Exhibit 10.2
PORTER BANCORP, INC.
AMENDED AND RESTATED
2006 STOCK INCENTIVE PLAN
Porter Bancorp, Inc. (the
“Holding Company”) hereby amends and restates its 2006
Stock Incentive Plan, originally adopted as of February 23,
2006 and amended on March 23, 2006 (the “Plan”), for
the benefit of its employees and the employees of its subsidiary,
PBI Bank (the “Subsidiary”), as set forth below. This
Plan provides for grants of nonqualified stock options (options
that do NOT constitute incentive stock options under the tax Code)
and of restricted stock.
Section 1 —
PURPOSE
The Holding Company adopts this
compensation program for certain key Subsidiary employees to, among
other things, (a) increase the profitability and growth of the
Subsidiary; (b) provide competitive executive compensation
while obtaining the benefits of tax deferral; (c) attract and
retain exceptional personnel and encourage excellence in the
performance of individual responsibilities; and (d) motivate
key employees to contribute to the Subsidiary’s
success.
Section 2 —
DEFINITIONS
For purposes of the Plan, the
following terms shall have the meanings below unless the context
clearly indicates otherwise:
2.1 “ Award ”
means an Option or Restricted Stock Award granted under the
Plan.
2.2 “ Award Agreement
” shall mean a a written agreement, in such form as the
Committee prescribes from time to time, setting forth the terms and
conditions of an Award.
2.3 “Board” means
the Board of Directors of the Holding Company.
2.4 “Change of
Control” of the Holding Company or the Subsidiary means
(i) an event or series of events which have the effect
of any “person” as such term is used in
Section 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), other than any
trustee or other fiduciary holding securities of the Company under
any employee benefit plan of the Company, becoming the
“beneficial owner” as defined in Rule 13d-3 under
the Exchange Act, directly or indirectly, of securities of the
Holding Company or the Subsidiary representing 50% or more of the
combined voting power of the Subsidiary or the Holding
Company’s then outstanding stock; (ii) during any period
of two consecutive years, individuals who at the beginning of such
period constitute the board of directors of the Holding Company
cease for any reason to constitute a majority thereof, unless the
election, or the nomination for election by the stockholders, of
each new director was approved by a vote of at
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least two-thirds of the directors then still in
office who were directors at the beginning of the period;
(iii) the business of the Subsidiary or the Holding Company is
disposed of pursuant to a partial or complete liquidation, sale of
assets, or otherwise.
2.5 “Code” means
the Internal Revenue Code of 1986, as it may be amended from time
to time.
2.6 “Committee”
means the committee appointed by Board, if any, pursuant to
Section 4.1 to administer the Plan. If no committee has been
appointed, Committee means the Board.
2.7 “Disability”
means a physical or mental condition of an Award recipient
resulting in bodily injury or disease or mental disorder which
renders an Award recipient incapable of continuing the further
performance of the Award recipient’s normal employment
activities with the Subsidiary and which is expected to be
permanent or continuing for a period of at least 12 months. The
determination of the Committee on any question involving disability
shall be conclusive and binding.
2.8 “Employee”
means an employee of the Holding Company or of the Subsidiary who
has been designated by the Committee, under the criteria in
Section 5, as eligible to participate in the Plan.
2.9 “Fair Market
Value” shall have the meaning specified in
Section 6.2.
2.10 “Option”
means an option to purchase Stock granted under Section 6 of
the Plan. All Options under the Plan shall be nonqualified stock
options.
2.11 “Option
Period” means the period from the date of the grant of an
Option to the date when the period for exercise of an Option
expires as stated in the terms of the Award Agreement.
2.12 “Optionee”
means an Employee who has been granted an option to purchase shares
of Stock under the provisions of the Plan.
2.13 “Plan” means
this Porter Bancorp Stock Option Plan.
2.14 “ Restriction
Period ” means the period of time from the Grant Date of
a Restricted Stock Award to the date when the restrictions placed
on the Award in the Award Agreement lapse.
2.15 “ Restricted Stock
Award ” or “ Restricted Stock ” means
Stock which is granted under Section 8 of the Plan, subject to
a Restriction Period and/or condition which, if not satisfied, may
result in the complete or partial forfeiture of such
Stock.
2.16 “Stock”
means the Holding Company’s non-voting common stock of no par
value per share.
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2.17 “Termination of
Employment” shall be deemed to have occurred at the close
of business on the last day on which an Employee is carried as an
active employee on the records of the Holding Company or the
Subsidiary. The Committee shall determine whether an authorized
leave of absence, or other absence on military or government
service, constitutes severance of the employment relationship
between the Holding Company or the Subsidiary and the
Employee.
Section 3 — STOCK
SUBJECT TO THE PLAN
3.1 Authorized Stock
.
(a) Subject to adjustment as
provided in this Section, the aggregate number of shares of Stock
subject to an Award under the Plan shall be 400,000 shares. Stock
delivered under the Plan may consist, in whole or in part, of
authorized and unissued shares or of shares acquired from
shareholders upon such terms as the Board deems appropriate for
reserve in connection with exercises hereunder.
(b) The maximum number of shares of
Stock that may be subject to all Awards granted under the Plan to
any one Employee under the Plan is 100,000 shares, subject to
adjustment under Section 3.3.
3.2 Effect of Expirations .
If any Award is wholly or partly canceled or forfeited, or
terminates, expires or lapses, for any reason, the number of shares
of Stock with respect to which the Award can no longer be exercised
or realized by the Employee shall again be available for grant of
Awards under the Plan. If previously acquired shares of Stock are
used to pay the exercise price of an Award, the number of shares
available for grant of Awards under the Plan shall be increased by
the number of shares delivered as payment of such exercise price.
If previously acquired shares of Stock are used to pay withholding
taxes payable upon exercise or vesting of an Award, or if shares of
Stock that would be acquired upon exercise or vesting of an Award
are withheld to pay the exercise price or withholding taxes payable
upon exercise or vesting of such Award, the number of shares
available for grant of Awards under the Plan shall be increased by
the number of shares delivered or withheld as payment of such
withholding taxes.
3.3 Adjustments in Authorized
Shares Upon Changes in Capitalization, Merger or Certain Other
Transactions .
(a) Change in Number of Shares
Subject to Plan or Agreements. The number of shares of Stock
covered by each outstanding Award, and the number of shares of
Stock that have been authorized for issuance under the Plan but as
to which no Awards have yet been granted or that have been returned
to the Plan upon cancellation or expiration of an Award, as well as
the price per share of Stock covered by each such outstanding
Option, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Stock resulting from a
stock split, reverse stock split, stock dividend, combination,
recapitalization or reclassification of the Stock, or any other
increase or decrease in the number of issued shares of Stock
effected without receipt of consideration by the Holding Company;
provided, however, that conversion of any convertible securities of
the Holding Company shall not be deemed to
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have been “effected without receipt of
consideration.” Such adjustment shall be made by the
Committee, whose determination in that respect shall be final,
binding and conclusive. If any adjustment under this
Section 3.3 would create a fractional share of Stock or a
right to acquire a fractional share of Stock, such fractional share
shall be disregarded and the number of shares of Stock reserved
under this Plan and the number subject to any Awards granted under
this Plan shall be the next lower number of shares of Stock,
rounding all fractions downward. Any adjustment under this Section
shall be made in such a manner that would not constitute a
“modification” under Section 424(h) of the Code,
even though that Code Section is not otherwise applicable. Except
as expressly provided herein, no issuance by the Holding Company of
shares of stock of any class other than common, or securities
convertible into shares of stock of any class other than common,
shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Stock subject to
an Award.
(b) Conversion Into Other
Securities. If the Holding Company shall at any time merge,
consolidate with or into another corporation or association, or
enter into a statutory share exchange or any other similar
transaction in which shares of Stock are converted as a matter of
law into securities and/or other property, except as otherwise
provided in (d) below, each Employee will thereafter receive,
upon the exercise of an Option, the securities or property to which
a holder of the number of shares of Stock then deliverable upon the
exercise of such Option would have been entitled if such Option had
been exercised immediately prior to such merger, consolidation, or
share exchange and the Holding Company shall take such steps in
connection with such merger, consolidation or share exchange as may
be necessary to ensure that the provisions of this Plan shall
thereafter be applicable, as nearly as is reasonably possible, in
relation to any securities or property thereafter deliverable upon
the exercise of such Option.
(c) Dissolution or Liquidation. In
the event of the proposed dissolution or liquidation of the Holding
Company, the Board shall notify each holder of an outstanding
Option at least 15 days prior to such proposed action. To the
extent it has not been previously exercised, an Option will
terminate immediately prior to the consummation of such proposed
action.
(d) Change in Control. In the event
of a Change in Control, each outstanding Option shall be assumed or
an equivalent option or right shall be substituted by the successor
corporation or a Parent or subsidiary of such successor
corporation. If such successor corporation does not agree to assume
the outstanding Options or to substitute equivalent options or
rights, then each Option outstanding shall expire upon the Change
in Control, and the Company shall give each holder of an
outstanding Option 15 days advance notice of the Change in Control
and termination of Options. At the direction and discretion of the
Committee, any unvested Awards shall become vested in full at the
date such notice is given, the date of Change in Control, or such
other date specified by the Holding Company.
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Section 4 —
ADMINISTRATION
4.1 Committee Governance
.
(a) This Plan shall be administered
by the Board, unless the Board appoints a fewer number of its
members to act on its behalf as a committee hereunder (in either
case, defined herein as the “Committee”). To the extent
that the Board determines it desirable to qualify transactions
hereunder as exempt under Rule 16b-3 of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), each member
of the Committee administering the Plan as to such transactions
shall be a “Non-Employee Director” within the meaning
of Rule 16b-3 promulgated under the Exchange Act. To the extent
that the Board determines it desirable to qualify Awards granted
hereunder as “performance-based compensation” within
the meaning of Section 162(m) of the Code, each member of the
Committee administering the Plan as to such Awards shall be an
“outside director” within the meaning of Treasury
Regulation Section 1.162-27(e)(3). The Committee shall be
appointed from time to time by, and shall serve at the pleasure of,
the Board.
(b) The number of Committee members
shall be determined by the Board. The Board shall add or remove
members from the Committee as the Board sees fit, and vacancies
shall be filled by the Board. The Committee shall select one of its
members as the chairperson of the Committee and shall hold meetings
at such times and places as it may determine. The Committee may
appoint a secretary and, subject to the provisions of the Plan and
to policies determined by the Board, may make such rules and
regulations for the conduct of its business as it shall deem
advisable. Written action of the Committee may be taken by a
majority of its members, and actions so taken shall be fully
effective as if taken by a vote of a majority of the members at a
meeting duly called and held. A majority of Committee members shall
constitute a quorum for purposes of meeting. The act of a majority
of the members present at any meeting for which there is a quorum
shall be a valid act of the Committee.
4.2 Committee to Interpret
Plan . Subject to the express terms and conditions of the Plan,
the Committee shall have sole power to (i) construe and
interpret the Plan; (ii) establish, amend or waive rules for
its administration; (iii) to determine and accelerate the
exercisability of any Option and the vesting in any Award;
(iv) correct inconsistencies in the Plan or in any Award
Agreement, or any other instrument relating to an Award;
(v) determine all factual matters respect to any Award; and
(v) subject to the provisions of Section 9, amend the
terms and conditions of any outstanding Award, to the extent such
terms and conditions are within the discretion of the Committee as
provided in the Plan. All constructions of this Plan shall be made
in a manner the Committee believes consistent with Awards under the
Plan not constituting “deferred compensation” within
the meaning of Code Section 409A. Constructions,
interpretations and rules for administration of
