORATION
By:
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Signature
Title:
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Date:
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ATTEST:
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Secretary
[SEAL]
[ADVISORY DIRECTOR]
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Signature
Date:
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