1995 Stock Option and Incentive Plan


    Exhibit
      10.1

     

     

    LSB
      FINANCIAL CORP.

    1995
      STOCK OPTION AND INCENTIVE PLAN

     

    1. Plan
      Purpose.  The
      purpose of the Plan is to promote the long-term interests of the Corporation
      and
      its stockholders by providing a means for attracting and retaining directors,
      officers and employees of the Corporation and its Affiliates. It is intended
      that designated Options granted pursuant to the provisions of this Plan to
      persons employed by the Corporation or its Affiliates will qualify as Incentive
      Stock Options. Options granted to persons who are not employees will be
      Non-Qualified Stock Options.

     

    2. Definitions. 
      The
      following definitions are applicable to the Plan:

     

    “Affiliate”
      - means any “parent corporation” or “subsidiary corporation” of the Corporation,
      as such terms are defined in Section 424(e) and (f), respectively, of the
      Code.

     

    “Bank”
-
      means Lafayette Savings Bank, FSB, and any successor entity.

     

    “Award”
-
      means the grant of an Incentive Stock Option, a Non-Qualified Stock Option,
      a
      Stock Appreciation Right, a Limited Stock Appreciation Right or any combination
      thereof, as provided in the Plan.

     

    “Code”
-
      means the Internal Revenue Code of 1986, as amended.

     

    “Committee”
      - means the Committee referred to in Section 3 hereof.

     

    “Continuous
      Service” - means the absence of any interruption or termination of service as a
      director, director emeritus, officer or employee of the Corporation or an
      Affiliate, except that when used with respect to persons granted an Incentive
      Option means the absence of any interruption or termination of service as an
      employee of the Corporation or an Affiliate. Service shall not be considered
      interrupted in the case of sick leave, military leave or any other leave of
      absence approved by the Corporation or in the case of transfers between payroll
      locations of the Corporation or between the Corporation, its parent, its
      subsidiaries or its suc-cessor. With respect to any director emeritus,
      continuous service shall mean availability to perform such functions as may
      be
      required of the Bank’s directors emeriti.

     

    “Corporation”
      - means LSB Financial Corp., an Indiana corporation.

     

    “Employee”
      - means any person, including an officer or director, who is employed by the
      Corporation or any Affiliate.

     

    “ERISA”
-
      means the Employee Retirement Income Security Act of 1974, as
      amended.

     

    “Exercise
      Price” - means (i) in the case of an Option, the price per Share at which the
      Shares subject to such Option may be purchased upon exercise of such Option
      and
      (ii) in the case of a Right, the price per Share (other than the Market Value
      per Share on the date of exercise and the Offer Price per Share as defined
      in
      Section 10 hereof) which, upon grant, the 

     


    
      
        
        

      

      
        
          

        

      

      
        
        

      

    


    Committee
      determines shall be utilized in calculating the aggregate value which a
      Participant shall be entitled to receive pursuant to Sections 9, 10 or 12 hereof
      upon exercise of such Right.

     

    “Incentive
      Stock Option” - means an option to purchase Shares granted by the Committee
      pursuant to Section 6 hereof which is subject to the limitations and
      restrictions of Section 8 hereof and is intended to qualify under Section 422
      of
      the Code.

     

    “Limited
      Stock Appreciation Right” - means a stock appreciation right with respect to
      Shares granted by the Committee pursuant to Sections 6 and 10
      hereof.

     

    “Market
      Value” - means the average of the high and low quoted sales price on the date in
      question (or, if there is no reported sale on such date, on the last preceding
      date on which any reported sale occurred) of a Share on the Composite Tape
      for
      the New York Stock Exchange-Listed Stocks, or, if on such date the Shares are
      not quoted on the Composite Tape, on the New York Stock Exchange, or, if the
      Shares are not listed or admitted to trading on such Exchange, on the principal
      United States securities exchange registered under the Securities Exchange
      Act
      of 1934 on which the Shares are listed or admitted to trading, or, if the Shares
      are not listed or admitted to trading on any such exchange, the mean between
      the
      closing high bid and low asked quotations with respect to a Share on such date
      on the Nasdaq System, or any similar system then in use, or, if no such
      quotations are available, the fair market value on such date of a Share as
      the
      Committee shall determine.

     

    “Non-Employee
      Director” - means a director who a) is not currently an officer or employee of
      the Corporation; b) is not a former employee of the Corporation who receives
      compensation for prior services (other than from a tax-qualified retirement
      plan); c) has not been an officer of the Corporation; d) does not receive
      remuneration from the Corporation in any capacity other than as a director,
      except "De Minimis Remuneration" as defined in the rules promulgated pursuant
      to
      Section 162(m) of the Code; and e) does not possess an interest in any other
      transactions or is not engaged in a business relationship for which disclosure
      would be required under Item 404(a) or (b) of Regulation S-K.

     

    “Non-Qualified
      Stock Option” - means an option to purchase Shares granted by the Committee
      pursuant to Section 6 hereof, which option is not intended to qualify under
      Section 422(b) of the Code.

     

    “Option”
      - means an Incentive Stock Option or a Non-Qualified Stock Option.

     

    “Participant”
      - means any director, officer or employee of the Corporation or any Affiliate
      who is selected by the Committee to receive an Award and any director or
      director emeritus of the Corporation who is granted an Award pursuant to Section
      20 hereof.

     

    “Plan”
-
      means the 1995 Stock Option and Incentive Plan of the Corporation.

     

    “Related”
      - means (i) in the case of a Right, a Right which is granted in connection
      with,
      and to the extent exercisable, in whole or in part, in lieu of, an Option or
      another Right and (ii) in the case of an Option, an Option with respect to
      which
      and to the extent a Right is exercisable, in whole or in part, in lieu thereof
      has been granted.

     


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    


    “Right”
-
      means a Limited Stock Appreciation Right or a Stock Appreciation
      Right.

     

    “Shares”
      - means the shares of common stock of the Corporation.

     

    “Stock
      Appreciation Right” - means a stock appreciation right with respect to Shares
      granted by the Committee pursuant to Sections 6 and 9 hereof.

     

    “Ten
      Percent Beneficial Owner” - means the beneficial owner of more than ten percent
      of any class of the Corporation’s equity securities registered pursuant to
      Section 12 of the Securities Exchange Act of 1934.

     

    3. Administration. 
      The
      Plan
      shall be administered by a Committee consisting of two or more members each
      of
      whom shall be a Non-Employee Director. The members of the Committee shall be
      appointed by the Board of Directors of the Corporation. Except as limited by
      the
      express provisions of the Plan, the Committee shall have sole and complete
      authority and discretion, subject to Office of Thrift Supervision Regulations,
      to (i) se-lect Participants and grant Awards; (ii) determine the number of
      Shares to be subject to types of Awards generally, as well as to individual
      Awards granted under the Plan; (iii) determine the terms and conditions upon
      which Awards shall be granted under the Plan; (iv) prescribe the form and terms
      of instruments evidencing such grants; and (v) establish from time to time
      regulations for the administration of the Plan, interpret the Plan, and make
      all
      determinations deemed necessary or advisable for the administration of the
      Plan.

     

    A
      majority of the Committee shall constitute a quorum, and the acts of a majority
      of the members present at any meeting at which a quorum is present, or acts
      approved in writing by a majority of the Committee without a meeting, shall
      be
      acts of the Committee.

     

    4. Participation
      in Committee Awards.  The
      Committee may select from time to time Participants in the Plan from those
      directors (including directors emeriti), officers and employees of the
      Corporation or its Affiliates who, in the opinion of the Committee, have the
      capacity for contributing to the successful performance of the Corporation
      or
      its Affiliates.

     

    5. Shares
      Subject to Plan.  Subject
      to adjustment by the operation of Section 11 hereof, the maximum number of
      Shares with respect to which Awards may be made under the Plan is 10% of the
      total Shares issued in the Bank’s conversion to the capital stock
      form. The
      Shares with respect to which Awards may be made under the Plan may be either
      authorized and unissued shares or issued shares heretofore or hereafter
      reacquired and held as treasury shares. Shares which are subject to Related
      Rights and Related Options shall be counted only once in determining whether
      the
      maximum number of Shares with respect to which Awards may be granted under
      the
      Plan has been exceeded. An Award shall not be considered to have been made
      under
      the Plan with respect to any Option or Right which terminates and new Awards
      may
      be granted under the Plan with respect to the number of Shares as to which
      such
      termination has occurred.

     

    6. General
      Terms and Conditions of Options and Rights.  The
      Committee shall have full and complete authority and discretion, subject to
      OTS
      regulations and except as expressly limited by the Plan, to grant Options and/or
      Rights and to provide the terms and conditions 

     


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    


    

      (which
        need not be identical among Participants) thereof. In particular, the Committee
        shall prescribe the following terms and conditions: (i) the Exercise Price
        of
        any Option or Right, which shall not be less than the Market Value per Share
        at
        the date of grant of such Option or Right, (ii) the number of Shares subject
        to,
        and the expiration date of, any Option or Right, which expiration date shall
        not
        exceed ten years from the date of grant, (iii) the manner, time and rate
        (cumulative or otherwise) of exercise of such Option or Right, and (iv) the
        restrictions, if any, to be placed upon such Option or Right or upon Shares
        which may be issued upon exercise of such Option or Right. Notwithstanding
        the
        foregoing and subject to compliance with applicable Office of Thrift Supervision
        Regulations, no individual shall be granted Awards with respect to more than
        25%
        of the total shares subject to the Plan, and no director who is not an employee
        of the Corporation shall be granted Awards with respect to more than 5% of
        the
        total Shares subject to the Plan. All
        non-employee directors of the Corporation, in the aggregate, may not be granted
        Awards with respect to more than 30% of the total Shares subject to the Plan.
        No
        Awards shall begin vesting earlier than one year from the date the Plan is
        approved by stockholders of the Corporation and shall not vest at a rate
        in
        excess of 20% per year, beginning from the date of grant.

       

      In
        the
        event Office of Thrift Supervision Regulations are amended (the “Amended
        Regulations”) to permit shorter vesting periods, any Award made pursuant to this
        Plan, which Award is subject to the requirements of such Amended Regulations,
        may vest, at the sole discretion of the Committee, in accordance with such
        Amended Regulations.

       

      Furthermore,
        at the time of any Award, the Participant shall enter into an agreement with
        the
        Corporation in a form specified by the Committee, agreeing to the terms and
        conditions of the Award and such other matters as the Committee, in its sole
        discretion, shall determine (the “Option Agreement”).

       

      7. Exercise
        of Options or Rights.

       

      (a) Except
        as
        provided herein, an Option or Right granted under the Plan shall be exercisable
        during the lifetime of the Participant to whom such Option or Right was granted
        only by such Participant and, except as provided in paragraphs (c) and (d)
        of
        this Section 7, no such Option or Right may be exercised unless at the time
        such
        Participant exercises such Option or Right, such Participant has maintained
        Continuous Service since the date of grant of such Option or Right.

       

      (b) To
        exercise an Option or Right under the Plan, the Participant to whom such
        Option
        or Right was granted shall give written notice to the Corporation in form
        satisfactory to the Committee (and, if partial exercises have been permitted
        by
        the Committee, by specifying the number of Shares with respect to which such
        Participant elects to exercise such Option or Right) together with full payment
        of the Exercise Price, if any and to the extent required. The
        date
        of exercise shall be the date on which such notice is received by the
        Corporation. Payment,
        if any is required, shall be made either (i) in cash (including check, bank
        draft or money order) or (ii) by delivering (A) Shares already owned by the
        Participant and having a fair market value equal to the applicable exercise
        price, such fair market value to be determined in such appropriate manner
        as may
        be provided by the Committee or as may be 

       

    


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    


    required
      in order to comply with or to conform to requirements of any applicable laws
      or
      regulations, or (B) a combination of cash and such Shares.

    

      (c) Except
        as
        provided in Section 13 hereof, if a Participant to whom an Option or Right
        was
        granted shall cease to maintain Continuous Service for any reason (excluding
        death or disability and termination of employment by the Corporation or any
        Affiliate for cause), such Participant may, but only within the period of
        three
        months immediately suc-ceeding such cessation of Continuous Service and in
        no
        event after the expiration date of such Option or Right, exercise such Option
        or
        Right to the extent that such Participant was entitled to exercise such Option
        or Right at the date of such cessation, provided, however, that such right
        of
        exercise after cessation of Continuous Service shall not be available to
        a
        Participant if the Committee otherwise determines and so provides in the
        applicable instrument or instruments evidencing the grant of such Option
        or
        Right. If a Participant to whom an Option or Right was granted shall cease
        to
        maintain Continuous Service by reason of death or disability then, unless
        the
        Committee shall have otherwise provided in the instrument evidencing the
        grant
        of an Option or Stock Appreciation Right, all Options and Rights granted
        and not
        fully exercisable shall become exercisable in full upon the happening of
        such
        event and shall remain so exercisable (i) in the event of death for the period
        described in paragraph (d) of this Section 7 and (ii) in the event of disability
        for a period of three months following such date. If the Continuous Service
        of a
        Participant to whom an Option or Right was granted by the Corporation is
        terminated for cause, all rights under any Option or Right of such Participant
        shall expire immediately upon the giving to the Participant of notice of
        such
        termination.

       

      (d) In
        the
        event of the death of a Participant while in the Continuous Service of the
        Corporation or an Affiliate or within the three-month period referred to
        in
        paragraph (c) of this Section 7, the person to whom any Option or Right held
        by
        the Participant at the time of his death is transferred by will or the laws
        of
        descent and distribution, or in the case of an Award other than an Incentive
        Stock Option, pursuant to a qualified domestic relations order, as defined
        in
        the Code or Title 1 of ERISA or the rules thereunder may, but only to the
        extent
        such Participant was entitled to exercise such Option or Right immediately
        prior
        to his death, exercise such Option or Right at any time within a period of
        one
        year succeeding the date of death of such Participant, but in no event later
        than ten years from the date of grant of such Option or Right. Following
        the
        death of any Participant to whom an Option was granted under the Plan,
        irrespective of whether any Related Right shall have theretofore been granted
        to
        the Participant or whether the person entitled to exercise such Related Right
        desires to do so, the Committee may, as an alternative means of settlement
        of
        such Option, elect to pay to the person to whom such Option is transferred
        by
        will or by the laws of descent and distribution, or in the case of an Option
        other than an Incentive Stock Option, pursuant to a qualified domestic relations
        order, as defined in the Code or Title I of ERISA or the rules thereunder,
        the
        amount by which the Market Value per Share on the date of exercise of such
        Option shall exceed the Exercise Price of such Option, multiplied by the
        number
        of Shares with respect to which such Option is properly exercised. Any such
        settlement of an Option shall be considered an exercise of such Option for
        all
        purposes of the Plan.

       

    

     

     

    8. Incentive
      Stock Options.  Incentive
      Stock Options may be granted only to Participants who are Employees. Any
      provision of the Plan to the contrary notwithstanding, (i) no Incentive Stock
      Option shall be granted more than ten years from the date the Plan is adopted
      

     


    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    


    by
      the
      Board of Directors of the Corporation and no Incentive Stock Option shall be
      exercisable more than ten years from the date such Incentive Stock Option is
      granted, (ii) the Exercise Price of any Incentive Stock Option shall not be
      less
      than the Market Value per Share on the date such Incentive Stock Option is
      granted, (iii) any Incentive Stock Option shall not be transferable by the
      Participant to whom such Incentive Stock Option is granted other than by will
      or
      the laws of descent and distribution, and shall be exercisable during such
      Participant’s lifetime only by such Participant, (iv) no Incentive Stock Option
      shall be granted to any individual who, at the time such Incentive Stock Option
      is granted, owns stock possessing more than ten percent of the total combined
      voting power of all classes of stock of the Corporation or any Affiliate unless
      the Exercise Price of such Incentive Stock Option is at least 110 percent of
      the
      Market Value per Share at the date of grant and such Incentive Stock Option
      is
      not exercisable after the expiration of five years from the date such Incentive
      Stock Option is granted, and (v) the aggregate Market Value (determined as
      of
      the time any Incentive Stock Option is granted) of the Shares with respect
      to
      which Incentive Stock Options are exercisable for the first time by a
      Participant in any calendar year shall not exceed $100,000.

     

    9. Stock
      Appreciation Rights.  A
      Stock
      Appreciation Right shall, upon its exercise, entitle the Participant to whom
      such Stock Appreciation Right was granted to receive a number of Shares or
      cash
      or combination thereof, as the Committee in its discretion shall determine,
      the
      aggregate value of which (i.e., the sum of the amount of cash and/or Market
      Value of such Shares on date of exercise) shall equal (as nearly as possible,
      it
      being understood that the Corporation shall not issue any fractional shares)
      the
      amount by which the Market Value per Share on the date of such exercise shall
      exceed the Exercise Price of such Stock Appreciation Right, multiplied by the
      number of Shares with respect of which such Stock Appreciation Right shall
      have
      been exercised. A Stock Appreciation Right may be Related to an Option or may
      be
      granted independently of any Option as the Committee shall from time to time
      in
      each case determine. At the time of grant of an Option the Committee shall
      determine whether and to what extent a Related Stock Appreciation Right shall
      be
      granted with respect thereto, provided, however, and notwithstanding any other
      provision of the Plan, that if the Related Option is an Incentive Stock Option,
      the Related Stock Appreciation Right shall satisfy all the restrictions and
      limitations of Section 8 hereof as if such Related Stock Appreciation Right
      were
      an Incentive Stock Option and as if other rights which are Related to Incentive
      Stock Options were Incentive Stock Options. In
      the
      case of a Related Option, such Related Option shall cease to be exer-cisable
      to
      the extent of the Shares with respect to which the Related Stock Appreciation
      Right was exercised. Upon the exercise or termination of a Related Option,
      any
      Related Stock Appre-ciation Right shall terminate to the extent of the Shares
      with respect to which the Related Option was exercised or
      terminated.

     

    10. Limited
      Stock Appreciation Rights.  At
      the
      time of grant of an Option or Stock Appreciation Right to any Participant,
      the
      Committee shall have full and complete authority and discretion to also grant
      to
      such Participant a Limited Stock Appreciation Right which is Related to such
      Option or Stock Appreciation Right, provided, however and notwithstanding any
      other provision of the Plan, that if the Related Option is an Incentive Stock
      Option, the Related Limited Stock Appreciation Right shall satisfy all the
      restrictions and limitations of Section 8 hereof as if such Related Limited
      Stock Appreciation Right were an Incentive Stock Option and as if all other
      Rights which are Related to Incentive Stock Options were Incentive Stock
      Options. Subject to vesting requirements contained in 12 C.F.R. § 563b.3(g)(4)
      or any successor 

     


    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    


    regulation,
      a Limited Stock Appreciation Right shall be exercisable only during the period
      be-ginning on the first day following the date of expiration of any “offer” (as
      such term is hereinafter defined) and ending on the forty-fifth day following
      such date.

    

      A
        Limited
        Stock Appreciation Right shall, upon its exercise, entitle the Participant
        to
        whom such Limited Stock Appreciation Right was granted to receive an amount
        of
        cash equal to the amount by which the “Offer Price per Share” (as such term is
        hereinafter defined) or the Market Value on the date of such exercise, as
        shall
        have been provided by the Committee in its discretion at the time of grant,
        shall exceed the Exercise Price of such Limited Stock Appreciation Right,
        multiplied by the number of Shares with respect to which such Limited Stock
        Appreciation Right shall have been exercised. Upon the exercise of a Limited
        Stock Appreciation Right, any Related Option and/or Related Stock Appreciation
        Right shall cease to be exercisable to the extent of the Shares with respect
        to
        which such Limited Stock Appreciation Right was exercised. Upon the exercise
        or
        termination of a Related Option or Related Stock Appreciation Right, any
        Related
        Limited Stock Appreciation Right shall terminate to the extent of the Shares
        with respect to which such Related Option or Related Stock Appreciation Right
        was exercised or terminated.

       

      For
        the
        purposes of this Section 10, the term “Offer” shall mean any tender offer or
        exchange offer for Shares other than one made by the Corporation, provided
        that
        the corporation, person or other entity making the offer acquires pursuant
        to
        such offer either (i) 25% of the Shares outstanding immediately prior to
        the
        commencement of such offer or (ii) a number of Shares which, together with
        all
        other Shares acquired in any tender offer or exchange offer (other than one
        made
        by the Corporation) which expired within sixty days of the expiration date
        of
        the offer in question, equals 25% of the Shares outstanding immediately prior
        to
        the commencement of the offer in question. The term “Offer Price per Share” as
        used in this Section 10 shall mean the highest price per Share paid in any
        Offer
        which Offer is in effect any time during the period beginning on the sixtieth
        day prior to the date on which a Limited Stock Appreciation Right is exercised
        and ending on the date on which such Limited Stock Appreciation Right is
        exercised. Any securities or property which are part or all of the consideration
        paid for Shares in the Offer shall be valued in determining the Offer Price
        per
        Share at the higher of (A) the valuation placed on such securities or property
        by the corporation, person or other entity making such Offer or (B) the
        valuation placed on such securities or property by the Committee.

       

    

     

    11. Adjustments
      Upon Changes in Capitalization.  In
      the
      event of any change in the outstanding Shares subsequent to the effective date
      of the Plan by reason of any reorganization, recapitalization, stock split,
      stock dividend, combination or exchange of shares, merger, consolidation or
      any
      change in the corporate structure or Shares of the Corporation, the maximum
      aggregate number and class of shares as to which Awards may be granted under
      the
      Plan and the number, class and exercise price of shares with respect to which
      Awards theretofore have been granted under the Plan shall be appropriately
      adjusted by the Committee, whose determination shall be conclusive.

     

    12. Effect
      of Merger.  In
      the
      event of any merger, consolidation or combination of the Corporation (other
      than
      a merger, consolidation or combination in which the Corporation is the
      continuing entity and which does not result in the outstanding Shares being
      converted into or 

     


    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    


    exchanged
      for different securities, cash or other property, or any combination thereof)
      pursuant to a plan or agreement the terms of which are binding upon all
      stockholders of the Corporation (except to the extent that dissenting
      stockholders may be entitled, under statutory provisions or provisions contained
      in the articles of incorporation, to receive the appraised or fair value of
      their holdings), any Participant to whom an Option or Right has been granted
      shall have the right (subject to the provisions of the Plan and any limitation
      or vesting period applicable to such Option or Right), thereafter and during
      the
      term of each such Option or Right, to receive upon exercise of any such Option
      or Right an amount equal to the excess of the fair market value on the date
      of
      such exercise of the securities, cash or other property, or combination thereof,
      receivable upon such merger, consolidation or combination in respect of a Share
      over the Exercise Price of such Right or Option, multiplied by the number of
      Shares with respect to which such Option or Right shall have been exercised.
      Such amount may be payable fully in cash, fully in one or more of the kind
      or
      kinds of property payable in such merger, consolidation or combination, or
      partly in cash and partly in one or more of such kind or kinds of property,
      all
      in the discretion of the Committee.

     

    13. Effect
      of Change in Control.  Each
      of
      the events specified in the following clauses (i) through (iii) of this Section
      13 shall be deemed a “change of control:” (i) any third person, including a
“group” as defined in Section 13(d)(3) of the Securities Exchange Act of 1934,
      shall become the beneficial owner of shares of the Corporation with respect
      to
      which 25% or more of the total number of votes which may be cast for the
      election of the Board of Directors of the Corporation, (ii) as a result of,
      or
      in connection with, any cash tender offer, merger or other business combination,
      sale of assets or contested election, or combination of the foregoing, the
      persons who were directors of the Corporation shall cease to constitute a
      majority of the Board of Directors of the Corporation, or (iii) the stockholders
      of the Corporation shall approve an agreement providing either for a transaction
      in which the Corporation will cease to be an independent publicly owned entity
      or for a sale or other disposition of all or substantially all the assets of
      the
      Corporation. In the event a change in control shall occur, unless the Committee
      shall have otherwise provided in the instrument evidencing the grant of an
      Option or Stock Appreciation Right, all Options and Stock Appreciation Rights
      theretofore granted and not fully exercisable shall become exercisable in full
      upon the happening of such event and shall remain so exercisable for a period
      of
      sixty days following such date, after which they shall revert to being
      exercisable in accordance with their terms, provided, however, that no Option
      or
      Stock Appreciation Right which has previously been exercised or otherwise
      terminated shall become exercisable.

     

    14. Assignments
      and Transfers.  No
      Award
      nor any right or interest of a Participant under the Plan in any instrument
      evidencing any Award under the Plan may be assigned, encumbered or transferred
      except, in the event of the death of a Participant, by will or the laws of
      descent and distribution or in the case of Awards other than Incentive Stock
      Options pursuant to a qualified domestic relations order, as defined in the
      Code
      or Title I of ERISA or the rules thereunder.

     

    15. Employee
      Rights Under the Plan.  No
      director, officer or employee shall have a right to be selected as a Participant
      nor, having been so selected, to be selected again as a Participant and no
      director, officer, employee or other person shall have any claim or right to
      be
      granted an Award under the Plan or under any other incentive or similar plan
      of
      the Corporation 

     


    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    


    or
      any
      Affiliate. Neither the Plan nor any action taken thereunder shall be construed
      as giving any employee any right to be retained in the employ of the Corporation
      or any Affiliate.

     

    16. Delivery
      and Registration of Stock.  The
      Corporation’s obligation to deliver Shares with respect to an Award shall, if
      the Committee so requests, be conditioned upon the receipt of a representation
      as to the investment intention of the Participant to whom such Shares are to
      be
      delivered, in such form as the Committee shall determine to be necessary or
      advisable to comply with the provisions of the Securities Act of 1933 or any
      other Federal, state or local securities legislation or regulation. It may
      be
      provided that any representation requirement shall become inoperative upon
      a
      registration of the Shares or other action eliminating the necessity of such
      representation under such Securities Act or other securities legislation. The
      Corporation shall not be required to deliver any Shares under the Plan prior
      to
      (i) the admission of such shares to listing on any stock exchange on which
      Shares may then be listed, and (ii) the completion of such registration or
      other
      qualification of such Shares under any state or Federal law, rule or regulation,
      as the Committee shall determine to be necessary or advisable.

     

    17. Withholding-Tax. 
      The
      Corporation shall have the right to deduct from all amounts paid in cash with
      respect to the exercise of a Right under the Plan any taxes required by law
      to
      be withheld with respect to such cash payments. Where a Participant or other
      person is entitled to receive Shares pursuant to the exercise of an Option
      or
      Right pursuant to the Plan, the Corporation shall have the right to require
      the
      Participant or such other person to pay the Corporation the amount of any taxes
      which the Corporation is required to withhold with respect to such Shares,
      and
      may, in its sole discretion, withhold sufficient Shares to cover the amount
      of
      taxes which the Corporation is required to withhold.

     

    18. Amendment
      or Termination.  The
      Board
      of Directors of the Corporation may amend, suspend or terminate the Plan or
      any
      portion thereof at any time, subject to Office of Thrift Supervision
      Regulations, but (except as provided in Section 11 hereof) no amendment shall
      be
      made without approval of the stockholders of the Corporation which shall, (i)
      increase the aggregate number of Shares with respect to which Awards may be
      made
      under the Plan (except pursuant to Section 11), (ii) materially increase the
      benefits accruing to Participants, (iii) materially change the requirements
      as
      to eligibility for participation in the Plan or (iv) change the class of persons
      eligible to participate in the Plan, provided, however, that no such amendment,
      suspension or termination shall impair the rights of any Participant, without
      his consent, in any Award theretofore made pursuant to the Plan.

     

    19. Effective
      Date and Term of Plan.  The
      Plan
      shall become effective upon its ratification by stockholders of the Corporation.
      It shall continue in effect for a term of ten years unless sooner terminated
      under Section 18 hereof.

     

    20. Initial
      Grant.  By,
      and
      simultaneously with, the ratification of this Plan by the stockholders of the
      Corporation, each member of the Board of Directors of the Corporation and each
      director emeritus of the Bank at the time of stockholder ratification of this
      Plan who is not an Employee, is hereby granted a ten-year, Non-Qualified Stock
      Option to purchase 3,860 shares at an Exercise Price per share equal to the
      Market Value per share of the Shares on the date of grant. Each such Option
      shall be evidenced by a Non-Qualified Stock Option Agreement in a form approved
      by the Board of Directors and shall be subject in all respects to the terms
      and


     


    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    


    conditions
      of this Plan, which are controlling. All Options granted pursuant to this
      section shall vest in five equal annual installments with the first installment
      vesting on the first anniversary of the date of grant, subject to the Director
      maintaining Continuous Service with the Corporation or its Affiliates since
      the
      date of grant.

     

     

     

     

     

     

    10