EXHIBIT 4.1
Form of Option Conversion Agreement by and between Astoria Financial
Corporation and Former Executive Officer of The Greater New York Savings Bank
dated September 30, 1997.
EXHIBIT 4.1
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OPTION CONVERSION AGREEMENT
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This OPTION CONVERSION 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 _________________________________
("Option Holder").
W I T N E S S E T H :
WHEREAS, the Option Holder holds certain options to purchase
shares of common stock of The Greater New York Savings Bank ("Existing
Options"); and
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 Option Holder
may elect to cause all or any portion of the Existing Options to be converted
into an option to purchase shares of the common stock of the Corporation
("Converted Option"); and
WHEREAS, the Option Holder has made such an election, and the
Option Holder and the Corporation desire to set forth the terms and conditions
of the Converted Option;
NOW, THEREFORE, the Option Holder and the Corporation agree as
follows:
SECTION 1. GRANT OF CONVERTED OPTION.
The Corporation hereby grants, and the Option Holder hereby
accepts the Corporation's grant of, a Converted Option, on the terms and
conditions hereinafter set forth, to purchase the number of shares of the
Corporation's Common Stock (each, an "Optioned Share"), at the exercise price(s)
per share (each, an "Applicable Exercise Price"), and generally for the period
beginning on the date hereof and ending on the expiration date(s) (each, an
"Applicable Expiration Date") set forth in columns (4), (5) and (6),
respectively, of the table set forth below:
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EXISTING OPTION CONVERTED OPTION
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(1) (2) (3) (4) (5) (6)
No. of Shares Exercise Price Expiration Date No. of Shares Exercise Price Expiration Date
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______ $______ ________________ ________ ______ Same as Column (3)
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______ $______ ________________ ________ ______ Same as Column (3)
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It is not intended that any of the Converted Options granted hereunder qualify
as incentive stock options described in section 422 of the Internal Revenue Code
of 1986 ("Code").
SECTION 2. TERM AND EXERCISE OF OPTIONS.
(a) Each Converted Option shall be exercisable as to an
Optioned Share at any time beginning on the date of this Agreement and ending on
the Applicable Expiration Date for such Optioned Share; PROVIDED, HOWEVER, that
the Converted Option shall be subject to earlier expiration as provided in
section 2(f) hereof.
(b) The Converted Option shall be exercisable in whole or in
part; PROVIDED HOWEVER, that no partial exercise of the Converted Option shall
be for an aggregate Applicable Exercise Price of less than One Thousand Dollars
($1,000). The partial exercise of a Converted Option shall not cause the
expiration, termination or cancellation of the remaining portion thereof. Upon
the partial exercise of the Converted Option, this Agreement, marked with any
notations deemed appropriate by the Corporation, shall be returned to the Option
Holder together with the delivery of the certificates described in section 2(e)
hereof.
(c) The Converted 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 Converted
Option is being exercised and the effective date of the proposed exercise, and
shall be signed by the Option Holder. The Option Holder 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 Converted 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.
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(d) During the life of the Option Holder, the Converted Option
shall be exercisable only by him. The Converted 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 Converted Option shall be issued in the name of the Option
Holder and delivered to the Option Holder as soon as practicable following the
effective date on which the Converted Option is exercised.
(f) In the event of the death of the Option Holder, the
Converted Option shall remain exercisable until the expiration of one year after
such death, on which date the Converted Option shall expire; PROVIDED, HOWEVER,
that the Converted Option shall not be exercisable as to any Optioned Share
after the Applicable Expiration Date for such Optioned Share.
(g) The exercise of all or any portion of the Converted Option
shall have the effect of reducing the number of Optioned Shares available for
purchase at the Applicable Exercise Price by the number of shares of Common
Stock acquired upon such exercise. At the close of business on any Applicable
Expiration Date, the number of Optioned Shares available for purchase at the
Applicable Exercise Price for the Optioned Shares subject to such Applicable
Expiration Date shall be reduced to zero. At the close of business on the first
anniversary of the Option Holder's death, the total number of Optioned Shares
available for purchase hereunder shall be reduced to zero.
SECTION 3. CERTAIN ADJUSTMENTS IN THE CONVERTED 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 or 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
Converted Option and the Applicable 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 Converted 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 Converted Option on such date would have received in such merger or
consolidation, and an appropriate adjustment shall be made in the Applicable
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
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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 Converted Option and, in full consideration of such
cancellation, pay to the Option Holder an amount in cash, for each
Optioned Share then subject to the Converted 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 Applicable Exercise Price; or
(B) provide for the exchange of the Converted 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 Applicable 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 Option Holder in partial consideration for
the exchange of the Converted Option.
The Corporation shall take the same action under this section 3(c) as it takes
under any similar provisions of 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 Corporation shall make such adjustments
in the number and class of shares subject to the Converted Option outstanding on
the date on which such change occurs and in the Applicable Exercise Price of
each Optioned Share then subject to the Converted Option as is appropriate to
prevent dilution or enlargement of rights.
(e) Except as expressly provided herein, the Option Holder
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 Converted Option
until the date of the issuance of a stock certificate with respect to such
shares. Except as otherwise expressly provided in section
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3 hereof, no adjustment to the Converted 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 Converted Option, the Corporation shall have the right to
require the Option Holder 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 Option Holder, but subject to the
approval of the Corporation, when shares of Common Stock are to be issued upon
the exercise of the Converted Option, in lieu of the remittance required by
section 5(a) hereof, the Option Holder 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 Participant's estimated total federal, state and local tax obligations
associated with such exercise.
(c) At the election of the Option Holder, but subject to the
approval of the Corporation, when shares of Common Stock are to be issued upon
the exercise of the Converted Option, in lieu of the remittance required by
section 5(a) hereof, the Corporation shall withhold a number of such shares
determined by the Option Holder, 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 greater than the Option Holder's
estimated total federal, state and local tax obligations associated with such
exercise.
SECTION 6. NO OBLIGATION TO EXERCISE.
The grant to the Option Holder of the Converted Option shall
impose no obligation to exercise such Converted Option.
SECTION 7. TRANSFERS UPON DEATH.
Upon the death of the Option Holder, the Converted Option may
be exercised only by the executors or administrators of Option Holder'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
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transfer and (b) an agreement by the transferee to comply with all the terms and
conditions of the Converted Option that are or would have been applicable to the
Option Holder and to be bound by the acknowledgements made by the Option Holder
in connection with the grant of the Converted Option. Except as provided in this
section 7, the Converted Option shall not be transferable and may only be
exercised during the Option Holder's lifetime by the Option Holder.
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 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 Converted Option, the Corporation
shall pay to the Option Holder 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 Converted Option was proposed to be exercised, 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
Converted Option.
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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
Applicable 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:
(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 Option Holder, to the Option Holder'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 Option Holder and their respective heirs,
successors and assigns.
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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.
SECTION 14. GOVERNING LAW.
This Agreement shall be construed, administered and enforced
according to the laws of the State of New York without giving effect to the
conflict of laws principles thereof, except to the extent that such laws are
preempted by the federal law.
SECTION 15. 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
Option Holder.
SECTION 16. 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.
SECTION 17. 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 18. 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.
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SECTION 19. 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 20. HEADINGS AND CONSTRUCTION.
The headings of sections in this Agreement are for convenience
of reference only and are not intended to qualify the meaning of any section.
Any reference to a section number shall refer to a section of this Agreement,
unless otherwise stated.
SECTION 21. ENTIRE AGREEMENT; MODIFICATIONS.
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. No modifications of this Agreement shall be valid unless made in
writing and signed by the parties hereto.
SECTION 22. 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 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. Each party shall
bear its own costs and expenses in any such Proceeding.
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IN WITNESS WHEREOF, the Option Holder 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]
[EXECUTIVE]
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Signature
Date:
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