CFX CORPORATION
1997
LONG-TERM INCENTIVE
PLAN
ARTICLE I.
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 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.
ARTICLE II.
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.
ARTICLE III.
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.
ARTICLE IV.
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.
ARTICLE V.
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.
ARTICLE VI.
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 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
