Exhibit 10.9
VSB BANCORP, INC.
RESTATED 1998 DIRECTORS STOCK OPTION PLAN
1.
PURPOSE
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The purpose of the Restated 1998 Directors Stock Option Plan
(the
"Plan") is to promote the growth and profitability of VSB Bancorp,
Inc. (the
"Company") by providing outside directors of the Company with an
incentive to
achieve long-term objectives of the Company 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
Company.
2.
DEFINITIONS
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(a)
"Affiliate" means (i) a member of a controlled group of
corporations of which the Company is a member or (ii) an
unincorporated trade or
business which is under common control with the Company 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 Company.
(d) "Change in
Control" of the Company, 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 8-K, 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 Victory
State Bank
(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, 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 Company representing 20% or more of the Company'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
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was approved by a vote of a majority of the directors comprising
the Incumbent
Board, or whose nomination for election by the Company'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 Company or similar transaction occurs in which
the Company is
not the resulting entity; or (D) a proxy statement shall be
distributed
soliciting proxies from shareholders of the Company, by someone
other than the
current management of the Company, seeking stockholder approval of
a plan of
reorganization, merger or consolidation of the Company 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
Company; or (E)
a tender offer is made for 20% or more of the voting securities of
the Company.
(e)
"Committee" means a
committee consisting of those members of
the Directors Stock Option Committee of the Company 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 Company, par
value, $0.0001 per share.
(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
Company who is not an employee of the Company 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 Company's
earnings.
2
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(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
Company.
(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 Company 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
Company 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
