NON-QUALIFIED STOCK OPTION AGREEMENT
PURSUANT TO THE
2003 STOCK OPTION PLAN FOR OFFICERS AND EMPLOYEES OF
ASTORIA FINANCIAL CORPORATION
STOCK OPTION AGREEMENT made as of _________________ (the "Date of
Grant"), between Astoria Financial Corporation ("AFC"), and _________________
(the "Optionee"). For purposes of this Agreement, the defined terms contained
herein shall have the same meanings as those contained in the 2003 Stock Option
Plan for Officers and Employees of Astoria Financial Corporation (the "Plan").
Whereas, the purpose of the Plan is to promote the growth and
profitability of AFC, to provide certain key officers and employees of AFC and
its affiliates with an incentive to achieve corporate objectives, to attract and
retain key individuals of outstanding competence and to provide such individuals
with an equity interest in AFC; and
Whereas, the Plan provides for the grant of both Incentive and
Non-qualified Stock Options to purchase shares of the Common Stock of AFC, par
value, $.01 per share ("Common Stock"); and
Whereas the Committee determined as of the Date of Grant to grant to
the Optionee a Non- qualified Stock Option to purchase shares of Common Stock (
the "Option") as provided herein.
Now, therefore, to evidence the grant of such Option, and subject to
the terms and conditions of the Plan and this Agreement, AFC and the Optionee
hereby agree as follows:
1. GRANT OF OPTION. AFC hereby evidences and confirms its grant to the
Optionee on the Date of Grant of an Option to purchase _______ shares of Common
Stock at the Exercise Price of $_______ per share which was the Fair Market
Value per Share of the underlying shares of Common Stock on the Date of Grant as
determined pursuant to the Plan. Pursuant to the terms of the Plan, the Option
evidenced and confirmed hereby is accompanied by a Limited Stock Appreciation
Right with respect to _______ shares of Common Stock as specified in Section 4.9
of the Plan. In the event of a Change of Control at a time when the Option
granted hereunder is outstanding in whole or in part, the Optionee shall have
the right to exercise the Limited Stock Appreciation Right granted hereby as
provided in Section 4.9 of the Plan notwithstanding the fact that, at the time
that the exercise of such right occurs, the Option provided herein may have
otherwise expired or terminated by its terms.
2. TERM AND EXERCISE OF OPTION. The term of the Option will be for a
period of ten years from the Date of Grant, beginning on _________________ and
ending on _________________. The Option shall also expire and be forfeited if
not exercised prior to such earlier date as is set forth in Section 4.5 of the
Plan. The Option shall vest and become exercisable during the term of the
Option, subject to the
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conditions set forth herein and in the Plan, on a cumulative basis in
installments as set forth in the following Option Vesting Schedule.
Option Vesting Schedule
-----------------------
Installment Installment Number of Shares as to which Option Vests
Number Vesting Date on Installment Vesting Date
----------- ----------- -----------------------------------------
1 ---------- -------
The Option shall vest and become immediately exercisable in its entirety as to
all Shares in the event of a Threatened Change of Control or a Change in Control
of the Company or in the event the Optionee terminates his employment with the
Company due to death, Disability or Retirement. The grant of the Option shall
impose no obligation upon the Optionee to exercise the Option.
3. MANNER OF EXERCISE. The Option may be exercised from time to time,
in whole or in part, by written notice to the Committee, delivered to AFC to the
person designated in Section 11 of this Option Agreement, signed by the Optionee
or the person or persons eligible to exercise the Option under Section 6 hereof.
Such notice shall state the number of Shares with respect to which the Option is
being exercised and the Exercise Price as to such Shares, and shall include such
written covenants, agreements and representations as may from time to time be
necessary or desirable in order to ensure compliance with applicable laws,
regulations of governmental authorities and the requirements of any exchange or
stock market upon which the Common Stock is traded or listed. Such notice shall
be accompanied by payment in full of the Exercise Price for the number of Shares
as to which the Option is being exercised as provided in the Plan. As soon as
practicable after such notice and payment shall have been received, AFC shall
deliver a certificate or certificates representing the number of Shares with
respect to which the Option was exercised in the name of the person or persons
exercising the Option; provided, however, that AFC, in its sole discretion, may
permit Shares to be held in book-entry form.
Payment of the Exercise Price shall be made in cash, or, in whole or in
part, through the surrender of Shares, which Shares shall be valued at Fair
Market Value (as defined in the Plan) on the date of exercise of the Option.
The Optionee or other person entitled to exercise the Option shall not
be entitled to any rights as a stockholder with respect to Shares being acquired
pursuant to the exercise of the Option unless and until the acquisition of such
Shares shall have been recorded on the official stock transfer records of AFC.
No adjustments shall be made for dividends or distributions or other rights for
which the record date is prior to the recording of such acquisition except as
provided in Section 10 hereof.
In the event the Option shall be exercised by any person other than by
the Optionee pursuant to Section 6 or 8 hereof, the notice of exercise of the
Option shall be accompanied by proof satisfactory to the Committee of the right
of such person to exercise the Option.
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All Shares that shall be acquired upon the exercise of the Option as
provided herein shall be fully paid and nonassessable.
4. SECURITIES LAWS: HOLDING PERIOD. Notwithstanding anything herein to
the contrary, AFC shall not be obligated to cause to be issued or delivered any
certificate evidencing Shares acquired pursuant to the exercise of the Option,
unless and until AFC is advised by its counsel that the issuance and delivery of
such certificates is in compliance with all applicable laws, regulations and
governmental authority and the requirements of any exchange or stock market upon
which the Common Stock is traded or listed. AFC shall in no event be obligated
to register any securities pursuant to the Securities Act of 1933 (as now in
effect or as hereafter amended) (the "Securities Act") or to take any other
affirmative action in order to cause the issuance and delivery of such
certificates to comply with any such law, regulation or requirement. In order to
ensure compliance with applicable federal, state and local law, the Committee
may at the time of exercise of the Option condition the exercise of such Option
upon receipt from the Optionee, or the person exercising the Option if other
than the Optionee, of a representation of the investment intention of the Person
to whom the Shares are to be delivered.
Under current law, unless the Shares issuable upon exercise of Options
under the Plan are registered with the Securities and Exchange Commission
("SEC") under the Securities Act, such Shares are restricted securities subject
to the restrictions on resale as provided in Rule 144 as promulgated by the SEC
under the Securities Act. THEREFORE, UNLESS (I) THE ISSUANCE OF SHARES PURSUANT
TO THE EXERCISE OF OPTIONS UNDER THE PLAN IS REGISTERED UNDER THE SECURITIES ACT
OR (II) THE SUBSEQUENT SALE OF SHARES ACQUIRED UPON EXERCISE OF THE OPTION IS
REGISTERED UNDER THE SECURITIES ACT, OR (III) AN EXEMPTION FROM REGISTRATION IS
AVAILABLE, SUCH SHARES MUST BE HELD FOR TWO YEARS AFTER EXERCISE BEFORE THEY MAY
BE SOLD. An appropriate legend reflecting this restriction shall be placed on
the certificate evidencing the Shares when issued unless the requirements of (i)
above have previously been met. Shares for which a restrictive legend is
required may not be held in book-entry form or registered in "street" name.
Also under applicable law, the grant of the Option and sale of the
underlying Shares may be deemed to be a purchase and sale, respectively, under
Section 16 of the Securities Exchange Act of 1934, as amended, (the "Exchange
Act") and, therefore, may result in the incursion of short swing profit recovery
under the Exchange Act and the regulations promulgated thereunder. To avoid
liability under Section 16 of the Exchange Act, a period of six months must
elapse between the Date of Grant and the sale of Common Stock received upon the
exercise of the Option.
5. NON-TRANSFERABILITY. The Option may be exercised during the
Optionee's lifetime only by the Optionee (and, upon death, by the Optionee's
beneficiary as defined in Section 6). The Option and this Option Agreement shall
not be assignable or transferable by the Optionee, other than by will, by the
laws of descent and distribution, or pursuant to the terms of a Qualified
Domestic Relations Order; provided, however, that the Optionee may, at any time
at or after the grant of the
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Option, apply to the Committee for approval to transfer all or any portion of
such Option which is then unexercised to such Optionee's spouse, and the lineal
ascendents and lineal descendants of such Optionee or his spouse, or any one or
more of them, or to any entity wholly owned by (including but not limited to a
trust the exclusive beneficiaries of which are) one or more of them or wholly
owned jointly by one or more of them and the Optionee. The Committee may approve
or withhold approval of such transfer in its sole and absolute discretion. If
such transfer is approved, it shall be effected by written notice to AFC given
in such form and manner as the Committee may prescribe and actually received by
AFC prior to the death of the person giving it. Thereafter, the transferee shall
have with respect to such Option, all of the rights, privileges and obligations
which would attached thereunder to the transferor. If a privilege of the Option
depends on the life, employment or other status of the transferor, such
privilege of the Option for the transferee shall continue to depend upon the
life, employment or other status of the transferor. No such transfer of the
Option or this Option Agreement by the Optionee shall be effective to bind AFC
unless the Committee shall have been furnished with written notice thereof and
such other evidence as the Committee may deem necessary or desirable to
establish the validity of the transfer and the agreement of the transferee or
transferees to be bound by the terms and conditions of this Agreement and the
Plan. The Exercise Price, upon the election of the Optionee or other person
entitled to exercise the Option, may be paid with borrowed funds the repayment
of which is secured by the Shares assigned or the proceeds thereof. Except as
provided above, the Option and this Option Agreement shall not be pledged,
hypothecated, sold, assigned, transferred or otherwise encumbered or disposed
of. Any purported pledge, hypothecation, sale, assignment, transfer or other
encumbrance or disposition of the Option or this Option Agreement contrary to
the provisions hereof shall be null and void and without effect. The levy of any
execution, attachment, or similar process upon the Option or Option Agreement
shall be null and void and without effect.
6. DESIGNATION OF BENEFICIARY. The Optionee may designate a person or
persons to receive, in the event of death, any rights that may be available to
the Optionee pursuant to the Plan under the Option and this Option Agreement.
Such designation will be made in writing upon terms supplied by and shall be
delivered to AFC prior to the death of the person making the designation and may
be revoked by a similar writing. If the Optionee fails effectively to designate
a beneficiary, then the Optionee's estate will be deemed to be the beneficiary.
The Optionee may designate a beneficiary or beneficiaries pursuant to this
Agreement in writing by delivery of such designation to the person specified in
Section 11 to receive notices on behalf of the Committee. Following the death of
an Optionee, the designated beneficiary shall have the right to designate his
own death beneficiary.
7. RIGHTS IN EVENT OF TERMINATION OF EMPLOYMENT. Subject to the
condition that the Option shall not be exercisable after _________________, the
Optionee (or, if applicable, his transferee) may exercise the Option only while
the Optionee is in the continuous service and employ of the Company or within
three months after the last day on which the Optionee is employed by or in the
service of the Company (unless the Optionee's service is terminated on account
of death as provided in Section 8 or Disability or Retirement as provided in
Section 9). If the Optionee's employment is terminated under circumstances which
constitute Termination for Cause, all Options
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and the Limited Stock Appreciation Right awarded to Optionee shall immediately
expire upon such termination.
8. RIGHTS IN EVENT OF DEATH. Subject to the condition that the Option
shall not be exercisable after _________________, if the Optionee shall die
while in the employ or service of the Company, the beneficiary of the Optionee
(as determined pursuant to Section 6) may exercise the Option held by the
Optionee for a period of only one year from the date of the Optionee's death.
9. RIGHTS IN EVENT OF DISABILITY OR RETIREMENT. Subject to the
condition that the Option shall not be exercisable after _________________, if
the Optionee shall terminate his employment or service to the Company as a
result of Disability or as a result of Retirement, the Optionee (or, if
applicable, his transferee) may exercise the Option for a period of only one
year from the date of the Optionee's termination of employment or service due to
such Disability or Retirement.
10. DILUTION AND OTHER ADJUSTMENTS. In the event of any change in the
outstanding Shares by reason of any stock dividend or split, recapitalization,
merger, consolidation, spin-off, reorganization, combination or exchange of
shares, or other similar corporate change, proportionate and equitable
adjustments to the Option shall be made to the number of shares of Common Stock
covered by the Option and to the Exercise Price per share covered by the Option
to prevent dilution or enlargement of the rights of the Optionee under this
Agreement.
11. NOTICE. Any notice required or permitted under this Option
Agreement or the Plan shall be deemed given when delivered in person or five
days after mailing, if mailed, postage prepaid, by registered or certified mail
with return receipt requested to the Committee addressed to One Astoria Federal
Plaza, Lake Success, New York 11042-1085, ATTN.: Corporate Secretary, and to the
Optionee or beneficiary at their last known addresses in the records of AFC.
12. NO RIGHT TO CONTINUED EMPLOYMENT. Nothing contained in the Plan or
set forth in this Option Agreement shall be held or construed to confer upon the
Optionee any right to continuation of employment by the Company or to impose
upon the Company any obligation to employ or retain the Optionee in its employ
or service for any period.
13. MODIFICATION AND WAIVER. Neither this Option Agreement nor any
provision hereof can be changed, modified, amended, discharged, terminated or
waived orally or by any course of dealing or purported course of dealing, but
only by an agreement in writing signed by the Optionee or the Optionee's legal
representative and AFC. The waiver of or failure to enforce any breach of this
Option Agreement or the Plan shall not be deemed to be a waiver of or
acquiescence in any other breach thereof.
14. INCORPORATION OF THE PLAN. This Option Agreement is subject in its
entirety to the terms and conditions set forth in the Plan which are
incorporated by reference herein. In the event of any conflict between the terms
and conditions set forth in this Option Agreement and those set forth in the
Plan, the terms and conditions set forth in the Plan shall control.
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15. GOVERNING LAW. This Option Agreement shall be governed by and
construed in accordance with the laws of the State of New York to the extent not
preempted by federal law.
16. OPTIONEE ACKNOWLEDGMENT. The Optionee hereby acknowledges that all
decisions, determinations and interpretations of the Committee, with respect to
the Plan and this Option Agreement, shall be final and conclusive.
IN WITNESS WHEREOF, AFC has caused this Option Agreement to be executed
by its duly authorized officer and its corporate seal to be affixed hereto, and
said Optionee has hereunto set his hand, as of the day and year first above
written.
[CORPORATE SEAL] ASTORIA FINANCIAL CORPORATION
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Assistant Secretary Executive Vice President, Secretary and General
Counsel
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Witness Optionee
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Address
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Address
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I hereby designate as my Beneficiary under the terms of this Option
Agreement the following person(s) in the designated portions:
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Name of Beneficiary %
--------------------------------
Relationship to Optionee
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Address of Beneficiary
--------------------- -------------
Name of Beneficiary %
--------------------------------
Relationship to Optionee
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Address of Beneficiary
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Name of Beneficiary %
--------------------------------
Relationship to Optionee
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Address of Beneficiary
Date: Signed:
--------------- ------------------------
Optionee
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Witness
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