EXHIBIT 10.9


 


STANDARD FINANCIAL CORP. 


 


2012 EQUITY INCENTIVE PLAN 


 


ARTICLE 1 – GENERAL 


 


Section 1.1        
Purpose, Effective Date and Term. The purpose of the Standard Financial Corp. 2012 Equity Incentive Plan (the “Plan”)
is to promote the long-term financial success of Standard Financial Corp. (the “Company”), and its Subsidiaries, including
Standard Bank, PaSB (the “Bank”), by providing a means to attract, retain and reward individuals who contribute to
such success and to further align their interests with those of the Company’s stockholders. The “Effective Date”
of the Plan shall be the date the Plan satisfies the applicable shareholder approval requirements. The Plan shall remain in
effect as long as any Awards are outstanding; provided, however, that no Awards may be granted under the Plan after the
ten-year anniversary of the Effective Date.


 


Section 1.2        
Administration. The Plan shall be administered by the Compensation Committee of the Company’s Board of Directors
(the “Committee”), in accordance with Section 5.1.


 


Section 1.3        
Participation. Each Employee or Director of the Company or any Subsidiary of the Company who is granted an Award
in accordance with the terms of the Plan shall be a “Participant” in the Plan. Awards shall be limited to Employees
and Directors of the Company or any Subsidiary.


 


Section 1.4        
Definitions. Capitalized terms used in this Plan are defined in Article 8 and elsewhere in this Plan.


 


ARTICLE 2 - AWARDS


 


Section 2.1        
General. Any Award under the Plan may be granted singularly or in combination with another Award (or Awards). Each
Award under the Plan shall be subject to the terms and conditions of the Plan and such additional terms, conditions, limitations
and restrictions as the Committee shall provide with respect to such Award and as evidenced in the Award Agreement. Subject
to the provisions of Section 2.8, an Award may be granted as an alternative to or replacement of an existing Award under the
Plan or any other plan of the Company or any Subsidiary or as the form of payment for grants or rights earned or due under any
other compensation plan or arrangement of the Company or its Subsidiaries, including without limitation the plan of any entity
acquired by the Company or any Subsidiary. The types of Awards that may be granted under the Plan include:


 


(a)         Stock
Options. A Stock Option means a grant under Section 2.2 that represents the right to purchase shares of Stock
at an Exercise Price established by the Committee. Any Stock Option may be either an Incentive Stock Option (an
“ISO”) that is intended to satisfy the requirements applicable to an “Incentive Stock Option”
described in Code Section 422(b), or a Non-Qualified Stock Option (a “Non-Qualified Option”) that is not
intended to be an ISO; provided, however, that no ISOs may be granted: (i) after the ten-year anniversary of the
Effective Date; or (ii) to a non-Employee. Unless otherwise specifically provided by its terms, any Stock Option
granted to an Employee under this Plan shall be an ISO. Any ISO granted under this Plan that does not qualify as an ISO for
any reason (whether at the time of grant or as the result of a subsequent event) shall be deemed to be a Non-Qualified
Option. In addition, any ISO granted under this Plan may be unilaterally modified by the Committee to disqualify such Stock
Option from ISO treatment such that it shall become a Non-Qualified Option; provided, however, that any such modification
shall be ineffective if it causes the Award to be subject to Code Section 409A (unless, as modified, the Award complies
with Code Section 409A).


 


(b)        
Restricted Stock. Restricted Stock means a grant of shares of Stock under Section 2.3 for no consideration or
such minimum consideration as may be required by applicable law, either alone or in addition to other Awards granted under
the Plan, subject to a vesting schedule or the satisfaction of market conditions or performance conditions.


 


Section 2.2        
Stock Options.


 


(a)        
Grant of Stock Options. Each Stock Option shall be evidenced by an Award Agreement that shall: (i) specify the number
of Stock Options covered by the Award; (ii) specify the date of grant of the Stock Option; (iii) specify the vesting
period or conditions to vesting; and (iv) contain such other terms and conditions not inconsistent with the Plan, including
the effect of termination of a Participant’s employment or Service with the Company as the Committee may, in its discretion,
prescribe.


 




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(b)        
Terms and Conditions. A Stock Option shall be exercisable in accordance with such terms and conditions and during such periods
as may be established by the Committee. In no event, however, shall a Stock Option expire later than ten years after the date of
its grant (or five years with respect to ISOs granted to an Employee who is a 10% Stockholder). The “Exercise Price”
of each Stock Option shall not be less than 100% of the Fair Market Value of a share of Stock on the date of grant (or, if greater,
the par value of a share of Stock); provided, however, that the Exercise Price of an ISO shall not be less than 110% of
Fair Market Value of a share of Stock on the date of grant if granted to a 10% Stockholder; provided further, that the Exercise
Price may be higher or lower in the case of Stock Options granted or exchanged in replacement of existing Awards held by an Employee
or Director of an acquired entity. The payment of the Exercise Price of a Stock Option shall be by cash or, subject to limitations
imposed by applicable law, by such other means as the Committee may from time to time permit, including: (i) by tendering,
either actually or constructively by attestation, shares of Stock valued at Fair Market Value as of the day of exercise; (ii) by
irrevocably authorizing a third party, acceptable to the Committee, to sell shares of Stock (or a sufficient portion of the shares)
acquired upon exercise of the Stock Option and to remit to the Company a sufficient portion of the sale proceeds to pay the entire
Exercise Price and any tax withholding resulting from such exercise; (iii) by a net settlement of the Stock Option, using
a portion of the shares obtained on exercise in payment of the Exercise Price of the Stock Option; (iv) by personal, certified
or cashiers’ check; (v) by other property deemed acceptable by the Committee; or (vi) by any combination thereof.
The total number of shares that may be acquired upon the exercise of a Stock Option shall be rounded down to the nearest whole
share.


 


Section 2.3        
Restricted Stock. 


 


(a)       Grant of Restricted Stock. Each Restricted Stock Award shall be evidenced by an Award Agreement that shall: (i) specify
the number of shares of Stock covered by the Restricted Stock Award; (ii) specify the date of grant of the Restricted Stock
Award; (iii) specify the vesting period; and (iv) contain such other terms and conditions not inconsistent with the Plan,
including the effect of termination of a Participant’s employment or Service with the Company, as the Committee may, in its
discretion, prescribe. All Restricted Stock Awards shall be in the form of issued and outstanding shares of Stock that shall be
either: (x) registered in the name of the Participant and held by the Company, together with a stock power executed by the
Participant in favor of the Company, pending the vesting or forfeiture of the Restricted Stock; or (y) registered in the name
of, and delivered to, the Participant. In any event, the certificates evidencing the Restricted Stock Award shall at all times
prior to the applicable vesting date bear the following legend:


 


The Stock evidenced hereby is subject to the terms
of an Award Agreement with Standard Financial Corp. dated [Date], made pursuant to the terms of the Standard Financial Corp. 2012
Equity Incentive Plan, copies of which are on file at the executive offices of Standard Financial Corp., and may not be sold, encumbered,
hypothecated or otherwise transferred except in accordance with the terms of such Plan and Award Agreement,


 


or such other restrictive legend as the Committee, in its
discretion, may specify. Notwithstanding the foregoing, the Company may in its sole discretion issue Restricted Stock in any
other approved format (e.g., electronically) in order to facilitate the paperless transfer of such Awards. In the
event Restricted Stock is not issued in certificate form, the Company and the transfer agent shall maintain appropriate
bookkeeping entries that evidence Participants’ ownership of such Awards. Restricted Stock that is not issued in
certificate form shall be subject to the same terms and conditions of the Plan as certificated shares, including the
restrictions on transferability and the provision of a stock power executed by the Participant in favor of the Company, until
the satisfaction of the conditions to which the Restricted Stock Award is subject.


 


(b)      Terms and Conditions. Each Restricted Stock Award shall be subject to the following terms and conditions:


 


(i)        
Dividends. Unless the Committee determines otherwise with respect to any Restricted Stock Award and specifies such determination
in the relevant Award Agreement, any dividends or distributions declared and paid with respect to shares of Stock subject to the
Restricted Stock Award, other than a stock dividend consisting of shares of Stock, shall be immediately distributed to the Participant.
If the Committee determines to delay the distribution of dividends to a Participant until the vesting of an Award of Restricted
Stock, the Committee shall cause the dividend (and any earnings thereon) to be distributed to the Participant no later than two
and one-half months following the date on which the Restricted Stock vests.


 




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(ii)        
Voting Rights. Unless the Committee determines otherwise with respect to any Restricted Stock Award and specifies such determination
in the relevant Award Agreement, voting rights with respect to the shares of Restricted Stock shall be exercised by the Participant
in his or her discretion.


 


(iii)        
Tender Offers and Merger Elections. Each Participant to whom a Restricted Stock Award is granted shall have the right to
respond, or to direct the response, with respect to the related shares of Restricted Stock, to any tender offer, exchange offer,
cash/stock merger consideration election or other offer made to, or elections made by, the holders of shares of Stock. Such a direction
for any such shares of Restricted Stock shall be given by proxy or ballot (if the Participant is the beneficial owner of the shares
of Restricted Stock for voting purposes) or by completing and filing, with the inspector of elections, the trustee or such other
person who shall be independent of the Company as the Committee shall designate in the direction (if the Participant is not such
a beneficial owner), a written direction in the form and manner prescribed by the Committee. If no such direction is given, then
the shares of Restricted Stock shall not be tendered. 


 


Section 2.4        
Performance-Based Compensation. Any Award under the Plan that is intended to be “performance-based compensation”
within the meaning of Code Section 162(m) shall be conditioned on the achievement of one or more objective performance measures,
to the extent required by Code Section 162(m), as may be determined by the Committee. The grant of any Award and the establishment
of performance measures that are intended to be performance-based compensation shall be made during the period required under Code
Section 162(m) and shall comply with all applicable requirements of Code Section 162(m).


 


(a)        Performance Measures. Such performance measures may be based on any one or more of the following:


 


		(i)	book value or tangible book value per share;



 


		(ii)	basic cash earnings per share;



 


		(iii)	diluted earnings per share;



 


		(iv)	return on equity;



 


		(v)	net income or net income before taxes;



 


		(vi)	cash earnings;



 


		(vii)	net interest income;



 


		(viii)	non-interest income;



 


		(ix)	general and administrative
expense to average assets ratio;


 


		(x)	cash general and administrative
expense to average assets ratio;


 


		(xi)	efficiency ratio;


 


		(xii)	cash efficiency ratio;


 


		(xiii)	return on average assets;


 


	 	(xiv)	cash return on average assets; 


 


	 	(xv)	return on average stockholders’ equity; 


 


	 	(xvi)	cash return on average stockholders’ equity; 


 


	 	(xvii)	return on average tangible stockholders’ equity; 


 


	 	(xviii)	cash return on average tangible stockholders’ equity; 


 


	 	(xix)	core earnings; 


 


	 	(xx)	operating income; 


 


	 	(xxi)	operating efficiency ratio; 


 


	 	(xxii)	net interest rate margin or net interest rate spread; 


 


	 	(xxiii)	growth in assets, loans, or deposits; 


 




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	 	(xxiv)	loan production volume; 


 


	 	(xxv)	non-performing loans; 


 


	 	(xxvi)	cash flow; 


 


(xxvii)       strategic
business objectives, consisting of one or more objectives based upon meeting specified cost targets, business expansion goals,
and goals relating to acquisitions or divestitures, or goals relating to capital raising and capital management; or


 


(xxviii)       any
combination of the foregoing.


 


Performance measures may be based on the
performance of the Company as a whole or on any one or more Subsidiaries or business units of the Company or a Subsidiary and may
be measured relative to a peer group, an index or a business plan and may be considered as absolute measures or changes in measures.
The Committee may elect to use different performance measures and shall have sole discretion in determining how performance measures
are calculated. In establishing any performance measures, the Committee may provide for the exclusion of the effects of the following
items, to the extent identified in the audited financial statements of the Company, including footnotes, or in the Management’s
Discussion and Analysis section of the Company’s annual report or in the Compensation Discussion and Analysis Section, if
any, of the Company’s annual proxy statement: (i) extraordinary, unusual, and/or nonrecurring items of gain or loss;
(ii) gains or losses on the disposition of a business; (iii) changes in tax or accounting principles, regulations or
laws; or (iv) mergers or acquisitions. To the extent not specifically excluded, such effects shall be included in any
applicable performance measure. The Committee also may exclude other items in its sole discretion in establishing and calculating
performance measures, which may include, but not limited to, the effect of dividends and the expense of Restricted Stock Awards.


  


(b)         Adjustments.
Pursuant to this Section 2.4, in certain circumstances the Committee may adjust performance measures; provided, however,
no adjustment may be made with respect to an Award that is intended to be performance-based compensation within the meaning of
Code Section 162(m), except to the extent the Committee exercises such negative discretion as is permitted under applicable
law for purposes of an exception under Code Section 162(m). If the Committee determines that a change in the business, operations,
corporate structure or capital structure of the Company or the manner in which the Company or its Subsidiaries conducts its business
or other events or circumstances render current performance measures to be unsuitable, the Committee may modify such performance
measures, in whole or in part, as the Committee deems appropriate. If a Participant is promoted, demoted or transferred to a different
business unit during a performance period, the Committee may determine that the selected performance measures or applicable performance
period are no longer appropriate, in which case, the Committee, in its sole discretion, may: (i) adjust, change or eliminate
the performance measures or change the applicable performance period; or (ii) cause to be made a cash payment to the Participant
in an amount determined by the Committee.


 


Section 2.5        
Vesting of Awards. (a) The Committee shall specify the vesting schedule or conditions of each Award. Unless otherwise
specified by the Committee and set forth in an Award Agreement between the Company and the Participant or as set forth in an employment
agreement entered into by and between the Company and/or the Bank and an Employee, Awards under the Plan shall be granted with
a vesting rate not exceeding 20% per year, with the first installment vesting one year after the date of grant. If the right
to become vested in an Award under the Plan (including the right to exercise a Stock Option) is conditioned on the completion of
a specified period of Service with the Company or its Subsidiaries, without achievement of performance measures or other performance
objectives being required as a condition of vesting, and without it being granted in lieu of, or in exchange for, other compensation,
then the required period of Service for full vesting shall be determined by the Committee and evidenced in the Award Agreement
(subject to acceleration of vesting, to the extent permitted by the Committee, including in the event of the Participant’s
death, Disability, or Involuntary Termination of Employment following a Change in Control). Unless otherwise provided by the Committee,
Service as a director emeritus or advisory director shall constitute Service for purposes of vesting.


 


(b)        
Notwithstanding Section 2.8 and Article 4 hereof, to the extent permitted by applicable law or regulations, or pursuant to
an applicable regulatory waiver, the Committee may determine that all Stock Options then held by the Participant shall become fully
exercisable (subject to the expiration provisions otherwise applicable to the Stock Option) and all Restricted Stock Awards described
in Section 2.1(b) shall be fully earned and vested immediately.


 




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Section 2.6        
Deferred Compensation. If any Award would be considered “deferred compensation” as defined under Code Section 409A
(“Deferred Compensation”), the Committee reserves the absolute right (including the right to delegate such right) to
unilaterally amend the Plan or the Award Agreement, without the consent of the Participant, to maintain exemption from, or to comply
with, Code Section 409A. Any amendment by the Committee to the Plan or an Award Agreement pursuant to this Section 2.6
shall maintain, to the extent practicable, the original intent of the applicable provision without violating Code Section 409A.
A Participant’s acceptance of any Award under the Plan constitutes acknowledgement and consent to such rights of the Committee,
without further consideration or action. Any discretionary authority retained by the Committee pursuant to the terms of this Plan
or pursuant to an Award Agreement shall not be applicable to an Award which is determined to constitute Deferred Compensation,
if such discretionary authority would contravene Code Section 409A.


 


Section 2.7        
Prohibition Against Option Repricing. Except for adjustments pursuant to Section 3.3, and reductions of the
Exercise Price approved by the Company’s stockholders, neither the Committee nor the Board shall have the right or authority
to make any adjustment or amendment that reduces or would have the effect of reducing the Exercise Price of a Stock Option previously
granted under the Plan, whether through amendment, cancellation (including cancellation in exchange for a cash payment in excess
of the Stock Option’s in-the-money value) or replacement grants, or other means.


 


Section 2.8.         Effect
of Termination of Service on Awards. The Committee shall establish the effect of a Termination of Service on the
continuation of rights and benefits available under an Award or the Plan and, in so doing, may make distinctions based
upon, among other things, the cause of Termination of Service and type of Award. Unless otherwise specified by the Committee
and set forth in an Award Agreement between the Company and the Participant or as set forth in an employment agreement
entered into by and between the Company and/or the Bank and an Employee, the following provisions shall apply to each Award
granted under this Plan:


 


(a)        
Upon a Participant’s Termination of Service for any reason other than Disability, death, or termination for Cause, Stock
Options shall be exercisable only as to those shares that were immediately exercisable by such Participant at the date of termination,
and Stock Options may be exercised only for a period of three months following termination and any Restricted Stock that has not
vested as of the date of Termination of Service shall expire and be forfeited.


 


(b)        
In the event of a Termination of Service for Cause, all Stock Options granted to a Participant that have not been exercised and
all Restricted Stock granted to a Participant that has not vested shall expire and be forfeited.


 


(c)        
Upon Termination of Service for reason of Disability or death, all Stock Options shall be exercisable as to all shares subject
to an outstanding Award, whether or not then exercisable, and all Restricted Stock shall vest as to all shares subject to an outstanding
Award, whether or not otherwise immediately vested, at the date of Termination of Service. Stock Options may be exercised for a
period of one year following Termination of Service due to death, Disability or Retirement; provided, however, that no Stock
Option shall be eligible for treatment as an ISO in the event such Stock Option is exercised more than three months following Termination
of Service due to Retirement or one year following Termination of Service due to Disability and provided, further, in order
to obtain ISO treatment for Stock Options exercised by heirs or devisees of an optionee, the optionee’s death must have occurred
while employed or within three months of Termination of Service.


 


(d)        
Notwithstanding anything herein to the contrary, no Stock Option shall be exercisable beyond the last day of the original term
of such Stock Option.


 


(e)        
Notwithstanding the provisions of this Section 2.8, the effect of a Change in Control on the vesting/exercisability of Stock
Options and Restricted Stock is as set forth in Article 4.


 


ARTICLE 3 - SHARES SUBJECT TO PLAN


 


Section 3.1        
Available Shares. The shares of Stock with respect to which Awards may be made under the Plan shall be shares currently
authorized but unissued, currently held or, to the extent permitted by applicable law, subsequently acquired by the Company as
treasury shares, including shares purchased in the open market or in private transactions.


 


Section 3.2        
Share Limitations.


 


(a)        
Share Reserve. Subject to the following provisions of this Section 3.2, the maximum number of shares of Stock that
may be delivered to Participants and their beneficiaries under the Plan shall be equal to Four


 




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Hundred Eighty-Six Thousand Nine Hundred Forty-Three (486,943) shares
of Stock. The maximum number of shares of Stock that may be delivered pursuant to the exercise of Stock Options (all of which may
be granted as ISOs) is Three Hundred Forty-Seven Thousand Eight Hundred Seventeen (347,817) shares of Stock. The maximum number
of shares of Stock that may be issued as Restricted Stock Awards is One Hundred Thirty-Nine Thousand One Hundred Twenty-Six (139,126) shares
of Stock. The aggregate number of shares available for grant under this Plan and the number of shares of Stock subject to outstanding
awards shall be subject to adjustment as provided in Section 3.3.


 


(b)        
Computation of Shares Available. For purposes of this Section 3.2, the number of shares of Stock available for the
granting of additional Stock Options and Restricted Stock shall be reduced by the number of shares of Stock granted. To the extent
any shares of Stock covered by an Award (including Restricted Stock) under the Plan are not delivered to a Participant or beneficiary
for any reason, including because the Award is forfeited or canceled or because a Stock Option is not exercised, then such shares
shall not be deemed to have been delivered for purposes of determining the maximum number of shares of Stock available for delivery
under the Plan. To the extent (i) a Stock Option is exercised by using an actual or constructive exchange of shares of Stock
to pay the Exercise Price, or (ii) shares of Stock are withheld to satisfy withholding taxes upon exercise or vesting
of an Award granted hereunder, the number of shares of Stock available shall be reduced by the gross number of Stock Options exercised
rather than by the net number of shares of Stock issued.


 


Section 3.3        
Corporate Transactions.


 


(a)        
General. In the event any recapitalization, forward or reverse stock split, reorganization, merger, consolidation, spin-off,
combination, repurchase, or exchange of shares of Stock or other securities, stock dividend or other special and nonrecurring dividend
or distribution (whether in the form of cash, securities or other property), liquidation, dissolution, or other similar corporate
transaction or event, affects the shares of Stock such that an adjustment is appropriate in order to prevent dilution or enlargement
of the rights of Participants under the Plan and/or under any Award granted under the Plan, then the Committee shall, in an equitable
manner, adjust any or all of (i) the number and kind of securities deemed to be available thereafter for grants of Stock Options
and Restricted Stock in the aggregate to all Participants and individually to any one Participant, (ii) the number and kind
of securities that may be delivered or deliverable in respect of outstanding Stock Options and Restricted Stock, and (iii) the
Exercise Price of Stock Options. In addition, the Committee is authorized to make adjustments in the terms and conditions of, and
the criteria included in, Stock Options and Restricted Stock (including, without limitation, cancellation of Stock Options and
Restricted Stock in exchange for the in-the-money value, if any, of the vested portion thereof, or substitution or exchange of
Stock Options and Restricted Stock using stock of a successor or other entity) in recognition of unusual or nonrecurring events
(including, without limitation, events described in the preceding sentence) affecting the Company or any parent or Subsidiary or
the financial statements of the Company or any parent or Subsidiary, or in response to changes in applicable laws, regulations,
or accounting principles. Unless otherwise determined by the Committee, any such adjustment to an Award intended to qualify as
“performance-based compensation” shall conform to the requirements of Code Section 162(m) and the regulations
thereunder then in effect.


 


(b)        
Merger in which Company is Not Surviving Entity. In the event of any merger, consolidation, or other business reorganization
(including, but not limited to, a Change in Control) in which the Company is not the surviving entity, unless otherwise determined
by the Committee at any time at or after grant and prior to the consummation of such merger, consolidation or other business reorganization,
any Stock Options granted under the Plan which remain outstanding shall be converted into Stock Options to purchase voting common
equity securities of the business entity which survives such merger, consolidation or other business reorganization having substantially
the same terms and conditions as the outstanding Stock Options under this Plan and reflecting the same economic benefit (as measured
by the difference between the aggregate Exercise Price and the value exchanged for outstanding shares of Stock in such merger,
consolidation or other business reorganization), all as determined by the Committee prior to the consummation of such merger; provided,
however, that the Committee may, at any time prior to the consummation of such merger, consolidation or other business reorganization,
direct that all, but not less than all, outstanding Stock Options be canceled as of the effective date of such merger, consolidation
or other business reorganization in exchange for a cash payment per share of Stock equal to the excess (if any) of the value exchanged
for an outstanding share of Stock in such merger, consolidation or other business reorganization over the Exercise Price of the
Stock Option being canceled.


 


Section 3.4        
Delivery of Shares. Delivery of shares of Stock or other amounts under the Plan shall be subject to the following:


 




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(a)        
Compliance with Applicable Laws. Notwithstanding any other provision of the Plan, the Company shall have no obligation
to deliver any shares of Stock or make any other distribution of benefits under the Plan unless such delivery or distribution complies
with all applicable laws (including, the requirements of the Securities Act), and the applicable requirements of any securities
exchange or similar entity.


 


(b)        
Certificates. To the extent that the Plan provides for the issuance of shares of Stock, the issuance may be effected
on a non-certificated basis, to the extent not prohibited by applicable law or the applicable rules of any stock exchange.


  


ARTICLE 4 - CHANGE IN CONTROL


 


Section 4.1        
Consequence of a Change in Control. Subject to the provisions of Section 2.5 (relating to vesting and acceleration)
and Section 3.3 (relating to the adjustment of shares), and except as otherwise provided in the Plan or as determined by the
Committee and set forth in the terms of any Award Agreement or as set forth in an employment agreement entered into by and between
the Company and/or the Bank and an Employee:


 


(a)        
At the time of an Involuntary Termination of Employment (as defined in Section 8.1) (or, as to a Director, Termination of
Service as a Director) following a Change in Control, all Stock Options then held by the Participant shall become fully exercisable
(subject to the expiration provisions otherwise applicable to the Stock Option).


 


(b)        
At the time of an Involuntary Termination of Employment (as defined in Section 8.1) (or, as to a Director, Termination of
Service as a Director) following a Change in Control, all Awards of Restricted Stock described in Section 2.1(b) shall be
fully earned and vested immediately. Notwithstanding the above, any Awards the vesting of which are based on satisfaction of performance-based
conditions will be vested as specified in subsection (c) hereof.


 


(c)        
In the event of a Change in Control, any performance measure attached to an Award under the Plan shall be deemed satisfied as of
the date of the Change in Control.


 


Section 4.2        
Definition of Change in Control. For purposes of the Plan, unless otherwise provided in an Award Agreement, a “Change
in Control” shall be deemed to have occurred upon the earliest to occur of the following:


 


(a)        
Merger: The Company or the Bank merges into or consolidates with another entity, or merges another bank or corporation into
the Company or the Bank, and as a result, less than a majority of the combined voting power of the resulting corporation immediately
after the merger or consolidation is held by persons who were stockholders of the Company or the Bank immediately before the merger
or consolidation;


 


(b)        
Acquisition of Significant Share Ownership: There is filed, or is required to be filed, a report on Schedule 13D or another
form or schedule (other than Schedule 13G) required under Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended,
if the schedule discloses that the filing person or persons acting in concert has or have become the beneficial owner of 25% or
more of a class of the Company’s or the Bank’s voting securities; provided, however, this clause (b) shall not
apply to beneficial ownership of the Company’s or the Bank’s voting shares held in a fiduciary capacity by an entity
of which the Company directly or indirectly beneficially owns 50% or more of its outstanding voting securities;


 


(c)        
Change in Board Composition: During any period of two consecutive years, individuals who constitute the Company’s
or the Bank’s Board of Directors at the beginning of the two-year period cease for any reason to constitute at least a majority
of the Company’s or the Bank’s Board of Directors; provided, however, that for purposes of this clause (c), each director
who is first elected by the board (or first nominated by the board for election by the stockholders or corporators) by a vote of
at least two-thirds (2/3) of the directors who were directors at the beginning of the two-year period shall be deemed to have
also been a director at the beginning of such period; or


 


(d)        
Sale of Assets: The Company or the Bank sells to a third party all or substantially all of its assets.


 


Notwithstanding the foregoing, a Change
in Control shall not be deemed to occur solely because any Person (the “Subject Person”) acquired beneficial ownership
of more than the permitted amount of the then outstanding common stock or Voting Securities as a result of a change in the number
of shares of Stock or Voting Securities then outstanding, which thereby increases the proportional number of shares beneficially
owned by the Subject Person;


 




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provided, however, that if a Change in Control would
occur (but for the operation of this sentence) as a result of the acquisition of Stock or Voting Securities by the Company, and
after such share acquisition by the Company, the Subject Person becomes the beneficial owner of any additional Stock or Voting
Securities which increases the percentage of the then outstanding Stock or Voting Securities beneficially owned by the Subject
Person, then a Change in Control shall occur. In the event that an Award constitutes Deferred Compensation, and the settlement
of, or distribution of benefits under, such Award is to be triggered solely by a Change in Control, then with respect to such Award,
a Change in Control shall be defined as required under Code Section 409A, as in effect at the time of such transaction.


 


ARTICLE 5 - COMMITTEE 


 


Section 5.1         Administration. The
Plan shall be administered by the members of the Compensation Committee of the Company who are Disinterested Board Members. If
the Committee consists of fewer than three Disinterested Board Members, then the Board shall appoint to the Committee such additional
Disinterested Board Members as shall be necessary to provide for a Committee consisting of at least three Disinterested Board Members.
Any members of the Committee who do not qualify as Disinterested Board Members shall abstain from participating in any discussion
to make or administer Awards that are made to Participants who at the time of consideration for such Award: (i) are persons
subject to the short-swing profit rules of Section 16 of the Exchange Act, or (ii) are reasonably anticipated to be Covered
Employees during the term of the Award. The Board (or those members of the Board who are “independent directors” under
the corporate governance statutes or rules of any national securities exchange on which the Company lists its securities) may,
in its discretion, take any action and exercise any power, privilege or discretion conferred on the Committee under the Plan with
the same force and effect under the Plan as if done or exercised by the Committee.


 


Section 5.2        
Powers of Committee. The administration of the Plan by the Committee shall be subject to the following:


 


(a)         the
Committee will have the authority and discretion to select from among the Company’s and its Subsidiaries’ Employees
and Directors those persons who shall receive Awards, to determine the time or times of receipt, to determine the types of Awards
and the number of shares covered by the Awards, to establish the terms, conditions, performance criteria, restrictions (including
without limitation, provisions relating to non-competition, non-solicitation and confidentiality), and other provisions of such
Awards (subject to the restrictions imposed by Article 6) to cancel or suspend Awards and to reduce, eliminate or accelerate any
restrictions or vesting requirements applicable to an Award at any time after the grant of the Award.


 


(b)         The
Committee will have the authority and discretion to interpret the Plan, to establish, amend and rescind any rules and regulations
relating to the Plan, and to make all other determinations that may be necessary or advisable for the administration of the Plan.


 


(c)         The
Committee will have the authority to define terms not otherwise defined herein.


 


(d)         Any
interpretation of the Plan by the Committee and any decision made by it under the Plan is final and binding on all persons.


 


(e)         In
controlling and managing the operation and administration of the Plan, the Committee shall take action in a manner that conforms
to the charter and bylaws of the Company and applicable corporate law.


 


Section 5.3         Delegation
by Committee. Except to the extent prohibited by applicable law, the applicable rules of a stock exchange or the Plan,
or as necessary to comply with the exemptive provisions of Rule 16b-3 promulgated under the Exchange Act or Code Section 162(m),
the Committee may allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate
all or any part of its responsibilities and powers to any person or persons selected by it, including: (a) delegating to a
committee of one or more members of the Board who are not “outside directors” within the meaning of Code Section 162(m),
the authority to grant Awards under the Plan to eligible persons who are not persons with respect to whom the Company wishes to
comply with Code Section 162(m); and/or (b) delegating to a committee of one or more members of the Board who are not
“non-employee directors,” within the meaning of Rule 16b-3, the authority to grant Awards under the Plan to eligible
persons who are not then subject to Section 16 of the Exchange Act. The acts of such delegates shall be treated hereunder
as acts of the Committee and such delegates shall report regularly to the Committee regarding the delegated duties and responsibilities
and any Awards so granted. Any such allocation or delegation may be revoked by the Committee at any time.


 




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Section 5.4         Information
to be Furnished to Committee. As may be permitted by applicable law, the Company and its Subsidiaries shall furnish
the Committee with such data and information as it determines may be required for it to discharge its duties. The records
of the Company and its Subsidiaries as to a Participant’s employment, termination of employment, leave of absence, reemployment
and compensation shall be conclusive on all persons unless determined by the Committee to be manifestly incorrect. Subject
to applicable law, Participants and other persons entitled to benefits under the Plan must furnish the Committee such evidence,
data or information as the Committee considers desirable to carry out the terms of the Plan.


 


Section 5.5         Committee
Action. The Committee shall hold such meetings, and may make such administrative rules and regulations, as it may deem
proper. A majority of the members of the Committee shall constitute a quorum, and the action of a majority of the members of the
Committee present at a meeting at which a quorum is present, as well as actions taken pursuant to the unanimous written consent
of all of the members of the Committee without holding a meeting, shall be deemed to be actions of the Committee. Subject to Section 5.1,
all actions of the Committee shall be final and conclusive and shall be binding upon the Company, Participants and all other interested
parties. Any person dealing with the Committee shall be fully protected in relying upon any written notice, instruction, direction
or other communication signed by a member of the Committee or by a representative of the Committee authorized to sign the same
in its behalf.


 


ARTICLE 6 - AMENDMENT AND TERMINATION



 


Section 6.1         General. The
Board may, as permitted by law, at any time, amend or terminate the Plan, and may amend any Award Agreement, provided that no amendment
or termination (except as provided in Section 2.6, Section 3.3 and Section 6.2) may cause the Award to violate Code
Section 409A, or, in the absence of written consent to the change by the affected Participant (or, if the Participant is not
then living, the affected beneficiary), adversely impair the rights of any Participant or beneficiary under any Award granted under
the Plan prior to the date such amendment is adopted by the Board; provided, however, that, no amendment may (a) materially
increase the benefits accruing to Participants under the Plan, (b) materially increase the aggregate number of securities
which may be issued under the Plan, other than pursuant to Section 3.3, or (c) materially modify the requirements for
participation in the Plan, unless the amendment under (a), (b) or (c) above is approved by the Company’s stockholders.


 


Section 6.2         Amendment
to Conform to Law and Accounting Changes. Notwithstanding any provision in this Plan or any Award Agreement to the
contrary, the Committee may amend the Plan or any Award Agreement, to take effect retroactively or otherwise, as deemed necessary
or advisable for the purpose of (i) conforming the Plan or the Award Agreement to any present or future law relating to plans
of this or similar nature (including, but not limited to, Code Section 409A), or (ii) avoiding an accounting treatment
resulting from an accounting pronouncement or interpretation thereof issued by the SEC or Financial Accounting Standards Board
subsequent to the adoption of the Plan or the making of the Award affected thereby, which, in the sole discretion of the Committee,
may materially and adversely affect the financial condition or results of operations of the Company. By accepting an Award under
this Plan, each Participant agrees and consents to any amendment made pursuant to this Section 6.2 or Section 2.6 to
any Award granted under the Plan without further consideration or action.


 


ARTICLE 7 - GENERAL TERMS


 


Section 7.1         No
Implied Rights.


 


(a)         No
Rights to Specific Assets. Neither a Participant nor any other person shall by reason of participation in the Plan acquire
any right in or title to any assets, funds or property of the Company or any Subsidiary whatsoever, including any specific funds,
assets, or other property which the Company or any Subsidiary, in its sole discretion, may set aside in anticipation of a liability
under the Plan. A Participant shall have only a contractual right to the shares of Stock or amounts, if any, payable or distributable
under the Plan, unsecured by any assets of the Company or any Subsidiary, and nothing contained in the Plan shall constitute a
guarantee that the assets of the Company or any Subsidiary shall be sufficient to pay any benefits to any person. 


 


(b)        
No Contractual Right to Employment or Future Awards. The Plan does not constitute a contract of employment, and selection
as a Participant will not give any participating Employee the right to be retained in the employ of the Company or any Subsidiary
or any right or claim to any benefit under the Plan, unless such right or claim has specifically accrued under the terms of the
Plan. No individual shall have the right to be selected to receive an Award under the Plan, or, having been so selected, to
receive a future Award under the Plan.


 




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(c)         No
Rights as a Stockholder. Except as otherwise provided in the Plan, no Award under the Plan shall confer upon the holder thereof
any rights as a stockholder of the Company prior to the date on which the individual fulfills all conditions for receipt of such
rights.


 


Section 7.2         Transferability. Except
as otherwise so provided by the Committee, ISOs under the Plan are not transferable except (i) as designated by the Participant
by will or by the laws of descent and distribution, (ii) to a trust established by the Participant, if under Code Section 671
and applicable state law, the Participant is considered the sole beneficial owner of the Stock Option while held in trust, or (iii) between
spouses incident to a divorce or pursuant to a domestic relations order, provided, however, in the case of a transfer within the
meaning of this Section 7.2(iii), the Stock Option shall not qualify as an ISO as of the day of such transfer. The Committee
shall have the discretion to permit the transfer of Stock Options (other than ISOs) under the Plan; provided, however, that
such transfers shall be limited to Immediate Family Members of Participants, trusts and partnerships established for the primary
benefit of such family members or to charitable organizations, and; provided, further, that such transfers are not made
for consideration to the Participant.


 


Awards of Restricted Stock shall not be
transferable prior to the time that such Awards vest in the Participant.


 


Section 7.3         Designation
of Beneficiaries. A Participant hereunder may file with the Company a written designation of a beneficiary or beneficiaries
under this Plan and may from time to time revoke or amend any such designation (“Beneficiary Designation”). Any designation
of beneficiary under this Plan shall be controlling over any other disposition, testamentary or otherwise (unless such disposition
is pursuant to a domestic relations order); provided, however, that if the Committee is in doubt as to the entitlement of
any such beneficiary to any Award, the Committee may determine to recognize only the legal representative of the Participant, in
which case the Company, the Committee and the members thereof shall not be under any further liability to anyone.


 


Section 7.4         Non-Exclusivity. Neither
the adoption of this Plan by the Board nor the submission of the Plan to the stockholders of the Company for approval shall be
construed as creating any limitations on the power of the Board or the Committee to adopt such other incentive arrangements as
either may deem desirable, including, without limitation, the granting of Restricted Stock or Stock Options otherwise than under
the Plan or an arrangement that is or is not intended to qualify under Code Section 162(m), and such arrangements may be either
generally applicable or applicable only in specific cases.


 


Section 7.5         Award
Agreement. Each Award granted under the Plan shall be evidenced by an Award Agreement signed by the Participant. A
copy of the Award Agreement, in any medium chosen by the Committee, shall be provided (or made available electronically) to the
Participant.


 


Section 7.6         Form
and Time of Elections. Unless otherwise specified herein, each election required or permitted to be made by any Participant
or other person entitled to benefits under the Plan, and any permitted modification or revocation thereof, shall be filed with
the Company at such times, in such form, and subject to such restrictions and limitations, not inconsistent with the terms of the
Plan, as the Committee shall require.


 


Section 7.7         Evidence. Evidence
required of anyone under the Plan may be by certificate, affidavit, document or other information upon which the person is acting
considers pertinent and reliable, and signed, made or presented by the proper party or parties.


 


Section 7.8         Tax
Withholding. Where a Participant is entitled to receive shares of Stock upon the vesting or exercise of an Award,
the Company shall have the right to require such Participant to pay to the Company the amount of any tax that the Company is required
to withhold with respect to such vesting or exercise, or, in lieu thereof, to retain, or to sell without notice, a sufficient number
of shares of Stock to cover the minimum amount required to be withheld. To the extent determined by the Committee and specified
in an Award Agreement, a Participant shall have the right to direct the Company to satisfy the minimum required federal, state
and local tax withholding by: (i) with respect to a Stock Option settled in stock, reducing the number of shares of Stock
subject to the Stock Option (without issuance of such shares of Stock to the Stock Option holder) by a number equal to the quotient
of (a) the total minimum amount of required tax withholding divided by (b) the excess of the Fair Market Value of a share
of Stock on the exercise date over the Exercise Price per share of Stock; and (ii) with respect to Restricted Stock, withholding
a number of shares (based on the Fair Market Value on the vesting date) otherwise vesting that would satisfy the minimum amount
of required tax withholding. Provided there are no adverse accounting consequences to the Company (a requirement to have liability
classification of an award under Financial Accounting Standards Board Accounting Standards Codification (ASC) Topic 718 (formerly,
FAS 123R) is an adverse consequence), a Participant who is not required to have taxes withheld may require the Company to


 




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withhold in accordance with the preceding sentence as if the
Award were subject to minimum tax withholding requirements.


 


Section 7.9        
Action by Company or Subsidiary. Any action required or permitted to be taken by the Company or any Subsidiary
shall be by resolution of its board of directors, or by action of one or more members of the Board (including a committee of the
Board) who are duly authorized to act for the Board, or (except to the extent prohibited by applicable law or applicable rules
of any stock exchange) by a duly authorized officer of the Company or such Subsidiary.


 


Section 7.10        
Successors. All obligations of the Company under the Plan shall be binding upon and inure to the benefit of any
successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation
or otherwise, of all or substantially all of the business, stock, and/or assets of the Company.


 


Section 7.11        
Indemnification. To the fullest extent permitted by law and the Company’s governing documents, each person
who is or shall have been a member of the Committee, or of the Board, or an officer of the Company to whom authority was delegated
in accordance with Section 5.3, or an Employee of the Company, shall be indemnified and held harmless by the Company against
and from any loss (including amounts paid in settlement), cost, liability or expense (including reasonable attorneys’ fees)
that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or
proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to
act under the Plan and against and from any and all amounts paid by him or her in settlement thereof, with the Company’s
approval, or paid by him or her in satisfaction of any judgment in any such action, suit, or proceeding against him or her, provided
he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes
to handle and defend it on his or her own behalf, unless such loss, cost, liability, or expense is a result of his or her own willful
misconduct or except as expressly provided by statute or regulation. The foregoing right of indemnification shall not be exclusive
of any other rights of indemnification to which such persons may be entitled under the Company’s charter or bylaws, as a
matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.


 


Section 7.12        
No Fractional Shares. Unless otherwise permitted by the Committee, no fractional shares of Stock shall be issued
or delivered pursuant to the Plan or any Award. The Committee shall determine whether cash or other property shall be issued or
paid in lieu of fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.


 


Section 7.13        
Governing Law. The Plan, all Awards granted hereunder, and all actions taken in connection herewith shall be governed
by and construed in accordance with the laws of the Commonwealth of Pennsylvania without reference to principles of conflict of
laws, except as superseded by applicable federal law. The federal and state courts located in the Commonwealth of Pennsylvania,
shall have exclusive jurisdiction over any claim, action, complaint or lawsuit brought under the terms of the Plan. By accepting
any award under this Plan, each Participant and any other person claiming any rights under the Plan agrees to submit himself and
any legal action that the Participant brings under the Plan, to the sole jurisdiction of such courts for the adjudication and resolution
of any such disputes.


 


Section 7.14        
Benefits Under Other Plans. Except as otherwise provided by the Committee or as set forth in a Qualified Retirement
Plan, Awards to a Participant (including the grant and the receipt of benefits) under the Plan shall be disregarded for purposes
of determining the Participant’s benefits under, or contributions to, any Qualified Retirement Plan, non-qualified plan and
any other benefit plans maintained by the Participant’s employer. The term “Qualified Retirement Plan” means
any plan of the Company or a Subsidiary that is intended to be qualified under Code Section 401(a).


 


Section 7.15        
Validity. If any provision of this Plan is determined to be illegal or invalid for any reason, said illegality
or invalidity shall not affect the remaining parts hereof, but this Plan shall be construed and enforced as if such illegal or
invalid provision has never been included herein.


 


Section 7.16        
Notice. Unless otherwise provided in an Award Agreement, all written notices and all other written communications
to the Company provided for in the Plan or in any Award Agreement, shall be delivered personally or sent by registered or certified
mail, return receipt requested, postage prepaid (provided that international mail shall be sent via overnight or two-day delivery),
or sent by facsimile, email or prepaid overnight


 




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courier to the Company at its principal executive office. Such
notices, demands, claims and other communications shall be deemed given:


 


(a)        
in the case of delivery by overnight service with guaranteed next day delivery, the next day or the day designated for delivery;


 


(b)        
in the case of certified or registered U.S. mail, five days after deposit in the U.S. mail; or


 


(c)        
in the case of facsimile or email, the date upon which the transmitting party received confirmation of receipt; provided, however,
that in no event shall any such communications be deemed to be given later than the date they are actually received, provided
they are actually received.


 


In the event a communication is not received, it shall only
be deemed received upon the showing of an original of the applicable receipt, registration or confirmation from the applicable
delivery service. Communications that are to be delivered by U.S. mail or by overnight service to the Company shall be directed
to the attention of the Company’s Chief Operating Officer and to the Corporate Secretary.


 


Section 7.17        
Forfeiture Events.


 


(a)        
The Committee may specify in an Award Agreement that the Participant’s rights, payments, and benefits with respect to an
Award shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified events, in
addition to any otherwise applicable vesting or performance conditions of an Award. Such events include, but are not limited to,
termination of employment for cause, termination of the Participant’s provisions of Services to the Company or any Subsidiary,
violation of material Company or Subsidiary policies, breach of noncompetition, confidentiality, or other restrictive covenants
that may apply to the Participant, or other conduct of the Participant that is detrimental to the business or reputation of the
Company or any Subsidiary.


 


(b)        
If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of
misconduct, with any financial reporting requirement under the federal securities laws, any Participant who is subject to automatic
forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002 shall reimburse the Company the amount of any payment in settlement
of an Award earned or accrued during the twelve month period following the first public issuance or filing with the SEC (whichever
first occurred) of the financial document embodying such financial reporting requirement.


 


In addition, in the event of an accounting
restatement, the Committee, in its sole and exclusive discretion, may require that any Participant reimburse the Company for all
or any part of the amount of any payment in settlement of any Award granted hereunder.


 


ARTICLE 8 - DEFINED TERMS; CONSTRUCTION


 


Section 8.1        
In addition to the other definitions contained herein, unless otherwise specifically provided in an Award Agreement, the following
definitions shall apply:


 


(a)        
“10% Stockholder” means an individual who, at the time of grant, owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company.


 


(b)        
“Award” means any Stock Option, Restricted Stock or any or all of them, or any other right or interest relating to
stock or cash, granted to a Participant under the Plan.


 


(c)        
“Award Agreement” means the document (in whatever medium prescribed by the Committee) which evidences the terms and
conditions of an Award under the Plan. Such document is referred to as an agreement, regardless of whether a Participant’s
signature is required.


 


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


 


(e)        
If the Participant is subject to a written employment agreement (or other similar written agreement) with the Company or a Subsidiary
that provides a definition of termination for “Cause,” then, for purposes of this Plan, the term “Cause”
shall have meaning set forth in such agreement. In the absence of such a definition, “Cause” means (i) the conviction
of the Participant of a felony or of any lesser criminal offense involving moral turpitude; (ii) the commission by the Participant
of a criminal or other act that, in the judgment of the Board, will likely cause substantial economic damage to the Company or
any Subsidiary or substantial injury to the business reputation of the Company or any Subsidiary; (iii) the commission by
the Participant of an act of fraud in the performance of his


 




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duties on behalf of the Company or any Subsidiary; (iv) the
continuing willful failure of the Participant to perform his duties to the Company or any Subsidiary (other than any such failure
resulting from the Participant’s incapacity due to physical or mental illness) after written notice thereof; or (v) an
order of a federal or state regulatory agency or a court of competent jurisdiction requiring the termination of the Participant’s
Service with the Company.


 


(f)        
“Change in Control” has the meaning ascribed to it in Section 4.2.


 


(g)        
“Code” means the Internal Revenue Code of 1986, as amended, and any rules, regulations and guidance promulgated thereunder,
as modified from time to time.


 


(h)        
“Code Section 409A” means the provisions of Section 409A of the Code and any rules, regulations and guidance
promulgated thereunder, as modified from time to time.


 


(i)        
“Committee” means the Committee acting under Article 5.


 


(j)        
“Covered Employee” has the meaning given the term in Code Section 162(m), and shall also include any other Employee
who may become a Covered Employee before an Award vests, as the Committee may determine in its sole discretion.


 


(k)        
“Director” means a member of the Board of Directors of the Company or a Subsidiary.


 


(l)        
If the Participant is subject to a written employment agreement (or other similar written agreement) with the Company or a Subsidiary
that provides a definition of “Disability” or “Disabled,” then, for purposes of this Plan, the terms “Disability”
or “Disabled” shall have meaning set forth in such agreement. In the absence of such a definition, “Disability”
shall be defined in accordance with the Bank’s long-term disability plan. To the extent that an Award hereunder is subject
to Code Section 409A, “Disability” or “Disabled” shall mean that a Participant: (i) is unable
to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period of not less than twelve months; or (ii) is,
by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected
to last for a continuous period of not less than twelve months, receiving income replacement benefits for a period of not less
than three months under an accident and health plan covering the Company’s Employees. Except to the extent prohibited under
Code Section 409A, if applicable, the Committee shall have discretion to determine if a termination due to Disability has
occurred.


 


(m)        
“Disinterested Board Member” means a member of the Board who: (a) is not a current Employee of the Company or
a Subsidiary; (b) is not a former employee of the Company who receives compensation for prior Services (other than benefits
under a tax-qualified retirement plan) during the taxable year; (c) has not been an officer of the Company; (d) does
not receive remuneration from the Company or a Subsidiary, either directly or indirectly, in any capacity other than as a Director
except in an amount for which disclosure would not be required pursuant to Item 404 of SEC Regulation S-K in accordance with
the proxy solicitation rules of the SEC, as amended or any successor provision thereto; and (e) does not possess an interest
in any other transaction, and is not engaged in a business relationship for which disclosure would be required pursuant to Item 404(a)
of SEC Regulation S-K under the proxy solicitation rules of the SEC, as amended or any successor provision thereto. The term Disinterested
Board Member shall be interpreted in such manner as shall be necessary to conform to the requirements of section 162(m) of the
Code, Rule 16b-3 promulgated under the Exchange Act and the corporate governance standards imposed on compensation committees under
the listing requirements imposed by any national securities exchange on which the Company lists or seeks to list its securities.


 


(n)        
“Employee” means any person employed by the Company or any Subsidiary. Directors who are also employed by the Company
or a Subsidiary shall be considered Employees under the Plan.


 


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


 


(p)        
“Excluded Transaction” means a plan of reorganization, merger, consolidation or similar transaction that would result
in the Voting Securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding
or by being converted into Voting Securities of the surviving corporation or any parent thereof) at least 50% of the combined voting
power of the Voting Securities of the entity surviving the plan of reorganization, merger, consolidation or similar transaction
(or the parent of such surviving entity) immediately after such plan of reorganization, merger, consolidation or similar transaction.


 


(q)        
“Exercise Price” means the price established with respect to a Stock Option pursuant to Section 2.2.


 


(r)        
“Fair Market Value” means, with respect to a share of Stock on a specified date:


 




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(I)        
the final reported 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) as reported in the principal consolidated reporting system with respect to securities listed
or admitted to trading on the principal United States securities exchange on which the shares of Stock are listed or admitted to
trading, as of the close of the market in New York City and without regard to after-hours trading activity; or


 


(II)        
if the shares of Stock are not listed or admitted to trading on any such exchange, the closing bid quotation with respect to a
share of Stock on such date, as of the close of the market in New York City and without regard to after-hours trading activity,
or, if no such quotation is provided, on another similar system, selected by the Committee, then in use; or


 


(III)        
if (I) and (II) are not applicable, the Fair Market Value of a share of Stock as the Committee may determine in good faith
and in accordance with Code Section 422 and the applicable requirements of Code Section 409A and the regulations promulgated
thereunder. For purposes of the exercise of a Stock Option, Fair Market Value on such date shall be the date a notice of exercise
is received by the Company, or if not a day on which the market is open, the next day that it is open.


 


(s)
        A termination of employment by an Employee Participant shall be deemed a
termination of employment for “Good Reason” as a result of the Participant’s resignation from the employ of
the Company or any Subsidiary upon the occurrence of any of the following events following a Change in Control: (a) the
failure of the Company or Subsidiary to appoint or re-appoint or elect or re-elect the Employee Participant to the
position(s) with the Company or Subsidiary held immediately prior to the Change in Control; (b) a material change in the
functions, duties or responsibilities of the Employee Participant compared to those functions, duties or responsibilities in
effect immediately prior to the Change in Control; (c) any reduction of the rate of the Employee Participant’s
base salary in effect immediately prior to the Change in Control; (d) any failure (other than due to reasonable
administrative error that is cured promptly upon notice) to pay any portion of the Employee Participant’s compensation
as and when due; (e) any change in the terms and conditions of any compensation or benefit program in which the Employee
Participant participated immediately prior to the Change in Control which, either individually or together with
other changes, has a material adverse effect on the aggregate value of his total compensation package; or (f) a change
in the Employee Participant’s principal place of employment, without his consent, to a place that is at least 30 miles
further away from the Employee Participant’s principal residence prior to the Change in Control.


 


(t)        
“Immediate Family Member” means with respect to any Participant: (a) any of the Participant’s children,
stepchildren, grandchildren, parents, stepparents, grandparents, spouses, former spouses, siblings, nieces, nephews, mothers-in-law,
fathers-in-law, sons-in-law, daughters-in-law, brothers-in-law or sisters-in-law, including relationships created by adoption;
(b) any natural person sharing the Participant’s household (other than as a tenant or employee, directly or indirectly,
of the Participant); (c) a trust in which any combination of the Participant and persons described in section (a) and
(b) above own more than 50% of the beneficial interests; (d) a foundation in which any combination of the Participant
and persons described in sections (a) and (b) above control management of the assets; or (e) any other corporation,
partnership, limited liability company or other entity in which any combination of the Participant and persons described in sections
(a) and (b) above control more than 50% of the voting interests.


 


(u)        
“Incumbent Directors” means:


 


(I)        
the individuals who, on the date hereof, constitute the Board; and


 


(II)        
any new Director whose appointment or election by the Board or nomination for election by the Company’s stockholders was
approved or recommended: (a) by the vote of at least two-thirds of the Whole Board, with at least two-thirds of the Incumbent
Directors then in office voting in favor of such approval or recommendation; or (b) by a Nominating Committee of the Board
whose members were appointed by the vote of at least two-thirds of the Whole Board, with at least two-thirds of the Incumbent Directors
then in office voting in favor of such appointments


 


(v)        
“Involuntary Termination of Employment” means the Termination of Service by the Company or Subsidiary (other than a
termination for Cause) or termination of employment by a Participant Employee for Good Reason.


 


(w)        
“ISO” has the meaning ascribed to it in Section 2.1(a).


 




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(x)        
“Non-Qualified Option” means the right to purchase shares of Stock that is either (i) granted to a Participant
who is not an Employee, or (ii) granted to an Employee and either is not designated by the Committee to be an ISO or does
not satisfy the requirements of Section 422 of the Code.


 


(y)        
“Participant” means any individual who has received, and currently holds, an outstanding Award under the Plan.


 


(z)        
“Restricted Stock” has the meaning ascribed to it in Section 2.3.


 


(aa)        
“Retirement” means, unless otherwise specified in an Award Agreement, retirement from employment as an Employee on
or after the attainment of age 65, or Termination of Service as a Director on or after the attainment of age 75, provided, however,
that unless otherwise specified in an Award Agreement, an Employee who is also a Director shall not be deemed to have terminated
due to Retirement until both Service as an Employee and Service as a Director has ceased. A non-Employee Director will be deemed
to have terminated due to


 


Retirement under the provisions of this Plan only if the non-Employee
Director has terminated Service on the Board(s) of Directors of the Company and any Subsidiary or affiliate in accordance with
applicable Company policy, following the provision of written notice to such Board(s) of Directors of the non-Employee Director’s
intention to retire.


 


(bb)        
“SEC” means the United States Securities and Exchange Commission.


 


(cc)        
“Securities Act” means the Securities Act of 1933, as amended from time to time.


 


(dd)        
“Service” means service as an Employee, service provider, or non-employee Director of the Company or a Subsidiary,
as the case may be, and shall include service as a director emeritus or advisory director.


 


(ee)        
“Stock” means the common stock of the Company, $0.01 par value per share.


 


(ff)        
“Stock Option” means an ISO or a Non-Qualified Option.


 


(gg)        
“Subsidiary” means any corporation, affiliate, bank or other entity which would be a subsidiary corporation with respect
to the Company as defined in Code Section 424(f) and, other than with respect to an ISO, shall also mean any partnership or
joint venture in which the Company and/or other Subsidiary owns more than 50% of the capital or profits interests.


 


(hh)        
“Termination of Service” means the first day occurring on or after a grant date on which the Participant ceases to
be an Employee or Director of, or service provider to, the Company or any Subsidiary, regardless of the reason for such cessation,
subject to the following:


 


(I)         The
Participant’s cessation as an Employee or service provider shall not be deemed to occur by reason of the transfer of the
Participant between the Company and a Subsidiary or between two Subsidiaries.


 


(II)        
The Participant’s cessation as an Employee or service provider shall not be deemed to occur by reason of the Participant’s
being on a bona fide leave of absence from the Company or a Subsidiary approved by the Company or Subsidiary otherwise receiving
the Participant’s Services, provided such leave of absence does not exceed six months, or if longer, so long as the Employee
retains a right to reemployment with the Company or Subsidiary under an applicable statute or by contract. For these purposes,
a leave of absence constitutes a bona fide leave of absence only if there is a reasonable expectation that the Employee will return
to perform Services for the Company or Subsidiary. If the period of leave exceeds six months and the Employee does not retain a
right to reemployment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first
day immediately following such six month period. For purposes of this sub-section (II), to the extent applicable, an Employee’s
leave of absence shall be interpreted by the Committee in a manner consistent with Treasury Regulation Section 1.409A-1(h)(1).


 


(III)        
If, as a result of a sale or other transaction, the Subsidiary for whom Participant is employed (or to whom the Participant is
providing Services) ceases to be a Subsidiary, and the Participant is not, following the transaction, an Employee of the Company
or an entity that is then a Subsidiary, then the occurrence of such transaction shall be treated as the Participant’s Termination
of Service caused by the Participant being discharged by the entity for whom the Participant is employed or to whom the Participant
is providing Services.


 


(IV)         A
service provider whose Services to the Company or a Subsidiary are governed by a written agreement with the service provider will
cease to be a service provider at the time the term of such written agreement ends (without renewal); and a service provider whose
Services to the Company or a Subsidiary are


 




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not governed by a written agreement with the service
provider will cease to be a service provider on the date that is 90 days after the date the service provider last provides Services
requested by the Company or any Subsidiary (as determined by the Committee).


  


(V)        
Except to the extent Section 409A of the Code may be applicable to an Award, and subject to the foregoing paragraphs of this
sub-section (hh), the Committee shall have discretion to determine if a Termination of Service has occurred and the date on which
it occurred. In the event that any Award under the Plan constitutes Deferred Compensation (as defined in Section 2.6 hereof),
the term Termination of Service shall be interpreted by the Committee in a manner consistent with the definition of “Separation
from Service” as defined under Code Section 409A and under Treasury Regulation Section 1.409A-1(h)(ii). For purposes
of this Plan, a “Separation from Service” shall have occurred if the Bank and Participant reasonably anticipate that
no further Services will be performed by the Participant after the date of the Termination of Service (whether as an employee or
as an independent contractor) or the level of further Services performed will be less than 50% of the average level of bona fide
Services in the 36 months immediately preceding the Termination of Service. If a Participant is a “Specified Employee,”
as defined in Code Section 409A and any payment to be made hereunder shall be determined to be subject to Code Section 409A,
then if required by Code Section 409A, such payment or a portion of such payment (to the minimum extent possible) shall be
delayed and shall be paid on the first day of the seventh month following Participant’s Separation from Service.


 


(VI)         With
respect to a Participant who is a director, cessation as a Director will not be deemed to have occurred if the Participant continues
as a director emeritus or advisory director.


 


(ii)        
“Voting Securities” means any securities which ordinarily possess the power to vote in the election of directors without
the happening of any pre-condition or contingency.


 


(jj)        
“Whole Board” means the total number of Directors that the Company would have if there were no vacancies on the Board
at the time the relevant action or matter is presented to the Board for approval.


 


Section 8.2        
In this Plan, unless otherwise stated or the context otherwise requires, the following uses apply:


 


(a)         actions
permitted under this Plan may be taken at any time and from time to time in the actor’s reasonable discretion;


 


(b)        references
to a statute shall refer to the statute and any successor statute, and to all regulations promulgated under or implementing the
statute or its successor, as in effect at the relevant time;


 


(c)        
in computing periods from a specified date to a later specified date, the words “from” and “commencing on”
(and the like) mean “from and including,” and the words “to,” “until” and “ending on”
(and the like) mean “to, but excluding”;


 


(d)        
references to a governmental or quasi-governmental agency, authority or instrumentality shall also refer to a regulatory body that
succeeds to the functions of the agency, authority or instrumentality;


 


(e)        
indications of time of day mean Eastern time;


 


(f)        
“including” means “including, but not limited to”;


 


(g)        
all references to sections, schedules and exhibits are to sections, schedules and exhibits in or to this Plan unless otherwise
specified;


 


(h)        
all words used in this Plan will be construed to be of such gender or number as the circumstances and context require;


 


(i)        
the captions and headings of articles, sections, schedules and exhibits appearing in or attached to this Plan have been inserted
solely for convenience of reference and shall not be considered a part of this Plan nor shall any of them affect the meaning or
interpretation of this Plan or any of its provisions;


 


(j)        
any reference to a document or set of documents in this Plan, and the rights and obligations of the parties under any such documents,
shall mean such document or documents as amended from time to time, and any and all modifications, extensions, renewals, substitutions
or replacements thereof; and


 


(k)        
all accounting terms not specifically defined herein shall be construed in accordance with GAAP.


 




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