EXHIBIT 4
CAPITAL BANK, N.A.
FCNB CORP AMENDED AND RESTATED
STOCK OPTION PLAN FOR EMPLOYEES OF
CAPITAL BANK, NATIONAL ASSOCIATION
FCNB Corp, ("FCNB") a Maryland corporation, FCNB Bank (the "Bank"), a
Maryland chartered commercial bank with its principal office in Frederick,
Maryland, and Capital Bank, National Association ("Capital"), a national banking
association with its main office in Rockville, Maryland, have entered into an
Agreement and Plan of Reorganization and Merger (the "Agreement") as of June 23,
1998. All capitalized terms used herein shall have the meanings assigned to them
in the Agreement unless otherwise defined herein.
Under the terms of the Agreement:
(a) Each Capital Incentive Option ("Capital Option") outstanding under the
Capital 1988 Incentive Stock Option Plan (from time to time
hereinafter, as in existence prior to the Effective Time of the Merger
of Capital with and into FCNB, the "Capital Plan") and which as of the
Effective Time was not held by a person who is not a continuing
employee of the Bank following the Effective Time, shall continue in
place as an option to purchase, in place of the purchase of each share
of Capital common stock, the number of shares (calculated to four
decimal places and then rounded up or down to the nearest whole share)
of FCNB common stock that would have been received by the holder of
such Capital Option in the Merger had the option or warrant been
exercised in full for shares of Capital common stock immediately prior
to the Effective Time, except for appropriate pro rata adjustments as
to the relevant option price for shares of FCNB common stock
substituted therefor so that the aggregate exercise price of shares
subject to such Capital Options immediately following the Effective
Time shall be the same as the aggregate exercise price for such shares
immediately prior to the Effective Time;
(b) The number of shares (or fraction thereof) of FCNB common stock into
which each share of Capital common stock shall be so converted shall
be increased or decreased proportionally to reflect any stock split,
stock dividend, or reclassification of FCNB common stock made or
declared between the date of the Agreement and the Effective Time, and
the number of shares of FCNB common stock issuable upon the exercise
of the Capital Options converted into options for shares of FCNB, and
the exercise price therefor, shall similarly be adjusted;
(c) The Capital Plan shall continue in effect but no additional options
shall be available for grant thereunder after the Effective Time;
(d) From time to time after the Effective Time, FCNB shall reserve for
issuance such number of shares of FCNB common stock as necessary to
permit the exercise of the Capital Options and that have been
converted into options for the purchase of FCNB common stock pursuant
to this Agreement;
(e) FCNB shall make all filings required under federal and state
securities laws so as to permit the exercise of the Capital Options so
converted and the sale of shares received by the optionees upon
exercise as contemplated by the Capital Plan and the Agreement; and
(f) Neither the Merger nor the terms of the Agreement shall limit any
periods in which the Capital Options may be exercised.
The Capital 1988 Incentive Stock Option Plan as assumed by FCNB will
hereinafter be referred to from time to time to time hereinafter as the "Plan".
Attached hereto as Exhibit A is a list of the outstanding options as of the
Effective Time. The entire text of the Plan following the Effective Time is as
follows:
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1. PURPOSE.
The Plan shall be known as the FCNB Corp. Amended and Restated Stock Option
Plan for Employees of Capital Bank, National Association (formerly, the Capital
Bank, National Association 1988 Employee Stock Option Plan). This Plan amends
and restates the Capital Bank 1988 Incentive Stock Option Plan. The purpose of
this plan (the "Plan") is to secure for FCNB Corp. (the "FCNB"), the benefits of
the incentive inherent in the ownership of common stock by the employees of the
Company (as herein defined). The Plan is intended to provide for the grant of
"incentive stock options" and "non-incentive stock options" within the meaning
of Section 422A of the Internal Revenue Code of 1954, as amended (the "Code").
Each and every one of the provisions of the Plan relating to incentive stock
options shall be interpreted to conform to the requirements of Section 422A of
the Code. As used herein, the "Company" shall mean FCNB, any subsidiary
corporations (as such terms are defined in Section 425 of the Code0, or any
predecessor of any such corporations, or any corporation or any subsidiary of
any corporation issuing or assuming any stock option in any transaction to which
Section 425(a) of the Code applies.
2. ADMINISTRATION.
This Plan shall be administered by the Board of Directors of FCNB (the
"Board") or, if the Board shall so determine, by a committee (the "Committee")
of the Board. The Committee shall consist of not less than three directors of
FCNB, all of whom shall be "Disinterested Persons," as herein defined. The Board
shall have all power and authority to administer the Plan except to the extent
that it may from time to time delegate such power and authority to the
Committee.
As used herein, the term "Disinterested Person" shall mean a member of the
Board who, as of any given date is not eligible, and has not within one year
prior to such date been eligible, for selection as a person to whom stock
options may be granted pursuant to the Plan or pursuant to any other plan of the
Company or any of its Affiliates (as such term is defined in the Securities Act
of 1933, as amended, and the rules and regulations promulgated thereunder).
Subject to the provisions of the Plan, the Committee or the Board, as the
case may be, shall have the authority to adopt, amend and rescind such rules,
regulations and procedures as it deems necessary, desirable or advisable in the
administration of the Plan, to construe and to interpret the Plan and to make
all such other determinations as are deemed necessary, desirable or advisable
for the administration of the Plan. All decisions, determinations and
interpretations of the Committee or the Board, as the case may be, shall be
final, conclusive and binding upon all Participants. As used herein,
"Participant" shall mean any present or former full-time, salaried employee of
the Company holding any stock option granted pursuant to the Plan.
Neither the Board nor the Committee, nor any member thereof, shall be
liable for any action or determination taken or made in good faith with respect
to the Plan or any stock option granted under the Plan.
3. SHARES OF STOCK SUBJECT TO THE PLAN.
Subject to the adjustment provision of Section 13 hereof, the maximum
number of shares which may be issued under the Plan pursuant to the exercise of
both incentive and non-incentive stock options granted under the Plan shall be
11,301 shares of FCNB common stock (the "Common Stock"), which are hereby
reserved for this purpose. In the event that any stock option granted under the
Plan terminates, in whole or part, without having been exercised, the number of
shares of Common Stock subject thereto shall not again become available for
issuance under the Plan.
4. ELIGIBILITY.
All full time, salaried employees of the Company shall be eligible to
receive stock options under the Plan. The Committee or the board shall from time
to time determine the employees of the Company who shall be granted stock
options under the Plan, the number of stock options to be granted to each such
employee under the Plan, and whether such stock options granted to each such
employee under the Plan shall be incentive and/or non-incentive stock options.
No director who is not otherwise a full-time, salaried officer or employee of
the Company shall be eligible to receive stock options under the Plan. In making
its selection of employees of the Company and determining the number of shares
of Common Stock to be
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granted to each such employee pursuant to each stock option granted under the
plan, the Committee or the Board, as the case may be, may consider the nature of
the services rendered by each such employee, each such employee's current and
potential contribution to the Company, and such other factors as the Committee
or the Board may, in its respective sole discretion, deem relevant.
For incentive stock options, the aggregate fair market value, determined as
of the date of grant, of the shares of Common Stock with respect to which such
incentive stock options are exercisable for the first time by any Participant
during any calendar year (under all plans of the company) shall not exceed
$100,000.
Directors of the Company shall be eligible to receive non-incentive stock
options.
No stock options may be granted pursuant to the Plan after January 18,
1998.
5. TERMS AND CONDITIONS OF INCENTIVE STOCK OPTIONS.
Each incentive stock option granted pursuant to the Plan shall be evidenced
by an instrument in such form as the Committee or the Board, as the case may be,
shall be from time to time approve, subject to prior approval, if required, by
the Office of the Comptroller of the Currency. Each and every incentive stock
option granted pursuant to the Plan shall comply with and be subject to the
following terms and conditions:
(A) OPTION PRICE.
(I) Except as provided in Section 5(a)(ii) below, the exercise
price per share of Common Stock for each incentive stock option granted pursuant
to the Plan shall be not less than one hundred percent (100%) of the fair market
value per share of Common Stock on the date the incentive stock option is
granted. The determination of such fair market value made by the Board or the
Committee, as the case may be, shall be final, conclusive and binding for
purposes of the Plan.
(II) The exercise price per share of Common Stock for any
incentive stock option granted pursuant to the Plan to any owner of shares of
the Company's stock having in excess of ten percent (10%) of the combined voting
power of all classes of the Company's stock shall be not less than one hundred
ten percent (110%) of the fair market value per share of Common Stock on the
date any such incentive stock option is granted.
(B) PAYMENT.
Full payment for each share of Common Stock purchased upon the
exercise of any incentive stock option granted under the plan shall be made at
the time of exercise of each incentive stock option and shall be paid in cash
(in United States Dollars). No shares of Common Stock shall be issued until full
payment therefor has been received by the Company, and no Participant shall have
any of the rights of a shareholder of Bank with respect to the option shares
until such shares of Common Stock are issued to him.
(C) TERM.
The term of each incentive stock option granted pursuant to the Plan
shall be not more than five (5) years from the date each such incentive stock
option is granted.
(D) EXERCISE GENERALLY.
Except as otherwise provided in Section 7 hereof, no incentive stock
option may be exercised unless the Participant shall have been in the full-time,
salaried employ of the Company at all times during the period beginning with the
date of grant of any such incentive stock option and ending on the date of
exercise of any such incentive stock option. The Committee or the Board, as the
case may be, may impose additional conditions upon the right of any Participant
to
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exercise any incentive stock option granted hereunder which are not inconsistent
with the terms of the Plan or the requirements for qualification as an incentive
stock option under Section 422A of the Code.
(E) TRANSFERABILITY.
Any incentive stock option granted pursuant to the Plan shall be
exercised during any Participant's lifetime only by the Participant to whom it
was granted and shall not be assignable or transferable otherwise than by will
or by the laws of descent and distribution.
6. TERMS AND CONDITIONS OF NON-INCENTIVE STOCK OPTIONS.
Each non-incentive stock option granted pursuant to the Plan shall be
evidenced by an instrument in such form as the Committee or the Board, as the
case may be, shall from time to time approve, subject to prior approval, if
required, by the Office of the Comptroller of the Currency. Each and every
non-incentive stock option granted pursuant to the Plan shall comply with and be
subject to the following terms and conditions:
(A) OPTION PRICE.
The exercise price per share of Common Stock for each non-incentive
stock option granted pursuant to the Plan shall be such price as the Committee
or the Board may, in its respective sole discretion, determine, but in not event
less than the fair market value of the Common Stock on the date of grant.
(B) PAYMENT.
Full payment for each share of Common Stock purchased upon the
exercise of any non-incentive stock option granted under the Plan shall be made
at the time of exercise of each such non-incentive stock option and shall be
paid in cash (in United States Dollars). No shares of Common Stock shall be
issued until full payment therefor has been received by the Company, and no
Participant shall have any of the rights of a shareholder of Bank with respect
to the option shares until such shares of Common Stock are issued to him.
(C) TERM.
The Term of each non-incentive stock option granted pursuant to the
Plan shall be not more than five (5) years from the date each such non-incentive
stock option is granted.
(D) EXERCISE GENERALLY.
Except as otherwise provided in Section 8 hereof, no non-incentive
stock option may be exercised unless the Participant shall have been in the
full-time, salaried employ of the Company at all times during the period
beginning with the date of grant of any such non-incentive stock option and
ending on the date of exercise of any such non-incentive stock option. The
Committee or the Board, as the case may be, may impose additional conditions
upon the right of any Participant to exercise any non-incentive stock option
granted hereunder which are not inconsistent with the terms of the Plan.
(E) TRANSFERABILITY.
Any non-incentive stock option granted pursuant to the Plan shall be
exercised during any Participant's lifetime only by the Participant to whom it
was granted and shall not be assignable or transferable otherwise than by will
or by the laws of descent and distribution.
(F) TERMS OF NON-INCENTIVE OPTIONS GRANTED TO DIRECTORS
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Non-incentive stock options granted to Directors shall be for a term
not more than five (5) years from the date each such non-incentive stock option
is granted. In the event that a Director terminates his or her position on the
Board, the Director shall have ninety days to exercise the non-incentive stock
option. At the end of the ninety day period if the non-incentive stock option is
not exercised, the option shall terminate. The Board may impose additional
conditions upon the right of any Participant to exercise any non-incentive stock
option granted hereunder which are not inconsistent with the terms of the Plan.
6. EFFECT OF TERMINATION OF EMPLOYMENT, DISABILITY OR DEATH ON INCENTIVE STOCK
OPTIONS.
(A) TERMINATION OF EMPLOYMENT.
In the event that any Participant's employment by the Company shall
terminate for any reason, other than Permanent and Total Disability (as such
term is defined in Section 105(d)(4) of the Code) or death, all of any such
Participant's rights to purchase or receive shares of Common Stock pursuant
thereof, as the case may be, shall automatically terminate on the date of such
termination of employment. However, no termination of a Participant's incentive
stock options shall occur if, and to the extent that, the Committee or the
Board, as the case may be, authorizes the Participant to exercise any such
incentive stock options at any time prior to the earlier of (i) the respective
expiration dates of any such incentive stock options or (ii) the expiration of
not more than three (3) months after the date of such termination of employment,
but only if and to the extent that, the Participant was entitled to exercise any
such incentive stock options at the date of such termination of employment. In
the event that a subsidiary ceases to be a subsidiary of the Company, the
employment of all of its employees who are not immediately thereafter employees
of the Company shall be deemed to terminate upon the date such subsidiary so
ceases to be a subsidiary of the Company.
(B) DISABILITY.
In the event that any Participant's employment by the Company shall
terminate as the result of the Permanent and Total Disability of such
Participant, such Participant may exercise any incentive stock options granted
to him pursuant to the Plan at any time prior to the earlier of (i) the
respective expiration dates of any such incentive stock options or (ii) the date
which is one (1) year after the date of such termination of employment, but only
if, and to the extent that, the Participant was entitled to exercise any such
incentive stock options at the date of such termination of employment.
(C) DEATH.
In the event of the death of any participant, any incentive stock
options granted to any such Participant may be exercised by the person or
persons to whom the Participant's rights under any such incentive stock options
pass by will or by the laws of descent and distribution (including the
Participant's estate during the period of administration) at any time prior to
the earlier of (i) the respective expiration dates of any such incentive stock
options or (ii) the date which is six (6) months after the date of death of such
Participant (or such later period not exceeding one (1) year to which the
Committee or the Board may, in its respective discretion, extend such period),
but only if, and to the extent that, the Participant was entitled to exercise
any such incentive stock options at the date of death. For purposes of this
Section 7(c), any incentive stock option held by a Participant shall be
considered exercisable at the date of his death if the only unsatisfied
condition precedent to the exercisability of such incentive stock option at such
date of death was the passage of a specified period of time.
(D) TERMINATION OF INCENTIVE STOCK OPTIONS.
To the extent that any incentive stock option granted under the Plan
to any Participant whose employment by the Company terminates shall not have
been exercised within the applicable period set forth in this Section 7, any
such incentive stock option, and all rights to purchase or receive shares of
Common Stock pursuant thereto, as the case may be, shall terminate on the last
day of the applicable period.
7. EFFECT OF TERMINATION OF EMPLOYMENT, DISABILITY OR DEATH ON NON-INCENTIVE
STOCK OPTIONS.
(A) TERMINATION OF EMPLOYMENT.
Except as otherwise provided in this Section 8, in the event that any
Participant's employment by the Company shall terminate for any reason, other
than Permanent and Total Disability or death, all of any such Participant's
non-incentive stock options, and all of any such Participant's rights to
purchase or receive shares of Common Stock pursuant thereto, as the case may be,
shall automatically terminate on the date of such termination of employment.
However, no termination of a Participant's non-incentive stock options shall
occur if, and to the extent that, the Committee or the Board, as the case may
be, authorizes the Participant to exercise any such non-incentive stock options
at any time prior to the earlier of (i) the respective expiration dates of any
such non-incentive stock options, or (ii) the expiration of not more than (3)
months after the date of such termination of employment, but only if, and to the
extent that, the Participant was entitled to exercise any such non-incentive
stock options at the date of such termination of employment. In the event that a
subsidiary ceases to be a subsidiary of the Company, the employment of all of
its employees who are not immediately thereafter employees of the Company shall
be deemed to terminate upon the date such subsidiary so ceases to be a
subsidiary of the Company.
(B) DISABILITY.
In the event that any Participant's employment by the Company shall
terminate as the result of the Permanent and Total Disability of such
Participant, such Participant may exercise any non-incentive stock options
granted to him pursuant to the Plan at any time prior to the earlier of (i) the
respective expiration dates of any such non-incentive stock options or (ii) the
date which is (1) year after the date of such termination of employment, but
only if, and to the extent that, the Participant was entitled to exercise any
such non-incentive stock options at the date of such termination of employment.
(C) DEATH.
In the event of the death of any participant, any non-incentive stock
options granted to any such Participant may be exercised by the persons or
persons to whom the Participant's rights under any such non-incentive stock
options pass by will or by the laws of descent and distribution (including the
Participant's estate during the period of administration) at any time prior to
the earlier of (i) the respective expiration dates of any such non-incentive
stock options or (ii) the date which is six (6) months after the date of death
of such Participant (or such later period not exceeding one (1) year to which
the Committee or the Board may, in its respective discretion, extend such
period), but only if, and to the extent that, the Participant was entitled to
exercise any such non-incentive stock options at the date of death. For purposes
of this Section 8(c), any non-incentive stock option held by a Participant at
the date of his death shall be considered exercisable if the only unsatisfied
condition precedent to the exercisability of such non-incentive stock option at
such date of death was the passage of a specified period of time.
(D) TERMINATION FOLLOWING FIVE YEAR EMPLOYMENT.
In the event that a Participant whose employment has terminated for
any reason other than death, disability or Just Cause (as such term is defined
in this Section 8(d)) shall have been continuously employed by the Company
during the five (5) year period immediately preceding such termination of
employment, then, in such event, such Participant shall have the right to
exercise any non-incentive stock options held by him at any time prior to the
earlier of (i) the respective expiration dates of any such non-incentive stock
options or (ii) the expiration of not more than five (5) years after the date of
such termination of employment, but only if, and to the extent that, the
Participant was entitled to exercise any such non-incentive stock options at the
date of such termination of employment.
As used herein, "Just Cause" shall be defined to mean any act of a
Participant or any failure to act on the part of a Participant which
constitutes: (i) misfeasance or malfeasance in connection with the performance
by him of his duties and responsibilities as an employee of the Company; (ii)
fraud, embezzlement or breach of trust; (iii) any criminal act other than minor
traffic infractions; or (iv) the willful or knowing refusal by a Participant to
perform substantially all or any portion of his duties and responsibilities as
an employee of the Company.
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(E) TERMINATION OF NON-INCENTIVE STOCK OPTIONS.
To the extent that any non-incentive stock option granted under the
Plan to any Participant whose employment by the Company terminates shall not
have been exercised within the applicable period set forth in this Section 8,
any such non-incentive stock option, and all rights to purchase or receive
shares of Common Stock pursuant thereto, as the case may be, shall terminate on
the last day of the applicable period.
9. RESTRICTIONS ON DISPOSITION AND RESTRICTIVE LEGEND.
(A) RESTRICTIONS ON DISPOSITION.
Except as otherwise expressly provided in this Section 9(a), no
Participant may sell, assign, transfer, pledge, gift, hypothecate or otherwise
dispose of any shares of Common Stock acquired pursuant to the exercise of any
incentive stock options and/or non-incentive stock options under the Plan (the
"Disposition Restriction"), without the prior written consent of the Company,
until the earlier of five (5) years immediately following the date of grant of
any such stock option or ninety (90) days immediately following the date of
termination of the employment of the Participant. However, in the event that a
Participant wishes to borrow funds for the purpose of financing the purchase of
shares of Common Stock pursuant to the exercise of any incentive stock option
and/or non-incentive stock option granted under the Plan, and, as a condition
precedent to the making of such loan, the lender requires the shares of Common
Stock to be acquired pursuant to the exercise of such stock option to be pledged
as collateral for the repayment of such loan, then, in such event, such shares
of Common Stock may be so pledged; provided, however, that such shares of Common
Stock shall continue to be subject to the Disposition Restrictions as provided
in the Plan.
(B) RESTRICTIVE LEGEND.
Each and every stock certificate representing shares of Common Stock
issued to any Participant during the Restriction Period shall bear the following
restrictive legend (the "Restrictive Legend"):
"The shares represented by this certificate (the "Shares")
have been acquired from the Issuer pursuant to the Issuer's
Employee Stock Option Plan (the "Plan"). The Shares are
subject to each and every on of the terms, conditions and
restrictions set forth in the Plan, and may not, in whole or
in part, be sold, transferred, pledged, gifted, hypothecated
or otherwise disposed of in any manner without the prior
written consent of the Issuer."
Upon the termination of the Disposition and Restrictions, a
Participant holding a stock certificate bearing the Restrictive Legend may
surrender such stock certificate to the Company's transfer agent and receive in
exchange therefor a stock certificate representing an identical number of shares
of Common Stock without the Restrictive Legend.
(C) DEATH OF A PARTICIPANT.
The Disposition Restrictions shall automatically terminate with
respect to any shares of Common Stock held by a Participant upon the death of
such Participant.
10. AMENDMENT OR TERMINATION OF PLAN.
(A) ACTION BY BOARD OF DIRECTORS.
The Board or the Committee, as the case may be, may, at any time,
suspend or terminate the Plan or make such changes in or amendments, subject to
the approval, if required, by the Office of the Comptroller of the Currency
prior to implementation thereof, to the Plan as the Board may deem necessary,
desirable or advisable; provided, however, that, except as provided in Section
11 hereof, neither the Board nor the Committee may, without the requisite
approval of the shareholders of the Bank, (i) increase the aggregate number of
shares of Common Stock subject to the Plan, (ii) change the
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designation of the class of employees of the Company eligible to receive stock
options under the Plan, (iii) materially increase the benefits accruing to
Participants under the Plan or (iv) take any action that would cause incentive
stock options issued under the Plan to fail to meet the requirements of Section
422A of the Code.
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(B) CHANGE IN APPLICABLE LAW.
Notwithstanding any other provision contained in the Plan, in the
event of a change in any Federal or state law, rule or regulation which would
make the exercise of all or part of any previously granted incentive and/or
non-incentive stock option unlawful or subject the Company to any penalty, the
Committee or the Board, as the case may be, may restrict any such exercise
without the consent of the Participant or other holder thereof in order to
comply with any such law, rule or regulation or to avoid any such penalty.
11. RECAPITALIZATION, MERGER, CONSOLIDATION AND SIMILAR TRANSACTIONS.
Except as expressly provide in this Section 11 hereof, no Participant shall
have any rights by reason of the occurrence of any of the events described in
this Section 11.
(A) ADJUSTMENT.
Subject to any required action by the shareholders of the Company, the
aggregate number of shares of Common Stock for which stock options may be
granted hereunder, the number of shares of Common Stock covered by each
outstanding stock option, and the exercise price per share of Common Stock of
each such stock option, shall all be proportionately adjusted for any increase
or decrease in the number of issued and outstanding shares of Common Stock
resulting from a subdivision or consolidation of shares or the payment of a
stock dividend (but only on the Common Stock) or any other increase or decrease
in the number of such shares of Common Stock effected without the receipt of
consideration by the Company.
(B) CHANGE IN CONTROL.
In the event of any Change in Control (as such term is defined in the
immediately following paragraph) of Bank, then (i) any and all incentive stock
options and/or non-incentive stock options outstanding pursuant to the Plan
shall automatically become immediately exercisable; and (ii) neither the Board
nor the Committee shall take any action pursuant to Section 11(c) hereof which
would prohibit or restrict the exercise of incentive stock options or
non-incentive stock options during the ninety (90) day period immediately
following such change in Control.
As used herein, the term "Change in Control" shall be defined to mean
the acquisition, directly or indirectly, beneficially and/or of record, of
ownership of securities of Bank representing twenty-five percent (25%) or more
of the combined voting power of all classes of Bank's outstanding securities by
any person, entity or group who or which, as of the effective date of the Plan,
is not an Affiliate of the Company or of any of the Company's present
Affiliates, or who or which, as of the date of such acquisition, is not an
Affiliate of any present Affiliate of the Company.
(C) CERTAIN EXTRAORDINARY CORPORATE ACTIONS.
Subject to any required action by the shareholders of the Company and
to Section 11(d) hereof, in the event of any Change of Control,
recapitalization, merger, consolidation, exchange of shares, spin-off,
reorganization, tender offer, liquidation or other extraordinary corporate
action or event, the Committee or the board, in its respective discretion, shall
have the power, prior or subsequent to such action or event to:
(I) appropriately adjust the number of shares of Common Stock
subject to each stock option, the exercise price per share of Common Stock, and
the consideration to be given or received by Bank upon the exercise of any
outstanding stock option; and
(II) make such other adjustments in connection with the Plan as
the Committee or the Board, in its respective discretion, deems necessary,
desirable, appropriate or advisable; provided however, that no action shall be
taken by the Committee or the Board, as the case may be, which would cause
incentive stock options granted pursuant to the Plan to fail to meet the
requirements of Section 422A of the Code.
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(D) EXTRAORDINARY CORPORATE ACTIONS WHERE BANK DOES NOT SURVIVE.
In the event of the sale, dissolution, or liquidation of the Bank or a
merger or consolidation in which the Bank is not the surviving or resulting
corporation, the Board of Directors may, in its discretion, provide for the
assumption by the surviving or resulting corporation of every option outstanding
hereunder on its terms and conditions, both as to the number of shares and
otherwise; provided, however, that, if the Board of Directors does not provide
for such assumption, the Board of Directors or Committee shall have the power to
cause the termination of every option outstanding hereunder, except that the
surviving or resulting corporation may, in its discretion, tender an option or
options to purchase its shares on its terms and conditions, both as to the
number of shares and otherwise; provided, further, that in all events the
optionee shall have the right immediately prior to such sale, dissolution,
liquidation, or merger or consolidation in which the Bank is not the surviving
or resulting corporation, to notification thereof as soon as practicable and,
thereafter, to exercise the optionee's option to purchase Shares subject thereto
to the extent of any unexercised portion of the option regardless of the vesting
provisions hereof or the instrument pursuant to which options are granted
pursuant thereto. This right of exercise shall be conditioned upon the execution
of a final plan of dissolution or liquidation or a definitive agreement of
merger or consolidation.
(E) ACCELERATION.
The Committee and/or the board shall at all times have the power to
accelerate the exercise date of stock options previously granted under the Plan.
12. ACQUISITION OF COMMON STOCK FOR INVESTMENT.
Each and every Participant exercising any incentive or non-incentive stock
option under the Plan may be required by the Company (i) to give a
representation in writing to the effect that any shares of Common Stock being
acquired pursuant to any such exercise are being acquired for the Participant's
own account, for investment and not with a view to or for resale in connection
with the distribution of all or any party thereof, and (ii) to covenant and
agree as to the time and circumstances of disposition of the shares of Common
Stock being acquired by such exercise, including without limitation those
restrictions on disposition set forth in Section 9 hereof.
13. UNSECURED OBLIGATION.
No Participant under the Plan shall have any interest in any fund or
special asset of the Company by reason of the Plan or the grant of any incentive
or non-incentive stock option to him under the Plan. No trust fund shall be
created in connection with the Plan or any grant of any incentive or
non-incentive stock option hereunder and there shall be no required funding of
amounts which may become payable to any Participant.
14. GOVERNING LAW.
The Plan shall be governed by and construed in accordance with the laws of
the District of Columbia.
15. EFFECTIVE DATE.
The effective date of the Plan shall be April 1, 1988
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