Unassociated Document


    Exhibit
      4.1

    


    ATLANTIC
      LIBERTY FINANCIAL CORP.

    2003
      INCENTIVE STOCK
      BENEFIT PLAN

    


    


    1. PURPOSE.
      The
      purpose of the Atlantic Liberty Financial Corp. 2003 Incentive Stock Benefit
      Plan (the “Plan”) is to (i) provide employees, officers and directors of
      Atlantic Liberty Financial Corp. (the “Company”), Atlantic Liberty Savings, F.
      A. (the “Association”) and any Affiliates of the Company (as defined below),
      with additional incentives to improve the growth and performance of the Company,
      and (ii) to attract and retain qualified and experienced personnel to the
      Company and its Affiliates.

     

    2. TERM.
      The Plan
      shall be effective as of the date of stockholder approval (the “Effective
      Date”), and shall remain in effect for ten years thereafter, unless sooner
      terminated by the Company’s Board of Directors (the “Board”). After termination
      of the Plan, no additional awards may be granted, but previously granted awards
      shall remain outstanding in accordance with their applicable terms and
      conditions and the terms and conditions of the Plan. 

     

    3. PLAN
      ADMINISTRATION. 

     

    (a) Role
      of the Committee.
      The
      Plan shall be administered by the Committee. The Committee shall consist of
      either (i) at least two “Non-Employee Directors” of the Company, or (ii) the
      entire Board of the Company. A “Non-Employee Director” means, for purposes of
      the Plan, a director who: (a) is not employed by the Company or an Affiliate;
      (b) does not receive compensation directly or indirectly from the Company as
      a
      consultant (or in any capacity other than as a director) greater than $60,000;
      (c) does not have an interest in a transaction requiring disclosure under Item
      404(a) of Regulation S-K; or (d) is not engaged in a business relationship
      for
      which disclosure would be required pursuant to Item 404(b) of Regulation S-K.
      The interpretation and construction by the Committee of any provisions of the
      Plan or of any Award granted hereunder shall be final and binding, except as
      set
      forth herein below. 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 and procedures as it deems
      appropriate for the conduct of its affairs. The Committee shall have the power
      to interpret and implement the Plan and any rules, regulations, guidelines
      or
      agreements adopted hereunder, and to adopt such rules, regulations and
      guidelines for carrying out the Plan as it may deem necessary or proper. These
      powers shall include, but not be limited to: (i) determination of the type
      or
      types of awards to be granted under the Plan; (ii) determination of the terms
      and conditions of any awards under the Plan; (iii) determination of whether,
      to
      what extent and under what circumstances awards may be settled, paid or
      exercised in cash, shares, other securities, other awards, other property,
      or
      accelerated, canceled, extended, forfeited or suspended; (iv) adoption of
      modifications, amendments, procedures, and subplans as may be necessary; (v)
      subject to the rights of participants, modification, amendment or cancellation
      of any award to correct an administrative error; and (vi) taking any other
      action the Committee deems necessary or desirable for the administration of
      the
      Plan. The Committee shall report its actions and decisions with respect to
      the
      Plan to the Board at appropriate times, but in no event less than one time
      per
      calendar year.

     

    (b) Role
      of the Board.
      The
      members of the Committee shall be appointed or approved by, and will serve
      at
      the pleasure of, the Board of Directors of the Company. The Board may in its
      discretion from time to time remove members from, or add members to, the
      Committee, subject to the requirements set forth in subsection (a) above. The
      Board shall have all of the powers allocated to it in the Plan, may take any
      action under or with respect to the Plan that the Committee is authorized to
      take, and may reverse or override any action taken or decision made by the
      Committee under or with respect to the Plan;provided,
      however,
      that
      the Board may not revoke any Award except in the event of revocation for Cause
      or with respect to unearned Awards in the event the Recipient of an Award
      voluntarily terminates employment with the Company or its Affiliates prior
      to
      Normal Retirement.

     

    (c) Plan
      Administration Restrictions. All
      transactions involving a grant, award or other acquisitions from the Company
      shall:

     

    (i)          
       be
      approved by the Company’s full Board or by the Committee;

     

    
      	 	
              (ii)

            	
              be
                approved, or ratified, in compliance with Section 14 of the Exchange
                Act,
                by either: the affirmative vote of the holders of a majority of the
                shares
                present, or represented and entitled to vote at a meeting duly held
                in
                accordance with the laws under which the Company is incorporated;
                or the
                written consent of the holders of a majority of the securities of
                the
                issuer entitled to vote, provided that such ratification occurs no
                later
                than the date of the next annual meeting of stockholders; or
                

            


    

     

    
      	 	
              (iii)

            	
              result
                in the acquisition of an Option or Limited Right that is held by
                the
                Recipient for a period of six months following the date of such
                acquisition.

            


    

     

    (d) Limitation
      on Liability.
      No
      member of the Board or the Committee shall be liable for any determination
      made
      in good faith with respect to the Plan 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
      Company or its Affiliates shall indemnify such member against all 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 Company and its Affiliates and, with respect
      to
      any criminal action or proceeding, had no reasonable cause to believe his
      conduct was unlawful.

     

    4. ELIGIBILITY
      TO PARTICIPATE.
      Officers
      and employees of the Company and its Affiliates shall be eligible to receive
      Incentive Stock Options, Non-Statutory Stock Options, Stock Awards, Limited
      Rights, Reload Options and /or Dividend Equivalent Rights under the Plan
      (collectively, “awards”). Outside directors shall be eligible to receive
      Non-Statutory Stock Options, Reload Options, Dividend Equivalent Rights and
      Stock Awards under the Plan. The term “Company” includes
      any entity that is directly or indirectly controlled by the Company or any
      entity in which the Company has a significant equity interest, as determined
      by
      the Committee. The term “Affiliate” means any “parent corporation” or
“subsidiary corporation” of the Company within the meaning of Sections 424(e)
      and (f) of the Internal Revenue Code (“Code”), respectively. An “outside
      director” means a director of the Company or an Affiliate who is not an employee
      of the Company or an Affiliate.

     

    5. SHARES
      OF STOCK SUBJECT TO THE PLAN.
      256,648
      shares of common stock of the Company (“Common Stock”) in the aggregate are
      reserved for issuance under the Plan, which shares shall be available for
      issuance (subject to adjustment as provided in Section 6) pursuant to the
      exercise of Stock Options, granted under Sections 7(a) and 7(c) of the Plan,
      or
      Stock Awards, under Section 7(d) of the Plan. The maximum number of Stock
      Options that may be granted to any one employee of the Company is 60,000.


     

    Any
      shares that are issued by the Company, and any awards that are granted by,
      or
      become obligations of, the Company, through the assumption by the Company or
      an
      Affiliate thereof, or in substitution for, outstanding awards previously granted
      by an acquired company, shall not be counted against the shares available for
      issuance under the Plan. In addition, any shares that are used for the full
      or
      partial payment of the exercise price of any option or in full or partial
      payment of a tax-withholding obligation under the Plan will not be counted
      as
      issued under the Plan and will be available for future grants under the
      Plan.

     

    Any
      shares issued under the Plan may consist, in whole or in part, of authorized
      and
      unissued shares, treasury shares or shares purchased by the Plan. No fractional
      shares shall be issued under the Plan. Cash may be paid in lieu of any
      fractional shares in settlement of awards under the Plan.

     

    6. ADJUSTMENTS.

     

    If
      the
      number of outstanding shares of Common Stock is increased or decreased or the
      shares of Common Stock are changed into or exchanged for a different number
      or
      kind of shares or other securities of the Company on account of any
      recapitalization, reclassification, stock split, reverse split, combination
      of
      shares, exchange of shares, stock dividend or other distribution payable in
      capital stock, or other increase or decrease in such shares effected without
      receipt of consideration by the Company occurring after the Effective Date,
      the
      number and kinds of shares for which grants of awards may be made under the
      Plan
      shall be adjusted proportionately and accordingly by the Company. In addition,
      the number and kind of shares for which grants are outstanding shall be adjusted
      proportionately and accordingly so that the proportionate interest of the
      grantee immediately following such event shall, to the extent practicable,
      be
      the same as immediately before such event. Any such adjustment in outstanding
      Stock Options shall not change the aggregate Stock Option purchase price payable
      with respect to shares that are subject to the unexercised portion of the Stock
      Option outstanding but shall include a corresponding proportionate adjustment
      in
      the Stock Option purchase price per share.

     

    Adjustments
      under this Section 6 relating to shares of Common Stock or securities of the
      Company shall be made by the Committee, whose determination in that respect
      shall be final, binding and conclusive. No fractional shares or other securities
      shall be issued pursuant to any such adjustment, and any fractions resulting
      from any such adjustment shall be eliminated in each case by rounding downward
      to the nearest whole share. The granting of awards pursuant to the Plan shall
      not affect or limit in any way the right or power of the Company to make
      adjustments, reclassifications, reorganizations, or changes of its capital
      or
      business structure or to merge, consolidate, dissolve, or liquidate, or to
      sell
      or transfer all or any part of its business or assets.

     

    7. AWARDS.
      The
      Committee shall determine the type or types of award(s) to be made to each
      participant under the Plan and shall approve the terms and conditions governing
      these awards in accordance with Section 11. Awards may be granted singly, in
      combination or in tandem so that the settlement or payment of one automatically
      reduces or cancels the other. The types of awards that may be made under the
      Plan are set forth below.

     

    (a) “Stock
      Option”
      - means
      a grant of a right to purchase a specified number of shares of Common Stock
      under the Plan during a specified period. A Stock Option may be in the form
      of
      an “Incentive Stock Option”, which means a Stock Option granted by the Committee
      that complies with Section 422 of the Code, as amended, and the regulations
      thereunder at the time of grant, or of a Non-Statutory Stock Option, as defined
      in this paragraph. A “Non-Statutory Stock Option” means a Stock Option granted
      by the Committee to (i) an outside director or (ii) to any other participant,
      and such option is either (A) not designated by the Committee as an Incentive
      Stock Option, or (B) fails to satisfy the requirements of an Incentive Stock
      Option as set forth in Section 422 of the Code and the regulations thereunder.
      The exercise price of each Stock Option shall be the per share Fair Market
      Value
      of Common Stock on the date the award is granted. However, if a key employee
      owns stock possessing more than 10% of the total combined voting power of all
      classes of stock of the Company or its Affiliates (or under Section 424(d)
      of
      the Code, is deemed to own stock representing more than 10% of the total
      combined voting power of all classes of stock of the Company or its Affiliates
      by reason of the ownership of such classes of stock, directly or indirectly,
      by
      or for any brother, sister, spouse, ancestor or lineal descendent of such key
      employee, or by or for any corporation, partnership, estate or trust of which
      such key employee is a shareholder, partner or beneficiary), the purchase price
      per share of Common Stock deliverable upon the exercise of each Incentive Stock
      Option shall not be less than 110% of the Fair Market Value of the Company’s
      Common Stock on the date the Incentive Stock Option is granted. A Stock Option
      may be exercised in whole or in installments, which may be cumulative. The
      price
      at which shares of Common Stock may be purchased under a Stock Option shall
      be
      paid in full at the time of the exercise, in either cash or such other methods
      as provided by the Committee at the time of grant or as provided in the form
      of
      agreement approved in accordance herewith, including tendering (either actually
      or by attestation) Common Stock at Fair Market Value on the date of surrender,
      or any combination thereof.

     

    (b) “Limited
      Right”
      - means
      the right to receive an amount of cash based upon the terms set forth in Section
      12. 

     

    (c)  “Reload
      Option”
      - means
      an additional Stock Option granted pursuant to Section 13.

     

    (d) “Dividend
      Equivalent Right”
      means
      the right to receive an amount of cash based upon the terms set forth in Section
      14 hereof.

     

    (e) “Stock
      Award”
      - means
      an award under the Plan, made in stock or denominated in units of stock. All
      or
      part of any Stock Award may be subject to conditions established by the
      Committee, and set forth in the award agreement, which may include, but are
      not
      limited to, continuous service with the Company, achievement of specific
      business objectives, and other measurements of individual, business unit or
      Company performance.

     

    8. DEFERRALS
      AND SETTLEMENTS.
      Payment
      of awards may be in the form of Common Stock or other awards, or in the case
      of
      Limited Rights, cash, or in combinations thereof as the Committee determines
      at
      the time of grant, and with such restrictions as it may impose. No Stock Option
      is to be considered exercised until payment in full is accepted by the
      Committee. The means by which a recipient of an award may make payment is set
      forth below.

     

    (a) Cash
      Payment.
      The
      exercise price may be paid in cash or by certified check. To the extent
      permitted by law, the Committee may permit all or a portion of the exercise
      price of a Stock Option to be paid from borrowed funds.

     

    (b) Cashless
      Exercise.
      Subject
      to vesting requirements, if applicable, a participant may engage in a “cashless
      exercise” of the Stock Option. Upon a cashless exercise, the participant shall
      give the Company written notice of the exercise of the Stock Option together
      with an order to a registered broker-dealer or equivalent third party, to sell
      part or all of the Common Stock subject to the Stock Option and to deliver
      enough of the proceeds to the Company to pay the Stock Option exercise price
      and
      any applicable withholding taxes. If the participant does not sell the Common
      Stock subject to the Stock Option through a registered broker-dealer or
      equivalent third party, the participant may give the Company written notice
      of
      the exercise of the Stock Option and the third-party purchaser of the Common
      Stock subject to the Stock Option shall pay the Stock Option exercise price
      plus
      applicable withholding taxes to the Company.

     

    (c) Exchange
      of Common Stock.
      The
      Committee may permit payment of the Stock Option exercise price by the tendering
      of previously acquired shares of Common Stock. All shares of Common Stock
      tendered in payment of the exercise price of a Stock Option shall be valued
      at
      the Fair Market Value of the Common Stock. No tendered shares of Common Stock
      which were acquired by the participant upon the prior exercise of a Stock Option
      or as awards under this or any other stock award plan sponsored by the Company
      shall be accepted for exchange unless the participant has held such shares
      (without restrictions imposed by said plan or award) for at least six months
      prior to the exchange.

     

    9. FAIR
      MARKET VALUE.“Fair
      Market Value” for all purposes under the Plan shall mean the reported closing
      price of Common Stock as reported by the Nasdaq stock market on such date (as
      reported in The
      Wall Street Journal,
      if
      published), or if the Common Stock was not traded on such date, on the next
      preceding day on which Common Stock was traded thereon. If the Common Stock
      is
      not reported on the Nasdaq stock market, Fair Market Value shall mean the
      average sale price of all shares of Common Stock sold during the 30-day period
      immediately preceding the date on which such stock option was granted, and
      if no
      shares of stock have been sold within such 30-day period, the average sale
      price
      of the last three sales of Common Stock sold during the 90-day period
      immediately preceding the date on which such stock option was granted. In the
      event Fair Market Value cannot be determined in the manner described above,
      then
      Fair Market Value shall be determined by the Committee. The Committee is
      authorized, but is not required, to obtain an independent appraisal to determine
      the Fair Market Value of the Common Stock.

     

    Under
      no
      circumstances shall Fair Market Value be less than the par value of the Common
      Stock.

     

    10. TRANSFERABILITY
      AND EXERCISABILITY. All
      awards under the Plan, other than Non-Statutory Stock Options, will be
      nontransferable and shall not be assignable, alienable, saleable or otherwise
      transferable by the participant other than by will or the laws of descent and
      distribution, except pursuant to a domestic relations order entered by a court
      of competent jurisdiction or as otherwise determined by the Committee.


     

    If
      so
      permitted by the Committee, a participant may designate a beneficiary or
      beneficiaries to exercise his rights under any Stock Option, Reload Option,
      Limited Right or Dividend Equivalent Right who would be entitled to and receive
      any distributions under the Plan upon the participant’s death. However, in the
      case of participants who are subject to Section 16 of the Securities Exchange
      Act 1934 (the “1934 Act”), any contrary requirements of Rule 16b-3 under the
      1934 Act, or any successor rule, shall prevail over the provisions of this
      Section.

     

    Awards
      granted pursuant to the Plan may be exercisable pursuant to a vesting schedule
      as determined by the Committee. The Committee may, in its sole discretion,
      accelerate or extend the time during which any Stock Option may be exercised,
      or
      any Stock Award may vest, in whole or in part, provided, however, that with
      respect to an Incentive Stock Option, it must be consistent with the terms
      of
      Section 422 of the Code in order to continue to qualify as an Incentive Stock
      Option. Notwithstanding the above, in the event of Retirement (as defined in
      Section 26 hereof), death or Disability (as defined in Section 26 hereof),
      all
      awards shall immediately vest. 

     

    11. AWARD
      AGREEMENTS.
      Each
      award of Stock Options, Reload Options, Limited Rights, Dividend Equivalent
      Rights and Stock Award under the Plan shall be evidenced by an agreement that
      is
      approved by the Committee. The agreement must set forth the terms, conditions
      and limitations to an award and the provisions applicable in the event the
      participant’s employment terminates, provided, however, in no event shall the
      term of any Incentive Stock Option exceed a period of ten years from the date
      of
      its grant. If any key employee, at the time an Incentive Stock Option is granted
      to him, owns stock representing more than 10% of the total combined voting
      power
      of all classes of stock of the Company or its Affiliate (or, under Section
      424(d) of the Code, is deemed to own stock representing more than 10% of the
      total combined voting power of all classes of stock, by reason of the ownership
      of such classes of stock, directly or indirectly, by or for any brother, sister,
      spouse, ancestor or lineal descendent of such key employee, or by or for any
      corporation, partnership, estate or trust of which such key employee is a
      shareholder, partner or beneficiary), the Incentive Stock Option granted to
      him
      shall not be exercisable after the expiration of five years from the date of
      grant.

     

    In
      addition, to the extent required by Section 422 of the Code, the aggregate
      Fair
      Market Value (determined at the time the option is granted) of the Common Stock
      for which Incentive Stock Options are exercisable for the first time by a
      participant during any calendar year (under all plans of the Company and its
      Affiliates) shall not exceed $100,000. In the event the amount exercisable
      shall
      exceed $100,000, the first $100,000 of Incentive Stock Options (determined
      as of
      the date of grant) shall be exercisable as Incentive Stock Options and any
      excess shall be exercisable as Non-Statutory Stock Options.

     

    12. LIMITED
      RIGHTS.
      The
      Committee may grant a Limited Right simultaneously with the grant of any Stock
      Option, with respect to all or some of the shares covered by such option.
      Limited Rights granted under the Plan are subject to the following terms and
      conditions:

     

    (a)  Terms
      of Limited Rights.
      A
      Limited Right shall not be exercisable in whole or in part before the expiration
      of six months from the date of grant of the Limited Right. A Limited Right
      may
      be exercised only in the event of a Change in Control of the Company or the
      Association.

     

    The
      Limited Right may be exercised only when the underlying Stock Option is eligible
      to be exercised; provided
      that the
      Fair Market Value of the underlying shares on the day of exercise is greater
      than the exercise price of the related Stock Option. 

     

    Upon
      exercise of a Limited Right, the related Stock Option shall cease to be
      exercisable. Upon exercise or termination of a Stock Option, any related Limited
      Rights shall terminate. The Limited Right may be for no more than 100% of the
      difference between the exercise price and the Fair Market Value of the Common
      Stock subject to the underlying Stock Option. The Limited Right is transferable
      only when the underlying Stock Option is transferable and under the same
      conditions.

     

    (b) Payment.
      Upon
      exercise of a Limited Right, the holder shall promptly receive from the Company
      an amount of cash equal to the positive difference between the Fair Market
      Value
      on the date of grant of the related Stock Option and the Fair Market Value
      of
      the underlying shares on the date the Limited Right is exercised, multiplied
      by
      the number of shares with respect to which such Limited Right is being
      exercised. In the event of a merger transaction, the Limited Right shall be
      exercisable solely for shares of the acquiring corporation or its parent, as
      applicable. The number of shares to be received on the exercise of such Limited
      Right shall be determined by dividing the amount of cash that would have been
      available under the first sentence above by the Fair Market Value at the time
      of
      exercise of the shares underlying the option subject to the Limited
      Right.

     

    13. RELOAD
      OPTION.
      Simultaneously with the grant of any Stock Option to a participant, the
      Committee may grant a Reload Option with respect to all or some of the shares
      covered by such Stock Option. A Reload Option may be granted to a participant
      who satisfies all or part of the exercise price of the Stock Option with shares
      of Common Stock. The Reload Option represents an additional Stock Option to
      acquire the same number of shares of Common Stock used by the participant to
      pay
      for the original Stock Option. Reload Options may also be granted to replace
      Common Stock withheld by the Company for payment of a participant’s withholding
      tax under Section 16. A Reload Option is subject to all of the same terms and
      conditions as the original Stock Option, including the remaining option exercise
      term, except that (i) the exercise price of the shares of Common Stock subject
      to the Reload Option will be determined at the time the original Stock Option
      is
      exercised, and (ii) such Reload Option will conform to all provisions of the
      Plan at the time the original option is exercised.

     

    14. DIVIDEND
      EQUIVALENT RIGHTS.
      Simultaneously with the grant of any Stock Option to a participant, the
      Committee may grant a Dividend Equivalent Right with respect to all or some
      of
      the shares covered by such Stock Option. Dividend Equivalent Rights granted
      under this Plan are subject to the following terms and conditions:

     

    (a)  Terms
      of Rights.
      The
      Dividend Equivalent Right provides the participant with a cash benefit per
      share
      for each share underlying the unexercised portion of the related Stock Option
      equal to the amount of any extraordinary dividend (as defined in Section 14
      (c))
      per share of Common Stock declared by the Company. The terms and conditions
      of
      any Dividend Equivalent Right shall be evidenced in the option agreement entered
      into with the participant and shall be subject to the terms and conditions
      of
      the Plan. The Dividend Equivalent Right is transferable only when the related
      option is transferable and under the same conditions.

     

    (b) Payment.
      Upon
      the payment of an extraordinary dividend, the participant holding a Dividend
      Equivalent Right with respect to Stock Options or portions thereof which have
      vested shall promptly receive from the Company or its Affiliate, as applicable,
      the amount of cash equal to the difference between the amount of the
      extraordinary dividend per share of Common Stock and the average dividend per
      share of Common Stock based on the current and preceding three quarters
      (assuming dividends were paid in each quarter, and if not then based on the
      average of the quarters in the last four quarters in which dividends were paid),
      multiplied by the number of shares of Common Stock underlying the unexercised
      portion of the related Stock Option. With respect to Stock Options or portions
      thereof which have not vested, the amount that would have been received pursuant
      to the Dividend Equivalent Right with respect to the shares underlying such
      unvested Stock Option or portion thereof shall be paid to the participant
      holding such Dividend Equivalent Right together with earnings thereon, on such
      date as the Stock Option or portion thereof becomes vested. Payment of an
      extraordinary dividend will be decreased by the amount of any applicable tax
      withholding prior to distribution to the participant as set forth in Section
      16.

     

    (c) Extraordinary
      Dividend.
      For
      purposes of this Section 14, an extraordinary dividend is any cash dividend
      paid
      on shares of Common Stock where (i) the dividend rate exceeds 200% of the
      Association’s weighted average cost of funds on interest-bearing liabilities for
      the current quarter and preceding three quarters, and (ii) the annualized
      aggregate dollar amount of the dividend exceeds the Association’s net income
      after taxes for the current quarter and preceding three quarters. For purposes
      of this Section 14, the dividend rate equals the quotient, expressed as a
      percentage, of (i) the annualized dollar amount of the dividend, and (ii) the
      last trade price of the Company’s Common Stock on the day immediately before the
      dividend is declared.

     

    15. PLAN
      AMENDMENT.
      The
      Board or the Committee may modify or amend the Plan as it deems necessary or
      appropriate or modify or amend an award received by key employees and/or outside
      directors. No such amendment shall adversely affect any outstanding awards
      under
      the Plan without the consent of the holders thereof.

     

    16. TAX
      WITHHOLDING.
      The
      Company may deduct from any settlement of an award made under the Plan,
      including the delivery or vesting of shares, an amount sufficient to cover
      the
      minimum withholding required by law for any federal, state or local taxes or
      to
      take such other action as may be necessary to satisfy any such withholding
      obligations. The Committee may permit shares to be used to satisfy the minimum
      required tax withholding and such shares shall be valued at the Fair Market
      Value as of the settlement date of the applicable award. 

     

    17. OTHER
      COMPANY BENEFIT AND COMPENSATION PROGRAMS.
      Settlements of awards received by participants under the Plan shall not be
      deemed a part of a participant’s regular, recurring compensation for purposes of
      calculating payments or benefits from any Company benefit plan, severance
      program or severance pay law of any country, unless otherwise determined by
      the
      Committee, or unless the contrary is specifically provided in a Company benefit
      plan that is exempt from tax under Section 401(a) of the Code.

     

    18. UNFUNDED
      PLAN.
      Unless
      otherwise determined by the Committee, the Plan is an unfunded plan. The Plan
      shall not create (or be construed to create) a trust or a separate fund or
      funds. The Plan shall not establish any fiduciary relationship between the
      Company and any participant or other person. To the extent any person holds
      any
      rights by virtue of a grant awarded under the Plan, such right (unless otherwise
      determined by the Committee) shall be no greater than the right of an unsecured
      general creditor of the Company.

     

    19. FUTURE
      RIGHTS.
      No
      person shall have any claim or right to be granted an award under the Plan,
      and
      no participant shall have any rights by reason of the grant of any award under
      the Plan to continued employment by the Company or any subsidiary of the
      Company.

     

    20. GENERAL
      RESTRICTION.
      Each
      award shall be subject to the requirement that, if at any time the Committee
      shall determine, in its sole discretion, that the listing, registration or
      qualification of any award under the Plan upon any securities exchange or under
      any state or federal law, or the consent or approval of any government
      regulatory body, is necessary or desirable as a condition of, or in connection
      with, the granting of such award or the grant or settlement thereof, such award
      may not be exercised or settled in whole or in part unless such listing,
      registration, qualification, consent or approval shall have been effected or
      obtained free of any conditions not acceptable to the Committee.

     

    21. GOVERNING
      LAW.
      The
      validity, construction and effect of the Plan and any actions taken or relating
      to the Plan shall be determined in accordance with the laws of the State of
      Delaware.

     

    22. SUCCESSORS
      AND ASSIGNS.
      The Plan
      shall be binding on all successors and permitted assigns of a participant,
      including, without limitation, the guardian or estate of such participant and
      the executor, administrator or trustee of such estate, or any receiver or
      trustee in bankruptcy or representative of the participant’s
      creditors.

     

    23. RIGHTS
      AS A SHAREHOLDER.
      A
      participant shall have no rights as a shareholder with respect to awards under
      the Plan until he or she becomes the holder of record of shares granted under
      the Plan.

     

    24. CHANGE
      IN CONTROL.
      Notwithstanding anything to the contrary in the Plan, the following shall apply
      to all outstanding awards granted under the Plan in the event of a Change in
      Control:

     

    (a) Definition.
      A
“Change in Control” of the Association or the Company means a change in control
      of a nature that: (i) would be required to be reported in response to Item
      1(a)
      of the current report on Form 8-K, as in effect on the date hereof, pursuant
      to
      Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”);
      or (ii) results in a Change in Control of the Association or the Company within
      the meaning of the Home Owners’ Loan Act, as amended (“HOLA”), and applicable
      rules and regulations promulgated thereunder, as in effect at the time of the
      Change in Control; or (iii) without limitation such a Change in Control shall
      be
      deemed to have occurred at such time as (a) any “person” (as the term is used in
      Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial
      owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
      indirectly, of securities of the Company representing 25% or more of the
      combined voting power of Company’s outstanding securities except for any
      securities purchased by the Association’s employee stock ownership plan or
      trust; or (b) individuals who constitute the Board on the date hereof (the
      “Incumbent Board”) cease for any reason to constitute at least a majority
      thereof, provided
      that any
      person becoming a director subsequent to the date hereof whose election was
      approved by a vote of at least three-quarters of the directors comprising the
      Incumbent Board, or whose nomination for election by the Company’s stockholders
      was approved by the same Nominating Committee serving under an Incumbent Board,
      shall be, for purposes of this clause (b), considered as though he were a member
      of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation,
      sale of all or substantially all the assets of the Association or the Company
      or
      similar transaction in which the Association or Company is not the surviving
      corporation occurs; or (d) a proxy statement soliciting proxies from
      stockholders of the Company, by someone other than the current Board of
      Directors of the Company, seeking stockholder approval of a plan of
      reorganization, merger or consolidation of the Company or similar transaction
      with one or more corporations as a result of which the outstanding shares of
      the
      common stock of the Company are exchanged for or converted into cash or property
      or securities not issued by the Company; or (e) a tender offer is made for
      25%
      or more of the voting securities of the Company and the shareholders owning
      beneficially or of record 25% or more of the outstanding securities of the
      Company have tendered or offered to sell their shares pursuant to such tender
      offer and such tendered shares have been accepted by the tender offeror.


     

    (b) Acceleration
      of Vesting and Payment of Limited Rights.

     

    
      	 	
              (1)

            	
              Upon
                the occurrence of an event constituting a Change in Control, all
                Limited
                Rights, Stock Options, Stock Awards or any other award granted pursuant
                to
                this Plan outstanding on such date shall become 100% vested.
                

            


    

     

    	(2)         
             	
            Upon
              the occurrence of an event constituting a Change in Control involving
              an
              exchange of stock, all Stock Options shall become options to purchase
              the
              exchanged stock at the applicable exchange ratio (with no change in
              the
              aggregate exercise price).

          


     

    (c) Effect
      of a Change in Control on Stock Option Awards.
      In the
      event of a Change in Control, the Committee and the Board of Directors will
      take
      one or more of the following actions to be effective as of the date of such
      Change in Control:

     

    
      	 	
              (1)

            	
              provide
                that such Stock Options shall be assumed, or equivalent stock options
                shall be substituted (“Substitute Options”) by the acquiring or succeeding
                corporation (or an affiliate thereof), provided that: (A) any such
                Substitute Options exchanged for Incentive Stock Options shall meet
                the
                requirements of Section 424(a) of the Code, and (B) the shares of
                stock
                issuable upon the exercise of such Substitute Options shall be registered
                in accordance with the Securities Act of 1933, as amended (“1933 Act”) or
                such securities shall be exempt from such registration in accordance
                with
                Sections 3(a)(2) or 3(a)(5) of the 1933 Act, (collectively, “Registered
                Securities”), or in the alternative, if the securities issuable upon the
                exercise of such Substitute Options shall not constitute Registered
                Securities, then the participant will receive upon consummation of
                the
                Change in Control a cash payment for each Stock Option surrendered
                equal
                to the difference between (1) the fair market value of the consideration
                to be received for each share of Common Stock in the Change in Control
                times the number of shares of Common Stock subject to such surrendered
                Stock Options, and (2) the aggregate exercise price of all such
                surrendered Stock Options; or

            


    

     

    
      	 	
              (2)

            	
              in
                the event of a Change in Control transaction whereby the holders
                of Common
                Stock will receive a cash payment (the “Merger Price”) for each share of
                Common Stock exchanged in the Change in Control transaction, make
                or
                provide for a cash payment to the participants equal to the difference
                between (1) the Merger Price times the number of shares of Common
                Stock
                subject to such Stock Options held by each participant (to the extent
                then
                exercisable at prices not in excess of the Merger Price), and (2)
                the
                aggregate exercise price of all such surrendered Stock
                Options.

            


    

     

    25. COMPLIANCE
      WITH SECTION 16.
      With
      respect to persons subject to Section 16 of the 1934 Act, transactions under
      this Plan are intended to comply with all applicable conditions of Rule 16b-3
      or
      its successors under the 1934 Act. To the extent any provisions of the Plan
      or
      actions of the Committee fail to so comply, it shall be deemed null and void,
      to
      the extent permitted by law and deemed advisable by the Committee.

     

    26. TERMINATION
      OF EMPLOYMENT.
      Upon the
      termination of an employee’s employment for any reason other than Disability,
      Retirement, Change in Control, death or Termination for Cause, the employee’s
      Stock Options shall be exercisable, but only as to those shares that were
      immediately purchasable by, or vested in, such employee at the date of
      termination, and such options may be exercised only for a period of three (3)
      months following such termination. Upon the termination of an employee’s service
      because of Disability, Retirement, Change in Control or death, the employee’s
      Stock Options shall be exercisable as to all shares whether or not then
      exercisable, and the employee’s Stock Awards shall vest as to all shares subject
      to an outstanding award, whether or not otherwise immediately vested in such
      employee at the date of termination and options may be exercised for a period
      of
      five (5) years following termination. Notwithstanding anything to the contrary
      herein, in no event shall the exercise period extend beyond the expiration
      of
      the Stock Option term. In the event of termination of employment or service
      for
      Cause (as defined herein) all rights and awards granted to an employee or
      director under the Plan not exercised or vested shall expire upon
      termination.

     

    No
      option
      shall be eligible for treatment as an Incentive Stock Option in the event such
      option is exercised more than three (3) months following the date of the
      employee’s Retirement or termination of employment following a Change in
      Control; and
      provided further,
      that no
      option shall be eligible for treatment as an Incentive Stock Option in the
      event
      such option is exercised more than one year following termination of employment
      due to Disability, and provided further, in order to obtain Incentive Stock
      Option treatment for options exercised by heirs or devisees of an optionee,
      the
      optionee’s death must have occurred while employed or within three (3) months of
      termination of employment. 

     

    “Disability”
      means, with respect to an employee, the permanent and total inability by reason
      of mental or physical infirmity or both, of an employee to perform the work
      customarily assigned to him. Additionally, a medical doctor selected or approved
      by the Board of Directors must advise the Committee that it is either not
      possible to determine when such Disability will terminate or that it appears
      probable that such Disability will be permanent during the remainder of the
      employee’s lifetime.

     

    “Retirement”
      means, with respect to an employee, retirement at the normal or early retirement
      date set forth in the Association’s employee stock ownership plan, or as
      determined by the Board of Directors, or such other time as determined by
      written resolution of the Committee. 

     

    Termination
      “for Cause” means the termination upon personal dishonesty, willful misconduct,
      any breach of fiduciary duty involving personal profit, intentional failure
      to
      perform stated duties, or the willful violation of any law, rule or regulation
      (other than traffic violations or similar offenses) or a final cease-and-desist
      order, any of which results in a material loss to the Company or an
      Affiliate.

     

    27. TERMINATION
      OF SERVICE AS A DIRECTOR. Upon
      the
      termination of a director’s service for any reason other than Disability,
      Retirement, Change in Control, death or Termination for Cause, the director’s
      Stock Options shall be exercisable, but only as to those shares that were
      immediately purchasable by, or vested in, such director at the date of
      termination, and options may be exercised for a period of one (1) year following
      termination of service, and all of the director’s unvested Stock Awards shall be
      forfeited. In the event of termination of service for Cause (as defined above)
      all rights granted to the director under the Plan not exercised by or vested
      in
      such director shall expire upon termination of service. Upon the termination
      of
      a director’s service because of Retirement, Disability, Change in Control or
      death, the director’s Stock Options shall be exercisable as to all shares,
      whether or not then exercisable, and the director’s Stock Awards shall vest as
      to all shares subject to an outstanding award, whether or not otherwise
      immediately vested in such director at the date of termination, and options
      may
      be exercised for a period of five (5) years following such termination. In
      no
      event shall the exercise period extend beyond the expiration of the Stock Option
      term.

     

    “Disability”
      means, with respect to an outside director, the permanent and total inability
      by
      reason of mental or physical infirmity or both, of a director to carry out
      the
      responsibilities of a director of the Company or an Affiliate, as required
      by
      applicable state and federal law.

     

    “Retirement”
      means, with respect to a director, retirement on or after attainment of age
      sixty-five (65) or seven (7) years of service at the Company or an Affiliate,
      or
      such other time as determined by written resolution of the Committee.


     

    “Termination
      for Cause” has the same meaning as set forth under Paragraph 26
      above.