Exhibit 10.2


 


THE WASHINGTON SAVINGS BANK


1997 OMNIBUS STOCK PLAN


 


The Washington Savings
Bank hereby adopts the following 1997 Omnibus Stock Plan for its key employees
as of August 20, 1997.


 


1.             Establishment,
Purpose and Types of Awards


 


The Washington Savings
Bank (“WSB”) hereby establishes THE WASHINGTON SAVINGS
BANK 1997 OMNIBUS STOCK PLAN (the “Plan”). The purpose of the Plan
is to promote the long-term growth and profitability of WSB by (i) providing
key people with incentives to improve stockholder value and to contribute to
the growth and financial success of WSB, and (ii) enabling WSB to attract,
retain, and reward the best-available persons for positions of substantial
responsibility.


 


The Plan permits the
granting of stock options (including incentive stock options qualifying under
Code section 422 and non-qualified stock options), stock appreciation rights,
restricted or unrestricted stock awards, phantom stock, performance awards, or
any combination of the foregoing.


 


2.             Definitions


 


Under this Plan, except
where the context otherwise indicates, the following definitions apply:


 


(a)            “Affiliate”
shall mean any entity, whether now or hereafter existing, which controls, is
controlled by, or is under common control with, WSB (including, but not limited
to, joint ventures, limited liability companies, and partnerships). For this
purpose, “control” shall mean ownership of 50% or more of the total combined
voting power or value of all classes of stock or interests of the entity.


 


(b)           “Award”
shall mean any stock option, stock appreciation right, stock award, phantom
stock award, or performance award.


 


(c)            “Board”
shall mean the Board of Directors of WSB.


 


(d)           “Change in
Control”  shall mean any of
the following transactions: (i) any consolidation, merger, or other corporate
reorganization of WSB with or into any other corporate organization, if as a
result of the transaction, the stockholders of WSB immediately before the
transaction, would not be able to elect a majority of the members of the Board
of Directors of WSB or would not be the beneficial owners, directly or
indirectly, of 51% or more of the combined voting power of the resulting
corporation’s then outstanding voting securities; (ii) any acquisition (by
purchase, lease or otherwise) of all or substantially all of the assets of WSB
by any person, firm or corporation or group thereof acting jointly; (iii) any
purchase by any person, firm, or corporation or group thereof acting jointly
(who was not a controlling stockholder of WSB on August 20, 1997), in one or a
series of transactions; or (iv) the first purchase of shares of WSB Common
Stock pursuant to a tender offer or an exchange offer (other than one made by
WSB) for all or part of the WSB Common Stock.


 

















 


(e)            “Committee”
shall mean a Board-appointed Option Committee; Committee members may only
be  outside directors.


 


(f)              “Code”
shall mean the Internal Revenue Code of 1986, as amended, and any regulations
promulgated thereunder.


 


(g)           “Common
Stock” shall mean shares of common stock of WSB, par value of One
Dollar ($1.00) per share.


 


(h)           “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended.


 


(i)               “Fair Market Value” of a share of WSB’s Common Stock for any
purpose on a particular date shall mean the last reported sale price per share
of Common Stock, regular way, on such date or, in case no such sale takes place
on such date, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on a national
securities exchange or included for quotation on the Nasdaq-National Market, or
if the Common Stock is not so listed or admitted to trading or included for
quotation, the last quoted price, or if the Common Stock is not so quoted, the
average of the high bid and low asked prices, regular way, in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System, or, if such system is no longer in
use, the principal other automated quotations system that may then be in use,
or, if the Common Stock is not quoted by any such organization, the average of
the closing bid and asked prices, regular way, as furnished by a professional
market maker making a market in the Common Stock as selected in good faith by
the Administrator or by such other source or sources as shall be selected in
good faith by the Administrator. If, as the case may be, the relevant date is
not a trading day, the determination shall be made as of the next preceding
trading day. As used herein, the term “trading day” shall mean a day on which
public trading of securities occurs and is reported in the principal
consolidated reporting system referred to above, or if the Common Stock is not
listed or admitted to trading on a national securities exchange or included for
quotation on the Nasdaq-National Market, any business day.


 


(j)               “Grant Agreement” 
shall mean a written document memorializing the terms and conditions of
an Award granted pursuant to the Plan and shall incorporate the terms of the
Plan.


 


(k)            “Parent”  shall mean a corporation, whether now or
hereafter existing, within the meaning of the definition of “parent corporation”
provided in Code section 424(e), or any successor thereto.


 


(l)               “Rule 16b-3” shall mean Rule 16b-3 as in effect under the
Exchange Act on the effective date of the Plan, or any successor provision
prescribing conditions necessary to exempt the issuance of securities under the
Plan (and further transactions in such securities) from Section 16(b) of the
Exchange Act.


 

















 


(m) “Subsidiary”
and “subsidiaries” shall mean only a corporation or corporations, whether now
or hereafter existing, within the meaning of the definition of “subsidiary
corporation” provided in Section 424(f) of the Code, or any successor thereto.


 


3.             Administration


 


(a)            Administration
of the Plan. The Plan shall be administered by the Committee which
shall hereinafter be referred to as the “Administrator”.


 


(b)           Powers of
the Administrator. The Administrator shall have all the powers
vested in it by the terms of the Plan, such powers to include authority, in its
sole and absolute discretion, to grant Awards under the Plan, prescribe Grant
Agreements evidencing such Awards and establish programs for granting Awards.


 


The Administrator shall
have full power and authority to take all other actions necessary to carry out
the purpose and intent of the Plan, including, but not limited to, the
authority to: (i) determine the eligible persons to whom, and the time or times
at which Awards shall be granted; (ii) determine the types of Awards to be
granted; (iii) determine the number of shares to be covered by or used for
reference purposes for each Award; (iv) impose such terms, limitations, restrictions
and conditions upon any such Award as the Administrator shall deem appropriate;
(v) modify, amend, extend or renew outstanding Awards, or accept the surrender
of outstanding Awards and substitute new Awards (provided however, that, except
as provided in Section 7(d) of the Plan, any modification that would materially
adversely affect any outstanding Award shall not be made without the consent of
the holder); (vi) accelerate or otherwise change the time in which an Award may
be exercised or becomes payable and to waive or accelerate the lapse, in whole
or in part, of any restriction or condition with respect to such Award,
including, but not limited to, any restriction or condition with respect to the
vesting or exercisability of an Award following termination of any grantee’s
employment; and (vii) establish objectives and conditions, if any, for earning
Awards and determining whether Awards will be paid after the end of a
performance period.


 


The Administrator shall
have full power and authority, in its sole and absolute discretion, to
administer and interpret the Plan and to adopt and interpret such rules,
regulations, agreements, guidelines and instruments for the administration of
the Plan and for the conduct of its business as the Administrator deems necessary
or advisable.


 


Notwithstanding the
foregoing or any provision hereafter contained, in the event of a Change in
Control,  all Awards previously granted
shall immediately become fully vested and/or exercisable, and may not be
amended or changed to the detriment of any holder, without the written consent
of said holder.


 


(c)            Non-Uniform
Determinations. The Administrator’s determinations under the Plan
(including without limitation, determinations of the persons to receive Awards,
the form, amount, and timing of such Awards, the terms and provisions of such
Awards and the Grant Agreements evidencing such Awards) need not be uniform and
may be made by the Administrator selectively among persons who receive, or are
eligible to receive, Awards under the Plan, whether or not such persons are
similarly situated.


 

















 


(d)           Limited
Liability. To the maximum extent permitted by law, no member of the
Administrator shall be liable for any action taken or decision made in good
faith relating to the Plan or any Award thereunder.


 


(e)            Indemnification.
To the maximum extent permitted by law and by WSB’s charter and
by-laws, the members of the Administrator shall be indemnified by WSB in
respect of all their activities under the Plan.


 


(f)              Effect of
Administrator’s Decision. All actions taken and decisions and
determinations made by the Administrator on all matters relating to the Plan
pursuant to the powers vested in it hereunder shall be in the Administrator’s
sole and absolute discretion and shall be conclusive and binding on all parties
concerned, including WSB, its stockholders, any participants in the Plan, and
any other employee of WSB, and its respective successors in interest.


 


4.             Shares Available for
the Plan; Maximum Awards


 


Subject to adjustments as
provided in Section 7(d) of the Plan, the shares of Common Stock that may be
issued with respect to Awards granted under the Plan shall not exceed an
aggregate of 250,000 shares of Common Stock, and WSB shall reserve such number
of shares for Awards under the Plan. If any Award, or portion of an Award,
under the Plan expires or terminates unexercised, becomes unexercisable or is
forfeited or otherwise terminated, surrendered or canceled as to any shares, or
if any shares of Common Stock are surrendered to WSB in connection with any
Award (whether or not such surrendered shares were acquired pursuant to any
Award), the shares subject to such Award and the surrendered shares shall
thereafter be available for further Awards under the Plan; provided, however,
that any such shares that are surrendered to WSB in connection with any Award
or that are otherwise forfeited after issuance shall not be available for
purchase pursuant to incentive stock options intended to qualify under Code
section 422.


 


Subject to adjustments as
provided in Section 7(d) of the Plan, the maximum number of shares of Common
Stock subject to Awards of any combination that may be granted during any one
fiscal year of WSB to any one individual shall be limited to 75,000 shares. Such
per-individual limit shall not be adjusted to effect a restoration of shares of
Common Stock with respect to which the related Award is terminated,
surrendered, or canceled.


 


5.             Participation


 


Participation in the Plan
shall be open to all employees, officers, and employee-directors of WSB, or of
any Affiliate of WSB, as may be selected by the Administrator from time to
time.


 


6.             Awards


 


The Administrator, in its
sole discretion, establishes the terms of all Awards granted under the Plan. Awards
may be granted individually or in tandem with other types of Awards. All Awards
are subject to the terms and conditions provided in the Grant Agreement.


 


(a)            Stock
Options. The Administrator may from time to time grant to eligible
participants Awards of incentive stock options as that term is defined in Code
section 422 or non-qualified stock options; provided, however, that Awards of
incentive stock options shall be limited to 


 

















 


employees of WSB or of any Parent or Subsidiary of WSB. Stock options,
whether designated as incentive stock options under Code section 422 or
non-qualified stock options, must have an exercise price at least equal to Fair
Market Value on the date of grant. No stock option shall be an incentive stock
option unless so designated by the Administrator at the time of grant or in the
Grant Agreement evidencing such stock option.


 


(b)           Stock
Appreciation Rights. The Administrator may from time to time grant
to eligible participants Awards of Stock Appreciation Rights (“SAR”). An SAR
entitles the grantee to receive, subject to the provisions of the Plan and the
Grant Agreement, a payment having an aggregate value equal to the product of
(i) the excess of (A) the Fair Market Value on the exercise date of one share
of Common Stock over (B) the base price per share specified in the Grant
Agreement, times (ii) the number of shares specified by the SAR, or portion
thereof, which is exercised. Payment by WSB of the amount receivable upon any
exercise of an SAR may be made by the delivery of Common Stock or cash, or any
combination of Common Stock and cash, as determined in the sole discretion of
the Administrator. If upon settlement of the exercise of an SAR a grantee is to
receive a portion of such payment in shares of Common Stock, the number of
shares shall be determined by dividing such portion by the Fair Market Value of
a share of Common Stock on the exercise date. No fractional shares shall be
used for such payment and the Administrator shall determine whether cash shall
be given in lieu of such fractional shares or whether such fractional shares
shall be eliminated.


 


(c)            Stock Awards.
The Administrator may from time to time grant restricted or unrestricted stock
Awards to eligible 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. A stock Award
may be paid in Common Stock, in cash, or in a combination of Common Stock and
cash, as determined in the sole discretion of the Administrator.


 


(d)           Phantom
Stock. The Administrator may from time to time grant Awards to
eligible participants denominated in stock-equivalent units (“phantom stock”)
in such amounts and on such terms and conditions as it shall determine. Phantom
stock units granted to a participant shall be credited to a bookkeeping reserve
account solely for accounting purposes and shall not require a segregation of
any of WSB’s assets. An Award of phantom stock may be settled in Common Stock,
in cash, or in a combination of Common Stock and cash, as determined in the
sole discretion of the Administrator. Except as otherwise provided in the
applicable Grant Agreement, the grantee shall not have the rights of a
stockholder with respect to any shares of Common Stock represented by a phantom
stock unit solely as a result of the grant of a phantom stock unit to the
grantee.


 


(e)            Performance
Awards. The Administrator may, in its discretion, grant performance
awards which become payable on account of attainment of one or more performance
goals established by the Administrator. Performance awards may be paid by the
delivery of Common Stock or cash, or any combination of Common Stock and cash,
as determined in the sole discretion of the Administrator. Performance goals
established by the Administrator may be based on WSB’s or an Affiliate’s
operating income or one or more other business criteria selected by the
Administrator that apply to an individual or group of individuals, a business
unit, or WSB or an Affiliate as a whole, over such performance period as the
Administrator may designate.


 

















 


7.            Miscellaneous


 


(a)            Withholding
of Taxes. Grantees and holders of Awards shall pay to WSB, or make
provision satisfactory to the Administrator, for payment of any taxes required
to be withheld in respect of Awards under the Plan no later than the date of
the event creating the tax liability. WSB may, to the extent permitted by law,
deduct any such tax obligations from any payment of any kind otherwise due to
the grantee or holder of an Award. In the event that payment to WSB of such tax
obligations is made in shares of Common Stock, such shares shall be valued at
Fair Market Value on the applicable date for such purposes.


 


(b)           Loans.
WSB may make or guarantee loans to grantees to assist grantees in exercising
Awards and satisfying any withholding tax obligations.


 


(c)            Transferability.
Except as otherwise determined by the Administrator, and in any event in the
case of an incentive stock option or a stock appreciation right granted with
respect to an incentive stock option, no Award granted under the Plan shall be
transferable by a grantee otherwise than by will or the laws of descent and
distribution. Unless otherwise determined by the Administrator in accord with
the provisions of the immediately preceding sentence, an Award may be exercised
during the lifetime of the grantee, only by the grantee or, during the period
the grantee is under a legal disability, by the grantee’s guardian or legal
representative.


 


(d)           Adjustments;
Business Combinations. In the event of changes in the Common Stock
of WSB by reason of any stock dividend, split-up, recapitalization, merger,
consolidation, business combination or exchange of shares and the like, the
Administrator shall, in its discretion, make appropriate adjustments  to the maximum number and kind of shares
reserved for issuance or with respect to which Awards may be granted under the
Plan as provided in Section 4 of the Plan and to the number, kind, and price of
shares covered by Awards granted, and shall, in its discretion and without the
consent of holders of Awards, make any other adjustments in Awards, including
but not limited to reducing the number of shares subject to Awards or providing
or mandating alternative settlement methods such as settlement of the Awards in
cash or in shares of Common Stock or other securities of WSB or of any other
entity, or in any other matters which relate to Awards as the Administrator
shall, in its sole discretion, determine to be necessary or appropriate.


 

















 


Notwithstanding anything
in the Plan to the contrary and without the consent of holders of Awards, the
Administrator, in its sole discretion, may make any modifications to any
Awards, including, but not limited to, cancellation, forfeiture, surrender or
other termination of the Awards in whole or in part regardless of the vested
status of the Award, in order to facilitate any business combination that is
authorized by the Board to comply with requirements for treatment as a pooling
of interests transaction for accounting purposes under generally accepted
accounting principles.


 


The Administrator is
authorized to make, in its discretion and without the consent of holders of
Awards, adjustments in the terms and conditions of, and the criteria included
in, Awards in recognition of unusual or non-recurring events affecting WSB, or
the financial statements of WSB, or any Subsidiary, or of changes in applicable
laws, regulations, or accounting principles, whenever the Administrator
determines that such adjustments are appropriate in order to prevent dilution
or enlargement of the benefits or potential benefits intended to be made
available under the Plan.


 


Notwithstanding the
foregoing, in the event of a Change in Control, all Awards previously granted
under the Plan shall become immediately vested and/or exercisable and may not
be amended or changed to the detriment of any holder, without the written
consent of said holder.


 


(e)            Termination,
Amendment, and Modification of the Plan. The Board may terminate,
amend or modify the Plan or any portion thereof at any time.


 


(f)              Non-Guarantee
of Employment or Service. Nothing in the Plan or in any Grant
Agreement thereunder shall confer any right on an individual to continue in the
service of WSB or shall interfere in any way with the right of WSB to terminate
such service at any time.


 


(g)           No Trust or
Fund Created. Neither the Plan nor any Award shall create or be
construed to create a trust or separate fund of any kind or a fiduciary
relationship between WSB and a grantee or any other person. To the extent that
any grantee or other person acquires a right to receive payments from WSB
pursuant to an Award, such right shall be no greater than the right of any
unsecured general creditor of WSB.


 


(h)           Governing
Law. The validity, construction and effect of the Plan, of Grant
Agreements entered into pursuant to the Plan, and of any rules, regulations,
determinations or decisions made by the Administrator relating to the Plan or
such grant Agreements, and the rights of any and all persons having or claiming
to have any interest therein or thereunder, shall be determined exclusively in
accordance with applicable federal laws and the laws of the State of Maryland,
without regard to its conflict of laws principles.


 


(i)               Effective Date;
Termination Date. The Plan is effective as of the date on which the Plan was
adopted by the Board, subject to approval of the stockholders within twelve
months before or after such date. No Award shall be granted under the Plan
after the close of business on the day immediately preceding the tenth
anniversary of the effective date of the Plan. Subject to other applicable
provisions of the Plan, all Awards made under the Plan prior to such
termination of the Plan shall remain in effect until such Awards have been
satisfied or terminated in accordance with the Plan and the terms of such
Awards.