This Stock Option Agreement involves
Title: 2003 Stock Option Plan for Officers and Employees
Astoria Financial Corporation
Governing Law: Delaware Date: 3/10/2006
Industry: SandLs/Savings Banks Sector: Financial
2003 Stock Option Plan for Officers and Employees
Astoria Financial Corporation
(As amended December 29, 2005)
Section 1.1 General Purpose of the Plan.
The purpose of the Plan is to promote the growth and profitability
of Astoria Financial Corporation, to provide certain key officers and employees
of Astoria Financial Corporation and affiliates with an incentive to achieve
corporate objectives, to attract and retain key individuals of outstanding
competence and to provide such individuals with an equity interest in Astoria
The following definitions shall apply for the purposes of this Plan,
unless a different meaning is plainly indicated by the context:
Section 2.1 Association means Astoria Federal Savings and Loan
Association, a federally chartered savings institution, and any successor
Section 2.2 Board means the board of directors of Astoria Financial
Section 2.3 Change in Control of the Company means any of the
(a) approval by the stockholders of Astoria Financial Corporation of
a transaction that would result in the reorganization, merger or
consolidation of Astoria Financial Corporation with one or more other
persons, other than a transaction following which:
(i) at least 51% of the equity ownership interests of the
entity resulting from such transaction are beneficially owned
(within the meaning of Rule 13d-3 promulgated under the Exchange
Act) in substantially the same relative proportions by persons who,
immediately prior to such transaction, beneficially owned (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) at
least 51% of the outstanding equity ownership interests in Astoria
Financial Corporation; and
(ii) at least 51% of the securities entitled to vote generally
in the election of directors of the entity resulting from such
transaction are beneficially owned (within the meaning of Rule 13d-3
promulgated under the Exchange Act) in substantially the same
relative proportions by persons who, immediately prior to such
transaction, beneficially owned (within the meaning of Rule 13d-3
promulgated under the Exchange Act) at least 51% of the securities
entitled to vote generally in the election of directors of Astoria
(b) the acquisition of all or substantially all of the assets of
Astoria Financial Corporation or beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of the outstanding securities of Astoria
Financial Corporation entitled to vote generally in the election of
directors by any person or by any persons acting in concert, or approval
by the stockholders of Astoria Financial Corporation of any transaction
which would result in such an acquisition;
(c) a complete liquidation or dissolution of Astoria Financial
Corporation, or approval by the stockholders of Astoria Financial
Corporation of a plan for such liquidation or dissolution;
(d) the occurrence of any event if, immediately following such
event, at least 50% of the members of the Board of Directors of Astoria
Financial Corporation do not belong to any of the following groups:
(i) individuals who were members of the Board of Directors of
Astoria Financial Corporation on the date of this Agreement; or
(ii) individuals who first became members of the Board of
Directors of Astoria Financial Corporation after the date of this
(A) upon election to serve as a member of the Board of
Directors of Astoria Financial Corporation by affirmative vote
of three-quarters of the members of such Board, or of a
nominating committee thereof, in office at the time of such
first election; or
(B) upon election by the stockholders of Astoria
Financial Corporation to serve as a member of the Board of
Astoria Financial Corporation, but only if nominated for
election by affirmative vote of three-quarters of the members
of the Board of Directors of Astoria Financial Corporation, or
of a nominating committee thereof, in office at the time of
such first nomination;
provided, however, that such individual's election or nomination did
not result from an actual or threatened election contest (within the
meaning of Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies
or consents (within the meaning of Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) other than by or on behalf of
the Board of Astoria Financial Corporation; or
(e) any event which would be described in section 2.3(a), (b), (c)
or (d) if the term "Association" were substituted for the term "Company"
In no event, however, shall a Change in Control be deemed to have occurred as a
result of any acquisition of securities or assets of Astoria Financial
Corporation, the Association, or a subsidiary of either of them, by Astoria
Financial Corporation, the Association, or a subsidiary of either of them, or by
any employee benefit plan maintained by any of them. For purposes of this
section 2.3, the term "person" shall have the meaning assigned to it under
sections 13(d)(3) or 14(d)(2) of the Exchange Act.
Section 2.4 Code means the Internal Revenue Code of 1986, as amended
(including the corresponding provisions of any succeeding law).
Section 2.5 Committee means the Committee described in section 3.1.
Section 2.6 Company means Astoria Financial Corporation, a
corporation organized and
existing under the laws of the State of Delaware, and any successor thereto, the
Association and any successor thereto and, with the prior approval of the Board,
and subject to such terms and conditions as may be imposed by the Board, any
other savings bank, savings and loan association, bank, corporation, financial
institution or other business organization or institution.
Section 2.7 Disability means a condition of total incapacity, mental
or physical, for further performance of duty with the Company which the
Committee shall have determined, on the basis of competent medical evidence, is
likely to be permanent.
Section 2.8 Disinterested Board Member means a member of the Board
who (a) is not a current employee of the Company, (b) is not a former employee
of the Company who receives compensation for prior services (other than benefits
under a tax-qualified retirement plan) during the taxable year, (c) has not been
an officer of the Company, (d) does not receive remuneration from the Company,
either directly or indirectly, in any capacity other than as a director and (e)
is not currently and for a period of at least one year has not been eligible for
discretionary awards under any stock compensation plan of the Company. The term
Disinterested Board Member shall be interpreted in such manner as shall be
necessary to conform to the requirements of section 162(m) of the Code and Rule
16b-3 promulgated under the Exchange Act.
Section 2.9 Effective Date means the date on which the Plan is
approved by the holders of a majority of the Shares represented in person or by
proxy at a meeting of the voting stockholders of Astoria Financial Corporation
duly called and held.
Section 2.10 Eligible Individual means any individual whom the
Committee may determine to be a key officer or employee of the Company and
select to receive a grant of an Option pursuant to the Plan.
Section 2.11 Exchange Act means the Securities Exchange Act of 1934.
Section 2.12 Exercise Price means the price per Share at which
Shares subject to an Option may be purchased upon exercise of the Option,
determined in accordance with section 4.4.
Section 2.13 Fair Market Value means, with respect to a Share on a
(a) the final quoted sales price on the date in question (or if
there is no reported sale on such date, on the last preceding date on
which any reported sale occurred) as reported in the principal
consolidated reporting system with respect to securities listed or
admitted to trading on the principal United States securities exchange on
which the Shares are listed or admitted to trading; or
(b) if the Shares are not listed or admitted to trading on any such
exchange, the closing bid quotation with respect to a Share on such date
on the National Association of Securities Dealers Automated Quotations
System, or, if no such quotation is provided, on another similar system,
selected by the Committee, then in use; or
(c) if sections 2.13(a) and (b) are not applicable, the fair market
value of a Share as the Committee may determine.
Section 2.14 Incentive Stock Option means a right to purchase Shares
that is granted pursuant to section 4.1, that is designated by the Committee to
be an Incentive Stock Option and that is intended to satisfy the requirements of
section 422A of the Code.
Section 2.15 Limited Stock Appreciation Right means a right granted
pursuant to section 4.9.
Section 2.16 Non-Qualified Stock Option means a right to purchase
Shares that is granted pursuant to section 4.1, that is designated by the
Committee to be a Non-Qualified Stock Option and that is not intended to satisfy
the requirements of section 422A of the Code.
Section 2.17 Option means either an Incentive Stock Option or a
Non-Qualified Stock Option.
Section 2.18 Option Period means the period during which an Option
may be exercised, determined in accordance with section 4.5.
Section 2.19 Person means an individual, a corporation, a bank, a
savings bank, a savings and loan association, a financial institution, a
partnership, an association, a joint-stock company, a trust, an estate, an
unincorporated organization and any other business organization or institution.
Section 2.20 Plan means the 2003 Stock Option Plan for Officers and
Employees of Astoria Financial Corporation, as amended from time to time.
Section 2.21 Qualified Domestic Relations Order means a Domestic
Relations Order that: (a) clearly specifies (i) the name and last known mailing
address of the Option holder and of each person given rights under such Domestic
Relations Order, (ii) the amount or percentages of the Option holder's benefits
under this Plan to be paid to each person covered by such Domestic Relations
Order, (iii) the number of payments or the period to which such Domestic
Relations Order applies, and (iv) the name of this Plan; and (b) does not
require the payment of a benefit in a form or amount that is (i) not otherwise
provided for under the Plan, or (ii) inconsistent with a previous Qualified
Domestic Relations Order. For the purposes of this Plan, a "Domestic Relations
Order" means a judgment, decree or order (including the approval of a property
settlement) that is made pursuant to a state domestic relations or community
property law and relates to the provision of child support, alimony payments, or
marital property rights to a spouse, child or other dependent of an Option
Section 2.22 Retirement means retirement at the normal or early
retirement date as set forth in any tax-qualified retirement/pension plan of the
Section 2.23 Share means a share of Common Stock, par value $.01 per
share, of Astoria Financial Corporation.
Section 2.24 Termination for Cause means the termination upon an
intentional failure to perform stated duties, breach of a fiduciary duty
involving personal dishonesty, which results in material loss to the Company or
one of its affiliates or willful violation of any law, rule or regulation (other
than traffic violations or similar offenses) or final case-and-desist order
which results in material loss to the Company or one of its affiliates.
Section 2.25 Threatened Change in Control means (a) the circulation
of a proxy statement by any Person other than management of Astoria Financial
Corporation seeking stockholder approval of a transaction that would result in a
Change in Control of the Company or (b) the commencement of a tender offer
(within the meaning of section 14 of the Exchange Act) which, if consummated,
would result in a Change in Control of the Company.
Section 3.1 Committee.
The Plan shall be administered by a Committee consisting of the
members of the Compensation Committee of Astoria Financial Corporation who are
Disinterested Board Members. If fewer than three members of the Compensation
Committee are Disinterested Board Members, then the Board shall appoint to the
Committee such additional Disinterested Board Members as shall be necessary to
provide for a Committee consisting of at least three Disinterested Board
Section 3.2 Committee Action.
The Committee shall hold such meetings, and may make such
administrative rules and regulations, as it may deem proper. A majority of the
members of the Committee shall constitute a quorum, and the action of a majority
of the members of the Committee present at a meeting at which a quorum is
present, as well as actions taken pursuant to the unanimous written consent of
all of the members of the Committee without holding a meeting, shall be deemed
to be actions of the Committee. All actions of the Committee shall be final and
conclusive and shall be binding upon the Company and all other interested
parties. Any Person dealing with the Committee shall be fully protected in
relying upon any written notice, instruction, direction or other communication
signed by the secretary of the Committee and one member of the Committee, by two
members of the Committee or by a representative of the Committee authorized to
sign the same in its behalf.
Section 3.3 Committee Responsibilities.
Subject to the terms and conditions of the Plan and such limitations
as may be imposed from time to time by the Board, the Committee shall be
responsible for the overall management and administration of the Plan and shall
have such authority as shall be necessary or appropriate in order to carry out
its responsibilities, including, without limitation, the authority:
(a) to interpret and construe the Plan, and to determine all
questions that may arise under the Plan as to eligibility for
participation in the Plan, the number of Shares subject to the Options, if
any, to be granted, and the terms and conditions thereof;
(b) to adopt rules and regulations and to prescribe forms for the
operation and administration of the Plan; and
(c) to take any other action not inconsistent with the provisions of
the Plan that it may deem necessary or appropriate.
Section 4.1 In General.
Subject to the limitations of the Plan, the Committee may, in its
discretion, grant to an Eligible Individual an Option to purchase Shares. Any
such Option shall be evidenced by a written agreement which shall:
(a) designate the Option as either an Incentive Stock Option or a
Non-Qualified Stock Option;
(b) specify the number of Shares covered by the Option;
(c) specify the Exercise Price, determined in accordance with
section 4.4, for the Shares subject to the Option;
(d) specify the Option Period determined in accordance with section
(e) set forth specifically or incorporate by reference the
applicable provisions of the Plan; and
(f) contain such other terms and conditions not inconsistent with
the Plan as the Committee may, in its discretion, prescribe with respect
to an Option granted to an Eligible Individual.
Section 4.2 Available Shares.
Subject to section 5.3, the maximum aggregate number of Shares with
respect to which Options may be granted at any time shall be equal to the excess
(a) 3,000,000 Shares; over
(b) the sum of:
(i) the number of Shares with respect to which previously
granted Options may then or may in the future be exercised; plus
(ii) the number of Shares with respect to which previously
granted Options have been exercised.
For purposes of this section 4.2, an Option shall not be considered as having
been exercised to the extent that such Option terminates by reason other than
the purchase of the related Shares.
Section 4.3 Size of Option.
Subject to section 4.2 and such limitations as the Board may from
time to time impose, the number of Shares as to which an Eligible Individual may
be granted Options shall be determined by the Committee, in its discretion. The
maximum number of Shares that may be granted to any one individual under this
Plan shall be the enti