Document:

Exhibit 4.2

 

 

TRINITY CAPITAL CORPORATION

 

 

BYLAWS

 

 

Amended and restated as of October 1,
2003

 

 

TRINITY CAPITAL CORPORATION

 

BYLAWS

 

ARTICLE I

 

NAME

 

Section 1.1            Name. 
The name of this corporation is “Trinity Capital Corporation.”

 

ARTICLE II

 

OFFICES

 

Section 2.1            Registered Office.  The corporation shall at all times maintain a
registered office in the State of New Mexico, which, except as otherwise
determined by the Board of Directors of the corporation (the “Board”), shall be
in the City of Los Alamos, County of Los Alamos.

 

Section 2.2            Principal Office.  The principal office of the corporation shall
be maintained at such place within or without the State of New Mexico as the
Board shall designate.

 

Section 2.3            Other Offices.  The corporation may also have offices at such
other places within or without the State of New Mexico as the Board shall from
time to time designate or the business of the corporation shall require.

 

ARTICLE III

 

MEETINGS OF SHAREHOLDERS

 

Section 3.1            Place of Meetings.  All annual and special meetings of
shareholders shall be held at such places within or without the State of New
Mexico as the Board may determine.

 

Section 3.2            Annual Meetings.

 

3.2.1       Time and Place.  The regular annual meeting of shareholders
for the election of directors and for the transaction of any other business of
the corporation shall be held each year on the third Thursday of May, if not a
legal holiday, or, if a legal holiday, then on the next succeeding day not a
Saturday, Sunday or legal holiday, or at such other time, date or place as the
Board may determine.

 

 

3.2.2       New Business.  At the annual meetings, directors shall be
elected and any other business properly proposed and filed with the Secretary
of the corporation as provided in these Bylaws may be transacted which is
within the powers of the shareholders.

 

Any new business to be conducted at the annual meeting of the
shareholders shall be stated in writing and filed with the Secretary of the
corporation on or before sixty (60) days in advance of the first anniversary
date (month and day) of the previous year’s annual meeting, and all business so
stated, proposed and filed shall, unless prior action thereon is required by
the Board, be considered at the annual meeting. 
Any shareholder may make any other proposal at the annual meeting and
the same may be discussed and considered, but unless stated in writing and
filed with the Secretary of the corporation on or before sixty (60) days in
advance of the first anniversary date (month or day) of the previous year’s
annual meeting, such proposal may only be voted upon at a meeting held at least
thirty (30) days after the annual meeting at which it is presented.  No other proposal made by shareholders may be
acted upon at the annual meeting.  This
provision shall not prevent the consideration, approval or disapproval at the
annual meeting of the reports of officers and committees, but in connection
with such reports no business shall be acted upon at such annual meeting unless
stated and filed as herein provided.

 

Section 3.3            Notice. 
Written notice stating the place, day and hour of the meeting and the
purpose or purposes for which the meeting of the shareholders is called shall
be given not less than ten (10) nor more than fifty (50) days before the
date of the meeting, either personally or by mail, to each shareholder of
record entitled to vote at such meeting. 
If mailed, such notice shall be deemed to be given when deposited in the
U.S. mail, postage prepaid, and addressed to the shareholder at his or her
address as it appears on the records of the corporation as of the record date
prescribed in Section 3.9.1 and Section 11.1.1 of these Bylaws.

 

Section 3.4            Nominations For Director.  Nominations of candidates for election as
directors at any meeting of shareholders may be made:  (a) by, or at the direction of, a
majority of the Board; or (b) by any shareholder of record entitled to
vote at such meeting; provided that only persons nominated in accordance with
procedures set forth in this Section shall be eligible for election as
directors.

 

Nominations, other than those made by, or at the direction of, the
Board, may only be made pursuant to timely notice in writing to the Secretary
of the corporation as set forth in this Section 3.4.  To be timely, a shareholder’s notice shall be
delivered to, or mailed and received by the Secretary of the corporation, for
an annual meeting, not less than sixty (60) days nor more than ninety (90) days
in advance of the first anniversary date (month and day) of the previous year’s
annual meeting, and for a special meeting, not less than sixty (60) days nor
more than ninety (90) days in advance of the date (month and day) of the
special meeting, regardless of any postponements or adjournments of that
meeting to a later date.  Such
shareholder notice shall set forth:  (a) as
to each person whom the shareholder proposes to nominate for election as a
director:  (i) the name, age,
business address and residential address of such person; (ii) the
principal occupation or employment of such person; (iii) the class and
number of shares of the corporation’s stock which are beneficially owned by
such person on the date of such shareholder notice; and (iv) any other
information relating to such person that would be required to be

 

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disclosed on Schedule 13D pursuant to Regulation 13D-G under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), in connection
with the acquisition of stock, and pursuant to Regulation 14A under the
Exchange Act, in connection with the solicitation of proxies with respect to
nominees for election as directors, regardless of whether such person is
subject to the provisions of such regulations, including, but not limited to,
information required to be disclosed by Items 4(b) and 6 of Schedule 14A
of Regulation 14A with the Securities and Exchange Commission; and (b) as
to the shareholder giving the notice:  (a) the
name and address, as they appear on the corporation’s books, of such
shareholder and the name and principal business or residential address of any
other beneficial shareholders known by such shareholder to support such
nominees; and (b) the class and number of shares of the corporation’s
stock which are beneficially owned by such shareholder on the date of such
shareholder notice and the number of shares owned beneficially by any other
record or beneficial shareholders known by such shareholder to be supporting
such nominees on the date of such shareholder notice.  At the request of the Board, any person
nominated by, or at the request of, the Board for election as a director shall
furnish to the Secretary of the corporation that information required to be set
forth in a shareholder’s notice of nomination which pertains to the nominee.

 

The Board may reject any nomination by a shareholder not timely made in
accordance with the requirements of this Section 3.4.  If the Board, or a committee designated by
the Board, determines that the information provided in a shareholder’s notice
does not satisfy the informational requirements of this Section 3.4 in any
material respect, the Secretary of the corporation shall promptly notify such
shareholder of the deficiency in the notice. 
The shareholder may cure the deficiency by providing additional information
to the Secretary within such period of time, not less than five days from the
date such deficiency notice is given to the shareholder, as the Board or such
committee shall determine.  If the
deficiency is not cured within such period, or if the Board or such committee
determines that the additional information provided by the shareholder,
together with information previously provided, does not satisfy the
requirements of this Section 3.4 in any material respect, then the Board
may reject such shareholder’s notice and the proposed nominations shall not be
accepted if presented at the shareholder meeting to which the notice
relates.  The Secretary of the
corporation shall notify a shareholder in writing whether his or her nomination
has been made in accordance with the time and informational requirements of
this Section 3.4.  Notwithstanding
the procedure set forth in this Section 3.4, if neither the Board nor such
committee makes a determination as to the validity of any nominations by a
shareholder, the presiding officer of the shareholders meeting shall determine
and declare at the meeting whether a nomination was not made in accordance with
the terms of this Section 3.4.  If
the presiding officer determines that a nomination was not made in accordance
with the terms of this Section 3.4, he or she shall so declare at the
meeting and the defective nomination shall not be accepted.

 

Section 3.5            Special Meetings.  Special meetings of shareholders for the
purpose of taking any action permitted the shareholders by law and the Articles
of Incorporation of this corporation may be called at any time by at least 50%
of the directors then in office or by the holders of not less than a majority
of shares entitled to vote at the meeting. 
Except in special cases where other express provision is made by
statute, notice of such special meetings shall be given in the same manner as
for annual meetings of shareholders.

 

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Section 3.6            Voting Lists.  The officer having charge of the stock
transfer books for shares of the capital stock of the corporation shall make,
at least ten (10) days before each meeting of the shareholders, a complete
list of the shareholders entitled to vote at such meeting in alphabetical
order, with the address of and the number of shares registered in the name of,
each shareholder.  Such list shall be
subject to inspection by any shareholder, for any purpose germane to the
meeting, at any time during the meeting, either at a place within the city
where the meeting is to be held, which place shall be specified in the notice
of the meeting, or, if not so specified in the notice of the meeting, at the
place where the meeting is to be held. 
Such list shall also be produced and kept open at the time and place of
the meeting and shall be subject to the inspection of any shareholder during
the whole time of the meeting.  The
original stock transfer books shall be prima facie evidence as to who are the
shareholders entitled to examine such list or transfer books or to vote at any
meeting of shareholders.

 

Section 3.7            Quorum. 
A majority of the shares entitled to vote, represented in person or by
proxy, shall constitute a quorum for the transaction of business at a meeting
of the shareholders.  The shareholders present
at a duly called or held meeting at which a quorum is present may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum, if any action taken (other than
adjournment) is approved by at least a majority of the shares required to
constitute a quorum.

 

Section 3.8            Adjourned Meeting and Notice Thereof.  Any shareholders meeting, annual or special,
whether or not a quorum is present, may be adjourned from time to time by the
vote of a majority of the shares present, whether in person or represented by
proxy, but in the absence of a quorum no other business may be transacted at
such meeting, except as provided in Section 3.7 above.  When any shareholders meeting, either annual
or special, is adjourned for more than thirty (30) days, or if after the
adjournment a new record date is fixed for the adjourned meeting, notice of the
adjourned meeting shall be given to each shareholder of record entitled to vote
at the meeting.  Except as provided
above, it shall not be necessary to give any notice of the adjourned meeting if
the time and place thereof are announced at the meeting at which such
adjournment is taken.

 

Section 3.9            Voting.

 

3.9.1       Record Date for
Shareholders.  For the purpose of
determining shareholders entitled to notice of, or to vote at, any meeting of
shareholders or any adjournment thereof, or entitled to receive payment of any
dividend, or in order to make a determination of shareholders for any other
proper purpose, the Board of Directors may provide that the stock transfer
books shall be closed for a stated period not to exceed fifty days.  If the stock transfer books are closed for
the purpose of determining the shareholders entitled to notice of, or to vote
at, a meeting of shareholders, the books shall be closed for at least ten days
immediately preceding the meeting.  In
lieu of closing the stock transfer books, the Board of Directors may fix in
advance a date as the record date for any such determination of shareholders,
the date to be not more than fifty days and, in case of a meeting of
shareholders, not less than ten days prior to the date on which the particular
action, requiring such determination of shareholders, is to be taken.  If the stock transfer books are not closed
and no record date is fixed for the determination of 

 

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shareholders entitled to notice of, or to vote at, a meeting of
shareholders, or shareholders entitled to receive payment of a dividend, the
date on which notice of the meeting is mailed or the date on which the
resolution of the Board of Directors declaring the dividend is adopted, as the
case may be, shall be the record date for the determination of shareholders.  When a determination of shareholders entitled
to vote at any meeting of shareholders has been made as provided in this
section, the determination shall apply to any adjournment thereof.

 

3.9.2       Method; Vote Required.  Unless otherwise required by law, voting may
be oral or by written ballot; provided,
however, that all elections for directors must be by ballot if
demanded by a shareholder before such voting begins.  Except as provided in Section 3.7, the
affirmative vote of the majority of the shares represented and voting at a duly
held meeting at which a quorum is present (which shares voting affirmatively
also constitute at least a majority of the required quorum) shall be the act of
the shareholders, unless the vote of a greater number or voting by classes is
required by the Business Corporation Act or the Articles of Incorporation or
these Bylaws.  There shall be no
cumulative voting in the election of directors.

 

3.9.3       Voting of Shares by Certain
Holders.  Shares standing in the
name of another corporation may be voted by any officer, agent or proxy as the
bylaws of such corporation may prescribe, or, in the absence of such provision,
as the board of directors of such corporation may determine.  Shares held by an administrator, executor,
guardian or conservator may be voted by him or her, either in person or by
proxy, without a transfer of such shares into his or her name.  Shares standing in the name of a trustee may
be voted by the trustee, either in person or by proxy, but no trustee shall be
entitled to vote shares held by him or her without a transfer of such shares
into the trustee’s name.

 

Neither treasury shares of its own stock held by the corporation, nor
shares held by another corporation, if a majority of the shares entitled to
vote for the election of directors of such other corporation are held directly
or indirectly by the corporation, shall be voted at any meeting or counted in
determining the total number of outstanding shares at any given time for
purposes of any meeting.

 

Section 3.10         Conduct of Meeting.  The presiding officer at any meeting of
shareholders, either annual or special, shall be the Chairman of the Board or,
in his or her absence, the Vice Chairman of the Board, or, in his or her
absence, the Chief Executive Officer or, in the absence of all of the Chairman
of the Board, the Vice Chairman of the Board and the Chief Executive Officer,
anyone selected by a majority of the Board. 
The secretary at such meetings shall be the Secretary of the corporation
or, in his or her absence, anyone appointed by the presiding officer.

 

Section 3.11         Proxies. 
At all meetings of the shareholders, every shareholder having the right
to vote shall be entitled to vote in person or by proxy appointed by an
instrument in writing and complying with the requirements of the Business
Corporation Act.  No proxy shall be valid
after the expiration of eleven (11) months from the date thereof unless
otherwise provided in the proxy.  A duly
executed proxy shall be irrevocable if it states that it is irrevocable and if,
and

 

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only so long as, it is coupled with an interest in the stock of the
corporation or in the corporation generally which is sufficient in law to
support an irrevocable power.

 

Section 3.12         Inspectors of Election.  In advance of any meeting of shareholders,
the Board may appoint any persons other than nominees for office as inspectors
of election to act at such meeting or any adjournment thereof.  If inspectors of election are not so appointed,
or if any persons so appointed fail to appear or refuse to act, the presiding
officer of any such meeting may, and on the request of any shareholder or a
shareholders proxy shall, make such appointment at the meeting.  The number of inspectors shall be either one
or three.  If appointed at a meeting on
the request of one or more shareholders or proxies, the majority of shares
represented in person or by proxy shall determine whether one or three
inspectors are to be appointed.  The
duties of such inspectors shall include: 
(a) determining the number of shares of stock and the voting power
of each share, the shares of stock represented at the meeting, the existence of
a quorum, and the authenticity, validity and effect of the proxies; (b) receiving
votes, ballots or consents; (c) hearing and determining all challenges and
questions in any way arising in connection with the right to vote; (d) counting
and tabulating all votes or consents; (e) determining the result; and (f) such
acts as may be proper to conduct the election or vote with fairness to all
shareholders.

 

ARTICLE IV

 

DIRECTORS

 

Section 4.1            Powers. 
Subject to any limitations imposed by law, the Articles of Incorporation
and these Bylaws as to actions which shall be authorized or approved by the
shareholders, and subject to the duties of directors as prescribed thereby, the
business and affairs of the corporation shall be managed and all corporate
powers shall be exercised by or under the direction of the Board.

 

Section 4.2            Number
and Qualifications.  (a) The
exact number of directors shall be fixed from time to time by the Board
pursuant to a resolution adopted of not less than 50% of the number of
directors which immediately prior to such change had been fixed, in the manner
prescribed herein, by the Board, subject to the provisions of the Articles of
Incorporation of the corporation.

 

(b)           The directors of the
corporation shall be divided into three classes, Class I, Class II
and Class III, as nearly equal in number as the then total number of
directors constituting the entire board permits with the term of office of one
class expiring each year.  Initially,
directors of Class I shall hold office for an initial term expiring at the
2004 annual meeting, directors of Class II shall hold office for an
initial term expiring at the 2005 annual meeting and directors of Class III
shall hold office for an initial term expiring at the 2006 annual meeting.  At each annual meeting of shareholders, the
successors to the class of directors whose term shall then expire shall be
elected to hold office for a term expiring at the third succeeding annual
meeting.  Any vacancies in the board of
directors for any reason, and any directorships resulting from any increase in
the number of directors, may be filled by the board of directors,

 

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acting by a majority of the directors then in office, although less
than a quorum, and any directors so chosen shall hold office until the next
election of the class for which such directors shall have been chosen and until
their successors shall be elected and qualified.  If the number of directors is changed, any
increase or decrease in the number of directors shall be apportioned among the
classes so as to maintain all classes as equal in number as possible.

 

(c)           Notwithstanding any
other provisions of the Articles of Incorporation of the corporation or these
bylaws (and notwithstanding the fact that some lesser percentage may be
specified by law, the Articles of Incorporation or these bylaws of the
corporation), any director or the entire board of directors of the corporation
may be removed at any time, but only for cause and only by the affirmative vote
of the holders of not less than 50% of the outstanding shares of stock of the
corporation entitled to vote generally in the election of directors (considered
for this purpose as one class) cast at an annual meeting of shareholders or at
a meeting of the shareholders called for that purpose.

 

(d)           No person shall be
eligible for election to the Board if such person has attained the age of
seventy-five (75) years prior to the date of the shareholders’ meeting at which
such person would be elected; provided however,
that this limitation on service as a director of the corporation shall not
apply to any director serving on the Board prior to the corporation’s 2003
annual meeting of shareholders and who has attained the age of
seventy-five.   

 

Section 4.3            Election and Vacancies.  Each director of the corporation shall be
elected at the annual meeting of shareholders of the corporation and each
director shall serve until the next succeeding annual meeting and until his or
her successor is elected and qualified or until his or her earlier death,
resignation or removal.  Any director may
resign at any time upon written notice to the corporation.  Thereafter, directors who are elected at an
annual meeting of shareholders, and directors who are elected in the interim to
fill vacancies, shall hold office until the next annual meeting of shareholders
at which directors are to be elected and until their successors are elected and
qualified or until their earlier death, resignation or removal.  In the interim between annual meetings of
shareholders or of special meetings of shareholders called for the election of
directors and/or for the removal of one or more directors and for the filling
of any vacancy in that connection, newly created directorships and any
vacancies in the board of directors, including vacancies resulting from the
removal of directors, may be filled by the vote of a majority of the remaining
directors then in office, although less than a quorum, or by the sole remaining
director.  Any directorship that is
filled by reason of an increase in the number of directors may be filled by the
board of directors for a term of office continuing only until the next election
of directors by the shareholders.

 

Section 4.4            Regular Meetings.  The Board shall meet regularly at the time
and place designated in a resolution of the Board or by written consent of all
members of the Board, whether within or without the State of New Mexico, and no
notice of such regular meetings need be given to the directors.

 

Section 4.5            Organization Meeting.  Following each annual meeting of
shareholders, the Board shall hold a regular meeting at the place of said
annual meeting or at such other place 

 

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as shall be fixed by the Board, for the purpose of organization,
election of officers, and the transaction of other business.  Call and notice of such meetings are hereby
dispensed with.

 

Section 4.6            Special Meetings.  Special meetings of the Board may be called
by the Chairman of the Board, the Chief Executive Officer, the President, the
Secretary, or a majority of directors then in office.  Notice of each such meeting shall be given to
each director by the Secretary or by the person or persons calling the
meeting.  Such notice shall specify the
time and place of the meeting, which may be within or without the State of New
Mexico, and the general nature of the business to be transacted, and no other
business may be transacted at the meeting. 
Such notice shall be deposited in the mail, postage prepaid, at least
four (4) days prior to the meeting, directed to the address of the
director on the records of the corporation, or delivered in person or by
telephone or telegram, telecopy or other means of electronic transmission to
the director at least 48 hours before the meeting.  Notice of a meeting need not be given to any
director who signs a waiver of notice or a consent to holding the meeting, or
an approval of the minutes thereof, whether before or after such meeting, or
who attends the meeting without protesting, prior thereto or at its
commencement, the lack of notice to such director.  All such waivers, consents and approvals
shall be filed with the corporate records or made a part of the minutes of the
meeting.

 

Section 4.7            Quorum; Majority Action.  A majority of the authorized number of
directors shall constitute a quorum for the transaction of business at any meeting
of the Board, but if less than such majority is present at a meeting, a
majority of the directors present may adjourn the meeting from time to
time.  Notice of any adjourned meeting
shall be given in the same manner as prescribed in Section 4.6 of these
Bylaws.  Every act or decision of a
majority of the directors present at a meeting at which a quorum is present,
made or done at a meeting duly held, shall be valid as the act of the Board,
unless a greater number is required by law or the Articles of Incorporation or
these Bylaws.

 

Section 4.8            Action Without Meeting.  Any action required or permitted to be taken
by the Board may be taken without a meeting if all members of the Board shall
individually or collectively consent in writing to such action.  Such written consent or consents shall be
filed with the minutes of the proceedings of the Board and shall have the same
force and effect as a unanimous vote of the Board.

 

Section 4.9            Telephonic Meetings.  Members of the Board may participate in any
regular or special meeting, including meetings of committees of the Board,
through use of conference telephone or similar communications equipment, so
long as all members participating in such meeting can hear one another.  Participation in a meeting pursuant to this section constitutes
presence in person at such meeting.

 

Section 4.10         Fees and Compensation.  Fees and compensation of directors and
members of committees for their services, and reimbursement for expenses, shall
be fixed or determined by a resolution of the Board.  Nothing herein contained shall be construed
to preclude any director from serving the corporation in any other capacity as
an officer, employee, agent or otherwise, and receiving compensation therefor.

 

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Section 4.11         Cause for Removal.  Cause for removal of a director in the manner
set forth in Section 4.2(b) hereof, shall be deemed to exist only if
the director whose removal is proposed has been convicted of a felony by a
court of competent jurisdiction or has been adjudged by a court of competent
jurisdiction to be liable for gross negligence or willful misconduct in the
performance of such director’s duty to the corporation and such adjudication is
no longer subject to direct appeal.

 

Section 4.12         Directors Emeritus/Advisory Directors.  The Board of Directors may by resolution
appoint directors emeritus or advisory directors who shall have such authority
and receive such compensation and reimbursement as the Board of Directors shall
provide.  Directors emeritus or advisory
directors shall not have the authority to participate by vote in the
transaction of business.

 

ARTICLE V

 

OFFICERS

 

Section 5.1            Executive Officers.  The executive officers of the corporation
shall be the Chairman of the Board, Vice Chairman, the Chief Executive Officer,
the President, the Secretary and any other individual performing functions
similar to those performed by the foregoing persons, including any officer
designated by the Board as performing such functions.

 

Section 5.2            Election.  The officers of the corporation, except such
officers as may be appointed in accordance with the provisions of Section 5.3
or Section 5.5 of this Article, shall be chosen annually by the
Board.  Each officer shall hold his or
her office until he or she shall resign or shall be removed or otherwise
disqualified to serve, or his or her successor shall be elected and qualified,
and shall perform such duties as are prescribed in the Bylaws or as the Board
may from time to time determine.

 

Section 5.3            Removal and Resignation.  Any officer may be removed, either with or
without cause, by the Board, at any regular or special meeting thereof, or by
any officer upon whom such power of removal may be conferred by the Board
(without prejudice, however, to the rights, if any, of an officer under any
contract of employment with the corporation).

 

Any officer may resign at any time by giving written notice to the
Board, the Chief Executive Officer or to the President or to the Secretary of
the corporation, without prejudice, however, to the rights, if any, of the
corporation under any contract to which such officer is a party.  Any such resignation shall take effect at the
date of the receipt or at any later time specified therein.

 

Section 5.4            Vacancies.  A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled by
the Board for the unexpired portion of the term.

 

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Section 5.5            Compensation.  The Board shall fix the compensation of the
officers of the corporation or shall be fixed by an officer of the corporation
to whom the authority to fix compensation has been delegated by the Board.

 

Section 5.6            Chairman of the Board.  The Chairman of the Board shall, subject to
the control of the Board, have general supervision, direction and control of
the business and affairs of the corporation. 
The Chairman of the Board shall, if present, preside at all meetings of
the shareholders and the Board and exercise and perform such other powers and
duties as may be from time to time assigned to him or her by the Board or
prescribed by these Bylaws.  The Chairman
of the Board shall have the authority to vote all shares of stock of any other
corporation standing in the name of the corporation, at any meeting of the
shareholders of such other corporation, or by written consent of the
shareholders of such other corporation, and may, on behalf of the corporation,
waive any notice of the calling of any such meeting, and may give a written
proxy in the name of the corporation to vote any or all shares of stock of such
other corporation owned by the corporation at any such meeting.

 

Section 5.7            Chief Executive Officer.  The Chief Executive Officer shall have
general supervision of the business of the corporation, shall see that
resolutions and orders of the Board are carried out, shall be a member of all
standing committees of the Board and shall perform such other duties as from
time to time may be assigned to him or her by the Board.

 

Section 5.8            President.  Except as otherwise provided by the Board,
the President shall be the chief operating officer of the corporation and
shall, subject to the control of the Board, have the general powers and duties
of management usually vested in the office of the president of a corporation,
and shall have such other powers and duties as the Board shall from time to
time prescribe

 

Section 5.9            Secretary.  The Secretary shall keep, or cause to be
kept, minutes of all meetings of the shareholders and Board in a book to be
provided for that purpose, and shall attend to the giving and serving of all
notices of meetings of shareholders and directors, and any other notices
required by law to be given.  The
Secretary shall be custodian of the corporate seal, if any, and shall affix the
seal to all documents and papers requiring such seal.  The Secretary shall have such other powers
and duties as the Board from time to time shall prescribe.

 

Section 5.10         Other Officers.  The corporation may have, at the
discretion of the Board, one or more Vice Presidents, Assistant Vice
Presidents, Assistant Secretaries and such other officers as may be appointed
by the Board, each of whom shall hold office for such period, have such
authority and perform such duties as the Board may from time to time
determine.  Any person may hold more than
one office.

 

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ARTICLE VI

 

COMMITTEES OF THE BOARD OF DIRECTORS

 

Section 6.1            Committees of the Board of Directors.  The Board of Directors, by resolution adopted
by majority of the Board of Directors, may designate from among its members an
executive committee and one or more other committees, each of which, to the
extent provided in the resolution or in these Bylaws will have and may exercise
all of the authority of the Board of Directors except that no committee (1) may
declare dividends or authorize distributions, (2) approve or recommend to
shareholders actions or proposals required by law to be approved by
shareholders, (3) amend Bylaws, (4) approve a plan of merger not
requiring shareholder approval, authorize or approve the reacquisition of
shares and (5) authorize and approve the issuance or sale of, or any
contract to sell shares or designate terms of a series of a class of
shares.  The action of any committee
appointed by the Board of Directors is subject to review and revision by the
Board of Directors.

 

ARTICLE VII

 

INDEMNIFICATION

 

Section 7.1            Indemnification.  Each person who is or was a director or
officer of this corporation and each person who serves or served at the request
of this corporation as a director, officer or partner of another enterprise
shall be indemnified by this corporation in accordance with, and to the fullest
extent authorized by, the Business Corporation Act, as the same now exists or
may be hereafter amended.  No amendment
to or repeal of this Article shall apply to or have any effect on the
rights of any individual referred to in this Article for or with respect
to acts or omissions of such individual occurring prior to such amendment or
repeal.

 

ARTICLE VIII

 

RECORDS AND REPORTS

 

Section 8.1            Records.  The corporation shall maintain adequate and
correct books and records of account of its business and properties in
compliance with the Business Corporation Act.

 

Section 8.2            Checks and Drafts.  All checks, drafts and other orders for
payment of money, notes or other evidences of indebtedness, issued in the name
of or payable to the corporation, shall be signed or endorsed by such person or
persons and in such manner as shall be determined from time to time by
resolution of the Board.

 

Section 8.3            Execution of Instruments.  The Board may authorize any officer or
officers or agent or agents to enter into any contract or execute any
instrument in the name of and on behalf of the corporation.  Such authority may be general or confined to
specific instances. 

 

12

 

Unless so authorized by the Board, no officer, agent or employee shall
have any power or authority to bind the corporation by any contract or
engagement, or to pledge its credit, or to render it liable for any purpose or
for any amount.

 

Section 8.4            Financial Information to Shareholders.  The Directors may appoint the Treasurer or
other fiscal officer to cause to be prepared and made available to shareholders
the financial information prescribed by Section 53-11-50 of the Business
Corporation Act.

 

Section 8.5            Fiscal Year.  The fiscal year of the corporation shall be a
December 31 fiscal year.

 

Section 8.6            Annual Audit.  The corporation shall be subject to an annual
audit as of the end of its fiscal year by independent accountants appointed by,
and responsible to, the Board.

 

ARTICLE IX

 

DIVIDENDS ON STOCK

 

Section 9.1            Dividends on Stock.  Subject to applicable law, the Articles of
Incorporation and these Bylaws, the Board may, from time to time, declare, and
the corporation may pay, dividends on the outstanding shares of capital stock
of the corporation.

 

ARTICLE X

 

CERTIFICATES

 

Section 10.1         Issuance. 
The corporation, as authorized by the Board, may issue any and all forms
of certificates of stock not inconsistent with law.  No certificate shall be issued for any share
until such share is fully paid.

 

Section 10.2         Certificates for Shares.  Every holder of shares of the stock of the
corporation or shares of any other class or series of stock that may be validly
authorized and issued by the corporation shall be entitled to have a
certificate signed in the name of the corporation by the Chairman or Vice Chairman
of the Board, or by the President or a Vice President and by the Treasurer or
an Assistant Treasurer or the Secretary or an Assistant Secretary, certifying
the number of shares and the class or series of shares owned by the
shareholder.  Any of the signatures on
the certificate may be a facsimile.  In
case any officer, transfer agent or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer, transfer agent or registrar before such certificate is issued, it may
be issued by the corporation with the same effect as if such person were an
officer, transfer agent or registrar at the date of issue.

 

13

 

Section 10.3         Statements on Certificates.  Any certificates for shares of stock shall
contain such legend or other statement as may be required by law or applicable rule or
regulation, by these Bylaws or by any agreements between the corporation and
the issue thereof.

 

Section 10.4         Lost or Destroyed Certificates.  In case any certificate for stock or other
security issued by this corporation is lost or destroyed, the Board may
authorize the issuance of a new certificate or instrument therefor, on such
terms and conditions as it may determine, after proof of such loss or
destruction satisfactory to the Board. 
The Board may require a bond or other security in an adequate amount as
indemnity for any such certificate or instrument when, in the Board’s judgment,
it is proper to do so.

 

Section 10.5         Transfer. 
Stock of the corporation shall be transferable on the books of the
corporation by the person named in the certificate, or by the person entitled
thereto, on surrender of the certificate for cancellation, accompanied by
proper evidence of succession, assignment or authority to transfer.  The corporation shall be entitled to treat
the holder of record of any stock certificate as owner thereof, and,
accordingly, shall not be bound to recognize any equitable or other claim to,
or interest in, such stock on the part of any other person, whether or not it
shall have express or other notice thereof, save as expressly provided by the
laws of the State of New Mexico.

 

ARTICLE XI

 

CORPORATE SEAL

 

Section 11.1         Corporate Seal.  The corporate seal of the corporation, if
any, shall be in such form as the Board shall prescribe.

 

ARTICLE XII

 

AMENDMENT OF BYLAWS

 

Section 12.1         Amendment of Bylaws.  The power to alter, amend and repeal these
Bylaws and to make new Bylaws shall be vested in the Board.

 

14Exhibit 10.1

 

 

TRINITY
CAPITAL CORPORATION

 

2005
STOCK INCENTIVE PLAN

 

 

TRINITY
CAPITAL CORPORATION

 

2005
STOCK INCENTIVE PLAN

 

Section 1.              Purpose
of the Plan.

 

The TRINITY
CAPITAL CORPORATION 2005 STOCK INCENTIVE PLAN (the “Plan”) is intended to provide a means whereby officers and
employees of TRINITY CAPITAL CORPORATION, a
New Mexico corporation (the “Company”), and
the Related Corporations may sustain a sense of proprietorship and personal
involvement in the continued development and financial success of the Company
and the Related Corporations, and to encourage them to remain with and devote
their best efforts to the Company and the Related Corporations, thereby
advancing the interests of the Company and its stockholders.  Accordingly, the Company may permit certain
officers and employees to acquire Shares or otherwise participate in the
financial success of the Company, on the terms and conditions established
herein.

 

Section 2.              Definitions.

 

The following terms, when
used herein and unless the context clearly requires otherwise, shall have the
following meanings (such meanings to be equally applicable to both the singular
and plural forms of the terms defined):

 

(a)           “Applicable
Laws” means the requirements relating to the administration of stock
option plans under federal and state corporate laws, federal and state
securities laws, the Code, any stock exchange or quotation system on which the
Common Stock is listed or quoted.

 

(b)           “Award” means individually or collectively,
a grant under the Plan of Options, SARs or Other Stock Based Awards.

 

(c)           “Board” means the board of directors of the Company.

 

(d)           “Cause” means either (i) in the case of an employee with
a then-current written employment agreement with the Company or a Related
Corporation, “Cause” as defined under that agreement, and (ii) in all
other cases, the commission of fraud or an act or acts of dishonesty, the
misappropriation of or intentional material damage to the property or business
of the Company or a Related Corporation, the material failure to fulfill the
duties and responsibilities of a regular position and/or comply with the
Company’s or a Related Corporation’s policies, rules or regulations, or
the conviction of a felony.

 

(e)           “Change of Control” means:

 

(i)            the consummation of
the acquisition by any person (as such term is defined in Section 13(d) or
14(d)(2) of the Exchange Act) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of fifty percent (50%)
or more 

 

1

 

of the combined voting
power of the then outstanding voting securities of the Company other than
through the receipt of Shares pursuant to the Plan;

 

(ii)           the individuals who, as
of the Effective Date, are members of the Board cease for any reason to
constitute a majority of the Board, unless the election, or nomination for
election by the stockholders of the Company, of any new director was approved
by a vote of a majority of the Board, and such new director shall, for purposes
of the Plan, be considered as a member of the Board; or

 

(iii)          consummation by the
Company of:  (A) a merger or
consolidation if the stockholders of the Company, immediately before such
merger or consolidation, do not, as a result of such merger or consolidation,
own, directly or indirectly, more than fifty percent (50%) of the combined
voting power of the then outstanding voting securities of the entity resulting
from such merger or consolidation; or (B) a complete liquidation or
dissolution or an agreement for the sale or other disposition of two-thirds or
more of the consolidated assets of the Company.

 

Notwithstanding the
foregoing, a Change of Control shall not be deemed to occur solely because (x) fifty
percent (50%) or more of the combined voting power of the then outstanding
securities of the Company is acquired by a trustee or other fiduciary holding
securities under one or more employee benefit plans maintained for employees of
the Company or a Related Corporation; or (y) the transaction is a merger or
consolidation effected to implement a recapitalization of the Company in which
no “person”, as defined above, acquires more than 50% of the combined voting
power of the Company’s then-outstanding securities.

 

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

 

(g)           “Committee” means the Compensation Committee of the
Board.  Each member of the Committee
shall be (i) a “non-employee director” for purposes of Section 16 and
Rule 16b-3 of the Exchange Act, and (ii) an “outside director” for
purposes of Section 162(m) of the Code, unless the Board has fewer than
two (2) such outside directors.

 

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

 

(i)            “Disability” means (i) in the case of an Incentive Stock
Option, a physical or mental disability (within the meaning of Section 22(e)(3) of
the Code) which impairs the individual’s ability to substantially perform his
or her current duties for a period of at least twelve (12) consecutive months,
as determined by the Committee, and (ii) in all other cases, the person’s
limitation, due to sickness or injury, in performing the material and
substantive duties of his or her position with the Company or a Related
Corporation for a period of six (6) consecutive months.

 

(j)            “Effective Date” means April 7, 2005, which was the date
that the Plan was adopted by the Board.

 

(k)           “Exchange Act” means the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations promulgated
thereunder.

 

2

 

(l)            “Fair Market Value” means as of any date, the value of a
share of the Company’s common stock determined as follows:

 

(i)            if such common stock
is then quoted on the American Stock Exchange, its last reported sale price on
the American Stock Exchange on such date or, if no such reported sale takes
place on such date, the average of the closing bid and asked prices;

 

(ii)           if such common stock is
publicly traded and is then listed on a national securities exchange, the last
reported sale price on such date or, if no such reported sale takes place on
such date, the average of the closing bid and asked prices on the principal
national securities exchange on which the common stock is listed or admitted to
trading;

 

(iii)          if such common stock is
publicly traded but is not quoted on the American Stock Exchange nor listed or
admitted to trading on a national securities exchange, the average of the
closing bid and asked prices on such date, as reported by The Wall Street
Journal, for the over-the-counter market; or

 

(iv)          if none of the foregoing
is applicable, by the Board of Directors of the Company in good faith.

 

(m)          “Incentive Stock Option” means an Award under the Plan that
satisfies the general requirements of Section 422 of the Code,
namely:  (i) grantees must be
employees; (ii) the exercise price may not be less than the fair market
value of the underlying Shares at the date of grant; (iii) no more than
$100,000 worth of Shares may become exercisable in any year; (iv) the
maximum duration of an Award may be ten (10) years; (v) Awards must
be exercised within three (3) months after termination of employment,
except in the event of Disability or death; and (vi) Shares received upon
exercise must be retained for the greater of two (2) years from the date
of grant or one (1) year from the date of exercise.

 

(n)           “Other Stock Based Awards” means any other
awards not specifically described in the Plan that are valued in whole or in
part by reference to, or are otherwise based on, Shares and are created by the
Committee pursuant to Section 7.

 

(o)           “Nonqualified Stock Option” means a stock option award under
the Plan that is not an Incentive Stock Option.

 

(p)           “Option” means a stock option granted pursuant to this Plan.

 

(q)           “Optionee” means the holder of an outstanding Incentive Stock
Option, Nonqualified Stock Option or Stock Appreciation Right granted under the
Plan.

 

(r)            “Plan” means this Trinity Capital Corporation 2005 Stock
Incentive Plan.

 

(s)           “Related Corporation” means any corporation, bank or other
entity which would be a parent or subsidiary corporation with respect to the
Company as defined in Section 424(e) or (f), respectively, of the
Code.

 

(t)            “Retirement” means Termination of Service, other than for
Cause, after attainment of age sixty-five (65) for Service Providers.

 

3

 

(u)           “Rule 16b-3” means Rule 16b-3 promulgated under the
Exchange Act, as amended from time to time.

 

(v)           “Service Provider” means an employee or
officer.

 

(w)          “Shares” means shares of the common stock, no par value per
share, of the Company.

 

(x)            “Stock Appreciation Rights” means rights entitling the
grantee to receive the appreciation in the market value of a stated number of
Shares.

 

(y)           “Stock Option Agreement” means a written agreement between
the Company and the Optionee evidencing the terms and restrictions apply to the
grant of Incentive Stock Options or Nonqualified Stock Options. The Stock
Option Agreement is subject to the terms and conditions of the Plan.

 

(z)            “Securities Act” means the Securities Act of 1933, as amended
from time to time, and the rules and regulations promulgated thereunder.

 

(aa)         “Termination of Service” means the termination of a person’s
status as an officer or employee of the Company or a Related Corporation.

 

Section 3.              Administration
of the Plan.

 

(a)           Authority of the
Committee.  The Plan shall be
administered by the Committee.  The Committee
shall have sole authority to:

 

(i)            select the Service
Providers to whom Awards shall be
granted under the Plan;

 

(ii)           establish the amount
and conditions of each Award;

 

(iii)          prescribe any legend to
be affixed to certificates representing such Awards;

 

(iv)          interpret the Plan and
Award agreement;

 

(v)           to the extent it deems
desirable to qualifying under Rule 16b-3, structure any Award to satisfy
the requirements for exception under Rule 16b-3.

 

(vi)          correct any defect,
supply any omission, or reconcile any inconsistency in the Plan, any Award or
any agreement related thereto; and

 

(vii)         adopt such rules,
regulations, forms and agreements, not inconsistent with the provisions of the
Plan, as it may deem advisable to carry out the Plan.

 

All decisions made by the
Committee in administering the Plan shall be subject to Board review.

 

4

 

(b)           Delegation by
Committee.  Except to the extent prohibited by applicable law, the
applicable rules of a stock exchange or the Plan, or as necessary to
comply with the exemptive provisions of Rule 16b-3 under the Exchange Act,
the Committee may allocate all or any portion of its responsibilities and
powers to any one or more of its members and may delegate all or any part of
its responsibilities and powers to any person or persons selected by it,
including:  (a) delegating to a
committee of one or more members of the Board who are not “independent
directors” within the meaning of Code Section 162(m), the authority to
grant Awards under the Plan to eligible persons who are either:  (i) not then “covered employees,” within
the meaning of Code Section 162(m) and are not expected to be “covered
employees” at the time of recognition of income resulting from such Award; or (ii) not
persons with respect to whom the Company wishes to comply with Code Section 162(m);
and/or (b) delegating to a committee of one or more members of the Board
who are not “non-employee directors,” within the meaning of Rule 16b-3,
the authority to grant Awards under the Plan to eligible persons who are not
then subject to Section 16 of the Exchange Act.  Any such allocation
or delegation may be revoked by the Committee at any time.  To the extent
permitted by applicable law and resolution of the Board, the Committee may
delegate all or any part of its responsibilities to any officer of the Company.

 

(c)           Limitation of
Liability.  In addition to such other
rights of indemnification as they have as directors or as members of the
Committee, the members of the Committee shall be indemnified by the Company
against reasonable expenses (including, without limitation, attorney’s fees)
incurred in connection with the defense of any action, suit or proceeding, or
in connection with any appeal, to which they or any of them may be a party by
reason of any action taken or failure to act in connection with the Plan or any
Award granted hereunder, and against all amounts paid by them in settlement
(provided such settlement is approved to the extent required by and in the
manner provided by the Certificate of Incorporation or Bylaws of the Company
relating to indemnification of directors) or paid by them in satisfaction of a
judgment in any such action, suit or proceeding, except in relation to matters
as to which it shall be adjudged in such action, suit or proceeding that the
Committee member shall not be indemnified as provided by the Certificate of
Incorporation or Bylaws of the Company relating to indemnification of
directors.

 

Section 4.              Shares
Subject to the Plan.

 

The aggregate number of
Shares that may be obtained by Service Providers under the Plan shall be 500,000
Shares.  The Shares may be authorized,
but unissued, or reacquired common stock. 
Subject to adjustment as provided in Section 14, no person may be
granted Options and SARS under this Plan that, considered together, relate to
more than 100,000 Shares during any calendar year.  The maximum number of Shares that may be
subject to Other Stock Based Awards described under Section 7 which are
granted to any one Participant during any calendar year and are intended to be “performance-based
compensation” (as that term is used for purposes of Code Section 162(m)),
shall be One Hundred Thousand Shares (100,000). 
Shares shall not be deemed to have been issued pursuant to the Plan with
respect to any portion of an Award that is settled in cash.  Upon payment in Shares pursuant to an
exercise of an Award, the number of Shares available for issuance under the
Plan shall be reduced only by the number of Shares actually issued in such
payment.  If a Participant pays the exercise
price (or purchase price, if applicable) of an Award through the tender of
Shares, or if Shares are tendered or 

 

5

 

withheld to satisfy any
Company withholding obligations, the number of Shares so tendered or withheld
shall again be available for issuance pursuant to future Awards under the
Plan.  Upon the expiration, termination,
forfeiture, or cancellation (in whole or in part) of unexercised Awards, Shares
subject thereto shall again be available for issuance hereunder.  Any Shares that remain unissued at the
termination of the Plan shall cease to be subject to the Plan, but until
termination of the Plan, the Company shall at all times make available
sufficient Shares to meet the requirements of the Plan.

 

Section 5.              Stock
Options.

 

(a)           Type of Options.  The Board may issue options that constitute
Incentive Stock Options and Nonqualified Options to officers or employees of the Company and the Related
Corporations; provided further that an Award (other than an Award of an
Incentive Stock Option) may be granted to an individual prior to the date on
which he or she first performs services as an employee, provided that such
Award does not become vested prior to the date such individual commences such
services.  Each grant of options shall be
confirmed by a Stock Option Agreement that shall be executed by the Company and
the Optionee as soon as practicable after such grant.  The Stock Option Agreement shall expressly
state or incorporate by reference the provisions of the Plan and state whether
the option is an Incentive Stock Option or a Nonqualified Stock Option.

 

(b)           Terms of Options.  Except as provided in paragraphs (c) and
(d) of this Section, each option granted under the Plan shall be subject
to the terms and conditions set forth by the Committee in the Stock Option Agreement
including, without limitation, option price, vesting schedule and option
term.

 

(c)           Additional Terms
Applicable to All Options.  Each
option shall be subject to the following terms and conditions:

 

(i)            Written Notice.  An option may be exercised only by giving
written notice to the Company specifying the number of Shares to be
purchased.  An option may be exercised
only to the extent it is vested on the date of exercise.  The Committee may specify a reasonable
minimum number of Shares that may be purchased on any exercise of an option;
provided that the minimum number will not prevent the option holder from
exercising an option for the full number of Shares for which it is then exercisable.

 

(ii)           Method of Exercise.
Except as otherwise provided in any written option agreement, the exercise
price of an option shall be paid in full in cash or, subject to limitations
imposed by applicable law, by such means as the Committee from time to time may
permit, including, (i) in Common Stock, either actually or by attestation,
valued at its Fair Market Value on the date of exercise, provided it has been
owned by the Optionee for at least six (6) months prior to the exercise; (ii) in
cash by an unaffiliated broker-dealer to whom the holder of the option has
submitted an exercise notice consisting of a fully endorsed option; or (iii) by
any combination of cash and/or clauses (i) or (ii) above, as the Optionee
shall elect.  In the case of payment pursuant
to clauses (i) or (ii) above, the Optionee’s election must be made on
or prior to the date of exercise of the option and must be irrevocable.  In lieu of a separate election

 

6

 

governing each exercise
of an option, an Optionee may file a blanket election that shall govern all
future exercises of options until revoked by the Optionee.

 

(iii)          Term of Option.  An option shall be exercisable as provided
under the Plan or by the Committee.

 

(iv)          Disability, Death or
Retirement of Optionee.  If an Optionee’s
Termination of Service occurs due to Retirement, Disability or death prior to
exercise in full of any options, he or she, or his or her beneficiary,
executor, administrator or personal representative, shall have the right to
exercise the options within a period of twelve (12) months after the date of
such termination to the extent that the right was vested and exercisable at the
date of such termination as provided in the stock option agreement, or as may otherwise
be provided by the Committee.

 

(v)           Transferability.  No option may be transferred, assigned or
encumbered by an Optionee, except:  (A) by
will or the laws of descent and distribution; (B) by gifting for the
benefit of descendants for estate planning purposes; or (C) pursuant to a
certified domestic relations order.

 

(vi)          Repricing is Subject
to Stockholder Approval.  Except for adjustments pursuant to Section 14
(relating to the adjustment of shares), and reductions of the exercise price
approved by the Company’s stockholders, the exercise price for any outstanding
option may not be decreased after the date of grant nor may an outstanding
option granted under the Plan be surrendered to the Company as consideration
for the grant of a replacement option with a lower exercise price.

 

(d)           Additional Terms
Applicable to Incentive Options. 
Each Incentive Stock Option shall be subject to the following terms and
conditions:

 

(i)            Option Price.  The option price per Share shall be 100% of
the fair market value of a Share on the date the option is granted.  Notwithstanding the preceding sentence, the
option price per Share granted to an individual who, at the time such option is
granted, owns stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company (a “10% Stockholder”)
shall not be less than 110% of the fair market value of a Share on the date the
option is granted.

 

(ii)           Term of Option.  No option may be exercised more than ten (10) years
after the date of grant.  No option
granted to a 10% Stockholder may be exercised more than five (5) years
after the date of grant.  Notwithstanding
any other provisions hereof, no option may be exercised more than three (3) months
after the Optionee terminates employment with the Company, except in the event
of death or Disability, in which case the option may be exercised as provided
in subparagraph (c)(iv) of this Section.  In the case of Retirement, the option may be
exercised as provided in subparagraph (c)(iv) of this of this Section, but
if exercised beyond the three (3) month period following Retirement, the
option will not be an Incentive Stock Option and will be treated for all
purposes as a Nonqualified Option.

 

(iii)          Annual Exercise Limit.  The aggregate fair market value of Shares
which first become exercisable during any calendar year shall not exceed
$100,000.  For purposes of the preceding
sentence, the fair market value of each Share shall be determined on the date
the option with respect to such Share is granted.

 

7

 

(iv)          Transferability.  No option may be transferred, assigned or
encumbered by an Optionee, except by will or the laws of descent and
distribution, and during the Optionee’s lifetime an option may only be
exercised by him or her.

 

(v)           Notice of
Disqualifying Dispositions.  If an Optionee
sells or otherwise disposes of any Shares acquired pursuant to the exercise of
an Incentive Stock Option on or before the later of (1) the date two (2) years
after the date of grant, and (2) the date one year after the exercise of
the Incentive Stock Option (in either case, a “Disqualifying Disposition”), the Optionee must immediately
notify the Company in writing of such disposition.  The Optionee may be subject to income tax
withholding by the Company on the compensation income recognized by the Optionee
from the Disqualifying Disposition.

 

Section 6.              Stock
Appreciation Rights.

 

(a)           Grants.  An Award of Stock Appreciation Rights under
the Plan (“SARs”) may be granted separately
or in tandem with or by reference to an Option granted prior to or
simultaneously with the grant of Stock Appreciation Rights, to such eligible
officers and employees as may be
selected by the Committee, and shall be evidenced by a written agreement in
such form and consistent with the Plan as the Committee shall approve from time
to time.

 

(b)           Terms of Grant.  SARs may be granted in tandem with or with
reference to a related option, in which event the grantee may elect to exercise
either the option or the SAR, but not both, as to the same Share subject to the
option and the SAR, or the SAR may be granted independently of a related
option.  SARs shall not be transferable,
except:  (i) by will or the laws of
descent and distribution; (ii) by gifting for the benefit of descendants
for estate planning purposes; or (iii) pursuant to a certified domestic
relations order.

 

(c)           Payment on Exercise.  Upon exercise of a SAR, the grantee shall be
paid the excess of the then fair market value of the number of Shares to which
the SAR relates over the fair market value of such number of Shares at the date
of grant of the SAR or of the related option, as the case may be.  Such excess shall be paid in cash, in Shares
of equivalent value, or in some combination thereof.

 

Section 7.              Other
Stock Based Awards.

 

Other Stock Based Awards
may be granted either alone, in addition to, or in tandem with, Awards granted
under the Plan and/or cash awards made outside of the Plan. The Committee shall
have authority to determine the Service Providers to whom and the time or times
at which Other Stock Based Awards shall be made, the amount of such Other Stock
Based Awards, and all other conditions of the Other Stock Based Awards
including any dividend and/or voting rights.

 

8

 

Section 8.              Performance-Based Compensation.

 

(a)           In General.  Any Award under the Plan which is intended to
be “performance-based compensation” within the meaning of Code Section 162(m)
shall be conditioned on the achievement of one or more objective performance
measures, to the extent required by Code Section 162(m) as may be
determined by the Committee.

 

(b)           Performance Measures.  Such performance measures may be
based on any one or more of the following: earnings (e.g., earnings before interest and taxes; earnings before
interest, taxes, depreciation and amortization; or earnings per share);
financial return ratios (e.g., return
on investment, return on invested capital, return on equity or return on
assets); increase in revenue, operating or net cash flows; cash flow return on
investment; total stockholder return; market share; net operating income,
operating income or net income; debt load reduction; expense management;
economic value added; stock price; assets, asset quality level, charge offs,
loan reserves, non-performing assets, loans, deposits, growth of loans,
deposits or assets; interest sensitivity gap levels, regulatory compliance,
improvement of financial rating, achievement of balance sheet or income statement
objectives, and strategic business objectives, consisting of one or more
objectives based on meeting specific cost targets, business expansion goals and
goals relating to acquisitions or divestitures.  Performance measures may
be based on the performance of the Company as a whole or of any one or more
Subsidiaries or business units of the Company or a Subsidiary and may be
measured relative to a peer group, an index or a business plan.

 

(c)           Partial Achievement. 
The terms of any Award may provide that partial achievement of the performance
measures may result in a payment or vesting based upon the degree of
achievement.

 

(d)           Extraordinary Items. 
In establishing any performance measures, the Committee may provide for the
exclusion of the effects of the following items, to the extent identified in
the audited financial statements of the Company, including footnotes, or in the
Management Discussion and Analysis section of the Company’s annual
report:  (i) extraordinary, unusual,
and/or nonrecurring items of gain or loss; (ii) gains or losses on the
disposition of a business; (iii) changes in tax or accounting principles,
regulations or laws; or (iv) mergers or acquisitions.  To the extent
not specifically excluded, such effects shall be included in any applicable
performance measure.

 

Section 9.              Deferral of Payment.

 

(a)           In General.  Subject to subsection (b), to the extent
permitted by the Committee or the terms of any Award under the Plan, a
Participant may defer receipt of the cash or Shares otherwise payable under the
Award and be credited with interest or dividend equivalents with respect
thereto; provided, however, that any Award
otherwise payable in Shares shall continue to be payable only in Shares.

 

(b)           Code Section 409A.  Any stock option, SAR, or Other Stock Based
Award and any deferrals of such Awards under this Section 9, which
constitutes “deferred compensation” under Code Section 409A (“409A Award”), and any rules and
regulations promulgated

 

9

 

thereunder, shall be subject to the following:

 

(i)            All 409A Award
documents and agreements, or rules and regulations created by the
Committee pertaining to 409A Awards, shall provide for the required procedures
under Code Section 409A, including the timing of deferral elections and
the timing and method of payment distributions.

 

(ii)           With respect to all
409A Awards, the Committee and its delegates shall operate the Plan at all
times in conformity with the known rules, regulations and guidance promulgated
under Code Section 409A, and the Committee shall reserve the right
(including the right to delegate such right) to unilaterally amend any 409A
Award granted under the Plan, without the consent of the Participant, to
maintain compliance with Code Section 409A.  A Participant’s acceptance of any Award under
the Plan constitutes acknowledgement and consent to such rights of the
Committee.

 

Section 10.            Amendment
or Termination of the Plan.

 

The Board or the
Committee may amend, alter, suspend, discontinue or terminate the Plan or the
Committee’s authority to grant Awards under the Plan without the consent of
Company stockholders or Service Providers, except that any amendment or
alteration to the Plan shall be subject to the approval of the Company’s
stockholders not later than the annual meeting next following such Board action
if such stockholders approval is required by any federal or state law or
regulation or the rules of any stock exchange or automated quotation
system on which the Shares may then be listed or quoted, and the Board may
otherwise, in its discretion, determine to submit other such changes to the
Plan to stockholders for approval. 
Notwithstanding the foregoing, no such action may materially and
adversely affect the rights of such Service Providers under any previously
granted and outstanding Award, without the consent of an affected Service
Provider.  The Committee may waive any
conditions or rights under, or amend, alter, suspend, discontinue or terminate
any Award theretofore granted and any Award agreement relating thereto, except
as otherwise provided in the Plan; provided that, without the consent of an
affected Service Provider, no such Committee action may materially adversely
affect the rights of such Service Providers under such Award.

 

Section 11.            Term
of Plan.

 

The Plan shall be
effective upon the date of its adoption by the Board; provided that Incentive
Stock Options may be granted only if the Plan is approved by the stockholders
within twelve (12) months before or after the date of adoption by the
Board.  Unless sooner terminated under
the provisions of Section 10 above,
Awards shall not be granted under the Plan after the expiration of ten (10) years
from the most recent approval of the Plan by the Company’s stockholders.  However, Awards may be exercisable after the
end of the term of the Plan.

 

10

 

Section 12.            Rights
as Stockholder.

 

Upon delivery of any
Share to an officer or employee, such person shall have all of the rights of a
stockholder of the Company with respect to such Share, including the right to
vote such Share and to receive all dividends or other distributions paid with
respect to such Share.

 

Section 13.            Change
of Control.

 

Subject to the provisions
of Section 14 (relating to the adjustment of shares), and except as
otherwise provided in the Plan or in the terms of any Award Agreement:

 

(a)           Upon a Change of
Control, all Options and SARs held by Service Providers who have not incurred a
Termination of Service prior to the Change of Control shall become fully
exercisable immediately prior to the Change of Control (subject to the
expiration provisions otherwise applicable to the option or SAR).

 

(b)           Upon a Change of
Control all other Stock Based Awards described in Section 7 held by
Service Providers who have not incurred a Termination of Service prior to the
Change of Control shall be fully earned and vested.

 

(c)           Notwithstanding the
forgoing, if the vesting of an outstanding Award is conditioned upon the
achievement of performance measures, then the Award shall be subject to the
following:

 

(i)            If, at the time of the
Change of Control, the established performance measures are less than fifty
percent (50%) attained (as determined in the sole discretion of the Committee,
based upon a pro rata determination through the date of the Change of Control),
then such Award shall become vested and exercisable on a fractional basis with
the numerator being equal to the percentage of attainment and the denominator
being fifty percent (50%).

 

(ii)           If at the time of the
Change of Control, the established performance measures are at least fifty
percent (50%) attained (as determined in the sole discretion of the Committee,
based upon a pro rata determination through the date of the Change of Control),
then such Award shall become fully vested and exercisable.

 

For purposes of the Plan,
unless otherwise provided in an Award Agreement, the term “Change of Control” shall be deemed to have
occurred on the earliest of the following dates:

 

(a)           the consummation of the
acquisition by any person (as such term is defined in Section 13(d) or
14(d) of the Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of fifty-one percent (51%) or more of the
combined voting power of the then outstanding voting securities of the Company;
or

 

11

 

(b)           the individuals who, as
of the date hereof, are members of the Board cease for any reason to constitute
a majority of the Board, unless the election or nomination for election by the
stockholders of any new director was approved by a vote of a majority of the
Board, in which case such new director shall for purposes of this Plan be
considered as a member of the Board; or

 

(c)           the consummation by the
Company of:  (i) a merger or
consolidation if the Company’s stockholders, immediately before such merger or
consolidation, do not, as a result of such merger or consolidation, own,
directly or indirectly, more than fifty-one percent (51%) of the combined
voting power of the then outstanding voting securities of the entity resulting
from such merger or consolidation in substantially the same proportion as their
ownership of the combined voting power of the voting securities of the Company
outstanding immediately before such merger or consolidation; or (ii) a
complete liquidation or dissolution or an agreement for the sale or other
disposition of all or substantially all of the assets of the Company.

 

Notwithstanding the
foregoing, a Change of Control shall not be deemed to occur solely because
fifty-one percent (51%) or more of the combined voting power of the then
outstanding securities of the Company are acquired by:  (x) a trustee or other fiduciary holding
securities under one or more employee benefit plans maintained for employees of
the entity; or (y) any corporation which, immediately prior to such
acquisition, is owned directly or indirectly by the stockholders in the same
proportion as their ownership of stock immediately prior to such acquisition.

 

Section 14.            Changes
in Capital and Corporate Structure.

 

The aggregate number of
Shares and interests awarded and which may be awarded under the Plan (including
the specified share limitations set forth in Section 4)
and the exercise price thereof shall be adjusted to reflect a change in the
outstanding Shares of the Company by reason of a recapitalization,
reclassification, reorganization, stock split, reverse stock split, combination
of shares, stock dividend or similar transaction.  The adjustment shall be made in an equitable
manner which will cause the Awards and the economic benefits thereof to remain
unchanged as a result of the applicable transaction.  The adjustment may include (a) adjustment
of the number and kind of shares which have been and may be delivered under the
Plan, (b) replacement of Awards with other awards which the Committee
determines have comparable value and which are based on stock of a company
resulting from the transaction, and (c) cancellation of the Award in
return for cash payment of the current value of the Award, determined as though
the Award were fully vested at the time of payment, provided that in the case
of an option or SAR, the amount of such payment shall be no less than the
excess of the value of the Stock subject to the option or SAR at the time of
the transaction over the exercise price.

 

Section 15.            Assumption
of Awards by the Company.

 

The Company, from time to
time, may substitute or assume outstanding Awards granted by it or another
company, whether in connection with an acquisition of another company or
otherwise, by either (a) granting an Award under the Plan in substitution
of such other company’s 

 

12

 

award, or (b) assuming
such Award as if it had been granted under the Plan if the terms of such
assumed Award could be applied to an Award granted under the Plan.  Such substitution or assumption shall be
permissible if the holder of the substituted or assumed Award would have been
eligible to be granted an Award under the Plan if the other company had applied
the rules of the Plan to such grant. 
In the event the Company assumes an Award granted by another company,
the terms and conditions of such Award shall remain unchanged (except that the
exercise price and the number and nature of Shares issuable upon exercise of
any such option will be adjusted appropriately pursuant to Section 424(a) of
the Code).  In the event the Company
elects to grant a new option rather than assuming an existing option, such new
option may be granted with a similarly adjusted exercise price.

 

Section 16.            Service.

 

An individual shall be
considered to be in the service of the Company or a Related Corporation as long
as he or she remains an officer or employee of
the Company or such Related Corporation. 
Nothing herein shall confer on any individual the right to continued
service with the Company or a Related Corporation or affect the right of the
Company or such Related Corporation to terminate such service.

 

Section 17.            Withholding
of Tax.

 

(a)           Generally.  To the extent the award, issuance, vesting or
exercise of an Award results in the receipt of compensation by an officer or
employee, the Company may require the officer or employee to pay to the Company or the grantee may
authorize the Company to withhold a portion of any cash compensation then or
thereafter payable to such person, an amount, sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery of any
certificate for the Shares.  If an Award
is to be paid in cash, the payment will be net of an amount sufficient to
satisfy such tax withholding obligations.

 

(b)           Stock Withholding.  To the extent a grantee incurs tax liability
in connection with the exercise or vesting of any Award that is subject to tax
withholding and the grantee is obligated to pay the Company the amount required
to be withheld, the Committee may, in its sole discretion, allow the grantee to
satisfy the minimum withholding tax obligation by electing to have the Company
withhold from the Shares to be issued that number of Shares having a Fair
Market Value equal to the minimum amount required to be withheld, determined on
the date that the amount of tax to be withheld is to be determined.  All elections by a grantee to have Shares
withheld for this purpose shall be made in writing in a form acceptable to the
Committee.

 

Section 18.            Delivery
and Registration of Stock.

 

The Company’s obligation
to deliver Shares with respect to an Award shall, if the Committee so requests,
be conditioned upon the receipt of a representation as to the investment

 

13

 

intention of the
individual to whom such Shares are to be delivered, in such form as the
Committee shall determine to be necessary or advisable to comply with the
provisions of the Securities Act or any other federal, state or local
securities legislation or regulation.  It
may be provided that any representation requirement shall become inoperative
upon a registration of the Shares or other action eliminating the necessity of
such representation under securities legislation.  The Company shall not be required to deliver
any Shares under the Plan prior to:  (a) the
admission of such Shares to listing on any stock exchange on which Shares may
then be listed, and (b) the completion of such registration or other
qualification of such Shares under any state or federal law, rule or
regulation, as the Committee shall determine to be necessary or advisable.  The Plan is intended to comply with Rule 16b-3,
if applicable.  Any provision of the Plan
which is inconsistent with said rule shall, to the extent of such
inconsistency, be inoperative and shall not affect the validity of the
remaining provisions of the Plan.

 

14

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