Document:

Exhibit 4.1

 

FIDELITY & TRUST FINANCIAL
CORPORATION

 

2004 LONG-TERM INCENTIVE PLAN

 

1.            Purpose of the Plan

 

The purpose of the Fidelity &
Trust Financial Company 2004 Long-Term Incentive Plan is to promote the
interests of the Company and its stockholders by strengthening the Company’s
ability to attract, motivate, and retain personnel upon whose judgment,
initiative, and efforts the financial success and growth of the business of the
Company largely depend, to offer such personnel additional incentives to put
forth maximum efforts for the success of the business, and to afford them an
opportunity to acquire a proprietary interest in the Company through stock
ownership and other rights.

 

2.            Definitions

 

Wherever the following
capitalized terms are used in this Plan, they shall have the meanings specified
below:

 

(a)          “Award” means an award of an Option, Restricted Stock
Award or Stock Appreciation Right granted under the Plan.

 

(b)          “Award Agreement” means an agreement entered into
between the Company and a Participant setting forth the terms and conditions of
an Award granted to a Participant.

 

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

 

(d)          “Change in Control” shall have the meaning specified
in Section 9 hereof.

 

(e)          “Code” means the Internal Revenue Code of 1986, as
amended.

 

(f)           “Common Stock” means the common stock of the Company.

 

(g)          “Company” means Fidelity & Trust Financial
Company, a Maryland corporation.

 

(h)          “Date of Grant” means the date on which an Award is
made by the Board, or such later date as the Board may specify to be the
effective date of the Award.

 

(i)           “Effective Date” means the Effective Date of this
Plan, as set forth in Section 12.1 hereof.

 

(j)           “Eligible Person” means any person who is an Employee
of the Company or any of its Subsidiaries and, in the case of Awards other than
Incentive Stock Options, any consultant or other independent contractor and any
non-employee director providing services to the Company or a Subsidiary.

 

(k)          “Employee” means any person who is employed by the
Company or a Subsidiary as a common-law employee and whose wages are reported
on a Form W-2.  The Company
classification as to who is an Employee shall be determinative for purposes of
an individual’s eligibility under the Plan.

 

(l)           “Exchange Act” means the Securities Exchange Act of
1934, as amended.

 

(m)         “Fair Market Value” of a share of Common Stock as of a
given date means:

 

(i)                          if the Common Stock is publicly traded,
the closing sales price (or, if there is no such price, the average of the highest
bid and lowest asked prices) of the Common Stock on the last trading 

 

1

 

day immediately preceding
the date as of which fair market value is to be determined as reported by the
principal exchange or market on which the Common Stock is traded, or, in the
absence of any reported sales of shares of Common Stock on such date, on the
first preceding date on which any such sale shall have been reported; or

 

(ii)           if the Common Stock is not publicly traded, the fair
market value of the Common Stock as the Board shall determine in good faith.

 

(n)          “Incentive Stock Option” means an option to purchase
Common Stock that is intended to qualify as an incentive stock option under
section 422 of the Code and the Treasury Regulations thereunder.

 

(o)          “Nonqualified Stock Option” means an option to
purchase Common Stock that is not an Incentive Stock Option.

 

(p)          “Option” means an Award of an Incentive Stock Option
or a Nonqualified Stock Option granted under Section 6 hereof.

 

(q)          “Participant” means any Eligible Person who holds an
outstanding Award under the Plan.

 

(r)           “Plan” means this Fidelity & Trusty Financial
Corporation 2004 Long-Term Incentive Plan as set forth herein, as it may be
amended from time to time.

 

(s)          “Restricted Stock Award” means an Award granted under Section 8
hereof.

 

(t)           “Stock Appreciation Right” or “SAR” means an Award
granted under Section 7 hereof.

 

(u)          “Subsidiary” means an entity (whether or not a
corporation) that is wholly or majority owned or controlled, directly or
indirectly, by the Company, or any other affiliate of the Company that is so
designated, from time to time, by the Board; provided, however, that with
respect to Incentive Stock Options, the term “Subsidiary” shall include only an
entity that qualifies under section 424(f) of the Code as a “subsidiary
corporation” with respect to the Company.

 

3.            Shares of Common Stock Subject to the
Plan

 

3.1           Number of Shares. 
Subject to Section 3.2, the aggregate number of shares of Common Stock
that may be issued pursuant to all Awards under the Plan is 315,500 shares of
Common Stock.  The shares of Common Stock
to be delivered under the Plan will be made available from authorized but
unissued shares of Common Stock or issued shares that have been reacquired by
the Company. To the extent that any Award payable in Common Stock is forfeited,
cancelled, returned to the Company for failure to satisfy vesting requirements
or upon the occurrence of other forfeiture events, or otherwise terminates without
payment being made thereunder, shares of Common Stock covered thereby will no
longer be charged against the foregoing maximum share limitation and may again
be made subject to Awards under the Plan pursuant to such limitation.

 

3.2           Adjustments. 
If there shall occur any recapitalization, reclassification, stock
dividend, stock split, reverse stock split, or other distribution with respect
to the shares of Common Stock, or other change in corporate structure affecting
the Common Stock, the Board may, in the manner and to the extent that it deems
appropriate and equitable to the Participants and consistent with the terms of
this Plan, cause an adjustment to be made in: (i) the maximum number and
kind of shares provided in Section 3.1 hereof; (ii) the number and
kind of shares of Common Stock or other rights subject to then outstanding
Awards; (iii) the price for each share or other right subject to then
outstanding Awards; or (iv) any other terms of an Award that are affected
by the event. Notwithstanding the foregoing, in the case of Incentive Stock
Options, any such adjustments shall be made in a manner consistent with the
requirements of section 424(a) of the Code.

 

2

 

4.            Administration of the Plan

 

4.1           Board.  The Plan
shall be administered by the Board. The Board shall have such powers and
authority as may be necessary or appropriate for the Board to carry out its
functions as described in the Plan.  No
member of the Board shall be liable for any action or determination made in
good faith by the Board with respect to the Plan or any Award thereunder.
Except to the extent prohibited by applicable law or the applicable rules of
a stock exchange, the Board shall have the right, power and authority to
delegate administration of the Plan, in whole or in part, to a committee of the
Board, subject to such limitations as the Board shall determine.

 

4.2           Discretionary Authority. 
Subject to the express limitations of the Plan, the Board shall have
authority, in its sole discretion, to determine the Eligible Persons to whom,
and the time or times at which, Awards may be granted, the number of shares or
other rights subject to each Award, the exercise, base or purchase price of an
Award (if any), the time or times at which an Award will become vested,
exercisable or payable, the duration of the Award, and all other terms and
conditions of the Award. The Board shall also have discretionary authority to
interpret the Plan, to make all factual determinations under the Plan, and to
make all other determinations necessary or advisable for Plan administration.
The Board may prescribe, amend, and rescind rules and regulations relating
to the Plan. All interpretations, determinations, and actions by the Board
shall be final, conclusive, and binding upon all parties.

 

4.3           Changes to Awards. 
The Board shall have the authority to affect, at any time and from time
to time: (i) the cancellation of any or all outstanding Awards and the
grant in substitution therefor of new Awards covering the same or different
numbers of shares of Common Stock and having an exercise or base price which
may be the same as or different than the exercise or base price of the
cancelled Awards; or (ii) the amendment of the terms of any and all
outstanding Awards; provided, however, that no such action by the
Board may adversely impair the rights of a Participant (or any permitted
transferee) under any outstanding Award without the consent of the Participant
(or transferee). The Board may in its discretion accelerate the vesting or
exercisability of an Award at any time or on the basis of any specified event.

 

5.            Eligibility and Awards

 

All Eligible Persons are
eligible to be designated by the Board to receive an Award under the Plan. The
Board has authority, in its sole discretion, to determine and designate from
time to time those Eligible Persons who are to be granted Awards, the types of
Awards to be granted and the number of shares subject to the Awards that are
granted under the Plan. Each Award will be evidenced by an Award Agreement
between the Company and the Participant that shall include such terms and
conditions (consistent with the Plan) as the Board may determine; provided,
however, that failure to issue an Award Agreement shall not invalidate
an Award.

 

6.            Stock Options

 

6.1           Grant of Option. 
An Option may be granted to any Eligible Person selected by the Board; provided,
however, that only Employees of the Company or a Subsidiary shall be
eligible to receive Incentive Stock Options. Subject to the applicable
provisions of section 422 of the Code, each Option shall be designated, in the
discretion of the Board, as an Incentive Stock Option or a Nonqualified Stock
Option.

 

6.2           Exercise Price. 
The exercise price under any Option shall be determined by the Board; provided,
however, that the exercise price per share under an Incentive Stock
Option shall not be less than 100 percent of the Fair Market Value per share of
the Common Stock on the Date of Grant.

 

6.3           Vesting Term of Option. 
The Board, in its sole discretion, shall prescribe the time or times at
which, or the conditions upon which, an Option shall become vested and
exercisable, and may accelerate the exercisability of any Option at any time.
The period during which a vested Option may be exercised shall be ten years
from the Date of Grant, unless a shorter exercise period is specified by the
Board in an Award Agreement, subject to such limitations as may apply under an
Award relating to the termination of a Participant’s employment or other service
with the Company or any Subsidiary.

 

3

 

6.4          Option Exercise and Withholding. 
Subject to such terms and conditions as shall be specified in an Award
Agreement, an Option may be exercised in whole or in part at any time during
the term thereof by written notice to the Company, together with payment of the
aggregate exercise price therefor. Payment of the exercise price shall be made:
(i) in cash or by check; (ii) at the discretion of the Board, in
shares of Common Stock acceptable to the Board, valued at the Fair Market Value
of such shares on the date of exercise; (iii) at the discretion of the
Board, by a combination of the methods described above; or (iv) by such
other method as may be approved by the Board from time to time. In addition to
and at the time of payment of the exercise price, the Participant shall pay to
the Company the full amount of any and all applicable income tax and employment
tax amounts required to be withheld in connection with such exercise, payable
under such of the methods described above for the payment of the exercise price
of the Options as may be approved by the Board.

 

6.5          Limited Transferability of Nonqualified
Options.  All Options shall be nontransferable except: (i) upon
the Participant’s death, by the Participant’s will or the laws of descent and
distribution; or (ii) in the case of Nonqualified Stock Options only, on a
case-by-case basis as may be approved by the Board in its discretion.

 

6.6          Additional Rules for Incentive Stock
Options.

 

(a)           Annual Limits.  No Incentive
Stock Option shall be granted to a Participant as a result of which the
aggregate Fair Market Value (determined as of the Date of Grant) of the stock
with respect to which Incentive Stock Options are exercisable for the first
time in any calendar year under the Plan and any other stock option plans of
the Company or any Subsidiary, would exceed the maximum amount permitted under
section 422(d) of the Code. This limitation shall be applied by taking
Options into account in the order in which granted.

 

(b)           Termination of Employment. 
An Award of an Incentive Stock Option may provide that such Option may
be exercised not later than three months following termination of employment of
the Participant with the Company and all Subsidiaries, subject to special rules relating
to death and disability, as and to the extent determined by the Board to be
appropriate with regard to the requirements of section 422 of the Code and
Treasury Regulations thereunder.

 

(c)           Other Terms and Conditions; Nontransferability. 
Any Incentive Stock Option granted hereunder shall contain such
additional terms and conditions, not inconsistent with the terms of this Plan,
as are deemed necessary or desirable by the Board, which terms, together with
the terms of this Plan, shall be intended and interpreted to cause such
Incentive Stock Option to qualify as an “incentive stock option” under section
422 of the Code. Such terms shall include, if applicable, limitations on
Incentive Stock Options granted to ten-percent owners of the Company. An Award
Agreement for an Incentive Stock Option may provide that such Option shall be
treated as a Nonqualified Stock Option to the extent that certain requirements
applicable to “incentive stock options” under the Code shall not be satisfied.
An Incentive Stock Option shall by its terms be nontransferable otherwise than
by will or by the laws of descent and distribution, and shall be exercisable
during the lifetime of a Participant only by such Participant.

 

(d)           Disqualifying Dispositions. 
If shares of Common Stock acquired by exercise of an Incentive Stock
Option are disposed of within two years following the Date of Grant or one year
following the transfer of such shares to the Participant upon exercise, the
Participant shall, promptly following such disposition, notify the Company in
writing of the date and terms of such disposition and provide such other
information regarding the disposition as the Board may reasonably require.

 

7.            Stock Appreciation Rights

 

7.1           Grant of SARs. 
A Stock Appreciation Right granted to a Participant is an Award in the
form of a right to receive, upon surrender of the right but without other
payment, an amount based on appreciation in the Fair Market Value of the Common
Stock over a base price established for the Award, exercisable at such time or
times and upon conditions as may be approved by the Board.

 

7.2           Tandem SARs. 
A Stock Appreciation Right may be granted in connection with an Option,
either at the time of grant or at any time thereafter during the term of the
Option.  An SAR granted in connection
with an 

 

4

 

Option will
entitle the holder, upon exercise, to surrender such Option or any portion thereof
to the extent unexercised, with respect to the number of shares as to which
such SAR is exercised, and to receive payment of an amount computed as
described in Section 7.4 hereof. 
Such Option will, to the extent and when surrendered, cease to be
exercisable.  An SAR granted in
connection with an Option hereunder will have a base price per share equal to
the per share exercise price of the Option, will be exercisable at such time or
times, and only to the extent, that a related Option is exercisable, and will
expire no later than the related Option expires.

 

7.3           Freestanding SARs. 
A Stock Appreciation Right may be granted without any related Option
and, in such case, will be exercisable as determined by the Board, but in no
event after 10 years from the Date of Grant. 
The base price of an SAR granted without any related Option shall be
determined by the Board in its sole discretion; provided, however,
that the base price per share of any such freestanding SAR shall not be less
than 100 percent of the Fair Market Value of the Common Stock on the Date of
Grant.

 

7.4           Payment of SARs. 
An SAR will entitle the holder, upon exercise of the SAR, to receive
payment of an amount determined by multiplying: (i) the excess of the Fair
Market Value of a share of Common Stock on the date of exercise of the SAR over
the base price of such SAR, by (ii) the number of shares to which such SAR
is exercised.  Payment of the amount
determined under the foregoing may be made, in the discretion of the Board, in
cash, in shares of Common stock valued at their Fair Market Value on the date
of exercise, or in a combination of cash and shares of Common Stock.

 

8.            Restricted Stock Award

 

8.1           Grant of Restricted Stock Awards. 
An Award of Restricted Stock to a Participant represents shares of
Common Stock that are issued subject to such restrictions on transfer and other
incidents of ownership and such forfeiture conditions as the Board may
determine. The Board may, in connection with any Restricted Stock Award,
require the payment of a specified purchase price.

 

8.2           Vesting Requirements. 
The restrictions imposed on shares granted under a Restricted Stock
Award shall lapse in accordance with the vesting requirements specified by the
Board in the Award Agreement. Such vesting requirements may be based on the continued
employment of the Participant with the Company or its Subsidiaries for a
specified time period or periods, provided that any such restriction shall not
be scheduled to lapse in its entirety earlier than the first anniversary of the
Date of Grant. Such vesting requirements may also be based on the attainment of
specified business goals or measures established by the Board in its sole
discretion.

 

8.3           Restrictions. 
Shares granted under any Restricted Stock Award may not be transferred,
assigned or subject to any encumbrance, pledge, or charge until all applicable
restrictions are removed or have expired, unless otherwise allowed by the
Board. The Board may require the Participant to enter into an escrow agreement
providing that the certificates representing the shares granted or sold under a
Restricted Stock Award will remain in the physical custody of an escrow holder
until all restrictions are removed or have expired. Failure to satisfy any
applicable restrictions shall result in the subject shares of the Restricted
Stock Award being forfeited and returned to the Company, with any purchase
price paid by the Participant to be refunded, unless otherwise provided by the
Board. The Board may require that certificates representing the shares granted
under a Restricted Stock Award bear a legend making appropriate reference to
the restrictions imposed.

 

8.4           Rights as Stockholder. 
Subject to the foregoing provisions of this Section 8 and the
applicable Award Agreement, the Participant will have all rights of a
stockholder with respect to the shares granted to him under a Restricted Stock
Award, including the right to vote the shares and receive all dividends and
other distributions paid or made with respect thereto, unless the Board
determines otherwise at the time the Restricted Stock Award is granted.

 

8.5           Section 83(b) Election. 
The Board may provide in an Award Agreement that the Restricted Stock
Award is conditioned upon the Participant’s refraining from making an election
with respect to the Award under section 83(b) of the Code. Irrespective of
whether an Award is so conditioned, if a Participant makes an election pursuant
to section 83(b) of the Code with respect to a Restricted Stock Award, the
Participant shall be required to promptly file a copy of such election with the
Company.

 

5

 

9.            Change in Control

 

9.1           Effect of Change in Control. 
The Board may, in an Award Agreement, provide for the effect of a “Change
in Control” of the Company (as defined below) on an Award. Such provisions may
include any one or more of the following: (i) the acceleration or
extension of time periods for purposes of exercising, vesting in, or realizing
gain from any Award; (ii) the elimination or modification of conditions related
to the payment or other rights under an Award; (iii) provision for the
cash settlement of an Award for an equivalent cash value, as determined by the
Board; or (iv) such other modification or adjustment to an Award as the
Board deems appropriate to maintain and protect the rights and interests of
Participants upon or following a Change in Control.

 

9.2           Definition of Change in Control. 
For purposes hereof a “Change in Control” of the Company shall mean:

 

(i)            an acquisition subsequent to the Effective Date hereof
by any individual, entity or group (within the meaning of section 13(d)(3) or
14(d)(2) of the Exchange Act (a “Person”)) of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of
twenty-five percent (25%) or more of either (A) the then outstanding
shares of Common Stock or (B) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”); excluding,
however, the following: (1) any acquisition directly from the Company,
other than an acquisition by virtue of the exercise of a conversion privilege
unless the security being so converted was itself acquired directly from the
Company, (2) any acquisition by the Company and (3) any acquisition
by an employee benefit plan (or related trust) sponsored or maintained by the
Company or any Subsidiary;

 

(ii)          during any period of two (2) consecutive years
(not including any period prior to the Effective Date), individuals who at the
beginning of such period constitute the Board (and any new directors whose
election by the Board or nomination for election by the Company’s stockholders
was approved by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors at the beginning of the period or whose
election or nomination for election was so approved) cease for any reason
(except for death, disability or voluntary retirement) to constitute a majority
thereof;

 

(iii)         the consummation of a merger, consolidation,
reorganization or similar corporate transaction which has been approved by the
stockholders of the Company, whether or not the Company is the surviving
Company in such transaction, other than a merger, consolidation, or
reorganization 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 entity) at least fifty percent (50%) of the combined voting power of
the voting securities of the Company (or such surviving entity) outstanding
immediately after such merger, consolidation, or reorganization;

 

(iv)         the approval by the stockholders of the Company of (A) the
sale or other disposition of all or substantially all of the assets of the
Company or (B) a complete liquidation or dissolution of the Company; or

 

(v)          adoption by the Board of a resolution to the effect
that any person has acquired effective control of the business and affairs of
the Company.

 

6

 

10.          Award Agreements

 

10.1         Form of Agreement. 
Each Award under this Plan shall be evidenced by an Award Agreement in a
form approved by the Board setting forth the number of shares of Common Stock
or other rights (as applicable) subject to the Award, the exercise, base, or
purchase price (if any) of the Award, the time or times at which an Award will
become vested, exercisable or payable, and the duration of the Award. The Award
Agreement shall also set forth other material terms and conditions applicable
to the Award as determined by the Board consistent with the limitations of this
Plan. Award Agreements evidencing Incentive Stock Options shall contain such
terms and conditions as may be necessary to meet the applicable provisions of
section 422 of the Code.

 

10.2         Forfeiture Events. 
The Board 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
conditions of an Award. Such events shall include, but shall not be limited to,
termination of employment for cause, violation of material Company or
Subsidiary policies, breach of noncompetition, confidentiality or other
restrictive covenants that may apply to the Participant, or other conduct by
the Participant that is detrimental to the business or reputation of the
Company or any Subsidiary.

 

11.          General Provisions

 

11.1         No Assignment or Transfer: Beneficiaries. 
Except as provided in Section 6.5 hereof, Awards under the Plan
shall not be assignable or transferable, except by will or by the laws of
descent and distribution, and during the lifetime of a Participant, the Award
shall be exercised only by such Participant or by his guardian or legal
representative. Notwithstanding the foregoing, the Board may provide in the
terms of an Award Agreement that the Participant shall have the right to
designate a beneficiary or beneficiaries who shall be entitled to any rights or
payments specified under an Award following the Participant’s death.

 

11.2         Deferrals of Payment. 
Notwithstanding any other provisions of the Plan, the Board may permit a
Participant to defer the receipt of payment of cash or delivery of shares of
Common Stock that would otherwise be due to the Participant by virtue of the
exercise of a right or the satisfaction of vesting or other conditions with
respect to an Award. If any such deferral is to be permitted by the Board, the
Board shall establish the rules and procedures relating to such deferral,
including, without limitation, the period of time in advance of payment when an
election to defer may be made, the time period of the deferral and the events
that would result in payment of the deferred amount, the interest or other
earnings attributable to the deferral and the method of funding, if any,
attributable to the deferred amount.

 

11.3         Rights as Stockholder. 
A Participant shall have no rights as a holder of Common Stock with
respect to any unissued securities covered by an Award until the date the
Participant becomes the holder of record of such securities. Except as provided
in Section 3.2 hereof, no adjustment or other provision shall be made for
dividends or other stockholder rights.

 

11.4         Employment or Service. 
Nothing in the Plan, in the grant of any Award or in any Award Agreement
shall confer upon any Eligible Person the right to continue in the capacity in
which he is employed by, or otherwise serves, the Company or any Subsidiary.

 

11.5         Securities Laws. 
No shares of Common Stock will be issued or transferred pursuant to an
Award unless and until all then applicable requirements imposed by federal and
state securities and other laws, rules and regulations and by any
regulatory agencies having jurisdiction, and by any stock exchanges upon which
the Common Stock may be listed, have been fully met. As a condition precedent
to the issuance of shares pursuant to the grant or exercise of an Award, the
Company may require the Participant to take any reasonable action to meet such
requirements. The Board may impose such conditions on any shares of Common
Stock issuable under the Plan as it may deem advisable, including, without
limitation, restrictions under the Securities Act of 1933, as amended, under
the requirements of any stock exchange upon which such shares of the same class
are then listed, and under any blue sky or other securities laws applicable to
such shares.  The Company reserves the
right to legend any 

 

7

 

certificate for
shares of Common Stock, conditioning sales of such shares upon compliance with
applicable federal and state securities laws and regulations.

 

11.6         Tax Withholding. 
The Participant shall be responsible for payment of any taxes or similar
charges required by law to be withheld from an Award or an amount paid in
satisfaction of an Award, which shall be paid by the Participant on or prior to
the payment or other event that results in taxable income in respect of an
Award. The Award Agreement shall specify the manner in which the withholding
obligation shall be satisfied with respect to the particular type of Award.

 

11.7         Unfunded Plan. 
The adoption of this Plan and any setting aside of cash amounts or
shares of Common Stock by the Company with which to discharge its obligations
hereunder shall not be deemed to create a trust or other funded arrangement.
The benefits provided under this Plan shall be a general, unsecured obligation
of the Company payable solely from the general assets of the Company, and
neither a Participant nor the Participant’s permitted transferees or estate
shall have any interest in any assets of the Company by virtue of this Plan,
except as a general unsecured creditor of the Company. Notwithstanding the
foregoing, the Company shall have the right to implement or set aside funds in
a grantor trust, subject to the claims of the Company’s creditors, to discharge
its obligations under the Plan.

 

11.8         Other Compensation and Benefit Plans. 
The adoption of the Plan shall not affect any other stock incentive or
other compensation plans in effect for the Company or any Subsidiary, nor shall
the Plan preclude the Company from establishing any other forms of stock
incentive or other compensation for employees of the Company or any Subsidiary.
The amount of any compensation deemed to be received by a Participant pursuant
to an Award shall not constitute compensation with respect to which any other
employee benefits of such Participant are determined, including, without
limitation, benefits under any bonus, pension, profit sharing, life insurance
or salary continuation plan, except as otherwise specifically provided by the
terms of such plan.

 

11.9         Plan Binding on Transferees. 
The Plan shall be binding upon the Company, its transferees and assigns,
and the Participant, his executor, administrator and permitted transferees and
beneficiaries.

 

11.10       Construction and Interpretation. 
Whenever used herein, nouns in the singular shall include the plural,
and the masculine pronoun shall include the feminine gender. Headings of
Articles and Sections hereof are inserted for convenience and reference and
constitute no part of the Plan.

 

11.11       Severability. 
If any provision of the Plan or any Award Agreement shall be determined
to be illegal or unenforceable by any court of law in any jurisdiction, the
remaining provisions hereof and thereof shall be severable and enforceable in
accordance with their terms, and all provisions shall remain enforceable in any
other jurisdiction.

 

11.12       Governing Law. 
The validity and construction of this Plan and of the Award Agreements
shall be governed by the laws of the State of Maryland.

 

12.          Effective Date, Termination and
Amendment

 

12.1         Effective Date: Stockholder Approval. 
The Plan shall become effective on the date of its adoption by the
Board; provided, however, that no Incentive Stock Option shall be
exercisable by a Participant unless and until the Plan shall have been approved
by the stockholders of the Company, which approval shall be obtained within 12
months before or after the adoption of the Plan by the Board.

 

12.2         Termination. 
The Plan shall terminate on the date immediately preceding the tenth
anniversary of the date the Plan is adopted by the Board. The Board may, in its
sole discretion and at any earlier date, terminate the Plan.  Notwithstanding the foregoing, no termination
of the Plan shall adversely affect any Award theretofore granted without the
consent of the Participant or the permitted transferee of the Award.

 

8

 

12.3         Amendment.  The Board may
at any time and from time to time and in any respect, amend or modify the Plan;
provided, however, the Board may seek the approval of any
amendment or modification by the Company’s stockholders to the extent it deems
necessary or advisable in its sole discretion for purposes of compliance with
section 422 of the Code, the listing requirements of any stock exchange or for
any other purpose. No amendment or modification of the Plan shall adversely
affect any Award theretofore granted without the consent of the Participant or
the permitted transferee of the Award.

 

9Exhibit 4.2

 

FIDELITY & TRUST FINANCIAL CORPORATION

 

2005 LONG-TERM INCENTIVE PLAN

 

1.                                      Purpose of the Plan

 

The purpose of the Fidelity & Trust Financial
Company 2005 Long-Term Incentive Plan is to promote the interests of the
Company and its stockholders by strengthening the Company’s ability to attract,
motivate, and retain personnel upon whose judgment, initiative, and efforts the
financial success and growth of the business of the Company largely depend, to
offer such personnel additional incentives to put forth maximum efforts for the
success of the business, and to afford them an opportunity to acquire a
proprietary interest in the Company through stock ownership and other rights.

 

2.                                      Definitions

 

Wherever the following capitalized terms are used in this
Plan, they shall have the meanings specified below:

 

(a)                                  “Award” means an award of an Option,
Restricted Stock Award or Stock Appreciation Right granted under the Plan.

 

(b)                                 “Award Agreement” means an agreement
entered into between the Company and a Participant setting forth the terms and
conditions of an Award granted to a Participant.

 

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

 

(d)                                 “Change in Control” shall have the
meaning specified in Section 9 hereof.

 

(e)                                  “Code” means the Internal Revenue Code of
1986, as amended.

 

(f)                                    “Common Stock” means the common stock of
the Company.

 

(g)                                 “Company” means Fidelity & Trust
Financial Company, a Maryland corporation.

 

(h)                                 “Date of Grant” means the date on which
an Award is made by the Board, or such later date as the Board may specify to
be the effective date of the Award.

 

(i)                                     “Effective Date” means the Effective Date
of this Plan, as set forth in Section 12.1 hereof.

 

(j)                                     “Eligible Person” means any person who is
an Employee of the Company or any of its Subsidiaries and, in the case of
Awards other than Incentive Stock Options, any consultant or other independent
contractor and any non-employee director providing services to the Company or a
Subsidiary.

 

(k)                                  “Employee” means any person who is
employed by the Company or a Subsidiary as a common-law employee and whose
wages are reported on a Form W-2. 
The Company classification as to who is an Employee shall be
determinative for purposes of an individual’s eligibility under the Plan.

 

(l)                                     “Exchange Act” means the Securities
Exchange Act of 1934, as amended.

 

(m)                               “Fair Market Value” of a share of Common
Stock as of a given date means:

 

(i)                                     if the Common Stock is publicly traded,
the closing sales price (or, if there is no such price, the average of the highest
bid and lowest asked prices) of the Common Stock on the last trading day

 

1

 

immediately preceding the date as of which fair market
value is to be determined as reported by the principal exchange or market on
which the Common Stock is traded, or, in the absence of any reported sales of
shares of Common Stock on such date, on the first preceding date on which any
such sale shall have been reported; or

 

(ii)                                  if the Common Stock is not publicly
traded, the fair market value of the Common Stock as the Board shall determine
in good faith.

 

(n)                                 “Incentive Stock Option” means an option
to purchase Common Stock that is intended to qualify as an incentive stock
option under section 422 of the Code and the Treasury Regulations thereunder.

 

(o)                                 “Nonqualified Stock Option” means an
option to purchase Common Stock that is not an Incentive Stock Option.

 

(p)                                 “Option” means an Award of an Incentive
Stock Option or a Nonqualified Stock Option granted under Section 6 hereof.

 

(q)                                 “Participant” means any Eligible Person
who holds an outstanding Award under the Plan.

 

(r)                                    “Plan” means this Fidelity &
Trusty Financial Corporation 2005 Long-Term Incentive Plan as set forth herein,
as it may be amended from time to time.

 

(s)                                  “Restricted Stock Award” means an Award
granted under Section 8 hereof.

 

(t)                                    “Stock Appreciation Right” or “SAR” means
an Award granted under Section 7 hereof.

 

(u)                                 “Subsidiary” means an entity (whether or
not a corporation) that is wholly or majority owned or controlled, directly or
indirectly, by the Company, or any other affiliate of the Company that is so
designated, from time to time, by the Board; provided, however, that with
respect to Incentive Stock Options, the term “Subsidiary” shall include only an
entity that qualifies under section 424(f) of the Code as a “subsidiary
corporation” with respect to the Company.

 

3.                                      Shares of Common Stock
Subject to the Plan

 

3.1                                 Number of Shares. 
Subject to Section 3.2, the aggregate number of shares of Common Stock
that may be issued pursuant to all Awards under the Plan is 211,500 shares of
Common Stock.  The shares of Common Stock
to be delivered under the Plan will be made available from authorized but
unissued shares of Common Stock or issued shares that have been reacquired by
the Company. To the extent that any Award payable in Common Stock is forfeited,
cancelled, returned to the Company for failure to satisfy vesting requirements
or upon the occurrence of other forfeiture events, or otherwise terminates without
payment being made thereunder, shares of Common Stock covered thereby will no
longer be charged against the foregoing maximum share limitation and may again
be made subject to Awards under the Plan pursuant to such limitation.

 

3.2                                 Adjustments. 
If there shall occur any recapitalization, reclassification, stock
dividend, stock split, reverse stock split, or other distribution with respect
to the shares of Common Stock, or other change in corporate structure affecting
the Common Stock, the Board may, in the manner and to the extent that it deems
appropriate and equitable to the Participants and consistent with the terms of
this Plan, cause an adjustment to be made in: (i) the maximum number and
kind of shares provided in Section 3.1 hereof; (ii) the number and
kind of shares of Common Stock or other rights subject to then outstanding
Awards; (iii) the price for each share or other right subject to then
outstanding Awards; or (iv) any other terms of an Award that are affected
by the event. Notwithstanding the foregoing, in the case of Incentive Stock
Options, any such adjustments shall be made in a manner consistent with the
requirements of section 424(a) of the Code.

 

2

 

4.                                      Administration of the
Plan

 

4.1                                 Board.  The Plan
shall be administered by the Board. The Board shall have such powers and
authority as may be necessary or appropriate for the Board to carry out its
functions as described in the Plan.  No
member of the Board shall be liable for any action or determination made in
good faith by the Board with respect to the Plan or any Award thereunder.
Except to the extent prohibited by applicable law or the applicable rules of
a stock exchange, the Board shall have the right, power and authority to delegate
administration of the Plan, in whole or in part, to a committee of the Board,
subject to such limitations as the Board shall determine.

 

4.2                                 Discretionary Authority. 
Subject to the express limitations of the Plan, the Board shall have
authority, in its sole discretion, to determine the Eligible Persons to whom,
and the time or times at which, Awards may be granted, the number of shares or
other rights subject to each Award, the exercise, base or purchase price of an
Award (if any), the time or times at which an Award will become vested,
exercisable or payable, the duration of the Award, and all other terms and
conditions of the Award. The Board shall also have discretionary authority to
interpret the Plan, to make all factual determinations under the Plan, and to
make all other determinations necessary or advisable for Plan administration.
The Board may prescribe, amend, and rescind rules and regulations relating
to the Plan. All interpretations, determinations, and actions by the Board
shall be final, conclusive, and binding upon all parties.

 

4.3                                 Changes to Awards. 
The Board shall have the authority to affect, at any time and from time
to time: (i) the cancellation of any or all outstanding Awards and the
grant in substitution therefor of new Awards covering the same or different
numbers of shares of Common Stock and having an exercise or base price which
may be the same as or different than the exercise or base price of the
cancelled Awards; or (ii) the amendment of the terms of any and all
outstanding Awards; provided, however, that no such action by the
Board may adversely impair the rights of a Participant (or any permitted
transferee) under any outstanding Award without the consent of the Participant
(or transferee). The Board may in its discretion accelerate the vesting or
exercisability of an Award at any time or on the basis of any specified event.

 

5.                                      Eligibility and Awards

 

All Eligible Persons are eligible to be designated by
the Board to receive an Award under the Plan. The Board has authority, in its
sole discretion, to determine and designate from time to time those Eligible
Persons who are to be granted Awards, the types of Awards to be granted and the
number of shares subject to the Awards that are granted under the Plan. Each
Award will be evidenced by an Award Agreement between the Company and the
Participant that shall include such terms and conditions (consistent with the
Plan) as the Board may determine; provided,  however, that failure
to issue an Award Agreement shall not invalidate an Award.

 

6.                                      Stock Options

 

6.1                                 Grant of Option. 
An Option may be granted to any Eligible Person selected by the Board; provided,
however, that only Employees of the Company or a Subsidiary shall be
eligible to receive Incentive Stock Options. Subject to the applicable
provisions of section 422 of the Code, each Option shall be designated, in the
discretion of the Board, as an Incentive Stock Option or a Nonqualified Stock
Option.

 

6.2                                 Exercise Price. 
The exercise price under any Option shall be determined by the Board; provided,
however, that the exercise price per share under an Incentive Stock
Option shall not be less than 100 percent of the Fair Market Value per share of
the Common Stock on the Date of Grant.

 

6.3                                 Vesting Term of Option. 
The Board, in its sole discretion, shall prescribe the time or times at
which, or the conditions upon which, an Option shall become vested and
exercisable, and may accelerate the exercisability of any Option at any time.
The period during which a vested Option may be exercised shall be ten years
from the Date of Grant, unless a shorter exercise period is specified by the
Board in an Award Agreement, subject to such limitations as may apply under an
Award relating to the termination of a Participant’s employment or other service
with the Company or any Subsidiary.

 

3

 

6.4                                 Option Exercise and Withholding. 
Subject to such terms and conditions as shall be specified in an Award
Agreement, an Option may be exercised in whole or in part at any time during
the term thereof by written notice to the Company, together with payment of the
aggregate exercise price therefor. Payment of the exercise price shall be made:
(i) in cash or by check; (ii) at the discretion of the Board, in
shares of Common Stock acceptable to the Board, valued at the Fair Market Value
of such shares on the date of exercise; (iii) at the discretion of the
Board, by a combination of the methods described above; or (iv) by such
other method as may be approved by the Board from time to time. In addition to
and at the time of payment of the exercise price, the Participant shall pay to
the Company the full amount of any and all applicable income tax and employment
tax amounts required to be withheld in connection with such exercise, payable
under such of the methods described above for the payment of the exercise price
of the Options as may be approved by the Board.

 

6.5                                 Limited Transferability of Nonqualified
Options.  All Options shall be nontransferable except: (i) upon
the Participant’s death, by the Participant’s will or the laws of descent and
distribution; or (ii) in the case of Nonqualified Stock Options only, on a
case-by-case basis as may be approved by the Board in its discretion.

 

6.6                                 Additional Rules for Incentive Stock
Options.

 

(a)                                  Annual Limits. 
No Incentive Stock Option shall be granted to a Participant as a result
of which the aggregate Fair Market Value (determined as of the Date of Grant)
of the stock with respect to which Incentive Stock Options are exercisable for
the first time in any calendar year under the Plan and any other stock option
plans of the Company or any Subsidiary, would exceed the maximum amount
permitted under section 422(d) of the Code. This limitation shall be
applied by taking Options into account in the order in which granted.

 

(b)                                 Termination of Employment. 
An Award of an Incentive Stock Option may provide that such Option may
be exercised not later than three months following termination of employment of
the Participant with the Company and all Subsidiaries, subject to special rules relating
to death and disability, as and to the extent determined by the Board to be
appropriate with regard to the requirements of section 422 of the Code and
Treasury Regulations thereunder.

 

(c)                                  Other Terms and Conditions;
Nontransferability.  Any Incentive Stock Option granted hereunder
shall contain such additional terms and conditions, not inconsistent with the
terms of this Plan, as are deemed necessary or desirable by the Board, which
terms, together with the terms of this Plan, shall be intended and interpreted
to cause such Incentive Stock Option to qualify as an “incentive stock option”
under section 422 of the Code. Such terms shall include, if applicable,
limitations on Incentive Stock Options granted to ten-percent owners of the
Company. An Award Agreement for an Incentive Stock Option may provide that such
Option shall be treated as a Nonqualified Stock Option to the extent that
certain requirements applicable to “incentive stock options” under the Code
shall not be satisfied. An Incentive Stock Option shall by its terms be
nontransferable otherwise than by will or by the laws of descent and
distribution, and shall be exercisable during the lifetime of a Participant
only by such Participant.

 

(d)                                 Disqualifying Dispositions. 
If shares of Common Stock acquired by exercise of an Incentive Stock
Option are disposed of within two years following the Date of Grant or one year
following the transfer of such shares to the Participant upon exercise, the
Participant shall, promptly following such disposition, notify the Company in
writing of the date and terms of such disposition and provide such other
information regarding the disposition as the Board may reasonably require.

 

7.                                      Stock Appreciation Rights

 

7.1                                 Grant of SARs. 
A Stock Appreciation Right granted to a Participant is an Award in the
form of a right to receive, upon surrender of the right but without other
payment, an amount based on appreciation in the Fair Market Value of the Common
Stock over a base price established for the Award, exercisable at such time or
times and upon conditions as may be approved by the Board.

 

7.2                                 Tandem SARs. 
A Stock Appreciation Right may be granted in connection with an Option,
either at the time of grant or at any time thereafter during the term of the
Option.  An SAR granted in connection
with an 

 

4

 

Option will entitle the
holder, upon exercise, to surrender such Option or any portion  thereof to the extent unexercised, with
respect to the number of shares as to which such SAR is exercised, and to
receive payment of  an amount computed as
described in Section 7.4 hereof. 
Such Option will, to the extent and when surrendered, cease to be
exercisable.  An SAR granted in
connection with an Option hereunder will have a base price per share equal to
the per share exercise price of the Option, will be exercisable at such time or
times, and only to the extent, that a related Option is exercisable, and will
expire no later than the related Option expires.

 

7.3                                 Freestanding SARs. 
A Stock Appreciation Right may be granted without any related Option
and, in such case, will be exercisable as determined by the Board, but in no
event after 10 years from the Date of Grant. 
The base price of an SAR granted without any related Option shall be
determined by the Board in its sole discretion; provided, however,
that the base price per share of any such freestanding SAR shall not be less
than 100 percent of the Fair Market Value of the Common Stock on the Date of
Grant.

 

7.4                                 Payment of SARs. 
An SAR will entitle the holder, upon exercise of the SAR, to receive
payment of an amount determined by multiplying: (i) the excess of the Fair
Market Value of a share of Common Stock on the date of exercise of the SAR over
the base price of such SAR, by (ii) the number of shares to which such SAR
is exercised.  Payment of the amount
determined under the foregoing may be made, in the discretion of the Board, in
cash, in shares of Common stock valued at their Fair Market Value on the date
of exercise, or in a combination of cash and shares of Common Stock.

 

8.                                      Restricted Stock Award

 

8.1                                 Grant of Restricted Stock Awards. 
An Award of Restricted Stock to a Participant represents shares of
Common Stock that are issued subject to such restrictions on transfer and other
incidents of ownership and such forfeiture conditions as the Board may
determine. The Board may, in connection with any Restricted Stock Award,
require the payment of a specified purchase price.

 

8.2                                 Vesting Requirements. 
The restrictions imposed on shares granted under a Restricted Stock
Award shall lapse in accordance with the vesting requirements specified by the
Board in the Award Agreement. Such vesting requirements may be based on the
continued employment of the Participant with the Company or its Subsidiaries
for a specified time period or periods, provided that any such restriction
shall not be scheduled to lapse in its entirety earlier than the first
anniversary of the Date of Grant. Such vesting requirements may also be based
on the attainment of specified business goals or measures established by the
Board in its sole discretion.

 

8.3                                 Restrictions. 
Shares granted under any Restricted Stock Award may not be transferred,
assigned or subject to any encumbrance, pledge, or charge until all applicable
restrictions are removed or have expired, unless otherwise allowed by the
Board. The Board may require the Participant to enter into an escrow agreement
providing that the certificates representing the shares granted or sold under a
Restricted Stock Award will remain in the physical custody of an escrow holder
until all restrictions are removed or have expired. Failure to satisfy any
applicable restrictions shall result in the subject shares of the Restricted
Stock Award being forfeited and returned to the Company, with any purchase
price paid by the Participant to be refunded, unless otherwise provided by the
Board. The Board may require that certificates representing the shares granted
under a Restricted Stock Award bear a legend making appropriate reference to
the restrictions imposed.

 

8.4                                 Rights as Stockholder. 
Subject to the foregoing provisions of this Section 8 and the
applicable Award Agreement, the Participant will have all rights of a
stockholder with respect to the shares granted to him under a Restricted Stock
Award, including the right to vote the shares and receive all dividends and
other distributions paid or made with respect thereto, unless the Board
determines otherwise at the time the Restricted Stock Award is granted.

 

8.5                                 Section 83(b) Election. 
The Board may provide in an Award Agreement that the Restricted Stock
Award is conditioned upon the Participant’s refraining from making an election
with respect to the Award under section 83(b) of the Code. Irrespective of
whether an Award is so conditioned, if a Participant makes an election pursuant
to section 83(b) of the Code with respect to a Restricted Stock Award, the
Participant shall be required to promptly file a copy of such election with the
Company.

 

5

 

9.                                      Change in Control

 

9.1                                 Effect of Change in Control. 
The Board may, in an Award Agreement, provide for the effect of a “Change
in Control” of the Company (as defined below) on an Award. Such provisions may
include any one or more of the following: (i) the acceleration or
extension of time periods for purposes of exercising, vesting in, or realizing
gain from any Award; (ii) the elimination or modification of conditions
related to the payment or other rights under an Award; (iii) provision for
the cash settlement of an Award for an equivalent cash value, as determined by
the Board; or (iv) such other modification or adjustment to an Award as
the Board deems appropriate to maintain and protect the rights and interests of
Participants upon or following a Change in Control.

 

9.2                                 Definition of Change in Control. 
For purposes hereof a “Change in Control” of the Company shall mean:

 

(i)                                    an acquisition subsequent to the Effective
Date hereof by any individual, entity or group (within the meaning of section
13(d)(3) or 14(d)(2) of the Exchange Act (a “Person”)) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of twenty-five percent (25%) or more of either (A) the then
outstanding shares of Common Stock or (B) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the “Outstanding Company Voting Securities”);
excluding, however, the following: (1) any acquisition directly from the
Company, other than an acquisition by virtue of the exercise of a conversion
privilege unless the security being so converted was itself acquired directly
from the Company, (2) any acquisition by the Company and (3) any
acquisition by an employee benefit plan (or related trust) sponsored or
maintained by the Company or any Subsidiary;

 

(ii)                                 during any period of two (2) consecutive
years (not including any period prior to the Effective Date), individuals who
at the beginning of such period constitute the Board (and any new directors
whose election by the Board or nomination for election by the Company’s
stockholders was approved by a vote of at least two-thirds
(2/3) of the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was so
approved) cease for any reason (except for death, disability or voluntary
retirement) to constitute a majority thereof;

 

(iii)                              the consummation of a merger,
consolidation, reorganization or similar corporate transaction which has been
approved by the stockholders of the Company, whether or not the Company is the
surviving Company in such transaction, other than a merger, consolidation, or
reorganization 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 entity) at least fifty percent (50%) of the combined voting power of
the voting securities of the Company (or such surviving entity) outstanding
immediately after such merger, consolidation, or reorganization;

 

(iv)                             the approval by the stockholders of the
Company of (A) the sale or other disposition of all or substantially all
of the assets of the Company or (B) a complete liquidation or dissolution
of the Company; or

 

(v)                                adoption by the Board of a resolution to
the effect that any person has acquired effective control of the business and
affairs of the Company.

 

10.                               Award Agreements

 

10.1                           Form of Agreement. 
Each Award under this Plan shall be evidenced by an Award Agreement in a
form approved by the Board setting forth the number of shares of Common Stock
or other rights (as applicable) subject to the Award, the exercise, base, or
purchase price (if any) of the Award, the time or times at which an Award will
become vested, exercisable or payable, and the duration of the Award. The Award
Agreement shall also 

 

6

 

set forth other material
terms and conditions applicable to the Award as determined by the Board
consistent with the limitations of this Plan. Award Agreements evidencing
Incentive Stock Options shall contain such terms and conditions as may be
necessary to meet the applicable provisions of section 422 of the Code.

 

10.2                           Forfeiture Events. 
The Board 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
conditions of an Award. Such events shall include, but shall not be limited to,
termination of employment for cause, violation of material Company or
Subsidiary policies, breach of noncompetition, confidentiality or other
restrictive covenants that may apply to the Participant, or other conduct by
the Participant that is detrimental to the business or reputation of the
Company or any Subsidiary.

 

11.                               General Provisions

 

11.1                           No Assignment or Transfer: Beneficiaries. 
Except as provided in Section 6.5 hereof, Awards under the Plan
shall not be assignable or transferable, except by will or by the laws of
descent and distribution, and during the lifetime of a Participant, the Award
shall be exercised only by such Participant or by his guardian or legal
representative. Notwithstanding the foregoing, the Board may provide in the
terms of an Award Agreement that the Participant shall have the right to
designate a beneficiary or beneficiaries who shall be entitled to any rights or
payments specified under an Award following the Participant’s death.

 

11.2                           Deferrals of Payment. 
Notwithstanding any other provisions of the Plan, the Board may permit a
Participant to defer the receipt of payment of cash or delivery of shares of
Common Stock that would otherwise be due to the Participant by virtue of the
exercise of a right or the satisfaction of vesting or other conditions with
respect to an Award. If any such deferral is to be permitted by the Board, the
Board shall establish the rules and procedures relating to such deferral,
including, without limitation, the period of time in advance of payment when an
election to defer may be made, the time period of the deferral and the events
that would result in payment of the deferred amount, the interest or other
earnings attributable to the deferral and the method of funding, if any,
attributable to the deferred amount.

 

11.3                           Rights as Stockholder. 
A Participant shall have no rights as a holder of Common Stock with
respect to any unissued securities covered by an Award until the date the
Participant becomes the holder of record of such securities. Except as provided
in Section 3.2 hereof, no adjustment or other provision shall be made for
dividends or other stockholder rights.

 

11.4                           Employment or Service. 
Nothing in the Plan, in the grant of any Award or in any Award Agreement
shall confer upon any Eligible Person the right to continue in the capacity in
which he is employed by, or otherwise serves, the Company or any Subsidiary.

 

11.5                           Securities Laws. 
No shares of Common Stock will be issued or transferred pursuant to an
Award unless and until all then applicable requirements imposed by federal and
state securities and other laws, rules and regulations and by any
regulatory agencies having jurisdiction, and by any stock exchanges upon which
the Common Stock may be listed, have been fully met. As a condition precedent
to the issuance of shares pursuant to the grant or exercise of an Award, the
Company may require the Participant to take any reasonable action to meet such
requirements. The Board may impose such conditions on any shares of Common
Stock issuable under the Plan as it may deem advisable, including, without
limitation, restrictions under the Securities Act of 1933, as amended, under
the requirements of any stock exchange upon which such shares of the same class
are then listed, and under any blue sky or other securities laws applicable to
such shares.  The Company reserves the
right to legend any certificate for shares of Common Stock, conditioning sales
of such shares upon compliance with applicable federal and state securities
laws and regulations.

 

11.6                           Tax Withholding. 
The Participant shall be responsible for payment of any taxes or similar
charges required by law to be withheld from an Award or an amount paid in
satisfaction of an Award, which shall be paid by the Participant on or prior to
the payment or other event that results in taxable income in respect of an
Award. The Award Agreement shall specify the manner in which the withholding
obligation shall be satisfied with respect to the particular type of Award.

 

7

 

11.7                           Unfunded Plan. 
The adoption of this Plan and any setting aside of cash amounts or
shares of Common Stock by the Company with which to discharge its obligations
hereunder shall not be deemed to create a trust or other funded arrangement.
The benefits provided under this Plan shall be a general, unsecured obligation
of the Company payable solely from the general assets of the Company, and
neither a Participant nor the Participant’s permitted transferees or estate
shall have any interest in any assets of the Company by virtue of this Plan,
except as a general unsecured creditor of the Company. Notwithstanding the
foregoing, the Company shall have the right to implement or set aside funds in
a grantor trust, subject to the claims of the Company’s creditors, to discharge
its obligations under the Plan.

 

11.8                           Other Compensation and Benefit Plans. 
The adoption of the Plan shall not affect any other stock incentive or
other compensation plans in effect for the Company or any Subsidiary, nor shall
the Plan preclude the Company from establishing any other forms of stock
incentive or other compensation for employees of the Company or any Subsidiary.
The amount of any compensation deemed to be received by a Participant pursuant
to an Award shall not constitute compensation with respect to which any other
employee benefits of such Participant are determined, including, without
limitation, benefits under any bonus, pension, profit sharing, life insurance
or salary continuation plan, except as otherwise specifically provided by the
terms of such plan.

 

11.9                           Plan Binding on Transferees. 
The Plan shall be binding upon the Company, its transferees and assigns,
and the Participant, his executor, administrator and permitted transferees and
beneficiaries.

 

11.10                     Construction and Interpretation. 
Whenever used herein, nouns in the singular shall include the plural,
and the masculine pronoun shall include the feminine gender. Headings of
Articles and Sections hereof are inserted for convenience and reference and
constitute no part of the Plan.

 

11.11                     Severability. 
If any provision of the Plan or any Award Agreement shall be determined
to be illegal or unenforceable by any court of law in any jurisdiction, the
remaining provisions hereof and thereof shall be severable and enforceable in
accordance with their terms, and all provisions shall remain enforceable in any
other jurisdiction.

 

11.12                     Governing Law. 
The validity and construction of this Plan and of the Award Agreements
shall be governed by the laws of the State of Maryland.

 

12.                               Effective Date,
Termination and Amendment

 

12.1                           Effective Date: Stockholder Approval. 
The Plan shall become effective on the date of its adoption by the
Board; provided, however, that no Incentive Stock Option shall be
exercisable by a Participant unless and until the Plan shall have been approved
by the stockholders of the Company, which approval shall be obtained within 12
months before or after the adoption of the Plan by the Board.

 

12.2                           Termination. 
The Plan shall terminate on the date immediately preceding the tenth
anniversary of the date the Plan is adopted by the Board. The Board may, in its
sole discretion and at any earlier date, terminate the Plan.  Notwithstanding the foregoing, no termination
of the Plan shall adversely affect any Award theretofore granted without the
consent of the Participant or the permitted transferee of the Award.

 

12.3                           Amendment.  The Board may
at any time and from time to time and in any respect, amend or modify the Plan;
provided, however, the Board may seek the approval of any
amendment or modification by the Company’s stockholders to the extent it deems
necessary or advisable in its sole discretion for purposes of compliance with
section 422 of the Code, the listing requirements of any stock exchange or for
any other purpose. No amendment or modification of the Plan shall adversely
affect any Award theretofore granted without the consent of the Participant or
the permitted transferee of the Award.

 

8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}]]