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Exhibit
10.3
ALLIANCE FINANCIAL
CORPORATION
RESTRICTED STOCK
AGREEMENT
This sets forth the terms of
the RESTRICTED STOCK AGREEMENT (“Agreement”), entered
into as of the 29th day of January 2008 by and
between ALLIANCE FINANCIAL CORPORATION (“Company”) and
John H. Watt, Jr. , an employee of the Company or one of its
subsidiaries (“Grantee”).
TERMS
1. Definition of Terms
. For purposes of this Agreement, all defined terms, as indicated
by the capitalization of the first letter of such term, shall have
the meanings specified in the Alliance Financial Corporation 1998
Long Term Incentive Compensation Plan (“Plan”) to the
extent not specified in this Agreement.
2. Restricted Stock
Grant . Pursuant to the Plan and subject to the terms and
conditions of the Plan and this Agreement, the Company hereby
grants to the Grantee, and the Grantee accepts, 1,750 shares
of Common Stock of the Company (“Restricted
Stock”).
3. Restrictions . The
shares of Restricted Stock are awarded to the Grantee on the
condition that the Grantee remain in the employment of the Company
or its subsidiaries during the Forfeiture Periods described
below.
a. Except to the extent that
the Forfeiture Period expires sooner pursuant to paragraph 3(b),
the Forfeiture Period for all of the shares of Restricted Stock
awarded pursuant to this Agreement shall expire on the seventh
anniversary of the date of this Agreement. If the foregoing date
occurs on a date that is not a normal business day of the Company,
the date shall be deemed to occur on the next ensuing normal
business day of the Company.
b. Notwithstanding the
provisions of paragraph 3(a), the Forfeiture Period for 875
shares of Restricted Stock awarded pursuant to this Agreement shall
expire on the date described in (i) or (ii) below, if the
applicable date occurs prior to the seventh anniversary of the date
of this Agreement:
i. if, for a period of at
least fifteen consecutive trading days between the date of this
Agreement and the third anniversary of the date of this Agreement,
unrestricted shares of common stock of the Company have had a
closing traded price on an established public market that equals at
least 160 percent of the closing traded price of unrestricted
shares of common stock of the Company on the date of this
Agreement, then the Forfeiture Period described in this paragraph
3(b) shall expire on the first date on or after the third
anniversary of the date of this Agreement on which unrestricted
shares of common stock of the Company are traded on an established
public market at a price that is at least equal to the closing
traded price of unrestricted shares of common stock of the Company
on the date of this Agreement; or
ii. if later than the third
anniversary of the date of this Agreement, the fifteen consecutive
trading date on which unrestricted shares of common stock of the
Company have had a closing traded price on an established public
market that equals at least 160 percent of the closing traded price
of unrestricted shares of common stock of the Company on the date
of this Agreement.
For purposes of this paragraph 3(b),
only unrestricted shares of common stock of the Company that are
traded by individuals and entities unrelated to the Company, its
subsidiaries and its affiliates, and that are of the same type and
class as the shares of Common Stock granted pursuant to this
Agreement, shall be taken into account in determining if and when
the applicable Forfeiture Period has expired. Subject to the other
terms of this Agreement, if the Forfeiture Period for the shares of
Restricted Stock described in this paragraph 3(b) does not expire
prior to the seventh anniversary of this Agreement pursuant to this
paragraph 3(b), then such Forfeiture Period shall expire on the
seventh anniversary of this Agreement as provided in paragraph
3(a).
c. During the Forfeiture
Period, the shares of Restricted Stock may not be sold, exchanged,
transferred, pledged, hypothecated, or otherwise disposed of, and
the Grantee agrees not to sell, exchange, transfer, pledge or
otherwise dispose of any of such shares, or attempt to do so,
during the Forfeiture Period.
4. Termination .
Except as provided in paragraphs 4(a), (b), (c) and
(d) below, if the Grantee’s employment with the Company
(or its subsidiaries) terminates prior to the expiration of the
applicable Forfeiture Period, the Grantee shall, on the date
employment terminates, forfeit and surrender to the Company the
number of shares of Restricted Stock with respect to which the
applicable Forfeiture Period is in effect on the date employment
terminates.
a. If the Grantee dies, or
terminates employment with the Company (or its subsidiaries)
because of disability, before the expiration of a Forfeiture
Period, the applicable Forfeiture Period on the Restricted Stock
granted pursuant to this Agreement shall expire on the date of
death, or on the date that employment terminates because of
disability, provided such date is not less than four years
subsequent to the date of this Agreement. If the date of death or
disability is within four years of the date of this Agreement, the
Board of Directors, in its sole discretion, may waive the
Forfeiture Period as to any or all of the Restricted
Stock.
b. If the Grantee’s
employment with the Company (or its subsidiaries) terminates prior
to the expiration of an applicable Forfeiture Period as
a
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