Exhibit 10.2

 

COAST FINANCIAL HOLDINGS, INC.

 

2005 STOCK INCENTIVE PLAN

 

ARTICLE I

The Plan

 

1.1 Establishment of the Plan. Coast Financial Holdings, Inc., a Florida
corporation (the “Corporation”), hereby establishes the “Coast Financial
Holdings, Inc. 2005 Stock Incentive Plan” (hereinafter referred to as the
“Plan”). The Plan permits the grant of incentives in the form of Nonqualified
Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted
Stock, or an Unrestricted Stock Award, and any combination thereof. Unless
otherwise defined, all capitalized terms have the meaning ascribed to them in
Article II.

 

1.2 Purpose. The purpose of the Plan is to advance the interests of the
Corporation and its shareholders by offering officers, employees, and directors
incentives that will promote the identification of their personal interests with
the long-term financial success of the Corporation and with growth in
shareholder value. The Plan is designed to strengthen the Corporation’s ability
to recruit, attract, and retain, highly qualified managers and staff, and
qualified and knowledgeable independent directors capable of furthering the
future success of the Corporation by encouraging the ownership of Shares (as
defined below) by such employees and directors and to strengthen the mutuality
of interest between employees and directors, on one hand, and the Corporation’s
shareholders, on the other hand. The equity investments granted under the Plan
are expected to provide employees with an incentive for productivity and to
provide both employees and directors with an opportunity to share in the growth
and value of the Corporation.

 

ARTICLE II

Definitions

 

As used in this Plan, unless the context otherwise requires, the following
capitalized terms are defined as follows:

 

2.1 “Additive SARs” shall have the meaning set forth in Section 7.1(b) of this
Plan.

 

2.2 “Award” shall mean any award under this Plan of any Stock Option, SAR, or
Restricted Stock. Each separate grant of a Stock Option, SAR, Restricted Stock
or an Unrestricted Stock Award, to an Employee or a Director, and each group of
Stock Options, SARs, Restricted Stock, or Unrestricted Stock Award which mature
on a separate date is treated as a separate Award.

 

2.3 “Award Agreement” means the written agreement between the Corporation and a
Participant implementing the grant of, and evidencing and reflecting the terms
of, an Award.

 

2.4 “Board” or “Board of Directors” means the Board of Directors of the
Corporation, as constituted from time to time.

 

2.5 “Cause” means a determination by the Board of Directors that a Participant
has: (a) engaged in any type of disloyalty to the Corporation, including without
limitation fraud, embezzlement,

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theft, or dishonesty in the course of his or her employment or service, or has
otherwise breached a duty owed to the Corporation, (b) been convicted of a
misdemeanor involving moral turpitude or a felony, (c) pled nolo contendere to a
felony, (d) disclosed trade secrets, customer lists, or confidential information
of the Corporation to unauthorized parties, except as may be required by law, or
(e) materially breached any material agreement with the Corporation, unless such
agreement was materially breached first by the Corporation.

 

2.6 “Change of Control” shall have the meaning set forth in Section 9.2 of this
Plan.

 

2.7 “Code” means the Internal Revenue Code of 1986, as amended, and the rules
and regulations thereunder. Reference to any provision of the Code or rule or
regulation thereunder shall be deemed to include any amended or successor
provision, rule, or regulation.

 

2.8 “Committee” means the committee appointed by the Board in accordance with
Section 3.1 of the Plan, if one is appointed, to administer this Plan. If no
such committee has been appointed, the term Committee shall refer to the Board
of Directors.

 

2.9 “Common Shares” or “Shares” means the common shares, $5.00 par value per
share, of the Corporation.

 

2.10 “Corporation” shall mean Coast Financial Holdings, Inc. or any successor
thereto as provided in Section 13.8 hereto.

 

2.11 “Date of Exercise” means the date on which the Corporation receives notice
of the exercise of a Stock Option in accordance with the terms of Section 6.8 of
this Plan or of an SAR in accordance with the terms of Article VII of this Plan.

 

2.12 “Date of Grant” or “Award Date” shall be the date on which an Award is made
by the Committee under this Plan. Such date shall be the date designated in a
resolution adopted by the Committee pursuant to which the Award is made;
provided, however, that such date shall not be earlier than the date of such
resolution and action thereon by the Committee. In the absence of a date of
grant or award being specifically set forth in the Committee’s resolution, or a
fixed method of computing such date, then the Date of Grant or Award Date shall
be the date of the Committee’s resolution and action.

 

2.13 “Director” means any person who is a member of the Board of Directors of
the Corporation or any of its Subsidiaries.

 

2.14 “Employee” means any person who is an officer or full-time employee of the
Corporation or any of its Subsidiaries and who receives from it regular
compensation (other than pension, retirement allowance, retainer, or fee under
contract). An Employee does not include independent contractors or temporary
employees.

 

2.15 “Exchange Act” means the Securities Exchange Act of 1934, as amended from
time to time.

 

2.16 “Exercise Period” means the period during which a Stock Option or a SAR may
be exercised.

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2.17 “Exercise Price” means the price for Shares at which a Stock Option may be
exercised.

 

2.18 “Fair Market Value” of a Common Share on a particular date shall be the
closing price for a Common Share as quoted on the National Association of
Securities Dealers Automated Quotation System National Market (“Nasdaq-NMS”), or
any other national securities exchange on which the Common Shares are listed (as
reported by the Wall Street Journal or, if not reported thereby, any other
authoritative source selected by the Committee), or if there is no trading on
that date, on the next preceding date on which there were reported share prices.
If the Common Shares are quoted on any other inter-dealer quotation system (but
not quoted by Nasdaq-NMS or any national securities exchange), then the Fair
Market Value per Common Share on a particular date shall be the mean of the bid
and asked prices for a Common Share as reported in the Wall Street Journal or,
if not reported thereby, any other authoritative source selected by the
Committee. If the Common Shares are not quoted by the Nasdaq-NMS or any other
inter-dealer quotation system, and are not listed on any national securities
exchange, then the “Fair Market Value” of a Common Share shall be determined by
the Committee pursuant to any reasonable method adopted by it in good faith for
such purpose. In the case of an Incentive Stock Option, if the foregoing method
of determining the fair market value is inconsistent with Section 422 of the
Code, “Fair Market Value” shall be determined by the Committee in a manner
consistent with the Code and shall mean the value as so determined.

 

2.19 “Freestanding SARs” shall have the meaning set forth in Section 7.1(c) of
this Plan.

 

2.20 “Incentive Stock Option” or “ISO” means any Stock Option awarded under this
Plan intended to be and designated as an incentive stock option within the
meaning of Section 422 of the Code.

 

2.21 “Non-Employee Director” shall have the meaning as set forth in, and
interpreted under, Rule 16b-3(b)(3) promulgated by the SEC under the Exchange
Act, or any successor definition adopted by the SEC.

 

2.22 “Nonqualified Stock Option” means any Stock Option awarded under this Plan
which is not an Incentive Stock Option.

 

2.23 “Participant” means each Employee or Director to whom an Award has been
granted under this Plan.

 

2.24 “Payment Share” shall have the meaning set forth in Section 6.8(b) of this
Plan.

 

2.25 “Person” shall mean an individual, partnership, corporation, limited
liability company or partnership, trust, joint venture, unincorporated
association, or other entity or association.

 

2.26 “Plan” means this Coast Financial Holdings, Inc. 2005 Stock Incentive Plan
as defined in Section 1.1 hereof.

 

2.27 “Related Option” means an Incentive Stock Option or a Nonqualified Stock
Option granted in conjunction with the grant of a Stock Appreciation Right.

 

2.28 “Restricted Period” shall have the meaning set forth in Section 8.3(b) of
the Plan.

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2.29 “Restricted Stock” shall mean the Common Shares issuable pursuant to a
Participant pursuant to Article VIII of this Plan.

 

2.30 “SEC” means the Securities and Exchange Commission.

 

2.31 “Securities Act” means the Securities Act of 1933, as amended from time to
time.

 

2.32 “Stock Appreciation Right” or “SAR” means an Award designated as a Stock
Appreciation Right granted to a Participant pursuant to Article VII of this
Plan.

 

2.33 “Stock Option” means any Incentive Stock Option or Nonqualified Stock
Option to purchase Common Shares that are awarded under this Plan.

 

2.34 “Subsidiary” or “Subsidiaries” means any corporation or corporations other
than the Corporation organized under the laws of the United States or any other
jurisdiction that the Board of Directors designates, in an unbroken chain of
corporations beginning with the Corporation if each corporation other than the
last corporation in the unbroken chain owns more than 50% of the total combined
voting power of all classes of stock in one of the other corporation in such
chain.

 

2.35 “Tandem SARs” shall have the meaning set forth in Section 7.1(a) of this
Plan.

 

2.36 “Toomey Affiliates” shall have the meaning set forth in Section 9.2(a) of
this Plan.

 

2.37 “Unrestricted Stock Award” means an Award of Shares pursuant to Section 8.9
of this Plan.

 

2.38 “Voting Securities” shall have the meaning set forth in Section 9.2(a) of
this Plan.

 

ARTICLE III

Administration of the Plan

 

3.1 The Committee. This Plan shall be administered by the Committee, subject to
such terms and conditions as the Board may prescribe from time to time. Pursuant
to applicable provisions of the Corporation’s Articles of Incorporation, as
amended, and Bylaws, the Committee, which shall be appointed by the Board, shall
consist of no fewer than three (3) members of the Board. Members of the
Committee shall serve for such period of time as the Board may determine. From
time to time the Board may increase the size of the Committee and appoint
additional members, remove members (with or without cause), and appoint new
members, fill vacancies however caused, and remove all members and thereafter
directly administer the Plan. During such times as the Corporation’s Common
Shares are registered under the Exchange Act, all members of the Committee shall
be: (a) “independent directors” as that terms is defined under Rule 4200 of the
NASD Marketplace Rules, and (b) “outside directors” as defined under Section
162(m)(4)(C)(i) of the Code.

 

3.2 Duties and Powers of the Committee. Subject to the express provisions of
this Plan, the Committee shall have all the power and authority to, and shall be
authorized to take any and all actions required, necessary, or desirable to
administer the Plan. In addition to any other powers, subject to the provisions
of the Plan, the Committee shall have the following powers:

 

(a) to select the Employees and Directors to whom Awards may from time to time
be granted pursuant to this Plan;

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(b) to determine all questions as to eligibility;

 

(c) to determine the number of Common Shares to be covered by each Award granted
under this Plan;

 

(d) subject to the limitations set forth in Section 4.1 of this Plan, to
determine whether and to what extent Incentive Stock Options, Nonqualified Stock
Options, SARs, Restricted Stock and Unrestricted Stock Awards, or any
combination thereof, are to be granted or awarded hereunder;

 

(e) to determine the terms and conditions (to the extent not inconsistent with
this Plan) of any Award granted hereunder, all provisions of each Award
Agreement, which provisions need not be identical (including, but not limited
to, the Exercise Price, the Exercise Period, any restriction or limitation, or
any vesting schedule or acceleration thereof, regarding any Stock Option or
other Award and the Common Shares relating thereto, based on such factors as the
Committee shall determine, in its sole discretion);

 

(f) to determine whether, and to what extent, and under what circumstances
grants of Stock Options and other Awards under this Plan are to operate on a
tandem basis and/or in conjunction with or apart from other cash awards made by
the Corporation outside of this Plan;

 

(g) to determine whether and under what circumstances a Stock Option may be
settled in cash, Common Shares (other than Restricted Stock), through a cashless
exercise, or any combination thereof under Section 6.8 of this Plan.

 

(h) to determine whether, and to what extent, and under what circumstances
Common Shares under this Plan shall be deferred either automatically or at the
election of the Participant;

 

(i) to prescribe, amend, waive, or rescind rules or regulations relating to the
Plan’s administration;

 

(j) to accelerate the vesting or Date of Exercise of any Award, or to waive
compliance by a holder of an Award of any obligation to be performed by such
holder or the terms and conditions of an Award;

 

(k) to construe and interpret the provisions of the Plan or any Award Agreement;

 

(l) to amend the terms of previously granted Awards so long as the terms as
amended are consistent with the terms of the Plan and provided that the consent
of the Participant is obtained with respect to any amendment that would be
detrimental to the Participant;

 

(m) require, whether or not provided for in the pertinent Award Agreement, of
any person exercising a Stock Option or otherwise receiving an Award, at the
time of such exercise or receipt, the making of any representations or
agreements that the Board of Directors or Committee may deem necessary or
advisable in order to comply with the securities laws of the United States or of
any applicable jurisdiction;

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(n) to delegate to an appropriate officer of the Corporation the authority to
select Employees for Awards and to recommend to the Committee the components of
the Award to each, including vesting requirements, subject in each case to final
approval by the Committee of the selection of the Employee and the Award;

 

(o) to authorize any person to execute on behalf of the Corporation any
instrument required to effectuate an Award or to take such other actions as may
be necessary or appropriate with respect to the Corporation’s rights pursuant to
Awards or agreements relating to the Awards or the exercise thereof; and

 

(p) to make all other determinations and take all other actions necessary or
advisable for the administration of the Plan.

 

3.3 Awards to Members of the Committee. Each Award granted to a Director or
members of the Committee shall be approved by the entire Board of Directors
(rather than just a committee thereof) and shall be evidenced by minutes of a
meeting or the written consent of the Board of Directors and an Award Agreement.

 

3.4 Requirements Relating to Section 162(m) of the Code. Any provision of this
Plan notwithstanding: (a) transactions with respect to persons whose
remuneration is subject to the provisions of Section 162(m) of the Code shall
conform to the requirements of Section 162(m)(4)(C) of the Code unless the
Committee determines otherwise; (b) the Plan is intended to give the Committee
the authority to grant Awards that qualify as performance-based compensation
under Section 162(m)(4)(C) of the Code as well as Awards that do not qualify;
and (c) any provision of the Plan that would prevent the Committee from
exercising the authority referred to in Section 3.4(b) of this Plan or that
would prevent an Award that the Committee intends to qualify as
performance-based compensation under Section 162(m)(4)(C) of the Code from so
qualifying shall be administered, interpreted, and construed to carry out the
Committee’s intention and any provision that cannot be so administered,
interpreted, and construed shall to that extent be disregarded.

 

3.5 Decisions Final and Binding. All decisions, determinations, and actions
taken by the Committee, and the interpretation and construction of any provision
of the Plan or any Award Agreement by the Committee shall be final, conclusive,
and binding, unless otherwise determined by the Board.

 

3.6 Limitation on Liability. Notwithstanding anything herein to the contrary,
except as otherwise provided under applicable Florida law, no member of the
Board of Directors or of the Committee shall be liable for any good faith
determination, act, or failure to act in connection with the Plan or any Award
hereunder.

 

ARTICLE IV

Shares Subject to the Plan

 

4.1 Number of Shares. Subject to adjustment as provided in Section 4.4, the
maximum aggregate number of Shares that may be issued under this Plan shall not
exceed 158,000 Shares, which Shares shall be authorized but unissued Shares.
Subject to Section 4.4, the maximum aggregate number of Shares or SARs which may
be awarded and issued under the Plan to any one Participant shall be 50,000
Common Shares. Stock Options awarded under the Plan may be either Incentive
Stock Options or Nonqualified Stock Options, as determined by the Committee.
Except

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as provided in Section 4.2 and 4.3 of this Plan, Shares issued upon the exercise
of an Award granted pursuant to the Plan shall not again be available for the
grant of an Award hereunder.

 

4.2 Lapsed or Forfeited Awards. If any Award granted under this Plan shall
terminate, expire, lapse, or be cancelled for any reason without having been
exercised in full, or if Shares or Restricted Stock are forfeited, any unissued
or forfeited Shares which had been subject to the Award Agreement relating
thereto shall again become available for the grant of an Award under this Plan;
provided, that in the case of forfeited Shares, the grantee has received no
dividends or other distributions prior to such forfeiture with respect to the
Shares.

 

4.3 Delivery of Shares as Payment. In the event a Participant pays the Exercise
Price for Shares pursuant to the exercise of a Stock Option with previously
acquired Shares, the number of Shares available for future Awards under the Plan
shall be reduced only by the number of new Shares issued upon exercise of the
Stock Option. Notwithstanding anything to the contrary herein, no fractional
Shares will be delivered under the Plan.

 

4.4 Capital Adjustments.

 

(a) If by reason of a merger, consolidation, reorganization, recapitalization,
combination of Shares, stock split, reverse stock split, stock dividend,
separation (including a spin-off or split-off), or other such similar event, the
number of outstanding Shares of the Corporation are increased, decreased,
changed into, or been exchanged for a different number or kind of shares, or if
additional shares or new and different shares are issued in respect of such
Shares, the Committee in its sole discretion may adjust proportionately: (i) the
aggregate maximum number of Shares available for issuance under the Plan; (ii)
the aggregate maximum number of Shares and SARs for which Awards can be granted
to any one Participant; (iii) the number and class of Shares covered by
outstanding Awards denominated in Shares or units of Shares, (including, but not
limited to, Awards of Restricted Stock); (iv) the Exercise Price and grant
prices related to outstanding Awards; and (v) the appropriate Fair Market Value
and other price determinations for such Awards.

 

(b) In the event of any other change in corporate structure affecting the Common
Shares or any distribution (other than normal cash dividends) to holders of
Common Shares, such adjustments in the number and kind of shares and the
exercise, grant, or conversion prices of the affected Awards as may be deemed
equitable by the Committee shall be made to give proper effect to such event.

 

(c) In the event of a corporate merger, consolidation, or acquisition of
property or stock, separation (including spin-offs and split-offs),
reorganization or liquidation, the Committee shall be authorized to cause the
Corporation to issue or assume stock options, whether or not in a transaction to
which Section 424(a) of the Code applies, by means of substitution of new Stock
Options for previously issued stock options or an assumption of previously
issued stock options. In such event, the aggregate maximum number of Shares
available for issuance under Section 4.1 of the Plan will be increased to
reflect such substitution or assumption.

 

(d) If any adjustment made pursuant to this Article IV would result in the
possible issuance of fractional Shares under any then-outstanding Award, the
Committee may adjust the outstanding Awards so as to eliminate fractional
Shares.

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(e) Any adjustment to be made with respect to Incentive Stock Options shall
comply with Sections 422 and 424 of the Code.

 

ARTICLE V

Eligibility

 

Awards may be made to any Employee or Director, except that (a) only Employees
(including Employees who also serve as Directors) may receive Incentive Stock
Options, and (b) the grant of Awards to Directors must comply with Section 3.3.
A Participant who has been granted an Award may be granted additional Awards;
provided, however, that grants of Awards to individual Participants are subject
to the limitations in Section 4.1.

 

ARTICLE VI

Stock Options

 

6.1 Stock Options. Each Stock Option granted alone or in addition to other
Awards granted under this Plan shall be either an Incentive Stock Option or a
Nonqualified Stock Option.

 

6.2 Grant of Stock Options.

 

(a) Subject to the terms and provisions of this Plan, the Committee shall have
the authority to grant to any Participant one or more Incentive Stock Options,
Nonqualified Stock Options, or both kinds of Stock Options. Subject to Section
4.1 and Article V, the Committee has complete and sole discretion in determining
the number of Shares subject to Stock Options to be granted to a Participant;
provided, however, that the aggregate Fair Market Value (determined at the time
the Award is made) of Shares with respect to which a Participant may first
exercise ISOs granted under the Plan during any calendar year may not exceed
$100,000 or such amount as shall be specified under Section 422 of the Code and
the rules and regulations promulgated thereunder. To the extent that any Stock
Option does not qualify as an Incentive Stock Option (whether because of its
provisions or the time and manner of its exercise or otherwise), such Stock
Options or portion thereof which does not qualify shall constitute a
Nonqualified Stock Option. Stock Options granted at different times need not
contain similar provisions.

 

(b) Non-Employee Directors may only be granted Stock Options under this Article
VI which are Nonqualified Stock Options.

 

6.3 Incentive Stock Options. Anything in the Plan to the contrary
notwithstanding, no term of this Plan relating to Incentive Stock Options shall
be interpreted, amended, or altered, nor shall any discretion or authority
granted under this Plan be so exercised, so as to disqualify the Plan under
Section 422 of the Code, or, without the consents of the Participants affected,
to disqualify any Incentive Stock Option under Section 422 of the Code.

 

6.4 Award Agreement. Each Stock Option granted under this Plan shall be
evidenced by a an Award Agreement between the Corporation and the Participant in
accordance with Section 6.2 that specifies the Exercise Price, the Exercise
Period, the number of Shares to which the Stock Option pertains, method of
exercise and the form of consideration payable therefor, any vesting
requirements, any conditions imposed upon the exercise of the Stock Options in
the event of retirement, death, disability, or other termination of service, and
such other provisions and conditions, not inconsistent with this Plan, as the
Committee may determine. Each Award Agreement relating to a grant of Stock
Options shall clearly specify whether the Stock Option is

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intended to be an Incentive Stock Option within the meaning of Section 422 of
the Code, or a Nonqualified Stock Option not intended to be within the
provisions of Section 422 of the Code.

 

6.5 Exercise Price. The Exercise Price per Share purchasable under any Stock
Option granted under this Plan shall be determined by the Committee at the Date
of Grant, subject to the following limitations:

 

(a) The Exercise Price of a Stock Option shall not be less than (i) 100% of the
Fair Market Value of the Common Shares on the Date of Grant, or (ii) in the case
of any Participant who is granted an Incentive Stock Option who, at the time of
such grant, owns Common Shares possessing more than 10% of the total combined
voting power of all classes of stock of the Corporation or of its parent
corporation or Subsidiaries, the Exercise Price of the Incentive Stock Option
shall not be less than 110% of the of the Fair Market Value of the Common Shares
on the Date of Grant.

 

(b) In no event shall the Exercise Price of any Stock Option be less than the
par value of the Common Shares.

 

6.6 Exercise Period. The Exercise Period of each Stock Option granted shall be
fixed by the Committee and shall be specified in the Award Agreement; provided,
however, that no Stock Option shall be exercisable later than ten years after
the Award Date, and no Incentive Stock Option which is granted to any optionee
who, at the time such Incentive Stock Option is granted, owns stock possessing
more than 10% of the total combined voting power of all classes of stock of the
Corporation or of its parent corporation or Subsidiaries, shall be exercisable
after the expiration of five years from the Award Date.

 

6.7 Exercise of Stock Options. Stock Options granted under the Plan shall be
exercisable at such time or times and be subject to such terms and conditions as
shall be set forth in the Award Agreement (as may determined by the Committee at
the time of such grant), which need not be the same for all Participants. Such
terms and conditions may include performance criteria with respect to the
Corporation or the Participant, and as shall be permissible under the other
terms of the Plan. No Stock Option, however, shall be exercisable until the
expiration of the vesting period, if any, set forth in the Award Agreement,
except to the extent such vesting period is accelerated pursuant to Article IX
of this Plan. To the extent that no vesting conditions are stated in the Award
Agreement, the Stock Options represented thereby shall be fully vested at the
Date of Grant.

 

6.8 Method of Exercise.

 

(a) Subject to the provisions of the Award Agreement, Stock Options may be
exercised in whole at any time, or in part from time to time with respect to
whole Shares only, during the Exercise Period by the delivery to the Corporation
of a written notice of intent to exercise the Stock Option, in such form as the
Committee may prescribe, setting forth the number of Shares with respect to
which the Stock Option is to be exercised. The Exercise Price, which shall
accompany the written notice of exercise, shall be payable to the Corporation in
full (along with the taxes described in the last sentence of this Section 6.8)
by the Participant who, if so provided in the Award Agreement, may: (i) deliver
cash or a check (acceptable to the Committee in accordance with guidelines
established for this purpose) in satisfaction of all or any part of the Exercise
Price; (ii) deliver, or cause to be withheld from the Stock Option, Shares
(except for Restricted Shares) valued at Fair Market Value on the Date of
Exercise in satisfaction of all or any part of the Exercise Price, or (iii) any
combination of cash and Shares, or (iv) any other

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consideration and method of payment permitted under any laws to which the
Corporation is subject, in each such case as the Committee may determine. In
addition to and at the time of payment of the Exercise Price, the Participant
shall pay to the Corporation in cash the full amount of all federal and state
withholding or other employment taxes applicable to the taxable income of the
Participant resulting from the exercise.

 

(b) If the Exercise Price is to be paid by the surrender of previously acquired
and owned Common Shares, the Participant will make representations and
warranties satisfactory to the Corporation regarding his title to the Common
Shares used to effect the purchase (the “Payment Shares”), including without
limitation, representations and warranties that the Participant has good and
marketable title to such Payment Shares free and clear of any and all liens,
encumbrances, charges, equities, claims, security interests, options or
restrictions, and has full power to deliver such Payment Shares without
obtaining the consent or approval of any person or governmental authority other
than those which have already given consent or approval in a manner satisfactory
to the Corporation. If such Payment Shares were acquired upon previous exercise
of Incentive Stock Options granted within two years prior to the exercise of the
Stock Option or acquired by the Participant within one year prior to the
exercise of the Stock Option, such Participant shall be required, as a condition
to using the Payment Shares in payment of the Exercise Price of the Stock
Option, to acknowledge the tax consequences of doing so, in that such previously
exercised Incentive Stock Options may have, by such action, lost their status as
Incentive Stock Options, and the Participant may recognize ordinary income for
tax purposes as a result. In no event can Restricted Stock be used as Payment
Shares.”

 

6.9 Transfer Restrictions. Neither the Stock Options granted under the Plan nor
any rights or interest in such Stock Options may be sold, pledged, hypothecated,
assigned, or otherwise disposed of or transferred by such Participant, other
than by will or by the laws of descent and distribution. Except as permitted by
the Committee, during the lifetime of Participant to whom a Stock Option is
granted, the Stock Options shall be exercisable only by him or her or, in the
event of the Participant’s permanent and total disability as determined by the
Committee in accordance with applicable Corporation policies, by his or her
legal representative.

 

6.10 Termination of Stock Options. Subject to the applicable provisions of the
Award Agreement and this Article VI, upon termination of a Participant’s
employment with the Corporation for any reason, all stock options shall vest or
expire in accordance with the terms and conditions established by the Committee
at or after grant. Unless otherwise provided in the Award Agreement:

 

(a) Termination by Death. If a Participant’s employment or service with the
Corporation or its Subsidiaries terminates by reason of death, then for a period
of one year (or such other period as the Committee may specify at grant) from
the date of such death or until the end of the Exercise Period of such Award,
whichever period is shorter, any Stock Option held by a Participant may be
exercised by the legal representative of the estate or by a person who acquires
the right to exercise such Stock Option by bequest or inheritance, subject to
the limitations of Section 6.11 with respect to Incentive Stock Options, to the
extent that such Participant was entitled to exercise the Award at the date of
such death.

 

(b) Termination by Disability. If a Participant’s employment or service with the
Corporation or its Subsidiaries terminates by reason of permanent and total
disability, as determined by the Committee in accordance with applicable
Corporation personnel policies, then for a period of one year (or such other
period as the Committee may specify at grant) from the date of such termination
of employment or service, or until the end of the Exercise Period of such

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Award, whichever is shorter, any Stock Option held by a Participant may be
exercised by the Participant, or his or her legal representative, subject to the
limitations of Section 6.11 with respect to Incentive Stock Options, to the
extent that such Participant was entitled to exercise the Award at the date of
such termination; provided, however, that, if the Participant dies within such
one year period (or such other period as the Committee may specify at grant),
then for a period of one year from the date of death or until the end of the
Exercise Period of such Award, whichever period is shorter, any unexercised
Stock Options held by such Participant shall thereafter be exercisable to the
extent to which they were exercisable at the time of such termination due to
disability. In the event of termination of employment by reason of permanent and
total disability, as determined by the Committee in accordance with applicable
Corporation personnel policies, if an Incentive Stock Option is exercised after
the expiration of the exercise periods that apply for purposes of Section 422 of
the Code (currently one year from such termination), such Stock Option will
thereafter be treated as a Nonqualified Stock Option.

 

(c) Termination by Retirement. If a Participant’s employment or service with the
Corporation or its Subsidiaries terminates by reason of normal or late
retirement under any retirement plan of the Corporation or its Subsidiaries or,
with the consent of Committee, then for a period of three months (or such other
period as the Committee may specify at grant) from the date of such termination
of employment or service, or until the end of the Exercise Period of such Award,
whichever is shorter, any Stock Option held by a Participant may be exercised by
the Participant, or his or her legal representative, subject to the limitations
of Section 6.11 with respect to Incentive Stock Options, to the extent that such
Participant was entitled to exercise the Award at the date of such termination;
provided, however, that, if the Participant dies within such three month period,
then for a period of one year from the date of death or until the end of the
Exercise Period of such Award, whichever period is shorter, any unexercised
Stock Options held by such Participant shall thereafter be exercisable to the
extent to which they were exercisable at the time of such retirement. In the
event of termination of employment by reason of retirement pursuant to any
retirement plan of the Corporation or its Subsidiaries or with the consent of
the Committee, if an Incentive Stock Option is exercised after the expiration of
the exercise periods that apply for purposes of Section 422 of the Code
(currently three months from such termination), such Stock Option will
thereafter be treated as a Nonqualified Stock Option.

 

(d) Other Termination of Employee. Unless otherwise determined by the Committee
at or after grant and except as provided in Section 9.1 hereof, if a
Participant’s employment by the Corporation terminates for any reason other than
death, disability, or retirement covered by Sections 6.10 (a), (b), or (c) of
this Plan: (i) any Stock Options that were not exercisable at the date of such
termination (which date shall be determined by the Committee in its sole
discretion) will expire automatically, and (ii) any Stock Options exercisable on
the date of termination will remain exercisable only for the lesser of three
months or the balance of such Exercise Period of such Stock Option; provided,
however, that the Participant was not involuntarily terminated by the
Corporation for Cause. If the Participant dies within such three month period
(or such other period as the Committee may specify at grant), then for a period
of one year from the date of death or until the end of the Exercise Period of
such Stock Option, whichever period is shorter, any unexercised Stock Options
held by such Participant shall thereafter be exercisable to the extent to which
they were exercisable at the time of such termination. Notwithstanding any other
provision of this Plan except for Section 9.1 hereof, upon termination of a
Participant’s employment with the Corporation or any of its Subsidiaries for
Cause, all of the Participant’s unexercised Stock Options will terminate
immediately upon the date of such termination (which date shall be determined by
the Committee in its sole discretion) and the Participant shall forfeit all
Shares for which the Corporation has not yet delivered share

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certificates to the Participant. In such event, the Corporation shall refund to
the Participant the Exercise Price paid to it, if any, in the same form as it
was paid (or in cash at the Corporation’s discretion). The Corporation may
withhold delivery of share certificates pending resolution of any inquiry that
could lead to a finding that a termination of a Participant’s employment was for
Cause.

 

(e) Non-Employee Director Resignation or Termination of Service. Except as
covered by Sections 6.10(a), (b), or (c) of this Plan, if a Participant serving
as a Non-Employee Director terminates his or her service by resigning from the
Board of Directors or by failing to run for election to an additional term as a
Director after being offered nomination for an additional term by a nominating
or similar committee of the Board of Directors (or in lieu of such committee, by
the entire Board of Directors), then (i) any Stock Options that were not
exercisable at the date of such termination of service will expire
automatically, and (ii) any exercisable Stock Options as of such date held by
the Participant may thereafter be exercised by the Participant for a period of
three months from the date of such resignation or, in the case of a failure to
run for election to an additional term, from (A) the date of such stockholder
meeting at which such election of Directors takes place, or (B) until the end of
the Exercise Period, whichever is shorter (or such other period as the Committee
may specify at grant). If a Participant serving as a Non-Employee Director does
not resign and is not offered nomination for an additional term, all Stock
Options held by such Participant shall immediately vest on the date that the
Participant’s service as a Director of the Corporation terminates and such Stock
Options shall be exercisable until the end of the Exercise Period for such Stock
Options. Notwithstanding any other provision of this Plan, upon removal of a
Director by shareholders of the Corporation for cause under applicable state
law, all of the Participant’s unexercised Stock Options will terminate
immediately upon the date of such termination (which date shall be determined by
the Committee in its sole discretion) and the Participant shall forfeit all
Shares for which the Corporation has not yet delivered share certificates to the
Participant. In such event, the Corporation shall refund to the Participant the
Exercise Price paid to it, if any, in the same form as it was paid (or in cash
at the Corporation’s discretion).

 

6.11 Incentive Stock Option Limitations.

 

(a) To the extent that the aggregate Fair Market Value (determined as of the
Date of Grant) of the Common Shares with respect to which Incentive Stock
Options are exercisable for the first time by a Participant during any calendar
year under the Plan and/or any other stock option plan of the Corporation or any
Subsidiary or parent corporation (within the meaning of Section 425 of the Code)
exceeds $100,000, such Stock Options shall be treated as Stock Options which are
not Incentive Stock Options.

 

(b) To the extent (if any) permitted under Section 422 of the Code, or the
applicable rules and regulations promulgated thereunder or any applicable
Internal Revenue Service pronouncement, if (i) a Participant’s employment with
the Corporation or any Subsidiary is terminated by reason of death, disability,
or retirement covered by Section 6.10(a), (b), or (c) of this Plan, and (ii) the
portion of the Incentive Stock Option that is otherwise exercisable during the
post-termination period specified under Sections 6.10(a), (b), or (c), applied
without regard to the $100,000 limitation currently contained in Section 422(d)
of the Code, is greater than the portion of the Stock Option that is immediately
exercisable as an “incentive stock option” during such post-termination period
under Section 422 of the Code, such excess shall be treated as a Nonqualified
Stock Option.

 

(c) In the event that the application of any of the provisions of Section
6.11(a) or (b) of this Plan is not necessary in order for Stock Options to
qualify as

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Incentive Stock Options, or should additional provisions be required, the
Committee may amend the Plan accordingly, without the necessity of obtaining the
approval of the stockholders of the Corporation.

 

6.12 Buy-Out and Settlement Provisions. The Committee may at any time offer to
buy-out a Stock Option previously granted, based on such terms and conditions as
the Committee shall establish and communicate to the Participant at the time
that such offer is made.

 

6.13 No Rights as Stockholder. No Participant or transferee of a Stock Option
shall have any rights as a stockholder of the Corporation with respect to any
Shares subject to a Stock Option (including without limitation, rights to
receive dividends, vote, or receive notice of meetings) prior to the purchase of
such Shares by the exercise of such Stock Option as provided in this Plan. A
Stock Option shall be deemed to be exercised and the Common Shares thereunder
purchased when written notice of exercise has been delivered to the Corporation
in accordance with Section 6.8 of the Plan and the full Exercise Price for the
Shares with respect to which the Stock Options is exercised has been received by
the Corporation, accompanied with any agreements required by the terms of the
Plan and the applicable Award Agreement; provided, however, that if the
Participant has been terminated for Cause, only those Common Shares for which a
certificate has been delivered to the Participant by the Corporation will be
deemed to be purchased by such Participant. Full payment may consist only of
such consideration and method of payment allowable under this Article VI of the
Plan. No adjustment will be made for a cash dividend or other rights for which
the record date precedes the Date of Exercise, except as provided in Section 4.4
of the Plan.

 

6.14 Sale of Common Shares Upon Exercise of Stock Option. Unless the Committee
provides otherwise in the Award Agreement, Common Shares acquired pursuant to
the exercise of Stock Option shall not be subject to any restrictions on
transferability under this Plan, except as provided in Section 12.1 of this
Plan. With respect to Common Shares acquired pursuant to the exercise of an
Incentive Stock Option, a transfer or other disposition of such Common Shares by
a Participant (other than by will or the laws of descent and distribution) may
not qualify for favorable tax treatment under Section 421(a) of the Code if such
transfer or other disposition shall occur before the expiration of the later of
(i) the two year period commencing on the Date of Grant of the ISO, or (ii) the
one year period commencing on the Date of Exercise of the ISO.

 

ARTICLE VII

Stock Appreciation Rights

 

7.1 Grant of Stock Appreciation Rights. Subject to the terms and conditions of
the Plan, Stock Appreciation Rights may be granted to Participants, at the
discretion of the Committee, in any of the following forms: (a) in connection
with the grant, and exercisable in lieu of Stock Options (“Tandem SARs”), (b) in
connection with and exercisable in addition to the grant of Stock Options
(“Additive SARs”), (c) independent of the grant of Stock Options (“Freestanding
SARs”), or (d) in any combination of the foregoing. Non-Employee Directors may
not be granted any SARs under this Plan other than Tandem SARs and Additive
SARs.

 

7.2 Exercise of Tandem SARs

 

(a) Tandem SARs may be exercised with respect to all or part of the Shares
subject to the Related Option. The exercise of Tandem SARs shall cause a
reduction in the number of Shares subject to the Related Option equal to the
number of Shares with respect to which the Tandem SAR is exercised. Conversely,
the exercise, in whole or part, of a Related

--------------------------------------------------------------------------------

Option, shall cause a reduction in the number of Shares subject to the Tandem
SAR equal to the number of Shares with respect to which the Related Option is
exercised. Shares with respect to which the Tandem SAR shall have been exercised
may not be subject again to an Award under the Plan.

 

(b) Notwithstanding any other provision of the Plan to the contrary, a Tandem
SAR shall expire no later than the expiration of the Related Option and shall be
exercisable only when the Related Option is eligible to be exercised. In
addition, if the Related Option is an ISO, a Tandem SAR shall be exercised for
no more than 100% of the difference between the Fair Market Value of Shares
subject to the Related Option at the time the Tandem SAR is exercised and the
Option Price of the Related Option.

 

7.3 Exercise of Additive SARs. Additive SARs shall be deemed to be exercised
upon, and in addition to, the exercise of the Related Option. The deemed
exercise of Additive SARs shall not reduce the number of Shares with respect to
which the Related Option remains unexercised.

 

7.4 Exercise of Freestanding SARs. Freestanding SARs may be exercised upon
whatever terms and conditions the Committee, in its sole discretion, imposes
upon such SARs.

 

7.5 Other Conditions Applicable to SARs.

 

(a) No SAR granted under the Plan shall be exercisable until the expiration of
at least one year after the Date of Grant, except that such limitation shall not
apply (i) in the case of death, disability, or retirement of a Participant
covered by Sections 6.10(a), (b), or (c) hereof, (ii) a termination of service
covered by the last sentence of Section 6.10(e) hereof, or (iii) as set forth in
Article VIII of this Plan. In no event shall the term of any SAR granted under
the Plan exceed seven years from the Award Date. A SAR may be exercised only
when the Fair Market Value of a Share exceeds either (i) the Fair Market Value
per Share on the Award Date in the case of a Freestanding SAR, or (ii) the
Exercise Price of the Related Option in the case of either a Tandem SAR or
Additive SAR. A SAR shall be exercised by delivery to the Committee of a notice
of exercise in the form prescribed by the Committee.

 

(b) In the event of a termination of service for any reason of death, disability
or retirement covered by Section 6.10(a), (b), or (c) of this Plan, or pursuant
to the last sentence of Section 6.10(e) hereof, unless otherwise determined by
the Committee at grant, all Additive SARs and Freestanding SARs shall be fully
vested and thereafter may be exercised by the participant or his or her legal
representatives for a period of one year from the date of such termination of
service or until the end of the Exercise Period for such SAR, whichever is
shorter; provided, however, that the Participant was not involuntarily
terminated for Cause. Notwithstanding any other provision of this Plan, upon
termination of a Participant’s service with the Corporation or it Subsidiaries
for Cause, all of the Participant’s unexercised Additive SARs and Freestanding
SARs will terminate immediately upon the date of such termination as determined
in accordance with Section 6.10(d) hereof.

 

(c) In the event of a termination of service for any reason other than death,
disability or retirement covered by Section 6.10(a), (b), or (c), or pursuant to
the last sentence of Section 6.10(e) hereof, unless otherwise determined by the
Committee at grant: (i) any Additive SAR and any Freestanding SAR that was not
exercised at the date of termination will expire automatically, and (ii) any
exercisable Additive SARs and Freestanding SARs will remain exercisable for a
period of three months from the date of such termination of service until the
end of the Exercise

--------------------------------------------------------------------------------

Period for such SAR, whichever is shorter; provided, however, that the
Participant was not involuntarily terminated for Cause. Notwithstanding any
other provision of this Plan, upon termination of a Participant’s service with
the Corporation or it Subsidiaries for Cause, all of the Participant’s
unexercised Additive SARs and Freestanding SARs will terminate immediately upon
the date of such termination as determined in accordance with Section 6.10(d)
hereof.

 

7.6 Payment Upon Exercise of SARs. (a) Subject to the provisions of the Award
Agreement, upon the exercise of a SAR, the Participant is entitled to receive,
without any payment to the Corporation (other than required tax withholding
amounts), an amount equal to the product of multiplying (i) the number of Shares
with respect to which the SAR is exercise by (ii) an amount equal to the excess
of: (A) the Fair Market Value per Share on the Date of Exercise of the SAR over
(B) either (x) Freestanding SAR or (y) the Exercise Price of the Related Option
in the case of either a Tandem SAR or Additive SAR.

 

(b) Payment to the Participant shall be made in Shares, valued at the Fair
Market Value of the Date of Exercise, in cash if the Participant has so elected
in his written notice of exercise, or a combination thereof.

 

7.7 Non-Transferability of SARs. Except as specifically provided in the Award
Agreement, no SARs 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
or his guardian or legal representative.

 

ARTICLE VIII

Restricted Stock and Unrestricted Stock Awards

 

8.1 Awards of Restricted Stock. Subject to the terms and provisions of this
Plan, 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
may determine. Shares of Restricted Stock may be issued either alone or in
addition to other Awards granted under the Plan. The Committee shall determine
the eligible persons to whom, and the time or times at which, grants of
Restricted Stock will be made, the number of shares to be awarded, the price (if
any) to be paid by the recipient (subject to Section 8.2), the time or times
within which such Awards may be subject to forfeiture, the vesting schedule and
rights to acceleration thereof, and all other terms and conditions of the
Awards. The Committee may condition the grant of Restricted Stock upon the
attainment of specified performance goals or such other factors as the Committee
may determine, in its sole discretion. The provisions of Restricted Stock Awards
need not be the same with respect to each Participant, and such Awards to
individual Participants need not be the same in subsequent years.

 

8.2 Award Agreement for Restricted Stock. The prospective Participant selected
to receive a Restricted Stock Award shall not have any rights with respect to
such Award, unless and until such Participant has executed an Award Agreement
evidencing the Award and has delivered a fully executed copy thereof to the
Corporation, and has otherwise complied with the applicable terms and conditions
of such Award. Each Award Agreement relating to Restricted Stock shall specify
the Restricted Period (as defined in Section 8.3(b) below), the conditions to be
satisfied prior to removal of such restrictions, the number of shares of
Restricted Stock granted, and such other provisions as the Committee shall
determine. The Award Agreement relating to Restricted Stock Award shall set
forth the purchase price for such shares, which purchase price shall be equal to
or less than their par value and may be zero. Each Award Agreement shall contain
at least one

--------------------------------------------------------------------------------

term, condition, or restriction constituting a “substantial risk of forfeiture”
as defined in Section 83(c) of the Code.

 

8.3 Certain Conditions and Restrictions. The shares of Restricted Stock awarded
pursuant to this Plan shall be subject to the following minimum restrictions and
conditions:

 

(a) Acceptance. Awards of Restricted Stock must be accepted within a period of
sixty (60) days (or such shorter period as the Committee may specify at grant)
after the Award Date, by executing an Award Agreement relating to the Restricted
Stock which is the subject of such Award and by paying whatever price (if any)
the Committee has designated hereunder.

 

(b) Restriction Period. Subject to the provisions of this Plan and the Award
Agreement, during a period set by the Committee commencing with the Award Date
(the “Restriction Period”), the Participant shall not be permitted to sell,
transfer, pledge, assign, hypothecate, or otherwise dispose of shares of
Restricted Stock awarded under this Plan. Within these limits, the Committee, in
its sole discretion, may provide for the lapse of such restrictions in
installments and may accelerate or waive such restrictions in whole or in part,
based on service, performance and/or such other factors or criteria as the
Committee may determine in its sole discretion. No such restrictions shall be
removed until the expiration of at least one year after the Award Date, except
that such limitation shall not apply as set forth in Article IX of this Plan.

 

(c) Legend. Each Participant receiving a Restricted Stock Award shall be issued
a stock certificate in respect of such shares of Restricted Stock. Such
certificate shall be registered in the name of such Participant, and shall bear
an appropriate legend referring to the terms, conditions, and restrictions
applicable to such Award, substantially in the following form:

 

“The sale, transferability, pledge, assignment, hypothecation, or other
disposition of this certificate and the shares of stock represented hereby are
subject to the terms and conditions (including forfeiture) of Coast Financial
Holdings, Inc. (the “Corporation”) 2005 Stock Incentive Plan, including the
rules and administrative procedures adopted pursuant to such plan, and an
Agreement entered into between the registered owner and the Corporation dated
                    . Copies of such Plan and Agreement are on file in the
offices of the Corporation at 2412 Cortez Road West, Bradenton, FL 34207.”

 

(d) Custody. The Committee may require that the stock certificates evidencing
such shares of Restricted Stock be held in custody by the Corporation until the
restrictions thereon shall have lapsed, and that, as a condition of any
Restricted Stock Award, the Participant shall have delivered a duly signed stock
power, endorsed in blank, relating to the Restricted Stock covered by such
Award.

 

8.4 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 legend the certificates representing
Restricted Stock to give appropriate notice of such restrictions.

--------------------------------------------------------------------------------

8.5 Lapse of Restrictions. Except as otherwise provided in this Article VIII, if
and when the Restriction Period expires without a prior forfeiture of the
Restricted Stock subject to such Restriction Period, the certificates for such
shares shall be delivered to the Participant. All legends shall be removed from
said certificates at the time of delivery to the Participant.

 

8.6 Rights as Shareholder. Except as provided in this Section 8.6, during the
Restriction Period, Participants in whose name shares of Restricted Stock are
granted hereunder: (a) shall have, with respect to such Restricted Stock, full
voting rights with respect to such shares, and (b) shall be entitled to receive
all dividends and other distributions paid with respect to such shares. If any
such dividends or distributions are paid in Shares, the Shares shall be subject
to the same restrictions on transferability as the Shares of Restricted Stock
with respect to which they were distributed. Furthermore, the Committee, in its
sole discretion, as determined at the time of Award, may permit or require the
payment of dividends to be deferred.

 

8.7 Termination of Employment or Resignation of Director. Subject to the
applicable provisions of the Award Agreement and this Article VIII, upon
termination of a Participant’s employment with, the Corporation for any reason
during the Restricted Period, all Restricted Shares still subject to restriction
shall vest or be forfeited in accordance with the terms and conditions
established by the Committee at or after grant. Unless otherwise provided in the
Award Agreement:

 

(a) Termination of Service by Death, Disability, or Retirement. In the event a
Participant’s employment is terminated during the Restriction Period, because of
death, disability, or retirement covered by Sections 6.10(a), (b), (c), or (e)
of this Plan, any remaining portion of the Restriction Period applicable to the
Restricted Stock pursuant to Section 8.3 herein shall automatically terminate
and, except as otherwise provided in Section 8.4 herein, the shares of
Restricted Stock shall thereby be released and free of restrictions.

 

(b) Termination of Service for Other Reasons. In the event that a Participant
terminates his employment of the Corporation during the Restriction Period for
any reason other than for death, disability, or retirement, as set forth in
Sections 8.7(a) herein, then any shares of Restricted Stock still subject to
restrictions as of the date of such termination shall automatically be forfeited
and, if held by the Participant, returned to the Corporation.

 

(c) Hardship. In the event of hardship or other special circumstances of a
Participant whose employment with the Corporation or a Subsidiary is
involuntarily terminated (other than for cause), the Committee may, in its sole
discretion, waive in whole or in part any or all remaining restrictions with
respect to such Participant’s shares of Restricted Stock, based on such factors
as the Committee may deem appropriate.

 

8.8 Notice of Section 83(b) Election. Any Participant making an election under
Section 83(b) of the Code with respect to Restricted Stock must provide a copy
thereof to the Corporation within 10 days of filing such election with the
Internal Revenue Service.

 

8.9 Unrestricted Stock Awards. Subject to the terms and conditions of this Plan,
the Committee, at any time and from time to time, may grant Unrestricted Stock
Awards free of restrictions under the Plan to such Participants in such amounts,
on such terms and conditions, and for such consideration, including no
consideration or such minimum consideration as may be required by law, as it
shall determine.

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ARTICLE IX

Change of Control

 

9.1 Acceleration of Options; Lapse of Restrictions

 

(a) In the event of a Change of Control of the Corporation: (i) each Stock
Option and SAR then-outstanding under the Plan shall be fully exercisable,
regardless of any unsatisfied vesting requirements established under the terms
of the pertinent Award Agreements, and remain so for the duration of the Stock
Option as specified in the Award Agreement, (ii) all conditions or restrictions
related to grants of Restricted Stock shall be deemed to be immediately and
fully satisfied and all certificates representing such shares of Restricted
Stock shall be released and have any legal removed by the Secretary of the
Corporation and thereby become freely transferable, (iii) all conditions or
restrictions related to an Award shall be accelerated or released; all in a
manner, in the case of persons subject to Section 16(b) of the Exchange Act, as
to conform with the provisions of Rule 16b-3 thereunder.

 

(b) Awards that remain outstanding after a Change of Control shall not be
terminated as a result of a termination of service covered by Sections 6.10,
7.2, 7.5, or 8.7, and shall continue to be exercisable until the end of the
Exercise Period in accordance with their original terms, except in the case of
(i) a Participant’s death in which case termination shall occur within one year
from the date of death, or (ii) a Participant’s termination for Cause in which
case the unexercised Stock Option shall terminate as set forth in Section
6.10(d).

 

(c) Notwithstanding the foregoing, if any right granted pursuant to this Section
9.1 would make a Change of Control transaction ineligible for pooling of
interests accounting treatment under applicable accounting principles that, but
for this Section 9.1, would have been available for such accounting treatment,
then the Committee shall have the authority to substitute stock for cash which
would otherwise be payable pursuant to this Section 9.1 having a Fair Market
Value equal to such cash.

 

9.2 Definition of Change of Control. For purposes of this Plan, a “Change of
Control” is deemed to have occurred if:

 

(a) any individual, entity, or group (within the meaning of Sections 13(d)(3) or
14(d)(2) of the Exchange Act) other than James K. Toomey, his immediate family
members (which shall include Mr. Toomey’s wife, children, and parents of each of
Mr. Toomey and his wife), or any of their respective affiliates (“Toomey
Affiliates”), is or becomes, directly or indirectly, the “beneficial owner” (as
defined by Rule 13d-3 promulgated under the Exchange Act) of 25% or more of the
combined voting power of the then outstanding securities of the Corporation
entitled to vote generally in the election of Directors (“Voting Securities”);
provided, however, that any acquisition by the following will not constitute a
Change of Control:

 

(i) the Corporation or any of its Subsidiaries,

 

(ii) any of the Toomey Affiliates,

 

(iii) any employee benefit plan (or related trust) of the Corporation or its
Subsidiaries, or

--------------------------------------------------------------------------------

(iv) any corporation, bank, or other financial institution with respect to
which, following such acquisition, more than 50% of the combined voting power of
the outstanding voting securities of such corporation entitled to vote generally
in the election of directors is then beneficially owned by the Persons who were
the beneficial owners of the Voting Securities immediately prior to such
acquisition in substantially the same proportion as their ownership immediately
prior to such acquisition of the Voting Securities; or

 

(b) (i) a tender offer or an exchange offer is made to acquire securities of the
Corporation whereby following such offer the offerees will hold, control, or
otherwise have the direct or indirect power to exercise voting control over 50%
or more of the Voting Securities, or (ii) Voting Securities are first purchased
pursuant to any other tender or exchange offer.

 

(c) as a result of a tender offer or exchange offer for the purchase of
securities of the Corporation (other than such an offer by the Corporation for
its own securities), or as a result of a proxy contest, merger, consolidation,
or sale of assets, or as a result of a combination of the foregoing, during any
period of two consecutive years, individuals who, at the beginning of such
period constitute the Board, plus any new Directors of the Corporation whose
election or nomination for election by the Corporation’s stockholders was or is
approved by a vote of at least two-thirds of the Directors of the Corporation
then still in office who either were Directors of the Corporation at the
beginning of such two year period or whose election or nomination for election
was previously so approved (but excluding for this purpose, any individual whose
initial assumption of office was or is in connection with the actual or
threatened election contest relating to the election of Directors of the
Corporation (as such term is used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act)), cease for any reason during such two year period to
constitute at least two-thirds of the members of the Board; or

 

(d) the stockholders of the Corporation approve a reorganization, merger,
consolidation, or other combination, with or into any other corporation or
entity regardless of which entity is the survivor, other than a reorganization,
merger, consolidation, or other combination, which would result in the Voting
Securities outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or being converted into Voting Securities of the
surviving entity) at least 60% of the combined voting power of the Voting
Securities or of the voting securities of the surviving entity outstanding
immediately after such reorganization, merger, consolidation; or other
combination; or

 

(e) the stockholders of the Corporation approve a plan of liquidation or
winding-up of the Corporation or an agreement for the sale or disposition by the
Corporation of all or substantially all of the Corporation’s assets, or any
distribution to security holders of assets of the Corporation having a value
equal to 30% or more of the total value of all assets of the Corporation.

 

9.3 Occurrence of a Change of Control. A Change of Control will be deemed to
have occurred:

 

(a) with respect to any acquisition referred to in Section 9.2(a) above, the
date on which the acquisition of such percentage shall have been completed;

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(b) with respect to a tender or exchange offer, the date the offer referred to
in Section 9.2(b)(i) above is made public or when documents are filed with the
SEC in connection therewith pursuant to Section 14(d) of the Exchange Act, or
the date of the purchase referenced in Section 9.2(b)(ii);

 

(c) with respect to a change in the composition of the Board of Directors
referred to in Section 9.2(c), the date on which such change is adopted or is
otherwise effective, whichever first occurs; or

 

(d) with respect to any stockholder approval referred to in Section 9.2(d) or
(e), the date of any approval.

 

8.4 Application of this Article IX. The provisions of this Article IX shall
apply to successive events that may occur from time to time but shall only apply
to a particular event if it occurs prior to the expiration of this Plan and each
Award issued pursuant to this Plan.

 

ARTICLE X

Amendment, Modification, or Termination of Plan

 

Insofar as permitted by applicable law, the Board, by resolution, shall have the
power at any time, and from time to time, to amend, modify, suspend, terminate
or discontinue the Plan or any part thereof including any amendment deemed
necessary to ensure that the Corporation may comply with any regulatory
requirements referred to in Article XIII). The Board is specifically authorized
to amend the Plan and take such other action as it deems necessary or
appropriate to comply with Section 162(m) of the Code and the rules and
regulations promulgated thereunder. Such amendment or modification may be
without stockholder approval except to the extent that such approval is required
by the Code, or pursuant to the rules and regulations under the Section 16 of
the Exchange Act, if then applicable, by any national securities exchange or
inter-dealer quotation system on which the Shares are then listed, quoted, or
reported, by any regulatory authority or board having jurisdiction with respect
thereto, or under any applicable laws, rules, or regulations. Notwithstanding
the provisions of this Article X, no termination, amendment, or modification of
the Plan, other than those pursuant to Article IV hereof, shall in any manner
adversely affect any Award theretofore granted under the Plan, without the
written consent of the Participant so affected.

 

ARTICLE XI

Modification, Extension, and Renewal of Stock Options and Awards

 

Subject to the terms and conditions, and within the limitations, of the Plan,
the Committee may modify, extend, or renew outstanding Stock Options,
prospectively or retroactively, or accept the surrender of outstanding Stock
Options (to the extent not theretofore exercised) granted under the Plan or any
other plan of the Corporation or a Subsidiary, and authorize the granting of new
Stock Options pursuant to the Plan in substitution therefor (to the extent not
theretofore exercised), and the substituted Stock Options may specify a lower
exercise price or a longer term than the surrendered Stock Options or have any
other provisions that are authorized by the Plan. Notwithstanding the foregoing
provisions of this Article XI, (a) no amendment or modification of an Award
which adversely affects the Participant shall not be made without the consent of
the affected Participant, and (b) no Incentive Stock Option may be modified,
amended, extended, or reissued if such action would cause it to cease to be an
“Incentive Stock Option” within the

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meaning of Section 422 of the Code, unless the Participant specifically
acknowledges and consents to the tax consequences of such action.

 

ARTICLE XII

Indemnification of the Committee

 

In addition to such other rights of indemnification as they may have as
Directors or as members of the Committee, the members of the Committee shall not
be liable for any act, omission, interpretation, construction, or determination
made in good faith in connection with their administration of and
responsibilities with respect to the Plan, and the Corporation hereby agrees to
indemnify the members of the Committee against any claim, loss, damage, or
reasonable expense, including attorneys’ fees, actually and reasonably incurred
in connection with the defense of any action, suit, or proceeding, or in
connection with any appeal therein, to which they or any of them may be a party
by reason of any action taken or failure to act under or in connection with the
Plan or any Award granted or made hereunder, and against all amounts reasonably
paid by them in settlement thereof or paid by them in satisfaction of a judgment
in any such action, suit, or proceeding, if such members acted in good faith and
in a manner which they believed to be in, and not opposed to, the best interests
of the Corporation and its Subsidiaries.

 

ARTICLE XIII

General Provisions

 

13.1 Conditions Upon Issuance of Shares. Shares shall not be issued pursuant to
the exercise of a Stock Option unless the exercise of such Stock Option and the
issuance and delivery of such Shares pursuant thereto shall comply with, and be
subject to the procurement of all approvals, permits, authorizations, and orders
required under, all relevant provisions of law, including, without limitation,
the Securities Act, the Exchange Act, and the rules and regulations promulgated
thereunder, and the requirements of any stock exchange or inter-dealer quotation
system upon which the Shares may then be listed, and shall be further subject to
the approval of counsel for the Corporation with respect to such compliance.
Unless the Shares have been issued to the Participant pursuant to a registration
statement declared effective by the SEC, the Committee may require each person
purchasing or otherwise acquiring Shares pursuant to a Stock Option under the
Plan to represent to and agree with the Corporation in writing to the effect
that the Participant: (a) is acquiring the Shares for his or her own personal
account, for investment purposes only, and not with an intent or a view to
distribution within the meaning of Section 2(11) of the Securities Act, and (b)
will not sell, assign, pledge, hypothecate, or otherwise dispose of or transfer
the Shares to be issued upon exercise of such Stock Option except as permitted
by this Plan and except in compliance with the Securities Act and the securities
laws of all other applicable jurisdictions, as supported by an opinion of
counsel if so requested by the Committee. As a further condition to the issuance
of such Shares, the Participant shall provide any other representation,
warranty, or covenant as the Committee or its counsel deems necessary under the
Securities Act and the securities laws of all other applicable jurisdictions. In
addition to any legend required by this Plan, the certificates for the Shares
may include any legend which the Committee deems appropriate to reflect any
restrictions on transfer.

 

13.2 Reservation of Shares. The Corporation shall at all times reserve and keep
available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan. The Corporation shall use its best efforts to seek to
obtain from appropriate regulatory agencies any requisite authorization in order
to issue and sell such number of Shares as shall be sufficient to satisfy the
requirements of the Plan. The inability of the Corporation to obtain from any
such

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regulatory agency having jurisdiction the requisite authorization(s) deemed by
the Corporation’s counsel to be necessary for the lawful issuance and sale of
any Shares hereunder, or the inability of the Corporation to confirm to its
satisfaction that any issuance and sale of any Shares hereunder will meet
applicable legal requirements, shall relieve the Corporation of any liability in
respect to the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

 

13.3 Limitation on Legal Rights. The establishment of the Plan shall not confer
upon any Employee or Director any legal or equitable right against the
Corporation, except as expressly provided in the Plan.

 

13.4 Not a Contract of Employment. This Plan is purely voluntary on the part of
the Corporation, and the continuation of the Plan shall not be deemed to
constitute a contract between the Corporation and any Participant, or to be
consideration for or a condition of the employment or service of any
Participant. Participation in the Plan shall not give any Employee or Director
any right to be retained in the service of the Corporation or any of its
Subsidiaries, nor shall anything in this Plan affect the right of the
Corporation or any of its Subsidiaries to terminate any such Employee with or
without Cause.

 

13.5 Other Compensation Plans. The adoption of the Plan shall not affect any
other Stock Option or incentive or other compensation plans in effect for the
Corporation or any of its Subsidiaries, nor shall the Plan preclude the
Corporation or any Subsidiary from establishing any other forms of incentive or
other compensation plan or arrangements for Employees or Directors of the
Corporation or any of its Subsidiaries.

 

13.6 Assumption by the Corporation. The Corporation or its Subsidiaries may
assume options, warrants, or rights to purchase shares issued or granted by
other companies whose shares or assets shall be acquired by the Corporation or
its Subsidiaries or which shall be merged into or consolidated with the
Corporation or its Subsidiaries. The adoption of this Plan shall not be taken to
impose any limitations on the powers of the Corporation or its Subsidiaries or
affiliates to issue, grant, or assume options, warrants, rights, or restricted
shares, otherwise than under this Plan, or to adopt other Stock Option or
restricted share plans or to impose any requirements of shareholder approval
upon the same.

 

13.7 Creditors. The interests of any Participant under this Plan is not subject
to the claims of creditors and may not, in any way, be assigned, alienated, or
encumbered.

 

13.8 Plan Binding on Successors. All obligations of the Corporation under this
Plan and any Awards granted hereunder shall be binding upon any successor and
assign of the Corporation, whether the existence of such successor or assign is
a result of a direct or indirect purchase, merger, consolidation, or otherwise,
of all or substantially all of the business or assets of the Corporation.

 

13.9 Unfunded Status of Plan. This Plan is intended to constitute an “unfunded”
plan for incentive and deferred compensation. With respect to any payments not
yet made to a Participant by the Corporation, nothing contained herein shall
give any Participant any rights that are greater than those of a general
creditor of the Corporation.

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13.10 Withholding.

 

(a) Tax Withholding. The Corporation shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Corporation, an
amount sufficient to satisfy federal, state, and local taxes (including the
Participant’s FICA obligation) required by law to be withheld with respect to
any grant, exercise, or payment under or as a result of this Plan.

 

(b) Share Withholding. To the extent the Code requires withholding upon the
exercise of Nonqualified Stock Options, or upon the occurrence of any other
similar taxable event, the Committee may permit or require, subject to any rules
it deems appropriate, the withholding requirement to be satisfied, in whole or
in part, with or without the consent of the participant, by having the
Corporation withhold Shares having a Fair Market Value equal to the amount
required to be withheld. The value of the Shares to be withheld shall be based
on Fair Market Value of the Shares on the date that the amount of tax to be
withheld is to be determined.

 

13.11 Singular, Plural; Gender. Whenever used in this Plan, nouns in the
singular shall include the plural, and vice versa, and the masculine pronoun
shall include the feminine gender.

 

13.12 Headings. Headings to the Sections and subsections are included for
convenience and reference and do not constitute part of the Plan.

 

13.13 Costs. The Corporation shall bear all expenses incurred in administrating
this Plan, including original issue, transfer, and documentary stamp taxes, and
other expenses of issuing the Shares pursuant to Awards granted hereunder.

 

13.14 Governing Law. This Plan and the actions taken in connection herewith
shall be governed, construed, and administered in accordance with the laws of
the State of Florida regardless of the law that might otherwise govern under
applicable Florida principles of conflicts of laws.

 

ARTICLE XIV

Effectiveness of the Plan

 

This Plan shall become effective on the date that it is adopted by the Board of
Directors. Following adoption of the Plan by the Board of Directors, the
Committee may make awards hereunder prior to the stockholders of the Corporation
approving the Plan; provided, however, that any and all Stock Options awarded
automatically shall be converted into Nonqualified Stock Options if the Plan is
not approved by such stockholders within 365 days of its adoption.

 

ARTICLE XV

Term of the Plan

 

Unless sooner terminated by the Board pursuant to Article X hereof, this Plan
shall terminate ten (10) years from its effective date and no Awards may be
granted after termination, but Awards granted prior to such termination may
extend beyond that date. The Board of Directors may terminate this Plan at any
time. The termination shall not affect the validity of any Award outstanding on
the date of termination.

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Date Plan Approved by Board of Directors: March 22, 2005

 

/s/ Brian F. Grimes

Secretary Certification

 

Date Approved by the Shareholders: May 20, 2005

 

  

Secretary Certification