PERPETUAL MIDWEST FINANCIAL, INC.
STOCK OPTION AND INCENTIVE PLAN
STOCK OPTION AGREEMENT
SO No. 1
Options to purchase shares of stock are hereby awarded on
January 27, 1994 by Perpetual Midwest Financial, Inc. (the
"Corporation"), to (the "Grantee"), in
accordance with the following terms and conditions, and the
conditions contained in the 1993 Stock Option and Incentive Plan
and any future amendments or revisions (the "Plan"):
1. Option Award. The Corporation hereby awards the
Grantee options (the "Options") to
purchase Common Stock, par value $.01 per share
("Common Stock"), of the Corporation at $10.00 per
share exercise price pursuant to the Plan, as the
same may from time to time be amended, and upon the
terms and conditions and subject to the restrictions
therein and hereinafter set forth. A copy of the
Plan as currently in effect is incorporated herein
by reference and is attached hereto.
2. General Terms and Conditions of Options and Rights.
The Committee referred to in Section 3 of the Plan
or its successor (the "Committee") shall have full
and complete authority and discretion, except as
limited by the Plan, to grant Options and/or Rights
and to provide the terms and conditions (which need
not be identical among Grantees) thereof. In
particular, the Committee shall prescribe the
following terms and conditions: (i) the Exercise
Price of any Option or Right, which shall not be
less than the Market Value per Share at the date of
grant of such Option or Right, (ii) the number of
Shares subject to, and expirations date of grant of
such Option or Right, which expiration date shall
not exceed ten years from the date of the grant,
(iii) the manner, time and rate (cumulative or
otherwise) of exercise of such Option or Right, and
(iv) the restrictions, if any, to be placed upon
such Option or Right or upon Shares which may be
issued upon exercise of such Option or Right. The
Committee may, as a condition of granting any Option
or Grant, require that a Grantee agree not to
thereafter exercise one or more Options or Rights
previously granted to such Grantee.
Provided that the Grantee maintains Continuous
Service (as defined in the Plan), the Shares will
vest pursuant to the following schedule:
Percentage
Of Initial
Date of Vesting Award Vested
September 30, 1994 20%
September 30, 1995 20%
September 30, 1996 20%
September 30, 1997 20%
September 30, 1998 20%
3. Exercise of Options or Rights.
(a) Except as provided in section 5 below, an
Option or Right granted under the Plan shall
be exercisable during the lifetime of the
Grantee only by such grantee, except as
provided in paragraphs (c) and (d) of this
Section 3, no such Option or Right may be
exercised unless at the time such Grantee
exercises such Option or Right, such Grantee
has maintained Continuous Service since the
date of grant of such Option or Right.
(b) To exercise an Option or Right under the Plan,
the Grantee shall give written notice to the
Corporation in form satisfactory to the
Committee (and, if partial exercises have been
permitted by the Committee, by specifying the
number of Shares with respect to which such
Grantee elects to exercise such Option or
Right) together with full payment of the
Exercise Price, if any and to the extent
required. The date of exercise shall be the
date on which such notice is received by the
Corporation. Payment, if any is required,
shall be made either (i) in cash (including
check, bank draft or money order) or (ii) if
permitted by the Committee, by delivering (A)
Shares already owned by the Grantee and having
a fair market value equal to the applicable
exercise price, such fair market value to be
determined in such appropriate manner as may
be provided by the Committee or as may be
required in order to comply with or conform to
requirements of any applicable laws or
regulations, or (B) a combination of cash and
such Shares.
(c) If a Grantee shall cease to maintain
Continuous Service for any reason (including
total or partial disability and normal or
early retirement at age 59 or later or
termination for any reason other than cause,
but excluding death and termination of
employment by the Corporation or any Affiliate
for cause), such Grantee may, but only within
the period of three years immediately
succeeding cessation of Continuous Service and
in no event after the expiration date of such
Option or Right, exercise such Option or Right
to the extent that such Grantee was entitled
to exercise such Option or Right at the date
of cessation. If a Grantee shall cease to
maintain Continuous Service by reason of death
or disability then, all Options and
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Rights granted and not fully exercisable shall
become exercisable in full upon the happening of
such event and shall remain so exercisable (i) in
the event of death for the period described in
section (d) of this Section 3 and (ii) in the
event of disability, termination for any
reason other than cause or normal or early
retirement, for a period of three years
following such date. If the Continuous
Service of a Grantee is terminated for cause,
all rights under any Option or Right of such
Grantee shall expire immediately upon the
giving to the Grantee of notice of such
termination.
(d) In the event of death of a Grantee while in
the Continuous Service of the Corporation or
an Affiliate or within the three year period
referred to in paragraph (c) of this Section
3, the person to whom any Option or Right held
by the Grantee at the time of his death is
transferred by will or by the laws of descent
and distribution, or in the case of an Award
other than an Incentive Stock Option, pursuant
to a qualified domestic relations order, as
defined in the Code or Title I of ERISA or the
rules thereunder may, but only to the extent
such Grantee was entitled to exercise such
Option or Right as set forth in paragraph (c)
of this Section 3, exercise such Option or
Right at any time within a period of one year
succeeding the date of death of such Grantee,
but in no event later than ten years from the
date of grant of such Option or Right.
Following the death of any Grantee,
irrespective of whether any Related Right
shall have theretofore been granted to the
Grantee or whether the person entitled to
exercise such Related Right desires to do so,
the Committee may, as an alternative means of
settlement of such Option, elect to pay the
person to whom such Option is transferred by
will or by the laws of descent and
distribution, or in the case of an Option
other than an Incentive Stock Option, pursuant
to a qualified domestic relations order, as
defined in the Code or Title I of ERISA or the
rules thereunder, the amount by which the
Market Value per Share on the date of exercise
of such Option shall exceed the Exercise Price
of such Option, multiplied by the number of
Shares with respect to which such Option is
properly exercised. Any such settlement of an
Option shall be considered an exercise of such
Option for all purposes of the Plan.
4. Incentive Stock Options. Incentive Stock Options
may be granted only to Employees. Any provision of
the Plan to the contrary not withstanding, (i) no
Incentive Stock Option shall be granted more than
ten years from the date the Plan is adopted by the
Board of Directors of the Corporation and no
Incentive Stock Option shall be exercisable more
than ten years from the date such Incentive Stock
Option is granted, (ii) the Exercise Price of any
Incentive Stock Option shall not be less than the
Market Value per Share on the date such Incentive
Stock Option is granted, (iii) any Incentive Stock
Option shall not be transferable by the Grantee
other than by will or the laws of descent and
distribution, and shall be exercisable during such
Grantee's lifetime only by such Grantee, (iv) no
Incentive Stock Option
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shall be granted to any individual who, at the time
such Incentive Stock Option is granted, owns stock
possessing more than ten percent of the total combined
voting power of all classes of stock of the
Corporation or any Affiliate unless the Exercise Price
of such Incentive Stock Option is at 110 percent of
the Market Value per Share at the date of grant and
such Incentive Stock Option is not exercisable after
the expiration of five years from the date such
Incentive Stock Option is granted, and (v) the
aggregate Market Value (determined as of the time
any Incentive Stock Option is granted) of Shares
with respect to which Incentive Stock Options are
exercisable for the first time by a Grantee in any
calendar year shall not exceed $100,000.
5. Adjustments Upon Changes in Capitalization. In the
event of any change in the outstanding Shares
subsequent to the effective date of the Plan by
reason of any reorganization, recapitalization,
stock split, stock dividend, combination or exchange
of shares, merger, consolidation, or any change in
the corporate structure or Shares of the
Corporation, the maximum aggregate number, class and
exercise price of shares as to which Awards may be
granted under the Plan and the number and class of
shares with respect to which Awards therefore have
been granted under the Plan shall be appropriately
adjusted by the Committee, whose determination shall
be conclusive.
6. Effect of Merger. In the event of any merger,
consolidation or combination of the Corporation
(other than a merger, consolidation or combination
in which the Corporation is the continuing entity
and which does not result in the outstanding Shares
being converted into or exchanged for different
securities, cash or other property, or any
combination thereof) pursuant to a plan or agreement
the terms of which are binding upon all stockholders
of the Corporation (except to the extent that
dissenting stockholders may be entitled, under
statutory provisions or provisions contained in the
certificate of incorporation, to receive the
appraised or fair value of their holdings), any
Grantee who has received an Option or Right at least
6 months prior to such event shall have the right
(subject to the provisions of the Plan and any
limitation applicable to such Option or Right),
thereafter and during the term of each such Option
or Right, to receive upon exercise of any such
Option or Right an amount equal to the excess of the
fair market value on the date of such exercise of
securities, cash or other property, or combination
thereof, receivable upon such merger, consolidation
or combination in respect of a Share over the
Exercise Price of such Right or Option, multiplied
by the number of Shares with respect to which such
Option or Right shall have been exercised. Such
amount may be payable fully in cash, fully in one or
more of the kind or kinds of property payable in
such merger, consolidation or combination, or partly
in cash and partly in one or more of such kind or
kinds of property, all in the discretion of the
Committee.
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7. Effect of Change in Control. Each of the events
specified in the following clauses (i) through (iii)
of this Section 7 shall be deemed a "change of
control": (i) any third person, including a "group"
as defined in Section 13(d)(3) of the Securities
Exchange Act of 1934, shall become the beneficial
owner of shares of the Corporation or Perpetual
Savings Bank, FSB (the "Bank") with respect to which
25% or more of the total number of votes for the
election of the Board of Directors of the
Corporation may be cast, (ii) as a result of, or in
connection with, any cash tender offer, merger or
other business combination, sale of assets or
contested election, or combination of the foregoing,
the persons who were directors of the Corporation
shall cease to constitute a majority of the Board of
Directors of the Corporation, or (iii) the
shareholders of the Corporation shall approve an
agreement providing either for a transaction in
which the Corporation will cease to be an
independent publicly owned entity or for a sale or
other disposition of all or substantially all the
assets of the Corporation. If a tender offer or
exchange offer for Shares (other than such an offer
by the Corporation) is commenced, or if the event
specified in clause (iii) above shall occur, all
Options theretofore granted and not fully
exercisable shall become exercisable in full upon
the happening of such event and shall remain so
exercisable for a period of sixty days following
such date, after which they shall revert to being
exercisable in accordance with their terms;
provided, however, that no Option which has
previously been exercised or otherwise terminated
shall become exercisable.
8. Assignments and Transfers. No award nor any right
or interest of a Grantee under the Plan in any
instrument evidencing any Award under the Plan may
be assigned, encumbered or transferred except, in
the event of death of a Grantee, by will or the laws
of descent and distribution or in the case of Awards
other than Incentive Stock Options pursuant to a
qualified domestic relations order, as defined in
the Code or Title I of ERISA or the rules
thereunder.
9. Delivery and Registration of Shares of Common Stock.
The Corporation's obligation to deliver shares of
Common Stock hereunder shall, if the Committee so
requests, be conditioned upon the receipt of a
representation as to the investment intention of the
Grantee or any other person to whom such shares are
to be delivered, in such form as the Committee shall
determine to be necessary or advisable to comply
with the provisions of the Securities Act of 1933,
as amended, or any other Federal, state or local
securities legislation or regulation. It may be
provided that any representation requirement shall
become inoperative upon a registration of such
shares or other action eliminating the necessity of
such representation under such Securities Act or
other securities regulation. The Corporation shall
not be required to deliver any shares under the Plan
prior to (i) the admission of such shares to listing
on any stock exchange on which the shares of Common
Stock may then be listed, and (ii) the completion of
such registration
SO-5
or other qualification of such shares under any state
or Federal law, rule or regulation, as the Committee
shall determine to be necessary or advisable.
10. Plan and Plan Interpretations as Controlling. The
Options or Rights hereby awarded and the terms and
conditions herein set forth are subject in all
respects to the terms and conditions of the Plan,
which are controlling. All determinations and
interpretations of the Committee shall be binding
and conclusive upon the Grantee or his legal
representative with regard to any question arising
hereunder or under the Plan.
11. Grantee Service. Nothing in this Agreement shall
limit the right of the Corporation or any of its
Affiliates to terminate the Grantee's service as a
director, advisory director, officer or employee, or
otherwise impose upon the Corporation or any of its
Affiliates any obligation to employ or accept the
services of the Grantee.
12. Withholding Tax. Upon the termination of the
Restricted Period with respect to any shares of
Restricted Stock (or at any such earlier time, if
any, that an election is made by the Grantee under
Section 83(b) of the Code, or any successor
provision thereto, to include the value of such
shares in taxable income), the Corporation may, in
its sole discretion, retain a sufficient number of
shares held by it to cover the amount required to be
withheld. The Corporation may, in its sole
discretion, have the right to deduct from all
dividends paid with respect to shares of Restricted
Stock the amount of any taxes which the Corporation
is required to withhold with respect to such
dividend payments.
The Corporation may, in its sole discretion, have
the right to deduct from all amounts paid in cash
with respect to the exercise of a Right under the
Plan any taxes required by law to be withheld with
respect to such cash payments. The Corporation may,
in its sole discretion, have the right to require
the Grantee or other such person to pay the
Corporation the amount of any taxes which the
Corporation is required to withhold with respect to
such Shares.
13. Grantee Acceptance. The Grantee shall signify his
acceptance of the terms and conditions of this
Agreement by signing in the space provided below and
returning a signed copy thereof. IF A FULLY
EXECUTED COPY HEREOF HAS NOT BEEN RECEIVED BY THE
CORPORATION, THE CORPORATION MAY REVOKE THIS AWARD,
AND CANCEL ALL OBLIGATIONS UNDER THIS AGREEMENT.
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IN WITNESS WHEREOF, the parties hereto have caused this
STOCK OPTION AGREEMENT to be executed as of the date first above
written.
Perpetual Midwest Financial, Inc.
By__________________________
Xxxxxxx X. Xxxxxxxx
Chairman of the Board
ACCEPTED:
_____________________________
_____________________________
(Street Address)
_____________________________
(City, State & Zip Code)
SO-7
