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Exhibit 4
CFX CORPORATION
1997 LONG-TERM INCENTIVE PLAN
1. Definitions. In this Plan, except where the context otherwise
indicates, the following definitions shall apply:
1.1. "Agreement" means a written agreement implementing an
Award.
1.2. "Award" means a grant of an Option.
1.3. "Board" means the Board of Directors of the
Corporation.
1.4. "Code" means the Internal Revenue Code of 1986, as
amended.
1.5. "Committee" means the committee or subcommittee of
the Board appointed by the Board to administer this Plan. Unless otherwise
determined by the Board, the Stock Option Committee of the Board shall be the
Committee.
1.6. "Common Stock" means the common stock, par value
$0.66 2/3 per share, of the Corporation.
1.7. "Corporation" means CFX Corporation.
1.8. "Date of Exercise" means the date on which the
Corporation receives notice of the exercise of an Option in accordance with the
terms of Section 7.1.
1.9. "Date of Grant" means the date on which an Option is
granted under this Plan.
1.10. "Director" means a member of the Board of the
Corporation or any Subsidiary.
1.11. "Employee" means any employee of the Corporation or a
Subsidiary, including an Employee Director or any person who has been hired to
be an employee of the Corporation or a Subsidiary.
1.12. "Employee Director" means a Director who is also an
Employee.
1.13. "Exchange Act" means the Securities Exchange Act of
1934, as amended.
1.14. "Fair Market Value" means an amount equal to the
closing sale price for a Share, on the date such fair market value is to be
determined (or if there is no sale of Shares on such date, the closing sale
price on the nearest trading date preceding such date), in the
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principal trading market for the Shares as reported by such source as the
Committee may select, or, if such price quotations of the Common Stock are not
then reported, then the fair market value of a Share as determined by the
Committee pursuant to a reasonable method adopted in good faith for such
purpose.
1.15. "Incentive Stock Option" means an Option granted
under this Plan that qualifies as an incentive stock option under Section 422
of the Code and that the Corporation designates as such in the Agreement
granting the Option.
1.16. "Independent Director" means a Director who is not an
Employee Director.
1.17. "Nonstatutory Stock Option" means an Option granted
under this Plan that is not an Incentive Stock Option.
1.18. "Option" means an option to purchase Shares granted
under this Plan in accordance with the terms of Section 6.
1.19. "Option Period" means the period during which an
Option may be exercised.
1.20. "Option Price" means the price per Share at which an
Option may be exercised. The Option Price shall be determined by the Committee
and shall not be less than the Fair Market Value determined as of the Date of
Grant. Notwithstanding the foregoing, in the case of an Incentive Stock Option
granted to a Ten-Percent Stockholder, the Option Price shall not be less than
110% of the Fair Market Value on the Date of Grant.
1.21. "Optionee" means an Employee or Independent Director
to whom an Option has been granted.
1.22. "Plan" means the CFX Corporation 1997 Long-Term
Incentive Plan.
1.23. "Rule 16b-3" means Rule 16b-3 under Section 16 of the
Exchange Act, or any successor rule.
1.24. "Share" means a share of Common Stock.
1.25. "Subsidiary" means a corporation at least 50% of the
total combined voting power of all classes of stock of which is owned by the
Corporation, either directly or through one or more other Subsidiaries.
1.26. "Ten-Percent Stockholder" means an Optionee who
(applying the rules of Section 424(d) of the Code) owns stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Corporation or a Subsidiary.
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2. Purpose. This Plan is intended to assist the Corporation and
its Subsidiaries in attracting and retaining Employees and Independent Directors
of outstanding ability and to promote the identification of their interests with
those of the stockholders of the Corporation.
3. Administration. The Committee shall administer this Plan and
shall have plenary authority, in its discretion, to award Options to Employees
and Independent Directors, subject to the provisions of this Plan. The Committee
shall have plenary authority and discretion, subject to the provisions of this
Plan, to determine the terms (which terms need not be identical) of all Awards
to Employees and Independent Directors, including without limitation the
exercise price of Options, the time or times at which Awards are made, the
number of Shares covered by Awards, whether an Option shall be an Incentive
Stock Option or a Nonstatutory Stock Option, any exceptions to
non-transferability, any provisions relating to vesting, any circumstances in
which the Options would terminate, the period during which Options may be
exercised, and the period during which Options shall be subject to restrictions.
In making these determinations, the Committee may take into account the nature
of the services rendered by the Award recipients, their present and potential
contributions to the success of the Corporation and its Subsidiaries, and such
other factors as the Committee in its discretion shall deem relevant. Subject to
the provisions of this Plan, the Committee shall have plenary authority to
interpret this Plan, prescribe, amend and rescind rules and regulations relating
to it, and make all other determinations deemed necessary or advisable for the
administration of this Plan. The determinations of the Committee on the matters
referred to in this Section 3 shall be binding and final.
4. Eligibility. Incentive Stock Options may be granted or
awarded only to Employees. Nonstatutory Stock Options may be granted or awarded
to Employees or Independent Directors.
5. Stock Subject to Plan.
5.1. Subject to adjustment as provided in Section 8, the
maximum number of Shares that may be issued under this Plan is 500,000 Shares.
The maximum number of Shares with respect to which an Employee may receive
Awards under this Plan during its term is 100,000.
5.2. If an Option expires or terminates for any reason without
having been fully exercised, the unissued or forfeited Shares which had been
subject to the Award shall become available for the grant of additional Awards.
6. Options.
6.1. Options granted under this Plan to Employees shall be
either Incentive Stock Options or Nonstatutory Stock Options, as designated by
the Committee. Each Option granted under this Plan shall be clearly identified
either as a Nonstatutory Stock Option or an Incentive Stock Option and shall be
evidenced by an Agreement that specifies the terms and
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conditions of the grant. Options granted to Employees shall be subject to the
terms and conditions set forth in this Section 6 and such other terms and
conditions not inconsistent with this Plan as the Committee may specify. All
Incentive Stock Options granted under this Plan shall comply with the provisions
of the Code governing incentive stock options and with all other applicable
rules and regulations.
6.2. The Option Period for Options granted to Employees shall
be determined by the Committee and specifically set forth in the Agreement;
provided, however, that an Option shall not be exercisable after ten years (five
years in the case of an Incentive Stock Option granted to a Ten-Percent
Stockholder) from its Date of Grant.
6.3. The Committee, in its discretion, may provide in an
Agreement for the right of the Optionee to surrender to the Corporation an
Option (or a portion thereof) that has become exercisable and to receive upon
such surrender, without any payment to the Corporation (other than required tax
withholding amounts) that number of Shares (equal to the highest whole number of
Shares) having an aggregate fair market value as of the date of surrender equal
to that number of Shares subject to the Option (or portion thereof) being
surrendered multiplied by an amount equal to the excess of (i) the Fair Market
Value on the date of surrender over (ii) the Option Price, plus an amount of
cash equal to the fair market value of any fractional Share to which the
Optionee would be entitled but for the parenthetical above relating to whole
number of Shares. Any such surrender shall be treated as the exercise of the
Option (or portion thereof).
6.4. Options made under this Plan shall not be transferable
other than by will, the laws of descent and distribution, or as provided by the
Committee in an Agreement.
7. Exercise of Options.
7.1. An Option may, subject to the terms of the applicable
Agreement under which it was granted, be exercised in whole or in part by the
delivery to the Corporation of written notice of the exercise, in such form as
the Committee may prescribe, accompanied by full payment for the Shares with
respect to which the Option is exercised. To the extent provided in the
applicable Option Agreement, payment may be made in whole or in part by delivery
(including constructive delivery) of Shares valued at Fair Market Value on the
Date of Exercise or by delivery of a promissory note as provided in Section 7.2
hereof.
7.2. To the extent provided in an Agreement and permitted by
applicable law, the Committee may accept as partial payment of the Option Price
a promissory note executed by the Optionee evidencing his or her obligation to
make future cash payment thereof. Promissory notes made pursuant to this Section
7.2 shall be payable upon such terms as may be determined by the Committee,
shall be secured by a pledge of the Shares received upon exercise of the Option
and shall bear interest at a rate fixed by the Committee.
8. Capital Adjustments. In the event of any change in the
outstanding Common Stock by reason of any stock dividend, split-up,
recapitalization, reclassification, combination
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or exchange of shares, merger, consolidation or liquidation and the like, the
Committee may, in its discretion, provide for a substitution for or adjustment
in (i) the number and class of Shares subject to outstanding Options, (ii) the
Option Price of Options, and (iii) the aggregate number and class of Shares for
which Awards thereafter may be made under this Plan and to individual Award
recipients.
9. Termination or Amendment. The Board may amend, alter or
terminate this Plan in any respect at any time; provided, however, that, after
this Plan has been approved by the stockholders of the Corporation, no
amendment, alteration or termination of this Plan shall be made by the Board
without approval of (i) the Corporation's stockholders to the extent stockholder
approval of the amendment is required by applicable law or regulations or the
requirements of the principal exchange or interdealer quotation system on which
the Common Stock is listed or quoted, and (ii) each affected Optionee if such
amendment, alteration or termination would adversely affect his or her rights or
obligations under any Award made prior to the date of such amendment, alteration
or termination.
10. Modification, Extension, Renewal, Substitution.
10.1. Subject to the terms and conditions of this Plan, the
Committee may modify, extend or renew outstanding Options, or accept the
surrender of outstanding Options granted under this Plan or options granted
under any other plan of the Corporation or a Subsidiary (to the extent not
theretofore exercised), and authorize the granting of new Options pursuant to
this Plan in substitution therefor. Any substituted Options may specify a lower
exercise price than the surrendered options, a longer term than the surrendered
options, or have any other provisions that are authorized by this Plan.
Notwithstanding the foregoing, however, no modification of an Award shall,
without the consent of the Optionee, alter or impair any of the Optionee's
rights or obligations under such Award.
10.2. Anything contained herein to the contrary
notwithstanding, Options may, at the discretion of the Committee, be granted
under this Plan in substitution for options to purchase shares of capital stock
of another corporation which is merged into, consolidated with, or all or a
substantial portion of the property or stock of which is acquired by, the
Corporation or one of its Subsidiaries. The terms and conditions of the
substitute Options so granted may vary from the terms and conditions set forth
in this Plan to such extent as the Committee may deem appropriate in order to
conform, in whole or part, to the provisions of the options in substitution for
which they are granted. Such Options shall not be counted toward the 100,000
Share limit imposed by the second sentence of Section 5.1, except to the extent
it is determined by the Committee that the applicability of such sentence is
required in order for grants of Options hereunder to be eligible to qualify as
"performance-based compensation" within the meaning of Section 162(m) of the
Code.
11. Effectiveness of this Plan. This Plan and any amendments
requiring stockholder approval pursuant to Section 9 are subject to approval by
vote of the stockholders of the Corporation within 12 months after their
adoption by the Board. Subject to that approval, this
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Plan and any amendments are effective on the date on which they are adopted by
the Board. Options may be granted or awarded prior to stockholder approval of
this Plan or amendments, but each such Award shall be subject to the approval of
this Plan or amendments by the stockholders. The date on which any Option
granted or awarded prior to stockholder approval of this Plan or amendment is
granted or awarded shall be the Date of Grant for all purposes as if the Option
had not been subject to approval; no such Option may be exercised prior to such
stockholder approval, and any such Option shall be void ab initio if such
stockholder approval is not obtained.
12. Withholding. The Corporation's obligation to deliver Shares or
pay any amount pursuant to the terms of any Award hereunder shall be subject to
the satisfaction of applicable federal, state and local tax withholding
requirements. To the extent provided in the applicable Agreement and in
accordance with rules prescribed by the Committee, an Optionee may satisfy any
such withholding tax obligation by any of the following means or by a
combination of such means: (i) tendering a cash payment, (ii) authorizing the
Corporation to withhold Shares otherwise issuable to the Optionee, or (iii)
delivering to the Corporation already owned and unencumbered Shares.
13. Term of this Plan. Unless sooner terminated by the Board
pursuant to Section 9, this Plan shall terminate on December 10, 2006, and no
Option, may be granted or awarded after such date. The termination of this Plan
shall not affect the validity of any Award outstanding on the date of
termination.
14. Indemnification of Committee. In addition to such other rights
of indemnification as they may have as Directors or as members of the Committee,
the members of the Committee shall be indemnified by the Corporation against all
reasonable expenses, including attorneys' fees, actually and reasonably incurred
in connection with the defense of any action, suit or proceeding, or in
connection with any appeal therein, to which they or any of them may be a party
by reason of any action taken or failure to act under or in connection with this
Plan or any Option granted or awarded hereunder, and against all amounts
reasonably paid by them in settlement thereof or paid by them in satisfaction of
a judgment in any such action, suit or proceeding, if such members acted in good
faith and in a manner which they believed to be in, and not opposed to, the best
interests of the Corporation.
15. General Provisions.
15.1. The establishment of this Plan shall not confer upon any
Employee or Independent Director any legal or equitable right against the
Corporation, any Subsidiary or the Committee, except as expressly provided in
this Plan.
15.2. This Plan does not constitute inducement or
consideration for the employment of any Employee or the service of any
Independent Director, nor is it a contract between the Corporation or any
Subsidiary and any Employee or Independent Director.
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Participation in this Plan shall not give an Employee or Independent Director
any right to be retained in the service of the Corporation or any Subsidiary.
15.3. Neither the adoption of this Plan nor its submission to
the stockholders, shall be taken to impose any limitations on the powers of the
Corporation or its Subsidiaries to issue, grant, or assume options, warrants,
rights, or restricted stock, otherwise than under this Plan, or to adopt other
stock option or restricted stock plans or to impose any requirement of
stockholder approval upon the same.
15.4. The interests of any Employee or Independent Director
under this Plan are not subject to the claims of creditors and may not, in any
way, be assigned, alienated or encumbered except as provided in an Agreement.
15.5. This Plan shall be governed, construed and administered
in accordance with the laws of the State of New Hampshire and it is the
intention of the Corporation that Incentive Stock Options granted under this
Plan qualify as such under Section 422 of the Code.
15.6. The Committee may require each person acquiring Shares
pursuant to Awards hereunder to represent to and agree with the Corporation in
writing that such person is acquiring the Shares without a view to distribution
thereof. The certificates for such Shares may include any legend which the
Committee deems appropriate to reflect any restrictions on transfer. All
certificates for Shares issued pursuant to this Plan shall be subject to such
stock transfer orders and other restrictions as the Committee may deem advisable
under the rules, regulations and other requirements of the Securities and
Exchange Commission, any stock exchange upon which the Common Stock is then
listed, and any applicable federal or state securities laws. The Committee may
place a legend or legends on any such certificates to make appropriate reference
to such restrictions.
15.7. The Corporation shall not be required to issue any
certificate or certificates for Shares with respect to Awards under this Plan,
or record any person as a holder of record of such Shares, without obtaining, to
the complete satisfaction of the Committee, the approval of all regulatory
bodies deemed necessary by the Committee, and without complying to the
Committee's complete satisfaction, with all rules and regulations, under
federal, state or local law deemed applicable by the Committee.
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