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Exhibit 10(a)
 
TRUSTCO BANK CORP NY

2010 EQUITY INCENTIVE PLAN
(Amended and Restated as of March 21, 2017)
 

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TrustCo Bank Corp NY

2010 EQUITY INCENTIVE PLAN
(Amended and Restated as of March 21, 2017)

TABLE OF CONTENTS
 
1.
Establishment and Amendment, Purpose, and Effective Date of Plan
1
     
2.
Definitions
1
     
3.
Eligibility and Participation
4
     
4.
Administration
4
     
5.
Stock Subject to Plan
5
     
6.
Duration of Plan
6
     
7.
Stock Options
6
     
9.
Stock Appreciation Rights
8
     
10.
Restricted Stock
9
     
10.
Restricted Stock Units
10
     
11.
Performance Units
11
     
12.
Performance Shares
12
     
13.
Performance Goals
13
     
14.
Beneficiary Designation
14
     
13.
Rights of Employees
14
     
14.
Change-in-Control
14
     
15.
Amendment, Modification and Termination of Plan
17
     
16.
Tax Withholding
19
     
17.
Indemnification
19
     
18.
Incentive-Based Compensation Recovery
20
     
19.
Requirements of Law
20

 

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1.
Establishment and Amendment, Purpose, and Effective Date of Plan.

 

(a)
Establishment and Amendment. On December 21, 2010 the Board adopted the “TRUSTCO
BANK CORP NY 2010 EQUITY INCENTIVE PLAN”.  On March 20, 2012, the Board amended
the Plan, and on March 17, 2015, the Board amended and restated the Plan. 
Effective as of March 21, 2017, the Board hereby further amends and restates the
Plan.

 

(b)
Purpose. The purpose of the Plan is to advance the interests of the Company and
its stockholders by providing to certain key employees additional incentives and
motivation toward superior performance of the Company and its Subsidiaries
through the opportunity to acquire equity ownership in the Company, and by
enabling the Company and its Subsidiaries to attract and retain the services of
employees upon whose judgment, interest, and special effort the successful
conduct of its operations is largely dependent. At the same time, the Board and
Committee will work together to ensure that the implementation of the Plan, in
conjunction with the Company’s other compensation policies and practices, does
not create risks that are reasonably likely to have a material adverse effect on
the Company.

 

(c)
Effective Date. The Plan was originally effective upon its adoption by the Board
of Directors of the Company on December 21, 2010 and was approved by
stockholders at the Company’s 2011 Annual Meeting of Stockholders. Stockholders
approved a prior amendment and restatement of the Plan at the Company’s 2015
Annual Meeting of Stockholders; the Compensation Committee of the Board and the
Board have determined that stockholder approval of the amendment and restatement
of the Plan as of March 21, 2017 is not required under Section 17 of the Plan.

 

2.
Definitions.

 

(a)
Definitions. Whenever used herein, the following terms shall have their
respective meanings set forth below.

 

(i)
“Award” means any Stock Option, Stock Appreciation Right, Restricted Stock,
Restricted Stock Unit, Performance Unit or Performance Share granted under the
Plan.

 

(ii)
“Award Agreement” means the agreement that sets forth the terms, conditions and
limitations applicable to an Award.

 

(iii)
“Board” means the Board of Directors of the Company.

 

(iv)
“Cause” means conduct of a Participant that involves the commission of an act of
fraud, embezzlement or theft constituting a felony against the Company or any
Subsidiary as finally determined by a court of competent jurisdiction or an
unequivocal admission by the Participant.

 

(v)
“Change-in-Control” shall have the meaning ascribed thereto in Section 16(b).

 

(vi)
“Code” means the Internal Revenue Code of 1986, as amended.

 

(vii)
“Committee” means the Compensation Committee of the Board or such other
committee appointed from time to time by the Board to administer the Plan. The
Committee shall consist of two or more members, each of whom shall qualify as a
“non-employee director,” as the term (or similar or successor term) is defined
by Rule 16b-3, and as an “outside director” within the meaning of Code Section
162(m) and regulations thereunder.

 

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(viii)
“Company” means TrustCo Bank Corp NY, a New York corporation.

 

(ix)
“Disability” means a Participant is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
that can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months.  The Participant also will be
deemed to have a “Disability” if determined to be totally disabled by the Social
Security Administration.

 

(x)
“Eligible Employee” means any executive, key managerial employee or other
employee of the Company or its Subsidiaries, or any branch or division thereof,
who is a regular, full-time, salaried employee. An Eligible Employee who, with
the approval of the Board or the Committee, enters into a written agreement (a
“Continuing Participant Agreement”) with the Company or its Subsidiaries to
remain a continuing participant in the Plan, which such agreement will be
effective upon such person ceasing to be a regular, full-time, salaried employee
of the Company or a Subsidiary, shall continue to be an Eligible Employee for
purposes of the Plan and shall not be deemed to incur a Separation from Service
during the term of such Continuing Participant Agreement, unless, with respect
to an Award that is not exempt from Code Section 409A, such person has had a
Separation from Service within the meaning of Code Section 409A.

 

(xi)
“Fair Market Value” means the closing price of the Stock as reported on the
Nasdaq Global Select Market, or such other system as may supersede it, on a
particular date. In the event that there are no Stock transactions on such date,
the Fair Market Value shall be determined as of the immediately preceding date
on which there were Stock transactions.

 

(xii)
“Option” means the right to purchase Stock at a stated price for a specified
period of time (subject to Section 7(c)).  For purposes of the Plan, an Option
may be either (1) an “Incentive Stock Option,” or “ISO,” within the meaning of
Section 422 of the Code, (2) a “Nonstatutory (Nonqualified) Stock Option,” or
“NSO,” or (3) any other type of option encompassed by the Code.

 

(xiii)
“Participant” means any Eligible Employee designated by the Committee to
participate in the Plan.

 

(xiv)
“Performance Period” means the time period during which the performance goals
must be met with respect to Performance Units, Performance Shares and any other
Award subject to performance goals.

 

(xv)
“Performance Unit” means a right to receive a payment equal to the value of a
performance unit granted as determined by the Committee based upon performance
and pursuant to Section 11 of the Plan.

 

(xvi)
“Performance Share” means a right to receive a payment equal to the value of a
performance share granted as determined by the Committee based on performance
and pursuant to Section 12 of the Plan.

 

(xvii)
“Period of Restriction” means the period during which the transfer of shares of
Restricted Stock is restricted pursuant to Section 9(g) of the Plan.

 

(xviii)
“Plan” means the TrustCo Bank Corp NY 2010 Equity Incentive Plan as set forth
herein and any amendments hereto.

 
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(xix)
“Previously-Acquired Share” means a share of Stock acquired by the Participant
or any beneficiary of the Participant, and if so acquired, such share of Stock
has been held for a period of not less than six months, or such shorter period
as the Committee may prescribe.

 

(xx)
“Qualified Change-in-Control” shall have the meaning ascribed thereto in Section
16(d).

 

(xxi)
“Restricted Stock” means Stock granted to a Participant pursuant to Section 9 of
the Plan.

 

(xxii)
“Restricted Stock Unit” means a right to receive a payment equal to the value of
a share of Stock, pursuant to Section 10 of the Plan.

 

(xxiii)
“Retirement” means a Participant’s Separation from Service other than for Cause
or because of the Participant’ death or Disability, at or after the
Participant’s (1) age 65 (“Normal Retirement Date”) or (2) age 55 (but prior to
age 65), with ten or more years of service, or such other date prior to age 65
which constitutes an Early Retirement Date (“Early Retirement Date”) as defined
from time to time under the Retirement Plan of Trustco Bank.  For purposes
hereof, the phrase “years of service” has the meaning ascribed to the term
“Credited Years of Service” under the Amended and Restated Trustco Bank and
TrustCo Bank Corp NY Supplemental Retirement Plan dated January 1, 2008.

 

(xxiv)
“Rule 16b-3” means Rule 16b-3 or any successor or comparable rule or rules
applicable to Awards granted under the Plan promulgated by the Securities and
Exchange Commission under Section 16(b) of the Securities Exchange Act of 1934,
as amended. Rule 16b-3 generally provides exemptions from the short-swing profit
recovery provisions of Section 16(b) for transactions between an issuer and its
officers or directors, including the grant and exercise of options and other
equity-related awards.

 

(xxv)
“Separation from Service” means a termination of the Participant’s employment or
service with the Company and all of its controlled group members within the
meaning of Code Section 409A.  Whether a Separation from Service has occurred is
determined based on whether the facts and circumstances indicate that the
Company and Participant reasonably anticipated that no further services would be
performed after a certain date or that the level of bona fide services the
Participant would perform after such date (whether as an employee or as an
independent contractor) would permanently decrease to no more than 25% of the
average level of bona fide services performed (whether as an employee or an
independent contractor) over the immediately preceding thirty-six month period
(or the full period of services to the Company if the Participant has been
providing services to the Company less than thirty-six months).  For periods
during which a Participant is on a paid bona fide leave of absence (as defined
in Treas. Reg. §1.409A-1(h)(1)(i)) and has not otherwise terminated employment,
the Participant is treated as providing bona fide services at a level equal to
the level of services that the Participant would have been required to perform
to receive the compensation paid with respect to such leave of absence.  Periods
during which a Participant is on an unpaid bona fide leave of absence (as
defined in Treas. Reg. §1.409A-1(h)(1)(i)) and has not otherwise terminated
employment are disregarded for purposes of this definition (including for
purposes of determining the applicable thirty-six month period).  There is no
Separation from Service of a Participant with the Company (or any of its
controlled group members within the meaning of Code Section 409A) where there is
a simultaneous reemployment (or commencement of service) or continuing
employment (or service) of the Participant by the Company or any of controlled
group members within the meaning of Code Section 409A.

 
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(xxvi)
“Stock” or “Common Stock” means the common stock of the Company.

 

(xxvii)
“Stock Appreciation Right” and “SAR” mean the right to receive a payment from
the Company equal to the excess of the Fair Market Value of a share of Stock at
the date of exercise over a specified price fixed by the Committee on the date
of grant, which shall not be less than 100% of the Fair Market Value of the
Stock on the date of grant, with respect to a number of shares of Stock fixed on
or before the date of grant.

 

(xxviii)
“Subsidiary” means a corporation of which stock possessing 50% or more of the
total combined voting power of all classes of its stock entitled to vote
generally in the election of directors is owned in the aggregate by TrustCo Bank
Corp NY directly or indirectly through one or more subsidiaries.

 

(xxix)
“Ten Percent Shareholder” means an Eligible Employee who (applying the rules of
Section 424(d) of the Code) owns stock possessing more than ten percent of the
total combined voting power of all classes of stock of the Company or a “parent
corporation” or “subsidiary corporation” (both as defined in Sections 424(e) and
(f) of the Code) with respect to the Company.

 

(b)
Gender and Number. Except when otherwise indicated by the context, words in the
masculine gender when used in the Plan shall include the feminine gender, the
singular shall include the plural, and the plural shall include the singular.

 

3.
Eligibility and Participation.

 

(a)
Eligibility and Participation. Participants in the Plan shall be selected by the
Committee from among those Eligible Employees who, in the opinion of the
Committee, are Eligible Employees in a position to contribute to the Company’s
continued growth and development and to its long-term financial success.

 

(b)
Participants Deemed to Accept Plan. By accepting any benefit under the Plan,
each Participant and each person claiming under or through any such Participant
shall be conclusively deemed to have indicated their acceptance and ratification
of, and consent to, all of the terms and conditions of the Plan and any action
taken under the Plan by the Board, the Committee or the Company, in any case in
accordance with the terms and conditions of the Plan.

4.
Administration.

 

(a)
Administration. The Committee shall be responsible for the administration of the
Plan. The Committee, by majority action thereof (whether taken during a meeting
or by written consent), shall determine the type or types of Awards to be made
under the Plan and shall designate from time to time the Eligible Employees who
are to be recipients of such Awards.  The Committee is authorized to interpret
the Plan, to prescribe, amend and rescind rules and regulations relating to the
Plan, to provide for conditions and assurances deemed necessary or advisable to
protect the interests of the Company and to make all other determinations
necessary or advisable for the administration of the Plan but only to the extent
not contrary to the express provisions of the Plan. Determinations,
interpretations, or other actions made or taken by the Committee pursuant to the
provisions of the Plan shall be final and binding and conclusive for all
purposes and upon all persons whomsoever. To the extent deemed necessary or
advisable for purposes of Rule 16b-3 or otherwise, the Board (or the independent
members of the Board) may act as the Committee hereunder.

 
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(b)
Delegation of Authority. The Committee may authorize the Chief Executive Officer
of the Company and other senior officers of the Company to recommend officers
and employees to be recipients of Awards, to determine the terms, conditions,
form and amount of any such Awards, and to take such other actions which the
Committee is authorized to take under the Plan, provided that the Committee may
not delegate to any person the authority to grant Awards to, or take other
action with respect to, Participants who at the time of such Awards or action
are subject to Section 16 of the Exchange Act or are “covered employees” as
defined in Section 162(m) of the Code.

 

(c)
Award Agreements. Each Award shall be embodied in an Award Agreement, which
shall contain such terms, conditions and limitations as shall be determined by
the Committee. The Award Agreement shall be delivered to and signed by the
Participant and the Company.

 

5.
Stock Subject to Plan.

 

(a)
Number of Shares Available for Awards. The total number of shares of Stock that
may be issued pursuant to Awards of Options and/or Restricted Stock under the
Plan may not exceed 2,332,500, and the total number of Awards of Stock
Appreciation Rights, Restricted Stock Units, Performance Units and/or
Performance Shares may not exceed the equivalent of 1,400,400 shares. (No shares
of Stock will in fact be issued by the Company upon the issuance or exercise of
any or all rights under Stock Appreciation Rights, Restricted Stock Units,
Performance Units or Performance Shares.) Such number of shares shall be subject
to adjustment upon occurrence of any of the events indicated in Section 5(d).
The shares of Stock to be delivered under the Plan may consist, in whole or in
part, of authorized but unissued Stock or treasury Stock, not reserved for any
other purpose.

 

(b)
No Reuse.

 

(i)
Shares of Stock subject to an Option that have not become outstanding shall not
be available for re-issuance under the Plan if the Option shall expire or
terminate without having been exercised in full (including, without limitation,
cancellation and re-grant), or in the event that an Option is exercised or
settled in a manner such that some or all of the shares of Stock related to the
Option are not issued to the Participant (or beneficiary).

 

(ii)
If, and to the extent any Awards under the Plan are forfeited for any reason, or
settled in cash in lieu of Stock or in a manner such that some or all of the
shares of Stock related to the Award are not issued to the Participant (or
beneficiary) (including as a result of the use of shares for tax withholding),
such shares of Stock shall not be available for issuance under the Plan.

 

(c)
Limitations on Awards to a Single Participant. Notwithstanding anything to the
contrary contained in the Plan, the following limitations shall apply to Awards
made hereunder:

 

(i)
no Participant may be granted, during any calendar year, Awards consisting of
Options or Restricted Stock that are exercisable for or relate to, more than
500,000 shares of Common Stock, subject to adjustment pursuant to the provisions
of Section 5(d); and

 

(ii)
no Participant may be granted, during any calendar year, Awards consisting of
units denominated in shares of Common Stock (other than any Awards consisting of
Options or Restricted Stock) covering or relating to more than 500,000 shares of
Common Stock, subject to adjustment pursuant to the provisions of Section 5(d)
hereof.

 

(d)
Adjustment in Capitalization. In the event of any change in the outstanding
shares of Stock that occurs after ratification of the Plan by the stockholders
of the Company by reason of a Stock dividend or split, recapitalization, merger,
consolidation, combination, exchange of shares or other similar corporate
change, the aggregate number of shares of Stock available for issuance under
Section 5(a), subject to each outstanding Award and the other terms thereof, and
the limitations set forth in Section 5(c), shall be adjusted appropriately by
the number of shares, kind of shares or other consideration subject to such
Awards as the Committee determines, which determination shall be conclusive;
provided, however, that fractional shares shall be rounded to the nearest whole
share.

 
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6.
Duration of Plan.

 

(a)
Duration of Plan.  The Plan shall remain in effect, subject to the Board’s right
to earlier terminate the Plan pursuant to Section 17 hereof, until all Stock
subject to it shall have been purchased or acquired pursuant to the provisions
hereof.  Notwithstanding the foregoing, no Award may be granted under the Plan
on or after December 21, 2020.

 

7.
Stock Options.

 

(a)
Grant of Options. Subject to the provisions of Sections 5 and 6, Options may be
granted to Participants at any time and from time to time as shall be determined
by the Committee.  The Committee shall have complete discretion in determining
the number of Options granted to each Participant.  The Committee may grant any
type of Option to purchase Stock that is permitted by law at the time of grant.

 

(b)
Option Price.  No Option granted pursuant to the Plan shall have an Option
exercise price that is less than the Fair Market Value of the Stock on the date
the Option is granted. An ISO granted to a Ten-Percent Shareholder, shall have
an Option Price which is not less than 110% of the Fair Market Value of the
Stock on the date the ISO is granted.

 

(c)
Exercise of Options. Options awarded under the Plan shall be exercisable at such
times and be subject to such restrictions and conditions as the Committee shall
approve, either at the time of grant of such Options or pursuant to a general
determination, and which need not be the same for all Participants. Each Option
which is intended to qualify as an Incentive Stock Option pursuant to Section
422 of the Code, and each Option which is intended to qualify as another type of
ISO which may subsequently be authorized by law, shall comply with the
applicable provisions of the Code pertaining to such Options. The Committee
shall determine the period of time during which an Option may be exercised,
which such period shall be specifically set forth in the Award Agreement;
provided, however, that no Option shall be exercisable after ten years  from the
date of grant (five years in the case of an ISO granted to an employee who is a
Ten-Percent Shareholder on the date of grant).

 

(d)
Payment. Options shall be exercised by the delivery of a written notice of
exercise to the Company, setting forth the number of shares of Stock with
respect to which the Option is to be exercised, accompanied by full payment for
the Stock. The Option exercise price upon exercise of any Option shall be
payable to the Company in full:

 

(i)
in cash or its equivalent (including, for this purpose, the proceeds from a
third-party broker-assisted “cashless” exercise);

 

(ii)
by tendering Previously-Acquired Shares having an aggregate Fair Market Value at
the time of exercise equal to the total Option price;

 

(iii)
by any other means which the Committee determines to be consistent with the
Plan’s purpose and applicable law; or

 

(iv)
by a combination of (i), (ii), and (iii), above.

 
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The Company may not sponsor, or assist in any material way, any “cashless”
exercise program pursuant to which payment for Options to be exercised is made
by surrendering other Options. The prohibition of the immediately preceding
sentence does not apply to third-party, broker-assisted “cashless” exercise
programs as described in clause (i) above  that the Company does not sponsor or
assist and payment of the exercise price of Options by tender of
Previously-Acquired Shares as described in clause (ii) above.

(e)
Limitations on ISOs. All shares authorized for issuance under the Plan may be
issued pursuant to Incentive Stock Options. Notwithstanding anything in the Plan
to the contrary, to the extent required from time to time by the Code, the
following additional provisions shall apply to the grant of Options which are
intended to qualify as Incentive Stock Options:

 

(i)
the aggregate Fair Market Value (determined as of the date the Option is
granted) of the shares of Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by any Participant during any
calendar year (together with any other “incentive stock options” within the
meaning of Section 422 of the Code, but without regard to subsection (d) of such
Section) under the Plan and all other plans of the Company, its parent (if any)
and any Subsidiary) shall not exceed $100,000.00 or such other amount as may
subsequently be specified by the Code; provided that, to the extent that such
limitation is exceeded, any excess Options (as determined under the Code) shall
be deemed to be Nonstatutory (Nonqualified) Stock Options;

 

(ii)
any Incentive Stock Option authorized under the Plan shall contain such other
provisions as the Committee shall deem advisable, but shall in all events be
consistent with and contain or be deemed to contain all provisions required in
order to qualify the Options as Incentive Stock Options;

 

(iii)
all Incentive Stock Options must be granted within ten years from the earlier of
the date on which the Plan was adopted by the Board or the date the Plan was
approved by the stockholders; and

 

(iv)
unless exercised, terminated, or cancelled sooner, all Incentive Stock Options
shall expire no later than ten years after the date of grant (five years in the
case of Incentive Stock Options granted to a Ten-Percent Shareholder).

 

(f)
Termination of Employment Due to Death, Disability or Retirement. In the event
the employment of a Participant with the Company is terminated by reason of
death, Disability, or Retirement, any outstanding Options shall vest 100% and be
deemed exercisable in full as of such termination. Such options may be exercised
at any time prior to the expiration date of the Options or within three years
after such date of termination, whichever period is the shorter. However, in the
case of Incentive Stock Options, the favorable tax treatment prescribed under
Section 422 of the Code shall not be available if such options are not exercised
within three months after date of termination, or twelve months in the case of
Disability, provided such Disability constitutes total and permanent disability
as defined in Section 22(e)(3) of the Code. If an Incentive Stock Option is not
exercised within three months of termination due to Retirement, it shall be
treated as a Nonstatutory (Nonqualified) Stock Option for the remainder of its
allowable exercise period.

 

(g)
Termination of Employment other than Due to Death, Disability or Retirement and
other than for Cause. Except as provided in Section 16(a)(ii)(2) below, if the
employment of the Participant shall terminate for any reason other than death,
Disability or Retirement, or other than involuntarily for Cause, the rights
under any then-outstanding Option granted pursuant to the Plan shall terminate
upon the expiration date of the Option or one month after such date of
termination of employment, whichever first occurs; provided, however, that no
vesting of any Options that are not vested as of the date of termination of
employment shall occur after such date of termination and provided further that
in the event such termination occurs after a Change-in-Control (as defined in
Section 16(b) of the Plan), the rights under any then-outstanding Option granted
pursuant to the Plan shall terminate upon the expiration date of the Option or
three years after such date of termination of employment, whichever first
occurs.

 
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(h)
Termination of Employment for Cause. Where termination of employment is
involuntarily for Cause, rights under all Options, whether or not such Options
are vested, shall terminate immediately upon such termination.

 

(i)
Nontransferability of Options. Except as provided below, no Option granted under
the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, otherwise than by will or by the laws of descent and distribution.
Further, all Options granted to a Participant under the Plan shall be
exercisable during his lifetime only by such Participant. Notwithstanding the
foregoing, the Committee may, in its discretion, authorize all or a portion of
the Options (other than Incentive Stock Options) granted to a Participant to be
on terms which permit transfer by such Participant to:

 

(i)
the spouse, children or grandchildren of the Participant (“Immediate Family
Members”);

 

(ii)
a trust or trusts for the exclusive benefit of such Immediate Family Members; or

 

(iii)
a partnership in which such Immediate Family Members are the only partners;

 
provided, however, that with respect to any of the foregoing permissible
transfers:
 

(i)
there may be no consideration for such transfer;

 

(ii)
the Award Agreement pursuant to which such Options are granted expressly
provides for transferability in a manner consistent with this Section 7(i); and

 

(iii)
subsequent transfers of transferred Options shall be prohibited except those in
accordance with Section 14. Following transfer, any such Options shall continue
to be subject to the same terms and conditions as were applicable immediately
prior to transfer, provided that for purposes of Section 14 hereof the term
“Participant” shall be deemed to refer to the transferee. The provisions of
Sections 7 and 16 relating to the period of exercisability and expiration of the
Option shall continue to be applied with respect to the original Participant,
and the Options shall be exercisable by the transferee only to the extent, and
for the periods, set forth in said Sections 7 and 16.

 

(j)
Restrictions on Stock Transferability. The Committee shall impose such
restrictions on any shares of Stock acquired pursuant to the exercise of an
Option under the Plan as it may deem advisable, including, without limitation,
restrictions under the applicable Federal securities law, under the requirements
of any stock exchange upon which such shares of Stock are then listed and under
any blue sky or state securities laws applicable to such shares.

 

8.
Stock Appreciation Rights.

 

(a)
Grant of Stock Appreciation Rights. Subject to the provisions of Sections 5 and
6, Stock Appreciation Rights (“SARs”) may be granted to Participants at any time
and from time to time as shall be determined by the Committee.

 

(b)
Exercise of SARs.  SARs may be exercised upon whatever terms and conditions the
Committee, in its sole discretion, imposes upon the SARs.

 
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(c)
Price.  No SAR granted pursuant to the Plan shall have a price that is less than
the Fair Market Value of the Stock on the date the SAR is granted.

 

(d)
Payment of SAR Amount.  Upon exercise of the SAR, the holder shall be entitled
to receive a cash payment of an amount (subject to Section 8(f) below)
determined by multiplying:

 

(i)
the difference between the Fair Market Value of a share of Stock at the date of
exercise over the price fixed by the Committee at the date of grant, by

 

(ii)
the number of shares with respect to which the Stock Appreciation Right is
exercised.

 

(e)
Form and Timing of Payment. Payment for SARs shall be made in cash.  Such
payment shall be made as soon as reasonably practicable following the date of
exercise of such SARs.

 

(f)
Limit of Appreciation. At the time of grant, the Committee may establish in its
sole discretion, a maximum amount per share which will be payable upon exercise
of an SAR.

 

(g)
Term of SAR. The term of an SAR granted under the Plan shall expire no later
than ten years after the date of grant.

 

(h)
Termination of Employment. Except as provided in Section 16(a)(ii)(2) below, in
the event the employment of a Participant is terminated by reason of death,
Disability, Retirement, or any other reason, any SARs outstanding shall
terminate in the same manner as specified for Options under Sections 7(f), 7(g)
and 7(h) herein.

 

(i)
Nontransferability of SARs. No SAR granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated,
otherwise than by will or by the laws of descent and distribution. Further, all
SARs granted to a Participant under the Plan shall be exercisable during his
lifetime only by such Participant.

 

9.
Restricted Stock.

 

(a)
Grant of Restricted Stock.  Subject to the provisions of Sections 5 and 6, the
Committee, at any time and from time to time, may grant shares of Restricted
Stock under the Plan to such Participants and in such amounts as it shall
determine.  Subject to the terms and conditions of this Section 9 and the Award
Agreement, upon delivery of shares of Restricted Stock to a Participant, or
creation of a book entry evidencing a Participant’s ownership of Shares of
Restricted Stock, the Participant shall have all of the rights of a shareholder
with respect to such Restricted Shares, subject to the terms and restrictions
set forth in this Section 9 or the applicable Award Agreement or as determined
by the Committee.

 

(b)
Other Restrictions. The Committee shall impose such other restrictions on any
shares of Restricted Stock granted pursuant to the Plan as it may deem advisable
including, without limitation, restrictions under applicable Federal or state
securities laws and may add a legend to the certificates representing Restricted
Stock to give appropriate notice of such restrictions.

 

(c)
Rights as a Shareholder. During the Period of Restriction, Participants holding
shares of Restricted Stock granted hereunder may exercise full voting rights
with respect to those shares and shall be entitled to receive all dividends and
other distributions paid with respect to those shares while they are so held. If
any dividends or distributions are paid in shares of Stock, the shares shall be
subject to the same restrictions on transferability as the shares of Restricted
Stock with respect to which they were paid.

 
9

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(d)
Separation from Service Due to Death or Disability During Period of
Restriction.  In the event of a Participant’s Separation from Service because of
death or Disability during the Period of Restriction, the Period of Restriction
applicable to the Restricted Stock pursuant to Subsection 9(g) hereof shall
automatically terminate upon such Separation from Service.

 

(e)
Separation from Service for Reasons other than Death or Disability During Period
of Restriction. Except as provided in Section 16(a)(ii)(2) below, in the event
of a Participant’s Separation from Service for any reason other than those set
forth in Section 9(d) hereof during the Period of Restriction, then any shares
of Restricted Stock still subject to the Period of Restriction at the date of
such Separation from Service automatically shall be forfeited and returned to
the Company.

 

(f)
Delivery of Shares. Subject to the other provisions of the Plan, after the last
day of the Period of Restriction applicable to a Participant’s shares of
Restricted Stock (whether through the lapse of time or early termination as
provided above), and after all conditions and restrictions applicable to such
shares of Restricted Stock have been satisfied or lapsed (including satisfaction
of any applicable withholding tax obligations), pursuant to the applicable Award
Agreement, such shares of Restricted Stock shall become freely transferable by
such Participant.

 

(g)
Nontransferability During Period of Restriction. Except as provided in Section
9(f) hereof, the shares of Restricted Stock granted hereunder may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated for such
period of time as shall be determined by the Committee and shall be specified in
the Award Agreement for the grant of the Restricted Stock, or upon earlier
satisfaction of other conditions (which may include the attainment of
performance goals as defined in Section 13 hereof), as specified by the
Committee in its sole discretion and set forth in the Award Agreement for the
grant of the Restricted Stock.

 

10.
Restricted Stock Units.

 

(a)
Grant of Restricted Stock Units.  Subject to the provisions of Sections 5 and 6,
the Committee, at any time and from time to time, may grant Restricted Stock
Units under the Plan to such Participants and in such amounts as it shall
determine. Restricted Stock Units shall be similar to Restricted Stock, except
no shares are actually awarded to a Participant who is granted Restricted Stock
Units on the date of grant, and such Participant shall have no rights of a
shareholder with respect to such Restricted Stock Units.

 

(b)
Other Conditions and Restrictions. Payment with respect to Restricted Stock
Units shall not be paid for such period of time as shall be determined by the
Committee and shall be specified in the Award Agreement for the grant of the
Restricted Stock Units, or upon earlier satisfaction of other conditions (which
may include the attainment of performance goals as defined in Section 13
hereof), as specified by the Committee in its sole discretion and set forth in
the Award Agreement for the grant of the Restricted Stock Units. The Committee
shall impose such other restrictions on Restricted Stock Units granted pursuant
to the Plan as it may deem advisable including, without limitation, restrictions
under applicable Federal or state securities laws.

 

(c)
Rights as a Shareholder. A Participant shall have no voting rights, and no
rights to dividends or other distributions, with respect to any Restricted Stock
Units.

 

(d)
Separation from Service Due to Death or Disability During Period of
Restriction.  In the event of a Participant’s Separation from Service because of
death or Disability during the Period of Restriction, the Period of Restriction
applicable to the Restricted Stock Units shall automatically terminate upon such
Separation from Service.

 
10

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(e)
Separation from Service for Reasons other than Death or Disability During Period
of Restriction. Except as provided in Section 16(a)(ii)(2) below, in the event
of a Participant’s Separation from Service for any reason other than those set
forth in Sections 9(d) hereof during the Period of Restriction, then any
Restricted Stock Units still subject to the Period of Restriction at the date of
such Separation from Service automatically shall be forfeited and returned to
the Company.

 

(f)
Payment of Restricted Stock Units.  Subject to the other provisions of the Plan,
after the last day of the Period of Restriction applicable to a Participant’s
Restricted Stock Units, and after all conditions and restrictions applicable to
Restricted Stock Units have been satisfied or lapse (including satisfaction of
any applicable withholding tax obligations), pursuant to the applicable Award
Agreement, such Restricted Stock Units shall be settled by a cash payment
determined by reference to the then-current Fair Market Value of Shares.

 

(g)
Compliance With Section 409A. Unless the Committee provides otherwise in an
Award Agreement, each Restricted Stock Unit shall be paid in full to the
Participant no later than the fifteenth day of the third month after the end of
the first calendar year in which the Restricted Stock Unit is no longer subject
to a “substantial risk of forfeiture” within the meaning of Code Section 409A. 
If the Committee provides in an Award Agreement that a Restricted Stock Unit is
intended to be subject to Code Section 409A, the Award Agreement shall include
terms that are intended to satisfy the requirements of Section 409A.

 

(h)
Nontransferability. Restricted Stock Units, and all rights with respect to
Restricted Stock Units, granted to a Participant under the Plan may not be sold,
transferred, pledged, assigned or otherwise alienated or hypothecated.

 

11.
Performance Units.

 

(a)
Grant of Performance Units. Subject to the provisions of Sections 5 and 6,
Performance Units may be granted to Participants at any time and from time to
time as shall be determined by the Committee. The Committee shall have complete
discretion in determining the number of Performance Units granted to each
Participant.  Such entitlements of a Participant with respect to his or her
outstanding Performance Units shall be reflected by a bookkeeping entry in the
records of the Company, unless otherwise provided by the Award Agreement.

 

(b)
Value of Performance Units. Each Performance Unit shall have an initial value of
one hundred dollars ($100.00). The Committee, in its sole discretion, shall
determine and set forth the performance goals and length of the Performance
Period in each Award Agreement which, depending on the extent to which they are
met, will determine the ultimate value of the Performance Unit to the
Participant.

 

(c)
Payment of Performance Units.  After a Performance Period has ended, the holder
of a Performance Unit shall be entitled to receive the value thereof as
determined by the extent to which performance goals discussed in Section 11(b)
have been met.

 

(d)
Form and Timing of Payment.  Payment in Section 11(c) above shall be made in
cash.  Payment may be made in a lump sum or installments as prescribed by the
Committee and set forth in the Award Agreement.

 

(e)
Rights as a Shareholder. A Participant shall have no voting rights, and no
rights to dividends or other distributions, with respect to any Performance
Units.

 
11

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(f)
Separation from Service Due to Death, Disability or Retirement During
Performance Period.  In the event of a Participant’s Separation from Service
because of death, Disability or Retirement during the Performance Period, the
holder of a Performance Unit shall receive a prorata payment based on the number
of months’ service during the Performance Period but taking into account the
achievement of performance goals during the entire Performance Period. Payment
shall be made as specified in the applicable Award Agreement after completion of
the applicable Performance Period at the time payments are made to Participants
who did not have a Separation from Service during the Performance Period.

 

(g)
Separation from Service for Other Reasons During Performance Period. Except as
provided in Section 16(a)(ii)(2) below, in the event of a Participant’s
Separation from Service for any reason other than death, Disability or
Retirement during the Performance Period, all Performance Units shall be
forfeited.

 

(h)
Nontransferability. No Performance Units granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated.

 

(i)
Compliance With Section 409A. Unless the Committee provides otherwise in an
Award Agreement, each Performance Unit shall be paid in full to the Participant
no later than the fifteenth day of the third month after the end of the first
calendar year in which such Award is no longer subject to a “substantial risk of
forfeiture” within the meaning of Code Section 409A.  If the Committee provides
in an Award Agreement that a Performance Unit is intended to be subject to Code
Section 409A, the Award Agreement shall include terms that are intended to
satisfy the requirements of Section 409A.

 

12.
Performance Shares.

 

(a)
Grant of Performance Shares. Subject to the provisions of Sections 5 and 6,
Performance Shares may be granted to Participants at any time and from time to
time as shall be determined by the Committee. The Committee shall have complete
discretion in determining the number of Performance Shares granted to each
Participant.  Such entitlements of a Participant with respect to his or her
outstanding Performance Shares shall be reflected by a bookkeeping entry in the
records of the Company, unless otherwise provided by the Award Agreement.

 

(b)
Value of Performance Shares. Each Performance Share initially shall represent
one share of Stock.  The Committee, in its sole discretion, shall determine and
set forth the performance goals and length of the Performance Period in each
Award Agreement which, depending on the extent to which they are met, will
determine the ultimate value of the Performance Share to the Participant.

 

(c)
Payment of Performance Shares.  After a Performance Period has ended, the holder
of a Performance Share shall be entitled to receive in cash the value thereof as
determined by the extent to which performance goals discussed in Section 12(b)
have been met.

 

(d)
Form and Timing of Payment.  Payment in Section 12(c) above shall be made in
cash.  Payment may be made in a lump sum or installments as prescribed by the
Committee and set forth in the Award Agreement.

 

(e)
Separation from Service Due to Death, Disability or Retirement During
Performance Period.  In the event of a Participant’s Separation from Service
because of death, Disability or Retirement during the Performance Period, the
holder of a Performance Share shall receive a prorata payment based on the
number of months’ service during the Performance Period but taking into account
the achievement of performance goals during the entire Performance Period.
Payment shall be made as specified in the applicable Award Agreement after
completion of the applicable Performance Period at the time payments are made to
Participants who did not have a Separation from Service during the Performance
Period.

 
12

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(f)
Separation from Service for Other Reasons During Performance Period. Except as
provided in Section 16(a)(ii)(2) below, in the event of a Participant’s
Separation from Service for any reason other than death, Disability or
Retirement during the Performance Period, all Performance Shares shall be
forfeited.

 

(g)
Nontransferability. No Performance Shares granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated.

 

(h)
Compliance With Section 409A. Unless the Committee provides otherwise in an
Award Agreement, each Performance Unit and Performance Share shall be paid in
full to the Participant no later than the fifteenth day of the third month after
the end of the first calendar year in which such Award is no longer subject to a
“substantial risk of forfeiture” within the meaning of Code Section 409A.  If
the Committee provides in an Award Agreement that a Performance Share or
Performance Unit is intended to be subject to Code Section 409A, the Award
Agreement shall include terms that are intended to satisfy the requirements of
Section 409A.

 

13.
Performance Goals.

 

(a)
For purposes of Sections 9, 10, 11 and 12 hereof, “performance goals” shall mean
the criteria and objectives, determined by the Committee pursuant to the Plan,
which shall be satisfied or met during the Period of Restriction or Performance
Period, as the case may be, as a condition to the Participant’s receipt, in the
case of a grant of the Restricted Stock, of the shares of Stock subject to such
grant, or in the case of Awards of Restricted Stock Units, Performance Units or
Performance Shares, of payment with respect to such Awards.

 

(b)
In the case of an Award intended to qualify for the exemption from the
limitation on deductibility imposed by Section 162(m) of the Code, the
performance goals shall be based on the attainment of specified levels of one or
more of the following measures: basic earnings per share, basic cash earnings
per share, diluted earnings per share, diluted cash earnings per share, net
income, cash earnings, net interest income, non-interest income, general and
administrative expense to average assets ratio, cash general and administrative
expense to average assets ratio, efficiency ratio, cash efficiency ratio, return
on average assets, cash return on average assets, return on average
shareholders’ equity, cash return on average shareholders’ equity, return on
average tangible shareholders’ equity, cash return on average tangible
shareholders’ equity, core earnings, operating income, operating efficiency
ratio, net interest rate spread, growth in fees and service charges income, loan
production volume, growth in loan originations and loan origination fees,
non-performing loans, loan charge offs (or net charge offs), allowance for loan
losses, cash flow, regulatory capital ratios, deposit levels, tangible assets,
improvement in or attainment of working capital levels, maintenance of asset
quality, strategic business objectives, consisting of one or more objectives
based upon meeting specified cost targets, business expansion goals, and goals
relating to acquisitions or divestitures, or goals relating to capital raising
and capital management, pre-tax pre-provision core operating earnings, any other
performance criteria established by the Committee and any combination of the
foregoing.

 

(c)
If an Award is intended to qualify for the exemption from the limitation on
deductibility imposed by Section 162(m) of the Code, the performance goals shall
be set by the Committee within the time period prescribed by Section 162(m) of
the Code (generally, prior to the 90th day of the applicable Performance
Period), and the regulations promulgated thereunder. Performance goals may be
particular to an Eligible Employee or the department, branch, Affiliate or
division in which the Eligible Employee works, or may be based on the
performance of the Company, one or more Affiliates, the Company and one or more
Affiliates or a particular line of business, and may, but need not be, based
upon a change or an increase or positive result, and shall cover such period as
the Committee may specify. Performance goals may include or exclude
extraordinary charges, losses from discontinued operations, restatements and
accounting changes and other unplanned special charges such as restructuring
expenses, acquisitions, acquisition expenses, including expenses related to
goodwill and other intangible assets, stock offerings, stock repurchases and
loan loss provisions; provided that in the case of an Award intended to qualify
for the exemption from the limitation on deductibility imposed by Section 162(m)
of the Code, such inclusion or exclusion shall be made in compliance with
Section 162(m) of the Code.

 
13

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(d)
Upon completion of the Period of Restriction or the Performance Period, as the
case may be, the Committee shall certify the level of the performance goals
attained and the amount of the Award payable as a result thereof.

 

14.
Beneficiary Designation.

 
Each Participant under the Plan may name, from time to time, any beneficiary or
beneficiaries (who may be named contingently or successively) to whom any
benefit under the Plan is to be paid in case of his death before he receives any
or all of such benefit. Each designation will revoke all prior designations by
the same Participant, shall be in a form prescribed by the Committee, and will
be effective only when filed by the Participant in writing with the Committee
during his lifetime. In the absence of any such designation, benefits remaining
unpaid at the Participant’s death shall be paid to his estate.
 

15.
Rights of Eligible Employees.

 

(a)
Employment. Nothing in the Plan shall interfere with or limit in any way the
right of the Company to terminate any Participant’s employment at any time, nor
confer upon any Participant any right to continue in the employ of the Company.

 

(b)
Participation. No employee shall have a right to be selected as a Participant,
or, having been so selected, to be selected again as a Participant.

 

16.
Change-in-Control.

 

(a)
In General.

 

(i)
For Awards Granted Prior to January 1, 2017.  Except as expressly provided
otherwise in an Award Agreement and subject to Section 16(c), in the event of a
Change-in-Control, all unvested outstanding Awards under the Plan granted prior
to January 1, 2017 shall vest 100%, whereupon all Options shall become
immediately exercisable in full, the restrictions applicable to Restricted Stock
shall immediately terminate, and Performance Units and Performance Shares shall
immediately fully vest, be settled and paid out in full without proration, on,
or immediately following the date of the Change-in Control (but in no event
later than thirty (30) days following such date) based upon the extent to which
performance goals during the Performance Period have been met up to the date of
the Change-in-Control, or at target, whichever provides the greater value to the
Award holder, and all other Awards, including SARs and Restricted Stock Units
shall immediately fully vest, be settled and paid out.  With respect to
Performance Shares and Performance Units, for purposes of calculating the Award
value relative to the achievement of performance goals that measure Company or
other performance, whether absolute or relative to the performance of other
companies, up to the date of a Change-in-Control, the Committee shall evaluate
such absolute or relative performance as of the most recent date on or prior to
the Change-in-Control that the relevant data is available and can be measured
with respect to the Company and/or such other companies or metrics, as
applicable.

 

(ii)
For Awards Granted After January 1, 2017.

 
14

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(1)
No Vesting on a Change-in-Control.  With respect to outstanding unvested Awards
under the Plan granted after January 1, 2017, there shall be no automatic
vesting of such Awards solely upon a Change-in-Control.

 

(2)
Vesting on Termination Following a Change-in-Control.  Except as expressly
provided otherwise in an Award Agreement and subject to Section 16(c), in the
event of a Participant’s Separation from Service because the Participant is
terminated by the Company, its successor, or a subsidiary or affiliate thereof
without Cause within twenty-four (24) months following a Change-in-Control, all
unvested outstanding Awards held by such Participant that were granted after
January 1, 2017 shall vest 100%, whereupon all Options shall become immediately
exercisable in full, the restrictions applicable to Restricted Stock shall
immediately terminate, and Performance Units and Performance Shares shall
immediately fully vest, be settled and paid out in full without proration on or
immediately following the date of Separation from Service (but in no event later
than thirty (30) days following such date) based upon (x) the extent to which
performance goals during the Performance Period have been met up to the date of
the Change-in-Control, (y) the extent to which performance goals during the
Performance Period have been met up to the date of the Separation from Service,
or (z) at target, whichever, as between (x), (y) and (z), provides the greater
value to the Participant, and all other Awards, including SARs and Restricted
Stock Units shall immediately fully vest, be settled and paid out; provided,
however, that with respect to Performance Shares and Performance Units, for
purposes of calculating the Award value relative to the achievement of
performance goals that measure Company or other performance, whether absolute or
relative to the performance of other companies, up to the date of a
Change-in-Control or Separation from Service, the Committee shall evaluate such
absolute or relative performance as of the most recent date on or prior to the
Change-in-Control and Separation from Service that the relevant data is
available and can be measured with respect to the Company and/or such other
companies or metrics, as applicable; and further provided, however, that with
respect to Performance Shares, to the extent that the shares of Stock underlying
the Awards have been adjusted or substituted in number and/or kind of share or
other consideration subject to such Awards, when determining the value of any
such Award, the Committee shall base the value of all such Awards on (x) the
value of the underlying shares of Stock immediately prior to the
Change-in-Control, or (y) the value of the adjusted and/or substituted shares or
other consideration immediately prior to such Separation from Service,
whichever, as between (x), and (y), provides the greater value to the
Participant.

 

(3)
Calculation of Performance Awards for Participants Who Remain Employed Following
a Change-in-Control.  Except as expressly provided otherwise in an Award
Agreement, with respect to unvested outstanding Performance Shares and
Performance Units under the Plan granted after January 1, 2017, in the event
that a Change-in-Control occurs during, but prior to the end of, a Performance
Period, for purposes of calculating the Award value relative to the achievement
of performance goals for Award holders who remain employed through the end of
the Performance Period, the Committee shall evaluate and measure the performance
(x) up to the date of the Change-in-Control and (y) through the end of the
Performance Period and shall base the Award value on the greater of the measure
of Company or other performance pursuant to (x) and (y) or at target value,
whichever provides the greater value to the Award holder; provided, however,
that for purposes of calculating the Award value relative to the achievement of
performance goals that measure Company or other performance, whether absolute or
relative to the performance of other companies, up to the date of a
Change-in-Control, the Committee shall evaluate such absolute or relative
performance as of the most recent date on or prior to the Change-in-Control that
the relevant data is available and can be measured with respect to the Company
and/or such other companies or metrics, as applicable; and further provided,
however, that with respect to Performance Shares, to the extent that the shares
of Stock underlying the Awards have been adjusted or substituted in number
and/or kind of share or other consideration subject to such Awards, when
determining the value of any such Award, the Committee shall base the value of
all such Awards on (x) the value of the underlying shares of Stock immediately
prior to the Change-in-Control, or (y) the value of the adjusted and/or
substituted shares or other consideration at the end of the Performance Period,
whichever, as between (x), and (y), provides the greater value to the
Participant.

 
15

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(b)
Definition. For purposes of the Plan, a “Change-in-Control” shall mean any one
or more of the following:

 

(i)
any individual, corporation (other than the Company or Trustco Bank, which, for
purposes of this Section 16(b), are collectively referred to as the
“Companies”), partnership, trust, association, pool, syndicate, or any other
entity or group of persons acting in concert becomes the beneficial owner, as
that concept is defined in Rule 13d-3 promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, of securities of either of
the Companies possessing 20% or more of the voting power for the election of
directors of either of the Companies; or

 

(ii)
there shall be consummated any consolidation, merger or other business
combination involving either of the Companies or the securities of either of the
Companies in which holders of voting securities immediately prior to such
consummation own, as a group, immediately after such consummation, voting
securities of either of the Companies (or, if either of the Companies does not
survive such transaction, voting securities of the entity or entities surviving
such transaction) having 60% or less of the total voting power in an election of
directors of either of the Companies (or such other surviving entity or
entities); or

 

(iii)
during any period of two consecutive years, individuals who at the beginning of
such period constitute the directors of either of the Companies cease for any
reason to constitute at least a majority thereof unless the election, or
nomination for election by either of the Companies’ shareholders, of each new
director of either of the Companies was approved by a vote of at least
two-thirds of the directors of either of the Companies then still in office who
were directors of either of the Companies at the beginning of any such period;
or

 

(iv)
removal by the stockholders of all or any of the incumbent directors of either
of the Companies other than a removal for cause; or

 

(v)
there shall be consummated at any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all, or substantially
all, of the assets of either of the Companies to a party which is not controlled
by or under common control with either of the Companies.

 

(c)
Compliance with Section 409A.  Notwithstanding any other provisions of the Plan
or any Award Agreement to the contrary, if a Change-in-Control that is not a
“Qualified Change-in-Control” (as defined below) occurs, and payment or
distribution of an Award constituting deferred compensation subject to Section
409A of the Code would otherwise be made or commence on the date of such
Change-in-Control (pursuant to the Plan, the Award Agreement or otherwise), (i)
the vesting of such Award shall accelerate in accordance with the Plan and the
Award Agreement, (ii) such payment or distribution shall not be made or commence
prior to the earliest date on which Code Section 409A permits such payment or
distribution to be made or commence without additional taxes or penalties under
Section 409A, and (iii) in the event any such payment or distribution is
deferred in accordance with the immediately preceding clause (ii), such payment
or distribution that would have been made prior to the deferred payment or
commencement date, but for Code Section 409A, shall be paid or distributed on
such earliest payment or commencement date, together, if determined by the
Committee, with interest at the rate established by the Committee.  The
Committee shall not extend the period to exercise an Option or SAR to the extent
that such extension would cause the Option or SAR to become subject to Code
Section 409A.  Additionally, the Committee shall not take any action pursuant to
this Section 16 that would cause an Award that is otherwise exempt from Code
Section 409A to become subject to Code Section 409A, or that would cause an
Award that is subject to Code Section 409A to fail to satisfy the requirements
of Code Section 409A.

 
16

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(d)
Qualified Change-in-Control Defined.  For purposes hereof, a “Qualified
Change-in-Control” means a Change-in-Control that qualifies as a change in
ownership or effective control of the Company, or in the ownership of a
substantial portion of the assets of the Company, within the meaning of Code
Section 409A(a)(2)(A)(v) and the regulations promulgated thereunder.

 

17.
Amendment, Modification and Termination of Plan.

 

(a)
Amendment, Modification, and Termination. The Board may, at any time and with or
without prior notice, amend, alter, suspend, or terminate the Plan, and the
Committee may, to the extent permitted by the Plan, amend the terms of any Award
theretofore granted, including any Award Agreement, in each case, retroactively
or prospectively; provided, however, that no such amendment, alteration,
suspension, or termination of the Plan shall be made which, without first
obtaining approval of the shareholders of the Company (where such approval is
necessary to satisfy (i) the then-applicable requirements of Rule 16b-3, (ii)
any requirements under the Code relating to ISOs or for exemption from Section
162(m) of the Code, or (iii) any applicable law, regulation or rule (including
the applicable regulations and rules of the SEC and any national securities
exchange)), would:

 

(i)
except as is provided in Section 5(d), increase the maximum number of Shares
that may be sold or awarded under the Plan or increase the maximum limitations
set forth in Section 5(a);

 

(ii)
except as is provided in Section 5(d), decrease the minimum Option Price or
Grant Price requirements of Sections 7(b) and 2(a)(xxvii), respectively;

 

(iii)
change the class of persons eligible to receive Awards under the Plan;

 

(iv)
change the performance goals described in Sections 9, 10, 11, 12 and 13.

 

(v)
extend the duration of the Plan or the period during which Options or SARs may
be exercised under Section 7 or Section 8, as applicable; or;

 

(vi)
otherwise require shareholder approval to comply with any applicable law,
regulation or rule (including the applicable regulations and rules of the SEC
and any national securities exchange).

 
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In addition, (A) no such amendment, alteration, suspension or termination of the
Plan or any Award theretofore granted, including any Award Agreement, shall be
made which would materially impair the previously accrued rights of a
Participant under any outstanding Award without the written consent of such
Participant, provided, however, that the Board may amend or alter the Plan and
the Committee may amend or alter any Award, including any Agreement, either
retroactively or prospectively, without the consent of the applicable
Participant, (x) so as to preserve or come within any exemptions from liability
under Section 16(b) of the Exchange Act, pursuant to the rules and releases
promulgated by the SEC (including Rule 16b-3), and/or so that any Award that is
intended to qualify as Performance-Based Compensation shall qualify for the
performance-based compensation exception under Code Section 162(m) (or any
successor provision), or (y) if the Board or the Committee determines in its
discretion that such amendment or alteration either (I) is required or advisable
for the Company, the Plan or the Award to satisfy, comply with or meet the
requirements of any law, regulation, rule or accounting standard or (II) is not
reasonably likely to significantly diminish the benefits provided under such
Award, or that such diminishment has been or will be adequately compensated, and
(B) any amendment or modification of any Award or Award Agreement must comply
with Section 21.
 

(b)
Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring
Events. The Board or the Committee shall make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including the events described in Section 5(d)) affecting
the Company or the financial statements of the Company or of changes in
applicable laws, regulations, or accounting principles in order to prevent
unintended dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan. Any such adjustment with respect
to an Award intended to be an ISO shall be made only to the extent consistent
with such intent, unless the Board or the Committee determines otherwise, and
any such adjustment that is made with respect to an Award that is intended to
qualify as performance-based compensation under Code Section 162(m) (or any
successor provision) shall be made consistent with such intent.

 

(c)
Corporate Events.  Except as may otherwise be provided in an Award agreement, in
connection with (i) a merger or consolidation involving the Company in which the
Company is not the surviving corporation; (ii) a merger or consolidation
involving the Company in which the Company is the surviving corporation but the
holders of shares of Stock receive securities of another corporation and/or
other property, including cash; (iii) a Change in Control; or (iv) the
reorganization or liquidation of the Company (each, a “Corporate Event”), the
Board or the Committee may, in its discretion, provide for any one or more of
the following:

 

(1)
that such Awards be assumed or substituted in connection with such Corporate
Event, in which case, the Awards shall be subject to the adjustment set forth in
subsection 5(d) above, and to the extent such Awards are Performance Shares,
Performance Units or other Awards that vest subject to the achievement of
performance goals, such performance goals or similar performance criteria shall
be appropriately adjusted to reflect the Corporate Event;

 

(2)
that the vesting of any Awards shall be accelerated, subject to the consummation
of such Corporate Event; and

 

(3)
that any or all vested and/or unvested Awards be cancelled as of the
consummation of such Corporate Event, and that Participants holding vested
Awards (including any Awards that would vest upon the Corporate Event but for
such cancellation) so cancelled will receive a payment in respect of
cancellation of their Awards based on the amount of the per-share consideration
being paid for the Stock in connection with such Corporate Event, less, in the
case of Options, Stock Appreciation Rights, and other Awards subject to
exercise, the applicable exercise price; provided, however, that holders of
Options, Stock Appreciation Rights, and other Awards subject to exercise shall
only be entitled to consideration in respect of cancellation of such Awards if
the per-share consideration less the applicable exercise price is greater than
zero (and to the extent the per-share consideration is less than or equal to the
applicable exercise price, such Awards shall be cancelled for no consideration).

 
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Payments to holders pursuant to clause (3) above shall be made in cash or, in
the sole discretion of the Committee, in the form of such other consideration
necessary for a Participant to receive property, cash, or securities (or
combination thereof) as such Participant would have been entitled to receive
upon the occurrence of the Corporate Event if the Participant had been,
immediately prior to such transaction, the holder of the number of shares of
Stock covered by the Award at such time (less any applicable exercise price). 
In addition, in connection with any Corporate Event, prior to any payment or
adjustment contemplated under this subsection (b), the Committee may require a
Participant to (i) represent and warrant as to the unencumbered title to his
Awards, (ii) bear such Participant’s pro rata share of any post-closing
indemnity obligations, and be subject to the same post-closing purchase price
adjustments, escrow terms, offset rights, holdback terms, and similar conditions
as the other holders of Stock; and (iii) deliver customary transfer
documentation as reasonably determined by the Committee.  Additionally, neither
the Board nor the Committee shall make any adjustment pursuant to this Section
17 that would cause an Award that is otherwise exempt from Code Section 409A to
become subject to Code Section 409A, or that would cause an Award that is
subject to Code Section 409A to fail to satisfy the requirements of Code Section
409A. The determination of the Committee as to the foregoing adjustments shall
be conclusive and binding on Participants under the Plan.
 

18.
Tax Withholding.

 

(a)
Tax Withholding. The Company shall deduct or withhold, or require a Participant
to remit to the Company, an amount sufficient to satisfy Federal, state, and
local taxes, domestic or foreign, required by law or regulation to be withheld
with respect to any taxable event arising as a result of the Plan.

 

(b)
Share Withholding. With respect to withholding required upon the exercise of
Options or SARs, upon the lapse of restrictions on Restricted Stock, or upon any
other taxable event arising as a result of awards granted hereunder,
Participants may elect to satisfy the withholding requirement, in whole or in
part, by having the Company withhold shares of Stock having a Fair Market Value
on the date the tax is to be determined equal to the minimum statutory
withholding that would be imposed on the transaction. All such elections shall
be irrevocable, made in writing, signed by the Participant, and shall be subject
to any restrictions or limitations that the Committee, in its sole discretion,
deems appropriate.

 

19.
Indemnification.

 
Each Person who is or shall have been a member of the Committee or of the Board
shall be indemnified and held harmless by the Company against and from any loss,
cost, liability, or expense that may be imposed upon or reasonably incurred by
him in connection with or resulting from any claim, action, suit, or proceeding
to which he may be a party or in which he may be involved by reason of any
action taken or failure to act under the Plan and against and from any and all
amounts paid by him in settlement thereof, with the Company’s approval, or paid
by him in satisfaction of any judgment in any such action, suit, or proceeding
against him, provided he shall give the Company an opportunity, at its own
expense, to handle and defend the same before he undertakes to handle and defend
it on his own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be
entitled under the Company’s Certificate of Incorporation or Bylaws, as a matter
of law, or otherwise, or any power that the Company may have to indemnify them
or hold them harmless.
 
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20.
Incentive-Based Compensation Recovery.

 
Notwithstanding any other provision to the contrary of the Plan, any Award or
agreement relating to an Award, any Award and any shares of Stock, cash or other
compensation received by an Eligible Employee pursuant to this Plan that
constitute incentive-based compensation may be subject to recovery by the
Company under any compensation recovery, recoupment or clawback policy that the
Company may adopt from time to time, including without limitation any policy
that the Company may be required to adopt under Section 954 of the Dodd-Frank
Wall Street Reform and Consumer Protection Act and the rules and regulations of
the U.S. Securities and Exchange Commission thereunder or the requirements of
any national securities exchange on which the Stock may be listed. Each Eligible
Employee shall promptly return any such incentive-based compensation that the
Company determines it is required to recover from such Eligible Employee under
any such policy.
 

21.
Repricing.

 
Notwithstanding any provision of the Plan to the contrary, neither the Board nor
a Committee may authorize the repricing of an Award without the prior approval
of the Company’s shareholders. For this purpose, the term “repricing” shall mean
any of the following or any other action that has the same effect: (a) to lower
the exercise price or price per share of an Award after it is granted, (b) to
purchase for cash or shares an outstanding Award at a time when its exercise
price or price per share exceeds the Fair Market Value of the Stock, (c) to take
any other action that is treated as a repricing under generally accepted
accounting principles or (d) to cancel an Award at a time when its exercise
price or price per share exceeds the Fair Market Value of the Stock in exchange
for another Award or Company equity. For purposes of this Section 21, however,
an adjustment pursuant to Section 5(d) shall not be deemed to be a repricing.
 

22.
Requirements of Law.

 

(a)
Requirements of Law. The granting of Awards and the issuance of shares of Stock
upon the exercise of an Option shall be subject to all applicable laws, rules,
and regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.

 

(b)
Governing Law. The Plan and all Award Agreements and other agreements hereunder
shall be construed in accordance with and governed by the laws of the State of
New York, without giving effect to the choice of law principles thereof, except
to the extent superseded by applicable United States federal law. Unless
otherwise provided in the Award Agreement, Participants are deemed to submit to
the exclusive jurisdiction and venue of the federal or state courts of New York,
to resolve any and all issues that may arise out of or relate to the Plan or any
related Award Agreement.

 

(c)
Code Section 409A. Anything under the Plan or an Award Agreement to the contrary
notwithstanding, to the extent applicable, it is intended that any Awards under
the Plan which provide for a “deferral of compensation” subject to Section 409A
of the Code and rules, regulation and guidance issued thereunder (collectively,
Code Section 409A) shall comply with the provisions of Code Section 409A and the
Plan and all applicable Awards shall be construed and applied in a manner
consistent with this intent. In furtherance thereof, any amount constituting a
“deferral of compensation” under Treasury Regulation Section 1.409A-1(b) that is
payable to a Participant upon a Separation from Service of the Participant
(within the meaning of Treasury Regulation Section 1.409A-1(h)) (other than due
to the Participant’s death), occurring while the Participant shall be a
“specified employee” (within the meaning of Treasury Regulation Section
1.409A-1(i)) of the Company or applicable Subsidiary, shall not be paid until
the earlier of (x) the date that is six months following such Separation from
Service or (y) the date of the Participant’s death following such Separation
from Service; provided, however, that the value of any such delayed payment
shall accrue interest at the then prevailing federal funds rate plus one percent
(1%) during the period of delay.

 
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(d)
Plan Unfunded. The Plan shall be unfunded.  The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the issuance of Shares or the payment of cash upon exercise or
payment of any Award.  Proceeds from the sale of shares of Stock pursuant to
Options or other Awards granted under the Plan shall constitute general funds of
the Company.

 
 
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