exh105.htm


     

    
      

      

    

    Exhibit
10.5

     

     

    
      FIRST
KEYSTONE FINANCIAL, INC.

      AMENDED
AND RESTATED 1998 STOCK OPTION PLAN

       

       

      ARTICLE
I

      ESTABLISHMENT
OF THE PLAN

       

      First
Keystone Financial, Inc. (the "Corporation") hereby amends and restates its 1998
Stock Option Plan (as amended and restated, the "Plan") upon the terms and
conditions hereinafter stated, with the amendment and restatement effective as
of November 25, 2008.  The Plan is being amended and restated in order
to comply with Section 409A of the Code, as defined herein.

       

       

      ARTICLE
II

      PURPOSE
OF THE PLAN

       

      The
purpose of this Plan is to improve the growth and profitability of the
Corporation and its Subsidiary Companies by providing Employees and Non-Employee
Directors with a proprietary interest in the Corporation as an incentive to
contribute to the success of the Corporation and its Subsidiary Companies, and
rewarding Employees and Non-Employee Directors for outstanding
performance.  All Incentive Stock Options issued under this Plan are
intended to comply with the requirements of Section 422 of the Code and the
regulations thereunder, and all provisions hereunder shall be read, interpreted
and applied with that purpose in mind. Each recipient of an Award hereunder is
advised to consult with his or her personal tax advisor with respect to the tax
consequences under federal, state, local and other tax laws of the receipt
and/or exercise of an Award hereunder.

       

       

      ARTICLE
III

      DEFINITIONS

       

      3.01           "Award"
means an Option or Stock Appreciation Right granted pursuant to the terms of
this Plan.

       

      3.02           "Bank"
means First Keystone Bank, the wholly owned subsidiary of the
Corporation.

       

      3.03           "Board"
means the Board of Directors of the Corporation.

       

      3.04           “Change
in Control” shall mean a change in the ownership of the Corporation or the Bank,
a change in the effective control of the Corporation or the Bank or a change in
the ownership of a substantial portion of the assets of the Corporation or the
Bank, in each case as provided under Section 409A of the Code and the
regulations thereunder.

       

      3.05           "Code"
means the Internal Revenue Code of 1986, as amended.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      3.06           "Committee"
means a committee of two or more directors appointed by the Board pursuant to
Article IV hereof, each of whom shall be a Non-Employee Director as defined in
Rule 16b-3(b)(3)(i) of the Exchange Act or any successor thereto and within the
meaning of Section 162(m) of the Code and the regulations
thereunder.

       

      3.07           "Common
Stock" means shares of the common stock, par value $.01 per share, of the
Corporation.

       

      3.08           "Disability"
means the Optionee (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 12 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 12
months, receiving income replacement benefits for a period of not less than
three months under an accident and health plan covering employees of the
Corporation or the Bank (or would have received such benefits for at least three
months if he had been eligible to participate in such plan).

       

      3.09           "Effective
Date" means the day upon which the Board originally adopted this
Plan.

       

      3.10           "Employee"
means any person who is employed by the Corporation, the Bank or a Subsidiary
Company, or is an Officer of the Corporation or a Subsidiary Company, but not
including directors who are not also Officers of or otherwise employed by the
Corporation, the Bank or a Subsidiary Company.

       

      3.11           "Exchange
Act" means the Securities Exchange Act of 1934, as amended.

       

      3.12           "Fair
Market Value" shall be equal to the fair market value per share of the
Corporation's Common Stock on the date an Award is granted.  For
purposes hereof, the Fair Market Value of a share of Common Stock shall be the
closing sale price of a share of Common Stock on the date in question (or, if
such day is not a trading day in the U.S. markets, on the nearest preceding
trading day), as reported with respect to the principal market (or the composite
of the markets, if more than one) or national quotation system in which such
shares are then traded, or if no such closing prices are reported, the mean
between the high bid and low asked prices that day on the principal market or
national quotation system then in use. Notwithstanding the foregoing, if the
Common Stock is not readily tradable on an established securities market for
purposes of Section 409A of the Code, then the Fair Market Value shall be
determined by means of a reasonable valuation method that takes into
consideration all available information material to the value of the Corporation
and that otherwise satisfies the requirements applicable under Section 409A of
the Code and the regulations thereunder.

       

      3.13           "Incentive
Stock Option" means any Option granted under this Plan which the Board intends
(at the time it is granted) to be an incentive stock option within the meaning
of Section 422 of the Code or any successor thereto.

       

      
        
          
          

        

        
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      3.14           "Non-Employee
Director" means a member of the Board of the Corporation or Board of Directors
of the Bank or any successor thereto, including a Director Emeritus of the
Boards of the Corporation and/or the Bank, who is not an Officer or Employee of
the Corporation or any Subsidiary Company.

       

      3.15           "Non-Qualified
Option" means any Option granted under this Plan which is not an Incentive Stock
Option.

       

      3.16           "Officer"
means an Employee whose position in the Corporation or Subsidiary Company is
that of a corporate officer, as determined by the Board.

       

      3.17           "Option"
means a right granted under this Plan to purchase Common
Stock.

       

      3.18           "Optionee"
means an Employee or Non-Employee Director or former Employee or Non-Employee
Director to whom an Option is granted under the Plan.

       

      3.19           "Retirement"
means a termination of employment which constitutes a "retirement" under any
applicable qualified pension benefit plan maintained by the Corporation or a
Subsidiary Company, or, if no such  plan is applicable, which would
constitute "retirement" under the Corporation's pension benefit plan, if such
individual were a participant in that plan. With respect to Non-Employee
Directors, retirement means retirement from service on the Board of Directors of
the Corporation or the Bank or any successor thereto (including service as an
Director Emeritus) after attaining the age of 70.

       

      3.20           "Stock
Appreciation Right" means a right to surrender an Option in consideration for a
payment by the Corporation in cash and/or Common Stock, as provided in the
discretion of the Board or the Committee in accordance with Section
8.10.

       

      3.21           "Subsidiary
Companies" means those subsidiaries of the Corporation, including the Bank,
which meet the definition of "subsidiary corporations" set forth in Section
424(f) of the Code, at the time of granting of the Option in
question.

       

       

      ARTICLE
IV

      ADMINISTRATION OF
THE PLAN

       

      4.01           Duties of the
Committee.  The Plan shall be administered and interpreted by
the Committee, as appointed from time to time by the Board pursuant to Section
4.02.  The Committee shall have the authority to adopt, amend and
rescind such rules, regulations and procedures as, in its opinion, may be
advisable in the administration of the Plan, including, without limitation,
rules, regulations and procedures which (i) deal with satisfaction of an
Optionee's tax withholding obligation pursuant to Section 12.02 hereof, (ii)
include arrangements to facilitate the Optionee's ability to borrow funds for
payment of the exercise or purchase price of an Award, if applicable, from
securities brokers and dealers, and (iii) include arrangements which provide for
the payment of some or all of such exercise or purchase price by delivery of
previously-owned shares of Common Stock or other property and/or by withholding
some of the shares of Common Stock which are being acquired.  The
interpretation and construction by the Committee of any provisions of the Plan,
any rule, regulation or procedure adopted by it pursuant thereto or of any Award
shall be final and binding in the absence of action by the
Board.

       

      
        
          
          

        

        
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      4.02           Appointment and
Operation of the Committee.  The members of the Committee shall
be appointed by, and will serve at the pleasure of, the Board.  The
Board from time to time may remove members from, or add members to, the
Committee, provided the Committee shall continue to consist of two or more
members of the Board, each of whom shall be a Non-Employee Director, as defined
in Rule 16b-3(b)(3)(i) of the Exchange Act or any successor
thereto.  In addition, each member of the Committee shall be an
"outside director" within the meaning of Section 162(m) of the Code and
regulations thereunder at such times as is required under such
regulations.  The Committee shall act by vote or written consent of a
majority of its members.  Subject to the express provisions and
limitations of the Plan, the Committee may adopt such rules, regulations and
procedures as it deems appropriate for the conduct of its affairs.  It
may appoint one of its members to be chairman and any person, whether or not a
member, to be its secretary or agent.  The Committee shall report its
actions and decisions to the Board at appropriate times but in no event less
than one time per calendar year.

       

      4.03           Revocation for
Misconduct.  The Board or the Committee may by resolution
immediately revoke, rescind and terminate any Option, or portion thereof, to the
extent not yet vested, or any Stock Appreciation Right, to the extent not yet
exercised, previously granted or awarded under this Plan to an Employee who is
discharged from the employ of the Corporation or a Subsidiary Company for cause,
which, for purposes hereof, shall mean termination because of the Employee's
personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties, willful
violation of any law, rule, or regulation (other than traffic violations or
similar offenses) or final cease-and-desist order.  Options granted to
a Non-Employee Director who is removed for cause pursuant to the Corporation's
Restated Articles of Incorporation and Bylaws or the Bank's Charter and Bylaws
shall terminate as of the effective date of such removal.

       

      4.04           Limitation on
Liability.  Neither the members of the Board nor any member of
the Committee shall be liable for any action or determination made in good faith
with respect to the Plan, any rule, regulation or procedure adopted by it
pursuant thereto or any Awards granted under it.  If a member of the
Board or the Committee is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of anything done or not
done by him in such capacity under or with respect to the Plan, the Corporation
shall, subject to the requirements of applicable laws and regulations, indemnify
such member against all liabilities and expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in the best interests of the
Corporation and its Subsidiary Companies and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful.

       

      
        
          
          

        

        
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      4.05           Compliance with Laws
and Regulations.  All Awards granted hereunder shall be subject
to all applicable federal and state laws, rules and regulations and to such
approvals by any government or regulatory agency as may be
required.  The Corporation shall not be required to issue or deliver
any certificates for shares of Common Stock prior to the completion of any
registration or qualification of or obtaining of consents or approvals with
respect to such shares under any federal or state law or any rule or regulation
of any government body, which the Corporation shall, in its sole discretion,
determine to be necessary or advisable.  Moreover, no Option or Stock
Appreciation Right may be exercised if such exercise would be contrary to
applicable laws and regulations.

       

      4.06           Restrictions on
Transfer.  The Corporation may place a legend upon any
certificate representing shares acquired pursuant to an Award granted hereunder
noting that the transfer of such shares may be restricted by applicable laws and
regulations.

       

      4.07           No Deferral of
Compensation Under Section 409A of the Code. All Awards granted under the
Plan are designed to not constitute a deferral of compensation for purposes of
Section 409A of the Code.  Notwithstanding any other provision in this
Plan to the contrary, all of the terms and conditions of any Awards granted
under this Plan shall be designed to satisfy the exemption for stock options or
stock appreciation rights set forth in the regulations issued under Section 409A
of the Code.  Both this Plan and the terms of all Options and Stock
Appreciation Rights granted hereunder shall be interpreted in a manner that
requires compliance with all of the requirements of the exemption for stock
options or stock appreciation rights set forth in the regulations issued under
Section 409A of the Code.  No Optionee shall be permitted to defer the
recognition of income beyond the exercise date of a Non-Qualified Option or
Stock Appreciation Right or beyond the date that the Common Stock received upon
the exercise of an Incentive Stock Option is sold.

       

       

      ARTICLE
V

      ELIGIBILITY

       

      Awards
may be granted to such Employees and Non-Employee Directors of the Corporation
and its Subsidiary Companies as may be designated from time to time by the Board
or the Committee.  Awards may not be granted to individuals who are
not Employees or Non-Employee Directors of either the Corporation or its
Subsidiary Companies.  Non-Employee Directors shall be eligible to
receive only Awards of Non-Qualified Options pursuant to this Plan.

       

       

       ARTICLE
VI

      COMMON
STOCK COVERED BY THE PLAN

       

      6.01           Option
Shares.  The aggregate number of shares of Common Stock which
may be issued pursuant to this Plan, subject to adjustment as provided in
Article IX, shall be 111,200.   None of such shares shall be the
subject of more than one Award at any time, but if an Option as to any shares is
surrendered before exercise, or expires or terminates for any reason without
having been exercised in full, or for any other reason ceases to be exercisable,
the number of shares covered thereby shall again become available for grant
under the Plan as if no Awards had been previously granted with respect to such
shares.  Notwithstanding the foregoing, if an Option is surrendered in
connection with the exercise of a Stock Appreciation Right, the number of shares
covered thereby shall not be available for grant under the
Plan.  During the time this Plan remains in effect, grants to each
Employee shall not exceed 25% of the shares of Common Stock available under the
Plan.  Awards made to Non-Employee Directors in the aggregate may not
exceed 25% of the number of shares available under this Plan

       

      
        
          
          

        

        
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      6.02           Source of
Shares.  The shares of Common Stock issued under the Plan may
be authorized but unissued shares, treasury shares or shares purchased by the
Corporation on the open market or from private sources for use under the
Plan.

       

       

      ARTICLE
VII

      DETERMINATION
OF

      AWARDS,
NUMBER OF SHARES, ETC.

       

      The Board
or the Committee shall, in its discretion, determine from time to time which
Employees and Non-Employee Directors will be granted Awards under the Plan, the
number of shares of Common Stock subject to each Award, whether each Option will
be an Incentive Stock Option or a Non-Qualified Stock Option (in the case of
Employees) and the exercise price of an Option.  In making all such
determinations there shall be taken into account the duties, responsibilities
and performance of each respective Employee and Non-Employee Director, his
present and potential contributions to the growth and success of the
Corporation, his salary or other compensation and such other factors deemed
relevant to accomplishing the purposes of the Plan.

       

       

      ARTICLE
VIII

      OPTIONS
AND STOCK APPRECIATION RIGHTS

       

      Each
Option granted hereunder shall be on the following terms and
conditions:

       

      8.01           Stock Option
Agreement.  The proper Officers on behalf of the Corporation
and each Optionee shall execute a Stock Option Agreement which shall set forth
the total number of shares of Common Stock to which it pertains, the exercise
price, whether it is a Non-Qualified Option or an Incentive Stock Option, and
such other terms, conditions, restrictions and privileges as the Board or the
Committee in each instance shall deem appropriate, provided they are not
inconsistent with the terms, conditions and provisions of this
Plan.  Each Optionee shall receive a copy of his executed Stock Option
Agreement.  Any Option granted with the intention that it will be an
Incentive Stock Option but which fails to satisfy a requirement for Incentive
Stock Options shall continue to be valid and shall be treated as a Non-Qualified
Option.

       

      
        
          
          

        

        
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      8.02    
Option Exercise Price.

       

      (a)           Incentive Stock
Options.  The per share price at which the subject Common Stock
may be purchased upon exercise of an Incentive Stock Option shall be no less
than one hundred percent (100%) of the Fair Market Value of a share of Common
Stock at the time such Incentive Stock Option is granted, except as provided in
Section 8.09(b).

       

      (b)           Non-Qualified
Options.  The per share price at which the subject Common Stock
may be purchased upon exercise of a Non-Qualified Option shall be established by
the Committee at the time of grant, but in no event shall be less than the one
hundred percent (100%) of the Fair Market Value of a share of Common Stock at
the time such Non-Qualified Option is granted.

       

      8.03   
Vesting and Exercise of Options.

       

      (a)           General
Rules.  Incentive Stock Options and Non-Qualified Options shall
become vested and exercisable at the rate, to the extent and subject to such
limitations as may be specified by the Committee.  Notwithstanding the
foregoing, except as provided in Section 8.03(b) hereof, no vesting shall occur
on or after an Employee's employment or service as a Non-Employee Director with
the Corporation and all Subsidiary Companies is terminated for any reason other
than his death, Disability, Retirement or in the event of a Change in
Control.  In determining the number of shares of Common Stock with
respect to which Options are vested and/or exercisable, fractional shares will
be rounded up to the nearest whole number if the fraction is 0.5 or higher, and
down if it is less.

       

      (b)           Accelerated
Vesting.  Unless the Board or the Committee shall specifically
state otherwise at the time an Option is granted, all Options granted under this
Plan shall become vested and exercisable in full on the date an Optionee
terminates his employment with the Corporation or a Subsidiary Company or
service as a Non-Employee Director because of his death or Disability. All
Options hereunder shall become immediately vested and exercisable in full on the
date an Optionee terminates his employment with the Corporation or a Subsidiary
Corporation due to Retirement. In addition, all outstanding Options hereunder
shall become immediately vested and exercisable in full as of the effective date
of a Change in Control.

       

      8.04    
Duration of Options.

       

      (a)           General
Rule.  Except as provided in Sections 8.04(b) and 8.09, each
Option or portion thereof granted to an Employee shall be exercisable at any
time on or after it vests and becomes exercisable until the earlier of (i) ten
(10) years after its date of grant or (ii) one (1) year after the date on which
the Employee ceases to be employed by the Corporation and all Subsidiary
Companies, unless the Board or the Committee in its discretion decides at the
time of grant or thereafter to extend such period of exercise upon termination
of employment to a period not exceeding five (5) years.

       

      
        
          
          

        

        
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      Except as
provided in Section 8.04(b), each Option or portion thereof granted to a
Non-Employee Director shall be exercisable at any time on or after it vests and
becomes exercisable until the earlier of (i) ten (10) years after its date of
grant or (ii) three (3) years after the date on which the Non-Employee Director
ceases to serve as a director of the Corporation and all Subsidiary Companies,
unless the Board or the Committee in its discretion decides at the time of grant
or thereafter to extend such period of exercise upon termination of service to a
period not exceeding five (5) years.

       

      (b)           Exceptions.  Unless
the Board or the Committee shall specifically state otherwise at the time an
Option is granted: (i) if an Employee terminates his employment with the
Corporation or a Subsidiary Company as a result of Disability or Retirement
without having fully exercised his Options, the Employee shall have the right,
during the three (3) year period following his termination due to Disability or
Retirement, to exercise such Options, and (ii) if a Non-Employee Director
terminates his service as a director (including service as a Director Emeritus)
with the Corporation or a Subsidiary Company as a result of Disability or
Retirement without having fully exercised his Options, the Non-Employee Director
shall have the right, during the three (3) year period following his termination
due to Disability or Retirement, to exercise such Options.

       

      Unless
the Board or the Committee shall specifically state otherwise at the time an
Option is granted, if an Employee or Non-Employee Director terminates his
employment or service with the Corporation or a Subsidiary Company following a
Change in Control without having fully exercised his Options, the Optionee shall
have the right to exercise such Options during the remainder of the original ten
(10) year term (or five (5) year term for Options subject to Section 8.09(b)
hereof) of the Option from the date of grant.

       

      If an
Optionee dies while in the employ or service of the Corporation or a Subsidiary
Company or terminates employment or service with the Corporation or a Subsidiary
Company as a result of Disability or Retirement and dies without having fully
exercised his Options, the executors, administrators, legatees or distributees
of his estate shall have the right, during the one (1) year period following his
death, to exercise such Options.

       

      In no
event, however, shall any Option be exercisable more than ten (10) years (or
five (5) years for Options subject to Section 8.09(b) hereof) from the date it
was granted.

       

      8.05           Nonassignability.  Options
shall not be transferable by an Optionee except by will or the laws of descent
or distribution, and during an Optionee's lifetime shall be exercisable only by
such Optionee or the Optionee's guardian or legal
representative.  Notwithstanding the foregoing, or any other provision
of this Plan, an Optionee who holds Non-Qualified Options may transfer such
Options to his or her spouse, lineal ascendants, lineal descendants, or to a
duly established trust for the benefit of one or more of these
individuals.  Options so transferred may thereafter be transferred
only to the Optionee who originally received the grant or to an individual or
trust to whom the Optionee could have initially transferred the Option pursuant
to this Section 8.05.  Options which are transferred pursuant to this
Section 8.05 shall be exercisable by the transferee according to the same terms
and conditions as applied to the Optionee.

       

      
        
          
          

        

        
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      8.06       Manner of
Exercise.  Options may be exercised in part or in whole and at
one time or from time to time.  The procedures for exercise shall be
set forth in the written Stock Option Agreement provided for in Section 8.01
above.

       

      8.07       Payment for
Shares.  Payment in full of the purchase price for shares of
Common Stock purchased pursuant to the exercise of any Option shall be made to
the Corporation upon exercise of the Option.  All shares sold under
the Plan shall be fully paid and nonassessable.  Payment for shares
may be made by the Optionee (i) in cash or by check, (ii) by delivery of a
properly executed exercise notice, together with irrevocable instructions to a
broker to sell the shares and then to properly deliver to the Corporation the
amount of sale proceeds to pay the exercise price, all in accordance with
applicable laws and regulations, or (iii) at the discretion of the Committee, by
delivering shares of Common Stock (including shares acquired pursuant to the
exercise of an Option) equal in Fair Market Value to the purchase price of the
shares to be acquired pursuant to the Option, by withholding some of the shares
of Common Stock which are being purchased upon exercise of an Option, or any
combination of the foregoing.  With respect to subclause (iii) hereof,
the shares of Common Stock delivered to pay the purchase price must have either
been (x) purchased in open market transactions or (y) issued by the Corporation
pursuant to a plan thereof more than six months prior to the exercise date of
the Option.

       

      8.08      Voting and Dividend
Rights.  No Optionee shall have any voting or dividend rights
or other rights of a stockholder in respect of any shares of Common Stock
covered by an Option prior to the time that his name is recorded on the
Corporation's stockholder ledger as the holder of record of such shares acquired
pursuant to an exercise of an Option.

       

      8.09      Additional Terms
Applicable to Incentive Stock Options.  All Options issued
under the Plan as Incentive Stock Options will be subject, in addition to the
terms detailed in Sections 8.01 to 8.08 above, to those contained in this
Section 8.09.

       

      (a)           Amount
Limitation.  Notwithstanding any contrary provisions contained
elsewhere in this Plan and as long as required by Section 422 of the Code, the
aggregate Fair Market Value, determined as of the time an Incentive Stock Option
is granted, of the Common Stock with respect to which Incentive Stock Options
are exercisable for the first time by the Optionee during any calendar year
under this Plan, and stock options that satisfy the requirements of Section 422
of the Code under any other stock option plan or plans maintained by the
Corporation (or any parent or Subsidiary Company), shall not exceed
$100,000.

       

      (b)           Limitation on Ten
Percent Stockholders.  The price at which shares of Common
Stock may be purchased upon exercise of an Incentive Stock Option granted to an
individual who, at the time such Incentive Stock Option is granted, owns,
directly or indirectly, more than ten percent (10%) of the total combined voting
power of all classes of stock issued to stockholders of the Corporation or any
Subsidiary Company, shall be no less than one hundred and ten percent (110%) of
the Fair Market Value of a share of the Common Stock of the Corporation at the
time of grant, and such Incentive Stock Option shall by its terms not be
exercisable after the earlier of the date determined under Section 8.04 or the
expiration of five (5) years from the date such Incentive Stock Option is
granted.

       

      
        
          
          

        

        
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      (c)           Notice of
Disposition; Withholding; Escrow.  An Optionee shall
immediately notify the Corporation in writing of any sale, transfer, assignment
or other disposition (or action constituting a disqualifying disposition within
the meaning of Section 421 of the Code) of any shares of Common Stock acquired
through exercise of an Incentive Stock Option, within two (2) years after the
grant of such Incentive Stock Option or within one (1) year after the
acquisition of such shares, setting forth the date and manner of disposition,
the number of shares disposed of and the price at which such shares were
disposed of.  The Corporation shall be entitled to withhold from any
compensation or other payments then or thereafter due to the Optionee such
amounts as may be necessary to satisfy any withholding requirements of federal
or state law or regulation and, further, to collect from the Optionee any
additional amounts which may be required for such purpose.  The
Committee or the Board may, in its discretion, require shares of Common Stock
acquired by an Optionee upon exercise of an Incentive Stock Option to be held in
an escrow arrangement for the purpose of enabling compliance with the provisions
of this Section 8.09(c).

       

      8.10     Stock
Appreciation Rights.

       

      (a)           General Terms and
Conditions.  The Board or the Committee may, but shall not be
obligated to, authorize the Corporation, on such terms and conditions as it
deems appropriate in each case, to grant rights to Optionees to surrender an
exercisable Option, or any portion thereof, in consideration for the payment by
the Corporation of an amount equal to the excess of the Fair Market Value of the
shares of Common Stock subject to the Option, or portion thereof, surrendered
over the exercise price of the Option with respect to such shares (any such
authorized surrender and payment being hereinafter referred to as a "Stock
Appreciation Right").  Such payment, at the discretion of the Board or
the Committee, may be made in shares of Common Stock valued at the then Fair
Market Value thereof, or in cash, or partly in cash and partly in shares of
Common Stock.

       

      The terms
and conditions with respect to a Stock Appreciation Right may include (without
limitation), subject to other provisions of this Section 8.10 and the Plan: the
period during which, date by which or event upon which the Stock Appreciation
Right may be exercised; the method for valuing shares of Common Stock for
purposes of this Section 8.10; a ceiling on the amount of consideration which
the Corporation may pay in connection with exercise and cancellation of the
Stock Appreciation Right; and arrangements for income tax
withholding.  The Board or the Committee shall have complete
discretion to determine whether, when and to whom Stock Appreciation Rights may
be granted.

       

      (b)           Time
Limitations.  If a holder of a Stock Appreciation Right
terminates service with the Corporation as an Officer or Employee, the Stock
Appreciation Right may be exercised only within the period, if any, within which
the Option to which it relates may be exercised.

       

      
        
          
          

        

        
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      (c)           Effects of Exercise
of Stock Appreciation Rights or Options.  Upon the exercise of
a Stock Appreciation Right, the number of shares of Common Stock available under
the Option to which it relates shall decrease by a number equal to the number of
shares for which the Stock Appreciation Right was exercised. Upon the exercise
of an Option, any related Stock Appreciation Right shall terminate as to any
number of shares of Common Stock subject to the Stock Appreciation Right that
exceeds the total number of shares for which the Option remains
unexercised.

       

      (d)           Time of
Grant.  A Stock Appreciation Right granted in connection with
an Incentive Stock Option must be granted concurrently with the Option to which
it relates, and a Stock Appreciation Right granted in connection with a
Non-Qualified Option must also be granted concurrently with the Option to which
it relates.

       

      (e)           Non-Transferable.  The
holder of a Stock Appreciation Right may not transfer or assign the Stock
Appreciation Right otherwise than by will or in accordance with the laws of
descent and distribution, and during a holder's lifetime a Stock Appreciation
Right may be exercisable only by the holder.

       

      ARTICLE
IX

      ADJUSTMENTS
FOR CAPITAL CHANGES

       

      9.01 General
Adjustments.  The aggregate number of shares of Common Stock
available for issuance under this Plan, the number of shares to which any
outstanding Award relates, the maximum number of shares that can be covered by
Awards to each Employee and each Non-Employee Director and the exercise price
per share of Common Stock under any outstanding Option or Stock Appreciation
Right shall be proportionately adjusted for any increase or decrease in the
total number of outstanding shares of Common Stock issued subsequent to the
Effective Date of this Plan resulting from a split, subdivision or consolidation
of shares or any other capital adjustment, the payment of a stock dividend, or
other increase or decrease in such shares effected without receipt or payment of
consideration by the Corporation.

       

      9.02           Adjustments for
Mergers and Other Corporate Transactions. If, upon a merger,
consolidation, reorganization, liquidation, recapitalization or the like of the
Corporation, the shares of the Corporation's Common Stock shall be exchanged for
other securities of the Corporation or of another corporation, each Award shall
be converted, subject to the conditions herein stated, into the right to
purchase or acquire such number of shares of Common Stock or amount of other
securities of the Corporation or such other corporation as were exchangeable for
the number of shares of Common Stock of the Corporation which such optionees
would have been entitled to purchase or acquire except for such action, and
appropriate adjustments shall be made to the per share exercise price of
outstanding Options and Stock Appreciation Rights, provided that in each case
the number of shares or other securities subject to the substituted or assumed
stock options and stock appreciation rights and the exercise price thereof shall
be determined in a manner that satisfies the requirements of Treasury Regulation
§1.424-1 and the regulations issued under Section 409A of the Code so that the
substituted or assumed option is not deemed to be a modification of the
outstanding Options or Stock Appreciation Rights.  Notwithstanding any
provision to the contrary herein, the term of any Option or Stock Appreciation
Right granted hereunder and the property which the Optionee shall receive upon
the exercise or termination thereof shall be subject to and be governed by the
provisions regarding the treatment of any such Options or Stock Appreciation
Rights set forth in a definitive agreement with respect to any of the
aforementioned transactions entered into by the Corporation to the extent any
such Option or Stock Appreciation Right remains outstanding and unexercised upon
consummation of the transactions contemplated by such definitive
agreement.

       

      
        
          
          

        

        
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      ARTICLE
X

      AMENDMENT
AND TERMINATION OF THE PLAN

       

      The Board
may, by resolution, at any time terminate or amend the Plan with respect to any
shares of Common Stock as to which Awards have not been granted, subject to any
required stockholder approval or any stockholder approval which the Board may
deem to be advisable for any reason, such as for the purpose of obtaining or
retaining any statutory or regulatory benefits under tax, securities or other
laws or satisfying any applicable stock exchange listing
requirements.  The Board may not, without the consent of the holder of
an Award, alter or impair any Award previously granted or awarded under this
Plan except as specifically authorized herein.

       

      ARTICLE
XI

      EMPLOYMENT
AND SERVICE RIGHTS

       

      Neither
the Plan nor the grant of any Awards hereunder nor any action taken by the
Committee or the Board in connection with the Plan shall create any right on the
part of any Employee or Non-Employee Director to continue in such
capacity.

       

      ARTICLE
XII

      WITHHOLDING

       

      12.01 Tax
Withholding.  The Corporation may withhold from any cash
payment made under this Plan sufficient amounts to cover any applicable
withholding and employment taxes, and if the amount of such cash payment is
insufficient, the Corporation may require the Optionee to pay to the Corporation
the amount required to be withheld as a condition to delivering the shares
acquired pursuant to an Award.  The Corporation also may withhold or
collect amounts with respect to a disqualifying disposition of shares of Common
Stock acquired pursuant to exercise of an Incentive Stock Option, as provided in
Section 8.09(c).

       

      12.02                       Methods of Tax
Withholding.  The Board or the Committee is authorized to adopt
rules, regulations or procedures which provide for the satisfaction of an
Optionee's tax withholding obligation by the retention of shares of Common Stock
to which the Employee would otherwise be entitled pursuant to an Award and/or by
the Optionee's delivery of previously owned shares of Common Stock or other
property.

       

      
        
          
          

        

        
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      ARTICLE
XIII

      EFFECTIVE
DATE OF THE PLAN; TERM

       

      13.01                      Effective Date of
the Plan.  This Plan as originally adopted became effective on
the Effective Date, and Awards may be granted hereunder no earlier than the date
that this Plan is approved by stockholders of the Corporation and no later than
the termination of the Plan, provided that this Plan is approved by stockholders
of the Corporation pursuant to Article XIV hereof.  The amendment and
restatement of this Plan was adopted effective as of the date set forth in
Article I hereof.

       

      13.02                      Term of the
Plan.  Unless sooner terminated, this Plan shall remain in
effect for a period of ten (10) years ending on the tenth anniversary of the
Effective Date.  Termination of the Plan shall not affect any Awards
previously granted and such Awards shall remain valid and in effect until they
have been fully exercised or earned, are surrendered or by their terms expire or
are forfeited.

       

      ARTICLE
XIV

      STOCKHOLDER
APPROVAL

       

      The
stockholders of the Corporation approved this Plan as originally adopted at a
meeting of stockholders of the Corporation held within twelve (12) months
following the Effective Date in order to meet the requirements of (i) Section
422 of the Code and regulations thereunder, (ii) Section 162(m) of the Code and
regulations thereunder, (iii) the Nasdaq Stock Market for continued quotation of
the Common Stock on the Nasdaq National Market (now the Nasdaq Global Market)
and (iv) the regulations of the Office of Thrift Supervision.

       

      ARTICLE
XV

      MISCELLANEOUS

       

      15.01                      Governing
Law.  To the extent not governed by federal law, this Plan
shall be construed under the laws of the Commonwealth of
Pennsylvania.

       

      15.02                      Pronouns.  Wherever
appropriate, the masculine pronoun shall include the feminine pronoun, and the
singular shall include the plural.

       

       

      
        
          
          

        

        
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