Exhibit 10.5
VICTORY STATE BANK
1998 DIRECTORS STOCK OPTION PLAN
1. PURPOSE
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The
purpose of Victory State Bank (the "Bank") 1998 Directors Stock
Option
Plan (the "Plan") is to promote the growth and profitability of the
Bank by
providing outside directors of the Bank with an incentive to
achieve long-term
objectives of the Bank and to attract and retain non-employee
directors of
outstanding competence by providing such outside Directors with an
opportunity
to acquire an equity interest in the Bank.
2.
DEFINITIONS
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(a)
"Affiliate" means (i)
a member of a controlled group of corporations
of which the Bank is a member or (ii) an unincorporated trade or
business which
is under common control with the Bank as determined in accordance
with Section
414(c) of the Internal Revenue Code of 1986, as amended, (the
"Code") and the
regulations issued thereunder. For purposes hereof, a "controlled
group of
corporations" shall mean a controlled group of corporations as
defined in
Section 1563(a) of the Code determined without regard to Section
1563(a)(4) and
(e)(3)(C).
(b)
"Award" means a grant
of Options under the provisions of this Plan.
(c)
"Board of Directors"
or "Board" means the board of directors of the
Bank.
(d)
"Change in Control" of
the Bank, for purposes of this Plan, means an
event of a nature that: (i) would be required to be reported in
response to Item
1 of the current report on Form F-3, as in effect on the date
hereof, pursuant
to Section 13 of the Securities Exchange Act of 1934 (the "Exchange
Act"); or
(ii) results in a Change in Control of the Bank within the meaning
of the Change
in Bank Control Act and the rules and regulations promulgated by
the Federal
Deposit Insurance Corporation (the "FDIC") at 12 C.F.R.
ss.303.4(a), as in
effect on the date hereof; or (iii) results in a transaction
requiring prior
approval of the Federal Reserve Board ("FRB"), under the Bank
Holding Company
Act of 1956 and the regulations promulgated thereunder by the FRB
at 12 C.F.R.
ss.225.11, as in effect on the date hereof or (iv) without
limitation, such a
Change in Control shall be deemed to have occurred at such time as
(A) any
"person" (as the term is used in Sections 13(d) and 14(d) of the
Exchange Act)
is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the
Exchange Act), directly or indirectly, of securities of the Bank
representing
20% or more of the Bank's outstanding securities or (B) individuals
who
constitute the Board on the date hereof (the "Incumbent Board")
cease for any
reason to constitute at least a majority thereof, provided that any
person
becoming a director subsequent to the date hereof whose election
was approved by
a vote of a majority of the directors comprising the Incumbent
Board, or whose
nomination for election by the Bank's stockholders was approved by
the Incumbent
Board, shall be, for purposes of this clause (B), considered as
though he or she
were a member of the Incumbent Board; or (C) a plan of
reorganization, merger,
consolidation, sale of all or substantially all the assets of the
Bank or
similar transaction occurs in which the Bank is not the resulting
entity; or (D)
a proxy statement shall be distributed soliciting proxies from
shareholders of
the Bank, by someone other than the current management of the Bank,
seeking
stockholder approval of a plan of reorganization, merger or
consolidation of the
Bank or similar transaction with one or more corporations as a
result of which
the outstanding shares of the class of securities then subject to
the plan or
transaction are exchanged for or converted into cash or property or
securities
not issued by the Bank; or (E) a tender offer is made for 20% or
more of the
voting securities of the Bank.
(e)
"Committee" means a
committee consisting of those members of the
Directors Stock Option Committee of the Bank who are Directors,
none of whom are
under consideration for a grant of Options at the time the
Committee acts.
(f)
"Common Stock" means
the Common Stock of the Bank, par value, $5.00
per share.
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(g)
"Date of Grant" means
the date an Award granted by the Committee is
effective pursuant to the terms hereof.
(h)
"Director" means a
member of the Board of Directors of the Bank who is
not an employee of the Bank or any of its Affiliates.
(i)
"Disability" means
disability as defined in the Bank's long term
disability plan, or if not so defined, disability shall mean the
permanent and
total inability by reason of mental or physical infirmity, or
both,of a Director
to perform the functions of a Director. Additionally, a medical
doctor selected
or approved by the Board of Directors must advise the Committee
that it is
either not possible to determine when such Disability will
terminate or that it
appears probable that such Disability will be permanent during the
remainder of
the Participant's lifetime.
(j)
"Fair Market Value"
means, when used in connection with the Common
Stock on a certain date: (i) if the bid and asked price of the
Common Stock is
reported by the National Association of Securities Dealers
Automated Quotation
System (as published by the Wall Street Journal,if published) on
such date or if
the Common Stock was not traded on such date, on the next preceding
day on which
the Common Stock was traded thereon or the last previous date on
which a sale is
reported, or (ii) if the bid and asked price of the Common Stock is
not so
reported, but the Common Stock is traded in the over-the-counter
market, the
mean of the highest bid price and the lowest asked price for the
Common Stock on
the date of grant as reported by the National Quotation Bureau,
Inc. or any
successor organization, or (iii) if a realistic and fair market
value of such
shares is not readily determinable, an estimation of the fair
market value made
by taking into consideration the market value of the shares of
comparable
financial institutions and the trend of the Bank's earnings.
(k)
"Option" means an
Award granted under Section 6.
(l)
"Participant" means a
director chosen by the Committee to participate
in the Plan.
(m)
"Retirement" means
termination of service as a director of the Bank.
(n)
"Removal for Cause"
means the removal of a Director upon an
intentional failure to perform stated duties, personal dishonesty
which results
in loss to the Bank or one of its Affiliates or willful violation
of any law,
rules or regulation (other than traffic violations or similar
offenses) or final
cease-and-desist order which results in substantial loss to the
Bank or one of
its Affiliates.
3.
ADMINISTRATION
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The
Plan shall be administered by the Committee. The Committee is
authorized, subject to the provisions of the Plan, to establish and
amend such
rules and regulations as it deems necessary for the proper
administration of the
Plan and to make whatever determinations and interpretations in
connection with
the Plan it deems necessary or advisable. All determinations and
interpretations
made by the Committee shall be binding and conclusive on all
Participants in the
plan and on their legal representatives and beneficiaries.
4. STOCK SUBJECT
TO THE PLAN
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Subject to adjustment as provided in Section 10, the maximum number
of
shares re
