GREAT LAKES BANCORP, INC. RESTATED 2002 STOCK OPTION PLAN
RESTATED
2002 STOCK OPTION PLAN
Under
an
Agreement and Plan of Reorganization dated as of February 10, 2003 (the “Plan of
Reorganization”), between Greater Buffalo Savings Bank (the “Bank”) and Great
Lakes Bancorp, Inc. (the “Corporation”), it was agreed that the Corporation
would become a holding corporation for the Bank and the sole holder of all
issued and outstanding shares of its common stock, and that each whole or
fractional share of Bank common stock issued and outstanding immediately prior
to the reorganization would automatically be converted into the same number
and
class of shares of the common stock of the Corporation.
Section
5
of the Plan of Reorganization provided that, at the effective date defined
in
the Plan of Reorganization (the “Effective Time”), the Greater Buffalo Savings
Bank 2002 Stock Option Plan (the “0000 XXXX Plan”) would be transferred to and
would be continued as a stock option plan of the Corporation
The
0000
XXXX Plan was approved by the shareholders of the Bank on April 30, 2002.
Pursuant to regulations applicable to the Bank, the Superintendent of Banks
of
the New York State Banking Department (the “Superintendent”) also approved the
0000 XXXX Plan. The shareholders of the Bank and the Superintendent approved
the
Plan of Reorganization on April 29, 2003 and April 17, 2003, respectively,
providing for the transfer of the 0000 XXXX Plan to the Corporation. As of
the
Effective Time, the Board of Directors of the Corporation approved the amendment
of the 0000 XXXX Plan to reflect its transfer and continuation and directed
the
appropriate officers to amend the plan accordingly.
Therefore,
the Corporation hereby amends and restates the former 0000 XXXX Plan to reflect
its transfer and continuation as the Great Lakes Bancorp, Inc. Restated 2002
Stock Option Plan (the “Plan”).
1.
Purposes
of Plan.
The
purposes of this Plan are to provide for stock options (“Options”) as incentives
for key employees, titled assistants, officers and/or directors of the
Corporation and its Subsidiary Corporations, as hereinafter defined and in
certain instances to compensate founding directors for their efforts in founding
the Bank or directors for attending meetings of the Corporation’s Board of
Directors or committees of the Corporation’s Board of Directors, through
acquisition or increased ownership of the Corporation’s common stock, par value
$5.00 per share (“Common Stock”), and where appropriate to encourage such
individuals to put forth maximum efforts for the success of the Corporation’s
business. It is intended that Options granted to employees under the Plan will
constitute incentive stock options (“ISOs”) within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended (the “Code”). It is also intended
that Options granted to non-employee officers and directors pursuant to this
Plan shall be non-qualified options (“NQSOs”) for purposes of the
Code.
2.
Definitions.
As used
in the Plan, the following words and phrases shall have the meanings
indicated:
(a)
Board of Directors
shall
mean the Board of Directors of the Corporation.
(b)
Disability
shall
mean a mental or physical condition which in the opinion of a majority of the
Option Committee renders an individual unable or incompetent to properly carry
out the responsibilities attendant to the individual’s employment. The decision
of the Option Committee shall be conclusive and binding on all
parties.
(c)
Disinterested
Director
shall
mean a director of the Corporation who is not an employee or officer of the
Corporation and is not under consideration for a grant of Options at the time
the Option Committee acts with respect to such grants.
(d)
Fair
Market Value
per
share as of a particular date shall mean (i) if the shares of Common Stock
are
then traded in the over-the-counter market, the average of the closing bid
and
asked prices for the shares of Common Stock in the over-the-counter market
on
the latest date prior to such date for which such prices are available; or
(ii)
if the shares of Common Stock are then listed on an established national
securities exchange, the average of the opening and closing prices on such
exchange on the latest date prior to such date for which such prices are
available, or (iii) if the shares of Common Stock are not then traded in the
over-the-counter market or listed on an established national securities
exchange, such value as the Option Committee shall determine based on a
reasonable method selected by the Option Committee in its discretion, such
method to include such factors as (a) the market value of shares of comparable
banks and (b) the trend of the bank’s earnings. The Fair Market Value of stock
is to be determined without regard to any restriction, other than a restriction
which, by its terms, will never lapse.
(e)
Option
Committee
shall
mean the committee responsible for administering the Plan as described in
Section 3 hereof.
(f)
Optionee
shall
mean an employee, officer or director of the Corporation or a Subsidiary
Corporation to whom an Option has been granted under the Plan.
(g)
Retirement
shall
mean either (i) the termination, retirement or resignation of an Optionee at
a
time when the Optionee is eligible for immediate commencement of pension
benefits under the provisions of any retirement plan for employees of the Bank
or the Corporation or any Subsidiary Corporation as then in effect, or (ii)
any
other voluntary or involuntary termination of employment by an Optionee which
the Board of Directors designates as a retirement for the purposes of this
Plan.
(h)
Subsidiary
Corporation
shall
mean any corporation (other than the Corporation) in an unbroken chain of
corporations beginning with the Corporation if, at the time of granting an
Option, each of the corporations other than the last corporation in the unbroken
chain owns stock possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.
3.
Administration.
The Plan
shall be administered by the Option Committee, which shall have the authority
to
administer the Plan and to exercise all the powers and authority either
specifically granted to it under the Plan or necessary or advisable in the
administration of the Plan, including, without limitation, the authority to
grant Options; to determine the Option purchase price of the shares of Common
Stock subject to an Option; to determine the individuals to whom, and the times
at which, Options shall be granted; to determine the number of shares to be
covered by each Option and the terms and conditions of each Option; to interpret
the Plan; to prescribe, amend and rescind rules and regulations relating to
the
Plan; to determine the terms and provisions of the Option Agreements provided
for in Section 6(j) hereof to be entered into in connection with Options granted
under the Plan; and to make all other determinations deemed necessary or
advisable for the administration of the Plan. All determinations and
interpretations made by the Option Committee shall be final, conclusive and
binding on all persons, including Optionees and their legal representatives,
successors in interest and beneficiaries. The Option Committee may delegate
to
one or more of its members or to one or more agents administrative or record
keeping duties as it may deem advisable.
2
The
Option Committee shall consist of those directors elected from time to time
by
the Board of Directors, except that only Disinterested Directors shall be
permitted to serve on the Option Committee. The Board of Directors shall
designate one of the members of the Option Committee as its chairman, and the
Option Committee may appoint a secretary (who need not be a member of the Option
Committee). The Option Committee shall hold its meetings at such times and
places as it may determine. A majority of its members, present in person or
all
of its members by conference telephone, shall constitute a quorum. All
determinations of the Option Committee at a meeting thereof in person or by
conference telephone call shall be made by a majority of its members
participating in such a meeting. The Option Committee may make any decision
or
determination by the unanimous written consent of all its members. The Board
of
Directors shall fill any vacancy in the Option Committee. No member of the
Option Committee shall be liable for any act or omission with respect to his
or
her service on the Option Committee, if he or she acts in good faith and in
a
manner he or she reasonably believes to be in or not opposed to the best
interests of the Corporation.
4.
Persons
Eligible to Receive Options.
(a)
In
General.
Options
under the Plan may be granted in the discretion of the Option Committee to
key
employees, titled assistants, officers, founding directors and/or directors
of
the Corporation or any Subsidiary Corporation. Options may be granted to such
eligible individuals whether or not they hold or have held Options previously
granted under the Plan or otherwise granted by the Corporation or a Subsidiary
Corporation, subject to any restrictions set forth in the Plan. In selecting
individuals to whom Options shall be granted, the Option Committee shall take
into consideration any factors it may deem relevant, including the duties of
the
respective individuals and such individuals’ past, present and potential
contributions to the success of the Corporation and its Subsidiary
Corporations.
(b)
Ten-Percent
Stockholders.
An
individual who owns more than 10% of the total combined voting power of all
classes of outstanding stock of the Corporation or any of its Subsidiary
Corporations (as determined in accordance with Section 424(d) of the Code)
will
not be eligible for the grant of an ISO unless (i) the Option Price is at least
110% of the Fair Market Value of a share of Common Stock on the date of grant
and (ii) the Option by its terms is not exercisable after the expiration of
5
years from the date of grant.
(c)
Directors.
Notwithstanding anything to the contrary contained herein, the Corporation
shall, on or before January 30 of each year during the term of this Plan, award
options for one thousand (1000) shares of Common Stock to each director of
the
Corporation, who is not a full time employee of the Corporation or any
Subsidiary Corporation, for all meetings of the Board of Directors of the
Corporation or any committee thereof which such director attended during the
preceding fiscal year of the Corporation, in lieu of paying any cash
consideration to the directors for their service as such or for attending such
meetings. The foregoing sentence shall be inoperative if, on or before the
first
day of any fiscal year or the effective date of the Plan, the Board of Directors
adopts a resolution providing for the payment of cash consideration to the
directors for their service as such and for attending meetings of the Board
of
Directors and the committees thereof during the ensuing fiscal year or the
remainder of the fiscal year during which the Plan first became
effective.
3
5.
Stock
Available for Options.
The
number of shares of voting Common Stock available for Options granted under
the
Plan shall be 217,460. Such amount may be adjusted pursuant to Section 6(g)
hereof. Shares of Common Stock used for purposes of the Plan shall be authorized
and unissued shares, or issued shares designated on the Corporation’s balance
sheet as “treasury shares.” Shares of Common Stock subject to Options which have
terminated or expired prior to exercise shall be available for subsequent grants
of Options under the Plan.
6.
Terms
and Conditions of Options.
The
Option Committee shall prescribe the terms and conditions of the Options granted
to each individual, which terms and conditions need not be the same in each
case, subject to the following:
(a)
Option
Price.
The
price at which each share of Common Stock subject to an Option may be purchased
(the “Option Price”) shall be determined by the Option Committee. The Option
Price shall be not less than the greater of $10 or one hundred percent (100%)
of
the Fair Market Value of the shares of Common Stock on the date of grant of
the
Option, or any higher percentage required by Section 4(b). The Option Price
shall be subject to adjustment as provided in Section 6(g).
(b)
Option
Period.
The
period during which an Option may be exercised shall be determined by the Option
Committee subject to the vesting schedule in subsection (c) below, and shall
in
no event be more than ten (10) years from the date of grant of such Option,
or
any shorter period required by Section 4(b). The exercise period shall be
subject to earlier termination as provided in Section 8 hereof. The date of
grant of an Option shall be the date specified by the Option Committee in its
resolution granting the Option (which date may not be earlier than the date
of
the resolution).
(c)
Vesting
and Exercisability.
Provided that an Optionee shall otherwise be entitled to exercise an Option
in
accordance with terms of this Plan, the right of an Optionee to exercise an
Option granted under the Plan will vest as follows:
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Percent
of
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Options
That Become Vested
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|
Date
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and
Exercisable
|
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1
Year After
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|
Date
of Grant
|
20
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%
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2
Years After
|
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|
Date
of Grant
|
20
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%
|
||
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3
Years After
|
||||
|
Date
of Grant
|
20
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%
|
||
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4
Years After
|
||||
|
Date
of Grant
|
20
|
%
|
||
|
5
Years After
|
||||
|
Date
of Grant
|
20
|
%
|
||
|
|
100
|
% | ||
4
Notwithstanding
any other provision contained herein to the contrary, Options awarded to
individuals who served as founding directors of the Bank for services rendered
and risk incurred in incorporating the Bank shall vest and become exercisable
immediately upon receipt. Additionally, Options awarded to any directors of
the
Corporation in lieu of compensation for attending meetings of the Corporation’s
Board of Directors or committees of the Corporation’s Board of Directors shall
vest and become exercisable immediately upon receipt.
In
the
event of the death, Retirement or Disability of an Optionee while employed
by
the Corporation or a Subsidiary Corporation, or the termination of the
Optionee’s employment with the Corporation or a Subsidiary Corporation without
Cause, as defined below, or the resignation, removal, or failure of an Optionee
who is a director of the Corporation to be re-elected to the Board of Directors
of the Corporation, all unexpired Options held by such Optionee shall be deemed
100% vested and exercisable as of the date of such death, Retirement or
Disability or termination of employment or expiration of service as a director
of the Corporation. If an Optionee’s employment with the Corporation or a
Subsidiary Corporation is terminated for Cause, all unexercised Options will
be
forfeited and will expire on the date of the Optionee’s termination for Cause,
unless otherwise determined by the Option Committee in its discretion. For
purposes of this Section 6(c) the term “Cause” shall mean any of the following:
(i) the Optionee’s conviction of any felony offense involving monies or other
property, or any crime of moral turpitude, or the commission of fraud or
embezzlement; (ii) the Optionee’s breach of any of his or her fiduciary duties
to the Corporation or any Subsidiary Corporation which breach materially
adversely affects the business of the Corporation or any Subsidiary Corporation;
(iii) the Optionee’s willful and continued neglect or failure, after written
demand, to discharge his or her duties or failure to obey a specific written
direction from the Board of Directors or Chief Executive Officer of the
Corporation or any Subsidiary Corporation; or (iv) the Optionee’s violation of
any non-competition or confidentiality agreement with the Corporation or any
Subsidiary Corporation.
(d)
Exercise
of Options and Payment.
An
Optionee, or transferee pursuant to Section 6(f) hereof, may exercise an Option
as to any or all shares of Common Stock as to which the Option has become
exercisable; provided, however, an Option may not be exercised for fewer than
one hundred (100) shares of Common Stock, or the number of shares of Common
Stock remaining as to which such Option is then exercisable, whichever is
smaller. The Option shall be exercised by delivering to the Corporation written
notice of such exercise setting forth the number of shares of Common Stock
to be
purchased and the name in which such shares shall be registered, together with
a
certified check, bank draft or money order, in the full amount of the purchase
price therefor, in each case payable to the order of the Corporation in United
States dollars; provided, however, that such purchase price may in the
alternative, to the extent permitted by law, be paid by assigning and delivering
to the Corporation shares of Common Stock having in the aggregate on the date
of
exercise a Fair Market Value equal to such purchase price; and provided further
that at the election of the Option Committee, to the extent permitted by law,
such purchase price may consist of other property, tangible or intangible,
or
labor or services actually received by or performed for the Corporation or
for
its benefit, or a combination thereof. In the absence of fraud in the
transaction, the judgment of the Board of Directors as to the value of the
consideration received upon the exercise of an Option shall be
conclusive.
5
If
the
Optionee so requests, shares of Common Stock purchased upon exercise of an
Option may be issued in the name of the Optionee or another person provided
that
any such shares will be subject to the restrictions contained in Section 6(k)
hereof.
The
shares of Common Stock issued to an Optionee upon the exercise of an Option
may
be restricted from further transfer for any period which may be required under
applicable securities laws, in which case the stock certificates therefor shall
contain a reference to such restriction.
(e)
No
Right to Continued Employment.
Nothing
in this Plan or in any Option granted pursuant to the Plan shall confer or
be
deemed to confer on any individual any right to continue in the employ of the
Corporation or any Subsidiary Corporation or be deemed to restrict in any way
the right of the Corporation or a Subsidiary Corporation to terminate his or
her
employment at any time.
(f)
Non-Transferability
of Options.
During
the lifetime of an Optionee, Options held by such Optionee shall be exercisable
only by such Optionee or, in the event of an Optionee’s Disability, by his
guardian or legal representative. No Option shall be assignable or transferable
by an Optionee other than by will or applicable laws of descent and
distribution.
(g)
Adjustments
for Change in Stock Subject to Plan and Other Events.
(1)
In
the event of a reorganization, recapitalization, stock split, stock dividend,
combination of shares, merger, consolidation, rights offering, or any other
change in the corporate structure or shares of Common Stock of the Corporation,
the number of shares of Common Stock available for Options, the number of such
shares covered by outstanding Options, and/or the Option Price per share shall
be proportionately adjusted by the Board of Directors to reflect any increase
or
decrease in the number of issued and outstanding shares of Common Stock;
provided, however, that any fractional shares resulting from such adjustment
shall be eliminated by rounding down to the nearest whole number of shares.
The
Board of Director’s determinations of adjustments shall be final, binding and
conclusive.
(2)
In
connection with (i) any sale or transfer by the Corporation of all or
substantially all its assets, or (ii) any acquisition, directly or indirectly
(including by way of tender or exchange offer, merger or consolidation), of
all
or a majority of the then outstanding voting securities of the Corporation
by
any person or any group (within the meaning of Section 13(d)(1) of the
Securities Exchange Act of 1934), other than the Corporation or a Subsidiary
Corporation, all outstanding Options under the Plan shall become fully vested
and exercisable in full, on and after (i) 15 days prior to the effective date
of
such sale, transfer or acquisition or (ii) the date of commencement of such
tender or exchange offer, as the case may be. Notwithstanding the foregoing,
in
no event shall any Option be exercisable at or after the date of termination
otherwise applicable to the exercise period of such Option.
(3)
In
the event of the proposed dissolution or liquidation of the Corporation, or
any
consolidation or merger in which the Corporation is the surviving corporation
and in which there is a reclassification or change of the shares of Common
Stock
(other than a change in par value), all outstanding Options under the Plan
shall
become fully vested and exercisable upon the Corporation’s adoption of the plan
or agreement related to such event. The Option Committee may provide that the
holder of each Option then exercisable shall have the right to exercise such
Option (at its then Option Price) solely for the kind and amount of shares
of
stock and other securities, property, cash or any combination thereof that
such
Optionee would receive upon such dissolution, liquidation, or corporate
consolidation or merger if the Optionee were already the holder of the number
of
shares of Common Stock for which such Option is exercisable; or the Option
Committee may provide in the alternative, that each Option granted under the
Plan shall terminate as of a date to be fixed by the Board of Directors,
provided, however, that not less than thirty (30) days written notice of the
date so fixed shall be given to each Optionee, who shall have the right, during
the period of thirty (30) days preceding such termination, to exercise each
Option as to all or any part of the shares of Common Stock subject
thereto.
6
(4)
Paragraphs (2) and (3) of this Section 6(g) shall not apply to any merger or
consolidation in which the Corporation is the surviving corporation and shares
of Common Stock are not converted into or exchanged for stock, securities of
any
other corporation, cash or any other thing of value.
(h)
Registration,
Listing and Qualification of Shares of Stock.
Each
Option shall be subject to the requirement that if at any time the Board of
Directors or the Option Committee shall determine that the registration, listing
or qualification of the shares of Common Stock subject thereto, upon any
securities exchange or under any federal or state law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as
a
condition of, or in connection with, the granting of such Option or the purchase
of shares of Common Stock thereunder, no such Option may be exercised unless
and
until such registration, listing, qualification, consent or approval has been
effected or obtained free of any conditions not acceptable to the Option
Committee or Board of Directors. The Corporation may require that any person
exercising an Option make such representations and agreements and furnish such
information as the Corporation deems appropriate to assure compliance with
the
foregoing or any other applicable legal requirement.
(i)
Rights
as a Stockholder.
An
Optionee shall have no rights as a stockholder with respect to any shares
covered by the Option until the date of the issuance of a stock certificate
to
him or her for such shares. No adjustment shall be made for dividends (ordinary
or extraordinary, whether in cash, securities or other property) or
distributions or other rights for which the record date is prior to the date
such stock certificate is issued, except as provided in Section 6(g)
hereof.
(j)
Option
Agreements.
Each
Option granted pursuant to the Plan shall be evidenced by a written option
agreement (“Option Agreement”) between the Corporation and the Optionee, which
agreement shall, subject to the terms and conditions contained in the Plan,
state: the number of shares of Common Stock to which the Option relates, the
Option Price, and that the terms and conditions of this Plan shall be
incorporated therein by reference. Each Option Agreement shall contain such
other provisions, including, without limitation, the imposition of restrictions
upon the exercise of an Option, as the Option Committee shall deem advisable.
Each Option Agreement also will specify whether the Option is an ISO or NQSO.
However, if any portion of an Option does not meet the requirements to qualify
as an ISO, that portion will be an NQSO.
7
(k)
Sale
of Shares.
An
Optionee may not sell any Common Stock which is acquired pursuant to the
exercise of an Option hereunder for a period of six (6) months after he acquires
such Common Stock.
(l)
Limitation
on Amount.
The
aggregate Fair Market Value (determined with respect to each ISO as of the
time
the ISO is granted) of the shares of Common Stock with respect to which ISOs
are
exercisable for the first time by an Optionee during any calendar year (under
this Plan or any other ISO plan of the Corporation or any Subsidiary
Corporation) may not exceed $100,000.
7.
Agreement
by Optionee Regarding Withholding Taxes.
If the
Option Committee shall so require, each Optionee shall agree that as a condition
of exercise of an Option:
(a)
no
later than the date of exercise of any Option granted hereunder, the Optionee
will pay to the Corporation or make arrangements satisfactory to the Option
Committee regarding payment of any federal, state or local taxes of any kind
required by law to be withheld upon the exercise of such Option, and
(b)
the
Corporation shall have the right to deduct from any payment of any kind
otherwise due to the Optionee, federal, state or local taxes of any kind
required by law to be withheld upon the exercise of such Option or to retain
a
sufficient number of shares to equal the amount of tax required to be withheld
with respect to the exercise of an Option.
8.
Term,
Amendment and Termination of the Plan.
Options
may be granted pursuant to the Plan from time to time within a ten-year period
from the date the Plan is adopted by the Board of Directors; provided, however,
that the Board of Directors may at any time prior to the end of the 10-year
period terminate the Plan. The Board of Directors may at any time suspend,
amend
or modify the Plan subject to the approval of the Superintendent to be obtained
in accordance with applicable law; provided, that no amendment or modification
to the Plan which eliminates or adversely affects a right or privilege of an
Optionee shall have any retroactive effect unless required by law. In addition,
the approval of the holders of a majority of the Corporation’s outstanding
Common Stock shall be required to any amendment, other than an adjustment made
pursuant to Section 6(g) hereof, which would (i) increase the number of shares
of Common Stock as to which Options may be granted, (ii) change the number
of
shares of Common Stock which may be optioned to any single individual, (iii)
decrease an Option Price, (iv) extend the term of the Plan or of an Option,
or
(v) change the persons or categories of persons eligible to be granted Options.
No termination of the Plan may, without the consent of an Optionee, adversely
affect the rights of such Optionee under any Option held by such
Optionee.
9.
Approval
of Stockholders.
This
Plan is subject to approval by the holders of a majority of the outstanding
shares of the capital stock of the Corporation within 12 months of its adoption,
and no Option granted hereunder shall be effective or exercisable prior to
such
approval. If the Plan is not approved as provided above, the Plan and all
Options granted hereunder shall be null and void and of no force and
effect.
10.
Other
Actions.
Nothing
contained in the Plan shall be construed to limit the authority of the
Corporation to exercise its corporate rights and powers, including but not
by
way of limitation, the right of the Corporation to grant options for proper
corporate purposes other than under the Plan with respect to any director,
employee or other person, firm, corporation or association.
8
11.
No
Obligation to Exercise Option.
The
granting of an Option shall impose no obligation upon the Optionee to exercise
such Option.
12.
Investment
Purpose.
Each
Option under the Plan shall be granted on the condition that the purchase of
Common Stock thereunder shall be for investment purposes, and not with a view
to
resale or distribution.
13.
Applicable
Law.
The Plan
and all Options granted under it will be construed and interpreted in accordance
with, and governed by, the laws of the State of New York, other than its laws
regarding choice of law.
14.
Effective
Date.
The
effective date of the 0000 XXXX Plan is April 29, 2002, which is the date final
approval is given to the GBSB Plan by the Superintendent. The effective date
of
the Plan is April 29, 2003, which is the Effective Time of the Plan of
Reorganization.
15.
Execution.
To
record the amendment and restatement of the Plan by the Board of Directors,
the
Corporation has caused its authorized officer to execute it.
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By:
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/s/
Xxxxxx X. Xxxx, Xx.
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Xxxxxx
X. Xxxx, Xx.
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President
and Chief Executive Officer
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9
