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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 30th day of
January 2007 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, 2000
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 1000
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:
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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.
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