formdef14ajune192008.htm
SCHEDULE
14-A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed
by the Registrant [x]
Filed
by a Party other than the Registrant [ ]
Check
the appropriate box:
[ ] Preliminary
Proxy Statement
[x] Definitive
Proxy Statement
[ ] Definitive
Additional Materials
[ ] Soliciting
Material Pursuant to §240.14a-11(c) or §240.14a-12
Greene County Bancorp,
Inc.
(Name
of Registrant as Specified In Its Charter)
____________________________________________
(Name of Person(s) Filing Proxy
Statement)
Payment
of Filing Fee (Check the appropriate box):
[x] No
fee required.
[ ] $125
per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500
per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to
which transaction applies:
........................................................................
2) Aggregate number of securities to
which transaction applies:
.......................................................................
3)
Per unit price or other underlying value of transaction computed
pursuant
to Exchange Act Rule 0-11:
.......................................................................
4) Proposed maximum aggregate value of
transaction:
........................................................................
[ ] Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1)
Amount Previously Paid:
2)
Form, Schedule or Registration Statement No.:
3)
Filing Party:
4)
Date Filed:
[GREENE
COUNTY BANCORP LETTERHEAD]
June 19,
2008
Dear
Stockholder:
We
cordially invite you to attend a Special Meeting of Stockholders of Greene
County Bancorp, Inc. (the “Company”). The Company is the holding
company of The Bank of Greene County (the “Bank”) and the Bank’s subsidiary
Greene County Commercial Bank. The Special Meeting will be held at
the Bank’s Lending/Operations Center, located at 288 Main Street, Catskill, New
York, at 2:00 p.m., New York Time, on July 29, 2008.
The
enclosed Notice of Special Meeting and Proxy Statement describe the formal
business to be transacted. Our directors and officers will be present to respond
to any questions that stockholders may have.
The
Special Meeting is being held so that stockholders may consider and vote on the
Greene County Bancorp, Inc. 2008 Equity Incentive Plan. Our Board of Directors
has determined that approval of the Greene County Bancorp, Inc. 2008 Equity
Incentive Plan is in the best interests of the Company and its
stockholders. For the reasons set forth in the Proxy Statement, the
Board of Directors unanimously recommends a vote “FOR” the approval of the
Greene County Bancorp, Inc. 2008 Equity Incentive Plan.
On behalf
of the Board of Directors, we urge you to sign, date and return the enclosed
proxy card as soon as possible, even if you currently plan to attend the Special
Meeting. This will not prevent you from voting in person, but will
assure that your vote is counted if you are unable to attend the
meeting. Your vote is important, regardless of the number of shares
that you own.
Sincerely,
/s/ Donald E. Gibson
Donald E.
Gibson
President
and Chief Executive Officer
Greene
County Bancorp, Inc.
302
Main Street
Catskill,
New York 12414
(518)
943-2600
NOTICE
OF
SPECIAL
MEETING OF STOCKHOLDERS
To Be
Held On July 29, 2008
Notice is hereby given that a Special
Meeting of Stockholders of Greene County Bancorp, Inc. (the “Company”) will be
held at the Lending/Operations Center of The Bank of Greene County, located at
288 Main Street, Catskill, New York, on July 29, 2008 at 2:00 p.m., New York
Time.
A Proxy Card and a Proxy Statement for
the Special Meeting are enclosed.
The Special Meeting is for the purpose
of considering and voting upon the Greene County Bancorp, Inc. 2008 Equity
Incentive Plan, and such other matters as may properly come before the Special
Meeting, or any adjournments thereof. The Board of Directors is not
aware of any other business to come before the Special Meeting.
Any action may be taken on the
foregoing proposal at the Special Meeting on the date specified above, or on any
date or dates to which the Special Meeting may be
adjourned. Stockholders of record at the close of business on June 5,
2008, are the stockholders entitled to vote at the Special Meeting, and any
adjournments thereof. A list of stockholders entitled to vote at the
Special Meeting will be available at 302 Main Street, Catskill, New York, for a
period of ten days prior to the Special Meeting and will also be available for
inspection at the meeting itself.
EACH STOCKHOLDER, WHETHER HE OR SHE
PLANS TO ATTEND THE SPECIAL MEETING, IS REQUESTED TO SIGN, DATE AND RETURN THE
ENCLOSED PROXY CARD WITHOUT DELAY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. ANY PROXY GIVEN BY THE STOCKHOLDER MAY BE REVOKED AT ANY
TIME BEFORE IT IS EXERCISED. A PROXY MAY BE REVOKED BY FILING WITH
THE SECRETARY OF THE COMPANY A WRITTEN REVOCATION OR A DULY EXECUTED PROXY
BEARING A LATER DATE. ANY STOCKHOLDER PRESENT AT THE SPECIAL MEETING
MAY REVOKE HIS OR HER PROXY AND VOTE PERSONALLY ON EACH MATTER BROUGHT BEFORE
THE SPECIAL MEETING. HOWEVER, IF YOU ARE A STOCKHOLDER WHOSE SHARES
ARE NOT REGISTERED IN YOUR OWN NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM
YOUR RECORD HOLDER IN ORDER TO VOTE PERSONALLY AT THE SPECIAL
MEETING.
By Order of the Board of
Directors
/s/ Rebecca R. Main
Rebecca R. Main
Secretary
June 19,
2008
____________________________________________________________________________________________________________
A
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE
IS REQUIRED IF MAILED WITHIN THE UNITED
STATES.
____________________________________________________________________________________________________________
PROXY
STATEMENT
Greene
County Bancorp, Inc.
302
Main Street
Catskill,
New York 12414
(518)
943-2600
SPECIAL
MEETING OF STOCKHOLDERS
July 29,
2008
This Proxy Statement is furnished in
connection with the solicitation of proxies on behalf of the Board of Directors
of Greene County Bancorp, Inc. (the “Company”) to be used at a Special Meeting
of Stockholders of the Company (the “Special Meeting”) that will be held at the
Lending/Operations Center of The Bank of Greene County, located at 288 Main
Street, Catskill, New York, on July 29, 2008, at 2:00 p.m., New York Time, and
all adjournments of the Special Meeting. The accompanying Notice of
Special Meeting of Stockholders and this Proxy Statement are first being mailed
to stockholders on or about June 19, 2008.
____________________________________________________________________________________________________________
REVOCATION OF PROXIES
____________________________________________________________________________________________________________
Stockholders who execute proxies in the
form solicited hereby retain the right to revoke them in the manner described
below. Unless so revoked, the shares represented by such proxies will
be voted at the Special Meeting and all adjournments thereof. Proxies
solicited on behalf of the Board of Directors of the Company will be voted in
accordance with the directions given thereon. Where no instructions are indicated,
validly executed proxies will be voted “FOR” the proposal set forth in this
Proxy Statement for consideration at the Special Meeting.
The Board
of Directors knows of no additional matters that will be presented for
consideration at the Special Meeting. Execution of a proxy, however,
confers on the designated proxy holders discretionary authority to vote the
shares in accordance with their best judgment on such other business, if any,
that may properly come before the Special Meeting or any adjournments
thereof.
A proxy may be revoked at any time
prior to its exercise by sending written notice of revocation to the Secretary
of the Company at the address shown above, by delivering to the Company a duly
executed proxy bearing a later date, or by attending the Special Meeting and
voting in person. However, if you are a stockholder whose shares are
not registered in your own name, you will need appropriate documentation from
your record holder to vote personally at the Special Meeting. The
presence at the Special Meeting of any stockholder who had returned a proxy
shall not revoke such proxy unless the stockholder delivers his or her ballot in
person at the Special Meeting or delivers a written revocation to the Secretary
of the Company prior to the voting of such proxy.
____________________________________________________________________________________________________________
VOTING PROCEDURES AND METHODS OF COUNTING VOTES
____________________________________________________________________________________________________________
Holders of record of the Company’s
common stock, par value $0.10 per share, as of the close of business on June 5,
2008 (the “Record Date”) are entitled to one vote for each share then
held. As of the Record Date, the Company had 4,094,528 shares of
common stock issued and outstanding (exclusive of Treasury shares), 2,304,632 of
which were held by Greene County Bancorp, MHC (the “Mutual Holding Company”),
and 1,789,896 of which were held by stockholders other than the Mutual Holding
Company (“Minority Stockholders”). The presence in person or by proxy
of a majority of the total number of shares of common stock outstanding and
entitled to vote is necessary to constitute a quorum at the Special
Meeting. Abstentions and broker non-votes will be counted for
purposes of determining that a quorum is present. In the event there
are not sufficient votes for a quorum, or to approve any matter being presented
at the time of the Special Meeting, the Special Meeting may be adjourned in
order to permit the further solicitation of proxies. However, the presence by
proxy of the Mutual Holding Company’s shares will assure a quorum is present at
the Special Meeting.
As to the
approval of the Greene County Bancorp, Inc. 2008 Equity Incentive Plan, by
checking the appropriate box a stockholder may vote “FOR” the item, vote
“AGAINST” the item or “ABSTAIN” from voting on the item. The approval
of this matter requires the affirmative vote of both (i) a majority of the votes
eligible to be cast at the Special Meeting, including the shares held by Greene
County Bancorp, MHC, and (ii) a majority of the votes cast at the Special
Meeting by Minority Stockholders. Abstentions and broker non-votes
will have the same effect as a negative vote for approval of the Greene County
Bancorp, Inc. 2008 Equity Incentive Plan by stockholders, including Greene
County Bancorp, MHC, but will have no effect on the voting for the approval of
the Greene County Bancorp, Inc. 2008 Equity Incentive Plan by stockholders,
excluding Greene County Bancorp, MHC.
Our
management anticipates that Greene County Bancorp, MHC will vote all of its
shares in favor of the approval of the Greene County Bancorp, Inc. 2008 Equity
Incentive Plan. Because Greene County Bancorp, MHC owns in excess of 50% of our
outstanding shares of common stock, the votes it casts will ensure the first of
the two vote requirements is satisfied.
Proxies solicited hereby will be
returned to the Company and will be tabulated by an Inspector of Election
designated by the Board of Directors of the Company.
____________________________________________________________________________________________________________
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
____________________________________________________________________________________________________________
Persons and groups who beneficially own
in excess of 5% of the common stock are required to file certain reports with
the Securities and Exchange Commission (the “SEC”) regarding such
ownership. The following table sets forth, as of the Record Date, the
shares of common stock beneficially owned by each person who was the beneficial
owner of more than 5% of the Company’s outstanding shares of common stock, by
each director and executive officer individually, and all directors and
executive officers of the Company as a group.
Amount of Shares
Owned and
Nature
Percent of Shares
Name and
Address
of of
Beneficial
of Common
Stock
Beneficial
Owners Ownership
(1)
(3) Outstanding
Principal
Stockholders:
|
|
Greene
County Bancorp,
MHC
2,304,632
|
|
56.30%
|
302 Main Street
Catskill, New York 12414
Greene County Bancorp, MHC
(2) 2,645,747
(5)
64.60%
and all Directors and Executive Officers
as
a group (10 persons)
Directors
and Executive Officers:
Paul
Slutzky
34,340 (4)
0.84%
David H.
Jenkins,
DVM
39,816
0.97%
Donald
Gibson 14,233
0.35%
J. Bruce
Whittaker 73,489
1.79%
Charles
H.
Schaefer 29,705
0.73%
Arthur
Place,
CPA
3,100
0.08%
Dennis R.
O'Grady 51,520
1.26%
Martin C.
Smith 60,177
1.47%
Michelle
M. Plummer,
CPA 22,196
(4)
0.54%
Stephen
E.
Nelson 12,519
0.31%
________________________________________
|
(1)
|
For
purposes of this table, a person is deemed to be the beneficial owner of
shares of common stock if he has shared voting or investment power with
respect to such security, or has a right to acquire beneficial ownership
at any time within 60 days from the Record Date. As used herein, “voting
power” is the power to vote or direct the voting of shares, and
“investment power” is the power to dispose of or direct the disposition of
shares. The table includes all shares held directly as well as
by spouses and minor children, in trust and other indirect ownership, over
which shares the named individuals effectively exercise sole or shared
voting and investment power.
|
|
|
(footnotes
continue on following page)
|
|
|
(footnotes from
previous page)
|
|
(2)
|
With
the exception of Arthur Place, CPA, the Company’s executive officers and
directors are also executive officers and directors of Greene County
Bancorp, MHC. Excluding shares held by Greene County Bancorp,
MHC, the Company’s executive officers and directors beneficially owned an
aggregate of 341,095 shares, or 8.3% of the outstanding
shares.
|
|
(4)
|
Includes
shares subject to options that are currently exercisable, as
follows: Messrs. Slutzky 5,400 and Ms. Plummer
9,000. No other executive officer or director has options
currently exercisable.
|
|
(5)
|
Includes
15,554 shares of common stock allocated to the accounts of executive
officers under the ESOP and excludes the remaining 100,561 shares of
common stock, or 2.46% of the shares of common stock outstanding, owned by
the ESOP for the benefit of employees of The Bank of Greene
County. Under the terms of the ESOP, shares of common stock
allocated to the accounts of employees are voted in accordance with the
instructions of the respective employees. Unallocated shares
are voted by the ESOP trustee in the manner calculated to most accurately
reflect the instructions it has received from the participants regarding
the allocated shares, unless its fiduciary duties require
otherwise.
|
|
|
EXECUTIVE
AND DIRECTOR COMPENSATION
|
Executive
Compensation
The
following table sets forth for the year ended June 30, 2007 certain information
as to the total remuneration paid by us to Mr. Gibson, who serves as President
and Chief Executive Officer, Mr. Whittaker, who served as President and Chief
Executive Officer until his retirement in June 2007, and the two most highly
compensated executive officers of the Company and The Bank of Greene County
other than Mr. Gibson (the “Named Executive Officers”).
|
SUMMARY
COMPENSATION TABLE
|
Name
and principal position
|
|
|
|
|
|
Non-equity
incentive plan compensation ($)
|
Nonqualified
deferred compensation earnings ($)
|
All
other compensation ($) (2)
|
|
|
Donald
Gibson
|
2007
|
88,500
|
5,010
|
---
|
---
|
---
|
---
|
19,520
|
113,030
|
|
J.
Bruce Whittaker
|
2007
|
241,875
|
14,175
|
---
|
---
|
---
|
---
|
248,410
|
504,460
|
|
Michelle
Plummer
|
2007
|
118,000
|
6,930
|
---
|
---
|
---
|
---
|
24,260
|
149,190
|
|
Bruce
Egger (3)
|
2007
|
110,000
|
6,540
|
---
|
---
|
---
|
---
|
21,470
|
138,010
|
|
(1)
|
Salary
for the Named Executive Officers is paid pursuant to Employment
Agreements, which are discussed below under “—Employment
Agreements.”
|
|
(2)
|
Includes
employer matching contributions of $3,774; $8,710; $5,021 and $4,678
allocated in fiscal 2007 to the accounts of Mr. Gibson, Mr. Whittaker, Ms.
Plummer and Mr. Egger, respectively, under The Bank of Greene County
401(k) plan, the fair market value at June 30, 2007 of the shares of
common stock allocated pursuant to the employee stock ownership plan in
fiscal 2007, representing $7,486; $20,343; $9,887 and $10,305 for each of
Mr. Gibson, Mr. Whittaker, Ms. Plummer and Mr. Egger,
respectively. The Bank also provides each qualifying employee,
including Mr. Whittaker, life insurance equal to one times the employee’s
salary with a maximum benefit of $50,000. The Bank also
provides each qualifying employee with short-term and long-term disability
coverage, medical and dental coverage for the employee and their spouse
and dependents. The employee contributes 25% for the cost of
the premium for the medical coverage. The Company also opted to
buy-out Mr. Whittaker’s 21,600 stock options at the closing stock price on
the on the day of his retirement, which was $13.60, less the exercise
price of the options, which was $3.9375. Total compensation
recognized by Mr. Whittaker in connection with this transaction was
$208,710.
|
|
(3)
|
Mr.
Egger retired as an officer of the Company and The Bank of Greene County
on December 31, 2007.
|
Employment
Agreements. Mr. J. Bruce Whittaker, President and Chief
Executive Officer of the Bank and the Company, retired from such service on June
30, 2007. Mr. Whittaker, the Company and the Bank had entered into an employment
agreement, dated as of January 1, 1999, which was amended and restated,
effective January 1, 2007. Under the amended agreement, the base
salary for Mr. Whittaker was $247,500. In addition to the base salary, the
amended agreement provided for, among other things, participation in retirement
plans and other employee and fringe benefits applicable to executive personnel.
In addition to the above, the Bank agreed to provide Mr. Whittaker and his
dependents with continuing health care coverage upon Mr. Whittaker’s retirement
or other termination of employment after attainment of age 55 with 25 years of
service, in substantially the same amount as provided to Mr. Whittaker and his
dependents prior to the termination of his employment. Such coverage,
which survives the termination or expiration of the amended agreement, ceases
upon Mr. Whittaker’s attainment of age 65. The amended agreement
provided that upon Mr. Whittaker’s retirement, he became entitled to all
benefits available to him under any retirement or other benefit plan maintained
by the Bank. The amended agreement provides that, following his termination of
employment, the executive will not compete with the Bank for a period of one
year.
In
connection with Mr. Whittaker’s retirement, Mr. Donald E. Gibson, who had been
serving as Senior Vice President of the Company and the Bank, succeeded Mr.
Whittaker as President and Chief Executive Officer. Michelle M.
Plummer, the Chief Financial Officer of the Company and the Bank, was appointed
to the newly created positions of Executive Vice President, Chief Operating
Officer and Chief Financial Officer.
In
connection with the appointments, Mr. Gibson and Ms. Plummer each entered into a
substantially identical employment agreement with the Bank and the Company. The
employment agreements were effective July 1, 2007. Mr. Gibson’s employment
agreement provides for a base salary of $150,000 and Ms. Plummer’s employment
agreement provides for a base salary of $140,000. Each agreement has a term of
36 months from July 1, 2007. Commencing on July 1, 2008, and continuing on each
July 1st thereafter, each agreement shall renew for an additional year such that
the remaining term shall be 36 full calendar months, unless written notice is
provided to the executive at least ten days and not more than 60 days prior to
any such anniversary date that his or her employment shall cease at the end of
36 months following such anniversary date. Prior to each notice
period for non-renewal, the disinterested members of the Board of Directors of
the Bank will conduct a comprehensive performance evaluation and review of the
executive for purposes of determining whether to extend the
agreement.
Under each agreement, the executive’s
base salary will be reviewed annually, and the base salary may be increased but
not decreased. In addition to the base salary, the executive will be
provided all such other benefits as are provided uniformly to permanent
full-time employees of the Bank. In addition, the Bank will provide the
executive with employee benefit plans, arrangements and perquisites
substantially equivalent to those in which the executive was participating or
otherwise deriving benefit. The executive will be entitled to participate in or
receive benefits under any employee benefit plans, including but not limited to,
retirement plans, supplemental retirement plans, pension plans, profit-sharing
plans, health-and-accident plans, medical coverage or any other employee benefit
plan or arrangement made available by the Bank in the future to its senior
executives and key management employees.
Each agreement provides for termination
by the Bank for cause at any time. If the agreement is terminated for cause, the
executive will not receive any compensation or other benefits from the Bank.
Under each agreement, if the executive’s employment is terminated for any reason
other than for cause, death, disability or retirement, including resignation
upon, among other things, failure to reappoint the executive to his or her
office, a material diminution of the executive’s duties or a breach of the
agreement by the Bank, or if the executive voluntarily resigns his or her
employment on or after a change in control of the Company or the Bank during the
term of the agreement, then the Bank is obligated to pay to the executive a lump
sum equal to three times the sum of the then current base salary and the highest
rate of bonus awarded to the executive during the prior three years. If such
amount is determined to constitute an “excess parachute payment,” the amount
would be reduced so as not to trigger an excess parachute payment.
In the event of the executive’s
disability for a period of six months, the Bank may terminate the agreement,
provided that the Bank will be obligated to pay the executive his or her base
salary for the remaining term of the agreement or one year, whichever is longer
(provided such payments are reduced to the extent of any disability insurance
payments). In the event of the executive’s death during the term of the
agreement, the Bank will pay his or her base salary to the named beneficiaries
for one year following the date of death. In the event the executive
retires, he or she will be entitled to any vested benefits under any retirement
plan of the Bank.
Each
agreement provides that, following the termination of the executive’s employment
as a result of which the Bank is paying the executive termination benefits
(other than termination upon a change in control), the executive will not
compete with the Bank for a period of one year in any city or county in which
the Bank has an office or has filed an application for regulatory approval to
establish an office.
Defined
Contribution Plan. The Bank has adopted
The Bank of Greene County Employees’ Savings & Profit Sharing Plan and Trust
(the “Plan”) in order to permit the investment of Plan assets in common stock of
the Company. Employees are eligible to join the Plan on the first of the month
following completion of three months of continuous employment (during which 250
hours are completed). The first year eligibility period runs from the
date of hire to the anniversary of such date. If an employee does not
satisfy the eligibility requirements during such period then the next
eligibility period shall be the calendar year. Employees are eligible
to contribute, on a pre-tax basis, up to 25% of their eligible salary, in
increments of 1%. Effective July 1, 2006, the Bank matched employee
contributions dollar for dollar for the first 2% and then 50% of the employee
contribution up to the next 4%. Effective January 1, 2007, the Bank
matched employee contributions dollar for dollar for the first 3% and then 50%
of the employee contribution up to the next 3%. In addition, the Bank
may make an additional discretionary contribution allocated among members’
accounts on the basis of compensation. All employee contributions and
earnings thereon under the Plan are at all times fully vested. A
member vests in employer matching and discretionary contributions at the rate of
20% per year beginning in the second year of employment and continuing until the
member is 100% vested after six years of employment. Employees are
entitled to borrow, within tax law limits, from amounts allocated to their
accounts.
Plan benefits will be paid to each
member in a lump sum or in equal payments over a fixed period upon termination,
disability or death. In addition, the Plan permits employees to
withdraw salary reduction contributions prior to age 59-1/2 or termination in
the event the employee suffers a financial hardship. In certain
circumstances, the Plan permits employees to withdraw the Bank’s matching
contributions to their accounts. The Plan permits employees to direct the
investment of their own accounts into various investment options.
At December 31, 2006, the market value
of the Plan trust fund was approximately $3.6 million. The total
contribution (i.e., both the employee and Bank contributions) to the Plan for
the Plan year ended December 31, 2006, was approximately $415,800.
Defined Benefit
Pension Plan. The Bank
maintains the Financial Institutions Retirement Fund, which is a qualified,
tax-exempt multi-employer defined benefit plan (the “Retirement
Plan”). During fiscal 2006, the Board of Directors approved changes
to the Retirement Plan. Effective January 1, 2006, the Board of
Directors of the Bank resolved to exclude from membership in the Retirement Plan
employees hired on or after January 1, 2006 and elected to cease additional
benefit accruals to existing Retirement Plan participants effective July 1,
2006. All employees age 21 or older who have worked at the Bank for a
period of one year in which they have 1,000 or more hours of service were
eligible for membership in the Retirement Plan. Once eligible, an
employee must have been credited with 1,000 or more hours of service with the
Bank during the year in order to accrue benefits under the Retirement
Plan. The Bank annually contributes an amount to the Retirement Plan
necessary to satisfy the actuarially determined minimum funding requirements in
accordance with the Employee Retirement Income Security Act
(“ERISA”).
The regular form of all retirement
benefits (i.e., normal, early or disability) is a life annuity with a guaranteed
term of 10 years. For a married participant, the normal form of
benefit is a joint and survivor annuity where, upon the participant’s death, the
participant’s spouse is entitled to receive a benefit equal to the commuted
value of such unpaid installments paid in lump sum. Either the member
or beneficiary may elect to have this benefit paid in the form of
installments. Where death occurs prior to a member’s benefit
commencement, in no event shall the death benefit be less than the amount
payable under the lump sum settlement options. An optional form of
benefit may be selected instead of the normal form of benefits. These
optional forms include various annuity forms as well as a lump sum payment after
age 55. Benefits payable upon death may be made in a lump sum,
installments over 10 years, or a lifetime annuity.
The normal retirement benefit payable
at or after age 65, is an amount equal to 1.5% multiplied by years of benefit
service (not to exceed 30) times average compensation based on the average of
the five years providing the highest average. A reduced benefit is
payable upon retirement at age 55 at or after completion of five years of
service. A member is fully vested in his account upon completion of
five or more years of employment or upon attaining normal retirement
age.
The following table indicates the
annual retirement benefit that would be payable under the Retirement Plan upon
retirement at age 65 in calendar year 2006, expressed in the form of a single
life annuity for the average salary and benefit service classifications
specified below.
Highest Five-Year
Average
Years of Service and Benefit
Payable at Retirement(1)
Compensation 15 20 25 30
|
|
$ 50,000
|
$11,300
|
$15,000
|
$18,800
$22,500
|
|
|
$ 75,000
16,900
|
22,500
|
28,100
|
|
33,800
|
|
|
$100,000
22,600
|
30,000
|
37,500
|
|
45,000
|
|
|
$125,000
28,100
|
37,500
|
46,900
|
|
56,300
|
|
|
$150,000
33,800
|
45,000
|
56,300
|
|
67,500
|
|
|
$175,000
39,400
|
52,500
|
65,600
|
|
78,800
|
|
|
$200,000
45,000
|
60,000
|
75,000
|
|
90,000
|
|
|
$225,000
50,600
|
67,500
|
84,400
|
|
101,300
|
____________________________
|
(1)
|
No
additional credit is received for years of service in excess of 30;
however, increases in compensation after 30 years will generally cause an
increase in benefits.
|
As of June 30, 2007, Mr. J. Bruce Whittaker, Mr. Bruce P. Egger, Ms. Michelle
Plummer and Mr. Donald Gibson had 34 years, 30 years, six years and 19 years of
credited service (i.e.,
benefit service), respectively, under the Retirement Plan.
Outstanding
Equity Awards at Year End. The following table sets forth
information with respect to outstanding equity awards as of June 30, 2007 for
the Named Executive Officers.
OUTSTANDING
EQUITY AWARDS AT JUNE 30, 2007 (1)
|
|
|
|
|
Number
of securities underlying unexercised options (#)
exercisable
|
Number
of securities underlying unexercised options (#)
unexercisable
|
Equity
incentive plan awards: number of securities underlying
unexercised unearned options (#)
|
Option
exercise price ($)
|
|
Number
of shares or units of stock that have not vested (#)
|
Market
value of shares or units of stock that have not vested
($)
|
Equity
incentive plan awards: number of unearned shares, units or other rights
that have not vested (#)
|
Equity
incentive plan awards: market or payout value of unearned shares, units or
other rights that have not vested ($)
|
|
Donald
Gibson
|
|
|
|
|
|
|
|
|
|
|
J.Bruce
Whittaker
|
|
|
|
|
|
|
|
|
|
|
Michelle
Plummer
|
|
|
|
|
|
|
|
|
|
|
Bruce
Egger(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
________________
|
(1)
|
All
equity awards noted in this table were granted pursuant to the 2000 Stock
Option Plan and the 2000 Recognition and Retention Plan, which were
approved by stockholders on March 28, 2000, and represent all awards held
at June 30, 2007 by the Named Executive Officers. On March 28,
2000, the Named Executive Officers were granted shares of restricted stock
and stock options. Shares of restricted stock vested at a rate
of 20% per year commencing on March 28, 2000. Stock options
vested at a rate of 20% per year commencing on March 28, 2000, have an
exercise price of $3.9375, the closing price (adjusted for a subsequent
2-for-1 stock split) on the date of grant, and expire ten years from the
date of grant.
|
(2) Mr.
Egger retired as an officer of the Company and The Bank of Greene County on
December 31, 2007.
Employee Stock
Ownership Plan and Trust. The Bank has
established an Employee Stock Ownership Plan and Related Trust (“ESOP”) for
eligible employees. The ESOP is a tax-qualified plan subject to the
requirements of ERISA and the Code. Persons who have been employed by
the Bank for 12 months during which they worked at least 1,000 hours and who
have attained age 21, are eligible to participate. The ESOP has
borrowed funds from the Company and has purchased or been issued a total of
72,760 shares of common stock. An additional 7,276 shares were issued
to the ESOP as a result of the 10% stock dividend effective August
1999. Accordingly, the ESOP originally owned 80,036 shares in
total. The ESOP owned 141,317 shares as of June 30, 2007 (reflective
of the 2-for-1 stock split effective on May 31, 2005). When fully
vested employees retire or leave the Company, they may take from the ESOP their
portion of allocated shares or cash; as a result of this, the overall number of
shares remaining in the ESOP has decreased. The common stock held by
the ESOP is collateral for the loan. The loan will be repaid
principally from the Bank’s contributions to the ESOP over a period of up to ten
years. The interest rate for the loan is a floating rate equal to the
Prime Rate as published in The
Wall Street Journal from time to time. Shares purchased by the
ESOP are held in a suspense account for allocation among participants as the
loan is repaid.
Contributions to the ESOP and shares
released from the suspense account in an amount proportional to the repayment of
the ESOP loan will be allocated among participants on the basis of compensation
in the year of allocation, up to an annual adjusted maximum level of
compensation. Benefits generally become vested after five years of
credited service. Forfeitures will be reallocated among remaining
participating employees in the same proportion as
contributions. Benefits may be payable upon death, retirement, early
retirement, disability or separation from service. The Company’s
contributions to the ESOP will not be fixed, so benefits payable under the ESOP
cannot be estimated.
A committee consisting of David
Jenkins, Dennis O’Grady and Paul Slutzky administers the ESOP. The
ESOP also has an unrelated corporate trustee who is appointed as a fiduciary
responsible for administration of the ESOP assets and who votes the ESOP
shares. The committee may instruct the trustee regarding investment
of funds contributed to the ESOP. The ESOP trustee generally will
vote all shares of common stock held by the ESOP in accordance with the written
instructions of the committee. In certain circumstances, however, the
ESOP trustee must vote all allocated shares held in the ESOP in accordance with
the instructions of the participating employees, and unallocated shares and
shares held in the suspense account in a manner calculated to most accurately
reflect the instructions the ESOP trustee has received from participants
regarding the allocated stock, subject to and in accordance with the fiduciary
duties under ERISA owed by the ESOP trustee to the ESOP
participants. Under ERISA, the Secretary of Labor is authorized to
bring an action against the ESOP trustee for the failure of the ESOP trustee to
comply with its fiduciary responsibilities.
Stock Option
Plan. The Board of Directors of the Company adopted the 2000
Stock Option Plan, which has been approved by the stockholders. Certain
directors, officers and employees of the Bank and the Company are eligible to
participate in the Stock Option Plan. The Stock Option Plan is
administered by a committee of outside directors (the
“Committee”). The Stock Option Plan authorizes the grant of stock
options to purchase 181,898 shares of common stock (reflective of the 2-for-1
stock split effective on May 31, 2005). The Stock Option Plan
provides, among other things, for the grant of options to purchase common stock
intended to qualify as incentive stock options under Section 422 of the Code,
and options that do not so qualify (“nonstatutory
options”). Options must be exercised within 10 years from the date of
grant. The exercise price of the options must be at least 100% of the
fair market value of the underlying common stock at the time of the
grant.
Directors’
Compensation
The following table sets forth for the
year ended June 30, 2007 certain information as to the total remuneration we
paid to the Company’s directors other than Mr.
Whittaker. Compensation paid to Mr. Whittaker for his services as a
director is included in “Executive Compensation—Summary Compensation
Table.”
DIRECTOR
COMPENSATION TABLE FOR THE YEAR ENDED JUNE 30,
2007
|
|
|
Fees
earned or paid in cash ($)
|
|
|
Non-equity
incentive plan compensation ($)
|
Nonqualified
deferred compensation earnings ($)
|
All
other compensation ($)
|
|
|
|
|
|
|
|
|
|
|
|
Walter
H. Ingalls (1)
|
$30,000
|
---
|
---
|
---
|
---
|
---
|
$30,000
|
|
Paul
Slutzky
|
$30,000
|
---
|
---
|
---
|
---
|
---
|
$30,000
|
|
David
H. Jenkins, DVM
|
$30,000
|
---
|
---
|
---
|
---
|
---
|
$30,000
|
|
Charles
H. Schaefer
|
$30,000
|
---
|
---
|
---
|
---
|
---
|
$30,000
|
|
Arthur
Place, CPA
|
$34,250
|
---
|
---
|
---
|
---
|
---
|
$34,250
|
|
Dennis
R. O’Grady
|
$30,000
|
---
|
---
|
---
|
---
|
---
|
$30,000
|
|
Martin
C. Smith
|
$34,250
|
---
|
---
|
---
|
---
|
---
|
$34,250
|
________________
(1) Mr.
Ingalls retired from the Board of Directors of the Company and The Bank of
Greene County on October 24, 2007.
Directors’
Compensation
Directors of The Bank of Greene County
(other than the Board and Audit Committee Chairmen) receive an annual retainer
of $18,000 and a fee of $1,000 per Board meeting. The Chairman of the
Board and Audit Committee Chairman receive an annual retainer of $24,000 and a
fee of $1,000 per Board meeting. No separate compensation is
currently paid to directors for service on the Board of the
Company. Directors of the Bank and the Company who are also employees
of the Bank and the Company are not entitled to receive Board
fees. For the fiscal year ended June 30, 2007, the Bank paid a total
of $218,500 in director fees.
Directors are eligible to participate
in the 2000 Stock Option Plan and the 2000 Recognition and Retention
Plan. On March 28, 2000, each outside director serving at that time
was granted a non-qualified stock option to purchase 5,400 shares of common
stock (reflective of a 2-for-1 stock split effective May 31,
2005). All granted options vest at the rate of 20% per year over a
five-year period and will become immediately exercisable upon the director’s
death, disability, normal retirement, or following a change in control of the
Company or the Bank. The options must be exercised within 10 years
from the date of grant, and the exercise price of the options must be at least
100% of the fair market value of the underlying common stock at the date of
grant.
On March
28, 2000, restricted stock awards for 3,200 shares of common stock (reflective
of a 2-for-1 stock split effective May 31, 2005) were granted to each outside
director serving at that time. These awards are also scheduled to
vest in 20% increments over a five-year period beginning on the grant date, with
accelerated vesting to occur in the event of the director’s death, disability,
normal retirement, or following a change in control of the Company or the
Bank.
____________________________________________________________________________________________________________
PROPOSAL
1—APPROVAL OF THE GREENE COUNTY BANCORP, INC.
2008
EQUITY INCENTIVE PLAN
____________________________________________________________________________________________________________
The Board of Directors has adopted,
subject to stockholder approval, the Greene County Bancorp, Inc. 2008 Equity
Incentive Plan (the “Equity Plan”), to provide officers, employees and directors
of the Company and the Company’s direct and indirect subsidiaries, The Bank of
Greene County and Greene County Commercial Bank, respectively, with additional
incentives to promote the growth and performance of the Company. Most
of the companies that we compete with for directors and management-level
employees are public companies that offer equity compensation as part of their
overall director and officer compensation programs. By approving the
Equity Plan, our stockholders will give us the flexibility we need to continue
to attract and retain highly qualified officers and directors by offering a
competitive compensation program that is linked to the performance of our common
stock.
The following is a summary of the
material features of the Equity Plan, which is qualified in its entirety by
reference to the provisions of the Equity Plan, attached hereto as Appendix
A.
Subject
to permitted adjustments for certain corporate transactions, the Equity Plan
authorizes the issuance of up to 180,000 shares of Company common stock pursuant
to the exercise by award recipients of grants of incentive and non-statutory
stock options, and stock appreciation rights.
The
Equity Plan will be administered by the members of Company’s Compensation
Committee who are “Disinterested Board Members,” as defined in the Equity Plan
(the “Committee”). The Committee has full and exclusive power within
the limitations set forth in the Equity Plan to make all decisions and
determinations regarding the selection of participants and the granting of
awards; establishing the terms and conditions relating to each award; adopting
rules, regulations and guidelines for carrying out the Equity Plan’s purposes;
and interpreting and otherwise construing the Equity Plan. The Equity
Plan also permits the Board of Directors or the Committee to delegate to one or
more officers the Committee’s power to: (i) designate officers and employees who
will receive awards; and (ii) determine the number of awards to be received by
them provided that such delegation is not prohibited by applicable law or the
rules of the stock exchange on which our common stock is
traded. Awards intended to be “performance-based” under Section
162(m) of the Internal Revenue Code must be granted by the Committee in order to
qualify for the exception to the $1.0 million deduction limit.
The
Committee may grant an award under the Equity Plan as an alternative to or
replacement of an existing award under the Equity Plan or any other plan of the
Company or a subsidiary of the Company, or as the form of payment for grants or
rights earned or due under any other plan or arrangement of the Company or a
subsidiary of the Company, including the plan of any entity acquired by the
Company or a subsidiary of the Company.
Employees
and outside directors of the Company or its subsidiaries are eligible to receive
awards under the Equity Plan, except that non-employees may not be granted
incentive stock options. There are 118 employees and seven
non-employee directors currently eligible to receive awards under the Equity
Plan.
The
Committee may determine the type and terms and conditions of awards under the
Equity Plan, which shall be set forth in an award agreement delivered to each
award recipient. Awards may be granted in a combination of incentive
and non-statutory stock options or stock appreciation rights, as
follows:
Stock
Options. A stock option
gives the recipient or “optionee” the right to purchase shares of common stock
at a specified price for a specified period of time. The exercise
price may not be less than the fair market value on the date the stock option is
granted. Fair market value for purposes of the Equity Plan means the
final sales price of the Company’s common stock as reported on the Nasdaq Capital Market on the
date the option is granted, or if the Company’s common stock was not traded on
such date, then on the day prior to such date or on the next preceding day on
which the Company’s common stock was traded, and without regard to after-hours
trading activity. The Committee will determine the fair market value,
in accordance with Section 422 of the Internal Revenue Code, if it cannot be
determined in the manner described above.
Stock
options are either “incentive” stock options or “non-qualified” stock
options. Incentive stock options have certain tax advantages and must
comply with the requirements of Section 422 of the Internal Revenue
Code. Only employees are eligible to receive incentive stock
options. Shares of common stock obtained upon the exercise of a stock
option must be paid for in full at the time of exercise (i) either in cash or
with stock of the Company valued at fair market value as of the day of exercise,
or (ii) through a “cashless exercise” through a third party, or (iii) by
tendering other property deemed acceptable by the Committee. The
total number of shares that may be acquired upon the exercise of an option shall
be rounded down to the nearest whole share. Stock options are subject
to vesting conditions and restrictions as determined by the
Committee.
Stock
Appreciation Rights. Stock appreciation
rights give the recipient the right to receive a payment in cash, shares of
Company common stock, or a combination thereof, of an amount equal to the excess
of the fair market value of a specified number of shares of common stock on the
date of the exercise of the stock appreciation rights over the fair market value
of the common stock on the date of grant of the stock appreciation rights, as
set forth in the recipient’s award agreement. The total number of
shares that may be acquired upon the exercise of stock appreciation rights shall
be rounded down to the nearest whole share.
Prohibition
Against Repricing of Options or Stock Appreciation Rights. The Equity Plan
provides that neither the Committee nor the Board is authorized to make any
adjustment or amendment that reduces or would have the effect of reducing the
exercise price of a stock option or a stock appreciation right previously
granted.
|
D.
|
Limitation on Awards
Under the Equity Plan
|
The
following limits apply to awards under the Equity Plan:
|
·
|
the
maximum number of shares that may be issued pursuant to the exercise of
incentive stock options is 180,000
shares;
|
|
·
|
the
maximum number of shares of stock that may be issued pursuant to the
exercise of options or stock appreciation rights under a grant to any one
participant in any one calendar year is 100,000
shares;
|
|
·
|
the
maximum dollar amount that may be payable to any one participant pursuant
to cash-settled stock appreciation rights (that are intended to be
“performance-based compensation”) in any calendar year is $500,000;
and
|
|
·
|
the
maximum number of shares of stock that may be issued pursuant to the
exercise of all stock options and stock appreciation rights granted to
non-employee directors as a group is 30% of the aggregate shares that may
be issued pursuant to the exercise of stock options or stock appreciation
rights granted under the plan.
|
In the
event of a corporate transaction involving the stock of the Company (including,
without limitation, any stock dividend, stock split, extraordinary cash
dividend, recapitalization, reorganization, merger, consolidation, split-up,
spin-off, combination or exchange of shares), the foregoing share limitations
and all outstanding awards will automatically be adjusted proportionally and
uniformly to reflect such event to the extent that the adjustment will not
affect the award’s status as “performance-based compensation” under
Section 162(m) of the Internal Revenue Code, if applicable; provided,
however, that the Committee may adjust awards to preserve the benefits or
potential benefits of the awards, including the prevention of automatic
adjustments if appropriate.
Section 162(m)
of the Internal Revenue Code. A federal income tax deduction for the
Company will generally be unavailable for annual compensation in excess of $1.0
million paid to its chief executive officer or three other most highly
compensated officers (other than its chief financial
officer). However, amounts that constitute “performance-based
compensation” are not counted toward the $1.0 million limit. The
Equity Plan is designed so that stock options and stock appreciation rights will
be considered performance-based compensation, whether or not such awards vest on
the basis of satisfaction of specific performance measures.
Performance
Measures. If the vesting of stock options and stock appreciation rights
under an award is conditioned on the satisfaction of performance measures, the
performance measures that may be used for such awards will be based on any one
or more of the following, as selected by the Committee: earnings; financial
return ratios; capital; increases in revenue, operating or net cash flows; cash
flow return on investment; total stockholder return; market share; net operating
income; operating income or net income; debt load reduction; expense management;
economic value added; stock price; assets, asset quality level, charge offs,
loan reserves, non-performing assets, loans, deposits, growth of loans, deposits
or assets; liquidity; interest sensitivity gap levels; regulatory compliance or
safety and soundness; improvement of financial rating; and achievement of
balance sheet or income statement objectives and strategic business objectives,
consisting of one or more objectives based on meeting specific targets, such as
business expansion goals and goals relating to acquisitions or divestitures.
Performance measures may be based on the performance of the Company as a whole
or of any one or more subsidiaries or business units of the Company or a
subsidiary and may be measured relative to a peer group, an index or a business
plan. The terms of any award may provide that partial achievement of performance
criteria may result in partial payment or vesting of the award. In certain
circumstances, consistent with the requirements of section 162(m) of the
Internal Revenue Code, the Committee may adjust performance measures after they
have been set. In establishing the performance measures, the Committee may
provide for the inclusion or exclusion of certain items. Additionally, the
establishment of any performance based measures shall be made during the period
required by section 162(m) of the Internal Revenue Code.
If the vesting of an award under the
Equity Plan is conditioned on the completion of a specified period of service
with the Company or its subsidiaries, without the achievement of performance
measures or objectives, then unless otherwise determined by the Committee and
evidenced in an award agreement, the required period of service for full vesting
shall not be less than five years for a participant, subject to acceleration in
the event of death, disability, retirement, involuntary termination of
employment or service following a change in control of the Company.
Unless otherwise provided in an award
agreement, in the event of a participant’s termination of service for any reason
other than disability, retirement, death or termination for cause, then any
stock options and stock appreciation rights shall be exercisable only as to
those awards that were vested on the date of termination of service and only for
a period of three months following termination (or the remaining term, if
less).
In the event of termination for cause,
any awards that have not vested, or that have vested but have not been exercised
(in the case of stock options and stock appreciation rights) shall expire and
shall be forfeited.
Unless otherwise provided in an award
agreement, upon termination of service due to retirement, death or disability,
all stock options and stock appreciation rights shall be exercisable as to all
shares subject to an outstanding award, whether or not then
exercisable. Stock options and stock appreciation rights may be
exercised for a period of one year following such termination of service (or the
remaining term, if less), provided, however, that an incentive stock option that
is not exercised within three months of termination of service due to retirement
will become a non-qualified stock option by operation of law. Under
the Internal Revenue Code, no stock option is eligible for treatment as an
incentive stock option in the event such option is exercised more than one year
following termination of service due to disability, and in order to obtain
incentive stock option treatment by heirs or devisees of an optionee, the
optionee’s death must have occurred while employed or within three months of
termination of service.
Unless
otherwise stated in an award agreement, upon the occurrence of an involuntary
termination of employment or service following a change in control of the
Company, all outstanding options and stock appreciation rights then held by a
participant will become fully exercisable. For the purposes of the Equity Plan,
a change in control occurs when: (a) any person (other than Greene County
Bancorp, MHC) is or becomes the beneficial owner, directly or indirectly, of
securities of the Company representing 25% or more of the combined voting power
of the Company’s then outstanding voting securities; (b) the Incumbent
Directors (as defined in the Equity Plan) cease, for any reason, to constitute a
majority of the Whole Board (as defined in the Equity Plan); or (c) a plan
of reorganization, merger, consolidation or similar transaction involving the
Company and one or more other corporations or entities is consummated, other
than a plan of reorganization, merger, consolidation or similar transaction that
is defined in the Equity Plan as an Excluded Transaction, or the stockholders of
the Company approve a plan of complete liquidation of the Company, or a sale,
liquidation or other disposition of all or substantially all of the assets of
the Company or The Bank of Greene County is consummated; or (d) a tender
offer is made for 25% or more of the outstanding voting securities of the
Company and the stockholders owning beneficially or of record 25% or more of the
outstanding voting securities of the Company have tendered or offered to sell
their shares pursuant to such tender offer and such tendered shares have been
accepted by the tender offeror; or (e) a Potential Change in Control (as
defined in the Equity Plan) occurs, and the Board of Directors determines,
pursuant to the vote of a majority of the Whole Board, with at least two-thirds
of the Incumbent Directors then in office voting in favor of such determination,
to deem the Potential Change in Control to be a change in control for the
purposes of the Equity Plan. Notwithstanding the foregoing, a change
in control is not deemed to occur as a result of a “second-step” conversion of
Greene County Bancorp, MHC, unless otherwise provided in the award
agreement.
In the
event of a change in control, any performance measure attached to an award under
the Equity Plan shall be deemed satisfied as of the date of the change in
control.
|
H.
|
Amendment and
Termination
|
The Board
of Directors may, at any time, amend or terminate the Equity Plan or any award
granted under the Equity Plan, provided that, other than as provided in the
Equity Plan, no amendment or termination may adversely impair the rights of an
outstanding award without the participant’s (or affected beneficiary’s) written
consent. The Board of Directors may not amend the provision of the Equity Plan
related to repricing, materially increase the original number of securities that
may be issued under the Equity Plan (other than as provided in the Equity Plan),
materially increase the benefits accruing to a participant, or materially modify
the requirements for participation in the Equity Plan without approval of
stockholders. Notwithstanding the foregoing, the Board may, without stockholder
approval, amend the Equity Plan at any time, retroactively or otherwise, to
ensure that the Equity Plan complies with current or future law and the Board of
Directors may unilaterally amend the Equity Plan and any outstanding award,
without participant consent, in order to maintain an exemption from, or to
comply with, Section 409A of the Internal Revenue Code, and its applicable
regulations and guidance.
The
Committee may specify in a covered employee’s award agreement that rights and
benefits with respect to an award may be subject to reduction, cancellation,
forfeiture or recoupment upon the employee’s termination for cause, termination
of employment with us or our affiliate or subsidiary, any material violation of
our policy, breach of noncompetition, confidentiality or other restrictive
covenants that apply to the covered employee, or any other conduct that is
detrimental to our business or reputation, our affiliates and/or our
subsidiaries.
If the
Company is required to prepare an accounting restatement due to the material
noncompliance of the Company, as a result of misconduct, with any financial
reporting requirement under the securities laws, any participant who is subject
to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002
shall reimburse the Company the amount of any payment in settlement of an award
earned or accrued during the twelve (12)-month period following the first public
issuance or filing with the SEC (whichever just occurred) of the financial
document embodying such financial reporting requirement. In addition,
in the event of an accounting restatement, the Committee in its sole and
exclusive discretion may require that any participant reimburse the Company for
all or any part of the amount of any payment in settlement of any award granted
hereunder.
The Equity Plan will become effective
upon approval by the stockholders at the Special Meeting. The Equity
Plan will remain in effect as long as any awards under it are outstanding;
however, no awards may be granted under the Equity Plan on or after the 10-year
anniversary of the effective date of the Equity Plan. At any time,
the Board of Directors may terminate the Equity Plan. However, any termination
of the Equity Plan will not affect outstanding awards.
|
K.
|
Federal Income Tax
Considerations
|
The
following is a summary of the federal income tax consequences that may arise in
conjunction with participation in the Equity Plan.
Non-Qualified
Stock Options. The grant of a non-qualified option will not result in
taxable income to the participant. Except as described below, the participant
will realize ordinary income at the time of exercise in an amount equal to the
excess of the fair market value of the shares acquired over the exercise price
for those shares and the Company will be entitled to a corresponding deduction.
Gains or losses realized by the participant upon disposition of such shares will
be treated as capital gains and losses, with the basis in such shares equal to
the fair market value of the shares at the time of exercise.
Incentive Stock
Options. The grant of an incentive stock option will not result in
taxable income to the participant. The exercise of an incentive stock option
will not result in taxable income to the participant provided that the
participant was, without a break in service, an employee of the Company or a
subsidiary during the period beginning on the date of the grant of the option
and ending on the date three months prior to the date of exercise (one year
prior to the date of exercise if the participant is disabled, as that term is
defined in the Internal Revenue Code).
The
excess of the fair market value of the shares at the time of the exercise of an
incentive stock option over the exercise price is an adjustment that is included
in the calculation of the participant’s alternative minimum taxable income for
the tax year in which the incentive stock option is exercised. For purposes of
determining the participant’s alternative minimum tax liability for the year of
disposition of the shares acquired pursuant to the incentive stock option
exercise, the participant will have a basis in those shares equal to the fair
market value of the shares at the time of exercise.
If the
participant does not sell or otherwise dispose of the shares within two years
from the date of the grant of the incentive stock option or within one year
after the exercise of such stock option, then, upon disposition of such shares,
any amount realized in excess of the exercise price will be taxed as a capital
gain. A capital loss will be recognized to the extent that the amount realized
is less than the exercise price.
If the
foregoing holding period requirements are not met, the participant will
generally realize ordinary income at the time of the disposition of the shares,
in an amount equal to the lesser of (i) the excess of the fair market value
of the shares on the date of exercise over the exercise price, or (ii) the
excess, if any, of the amount realized upon disposition of the shares over the
exercise price, and the Company will be entitled to a corresponding deduction.
If the amount realized exceeds the value of the shares on the date of exercise,
any additional amount will be a capital gain. If the amount realized is less
than the exercise price, the participant will recognize no income, and a capital
loss will be recognized equal to the excess of the exercise price over the
amount realized upon the disposition of the shares.
Stock
Appreciation Rights. The grant of a stock appreciation right will not
result in taxable income to the participant. Upon exercise of a stock
appreciation right, the cash received or the fair market value of shares
received will be taxable to the participant as ordinary income and the Company
will be entitled to a corresponding deduction. Gains and losses realized by the
participant upon disposition of any such shares will be treated as capital gains
and losses, with the basis in such shares equal to the fair market value of the
shares at the time of exercise.
Withholding of
Taxes. The Company may withhold amounts from participants to satisfy
withholding tax requirements. Except as otherwise provided by the Committee,
participants may have shares withheld from awards or may tender previously owned
shares to the Company to satisfy tax withholding requirements.
Change in
Control. Any
acceleration of the vesting or payment of awards under the Equity Plan in the
event of a change in control may cause part or all of the consideration involved
to be treated as an “excess parachute payment” under the Internal Revenue Code,
which may subject the participant to a 20% excise tax and preclude deduction by
the Company.
Tax
Advice. The preceding discussion is based on federal tax laws
and regulations presently in effect, which are subject to change, and the
discussion does not purport to be a complete description of the federal income
tax aspects of the Equity Plan. A participant may also be subject to state
and local taxes in connection with the grant of awards under the Equity Plan.
The Company suggests that participants consult with their individual tax
advisors to determine the applicability of the tax rules to the awards
granted to them in their personal circumstances.
Accounting
Treatment
Under Statement of Financial Accounting
Standards No. 123R, “Share-Based Payment,” the Company is required to recognize
compensation expense on its income statement over the requisite service period
based on the grant date fair value of options and other equity-based
compensation (such as stock appreciation rights).
Awards
to be Granted
The Board
of Directors adopted the Equity Plan, and the Compensation Committee intends to
meet promptly after stockholder approval to determine the specific terms of the
awards, including the allocation of awards to executive officers, employees and
non-employee directors. At the present time, no specific
determination has been made as to the allocation of awards.
|
L.
|
Required Vote and
Recommendation of the Board
|
Approval
of the Equity Plan requires the affirmative vote of both (i) a majority of the
votes eligible to be cast at the Special Meeting, including the shares held by
Greene County Bancorp, MHC, and (ii) a majority of the
votes cast at the Special Meeting by Minority
Stockholders. Abstentions and broker non-votes will have the same
effect as a negative vote for approval of the Equity Plan by stockholders,
including Greene County Bancorp, MHC, but will have no effect on the voting for
the approval of the Equity Plan by stockholders, excluding Greene County
Bancorp, MHC.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE GREENE COUNTY
BANCORP, INC. 2008 EQUITY INCENTIVE PLAN.
____________________________________________________________________________________________________________
STOCKHOLDER
PROPOSALS
____________________________________________________________________________________________________________
In order to be eligible for inclusion
in the proxy materials for the 2008 Annual Meeting of Stockholders, any
stockholder proposal to take action at such meeting had to have been received at
the Company’s executive office, P.O. Box 470, 302 Main Street, Catskill, New
York 12414, no later than May 29, 2008. Any such proposals shall be subject to
the requirements of the proxy rules adopted under the Exchange Act.
____________________________________________________________________________________________________________
ADVANCE
NOTICE OF BUSINESS TO BE BROUGHT BEFORE AN ANNUAL MEETING
____________________________________________________________________________________________________________
The
Bylaws of the Company provide an advance notice procedure for certain business
or nominations to the Board of Directors to be brought before an annual meeting.
In order for a stockholder to properly bring business before an annual meeting,
or to propose a nominee to the Board, the stockholder must give written notice
to the Secretary of the Company not less than five days prior to the date of the
annual meeting. No other proposal shall be acted upon at the annual
meeting. A stockholder may make any other proposal at the annual
meeting and the same may be discussed and considered, but unless stated in
writing and filed with the Secretary at least five days prior to the annual
meeting, the proposal will be laid over for action at an adjourned, special or
annual meeting taking place 30 days or more thereafter.
The date on which the next Annual
Meeting of Stockholders is expected to be held is October 25,
2008. Accordingly, advance written notice of business or nominations
to the Board of Directors to be brought before the 2008 Annual Meeting of
Stockholders must be made in writing and delivered to the Secretary of the
Company no later than October 20, 2008.
____________________________________________________________________________________________________________
OTHER MATTERS
_____________________________________________________________________________________________________________
The Board of Directors is not aware of
any business to come before the Special Meeting other than the matters described
above in this Proxy Statement. However, if any matters should
properly come before the Special Meeting, it is intended that holders of the
proxies will act as directed by a majority of the Board of Directors, except for
matters related to the conduct of the Special Meeting, as to which they shall
act in accordance with their best judgment. The Board of Directors
intends to exercise its discretionary authority to the fullest extent permitted
under the Exchange Act.
____________________________________________________________________________________________________________
MISCELLANEOUS
____________________________________________________________________________________________________________
The cost of solicitation of proxies in
the form enclosed herewith will be borne by the Company. Proxies also
may be solicited personally or by mail, telephone or telegraph by the Company’s
directors, officers and employees, without additional compensation therefore.
The Company also will request persons, firms and corporations holding shares in
their names, or in the names of their nominees which are beneficially owned by
others, to send proxy materials to and to obtain proxies from such beneficial
owners, and will reimburse such holders for their reasonable expenses in doing
so. The Company has retained Laurel Hill Advisory Group, LLC to
assist the Company in soliciting proxies, and has agreed to pay Laurel Hill
Advisory Group, LLC a fee of $9,000, which includes its out-of-pocket
expenses.
BY ORDER OF THE BOARD OF
DIRECTORS
/s/ Rebecca R. Main
Rebecca R. Main
Secretary
Catskill,
New York
June 19,
2008
APPENDIX
A
GREENE
COUNTY BANCORP, INC.
2008
EQUITY INCENTIVE PLAN
ARTICLE
1 – GENERAL
Section
1.1 Purpose,
Effective Date and Term. The purpose of this 2008 Equity Incentive
Plan (this “Plan”) is to promote the long-term financial success of Greene
County Bancorp, Inc., a federal mid-tier holding company (the “Company”), and
its Subsidiaries, including The Bank of Greene County (the “Bank”), by providing
a means to attract, retain and reward individuals who can and do contribute to
such success and to further align their interests with those of the Company’s
stockholders. The “Effective Date” of this Plan is July 29, 2008, the
expected date of the approval of this Plan by the Company’s stockholders.
This Plan shall remain in effect as long as any awards under it are outstanding;
provided, however, that
no awards may be granted under this Plan after the day before the ten-year
anniversary of the Effective Date.
Section
1.2 Administration.
This Plan shall be administered by a committee of the Company’s Board of
Directors (the “Committee”), in accordance with Section 5.1.
Section
1.3 Participation.
Each Employee or Director of the Company or any Subsidiary of the Company who is
granted an award in accordance with the terms of this Plan shall be a
“Participant” in this Plan. Awards under this Plan shall be limited to
Employees and Directors of the Company or any Subsidiary.
Section
1.4 Definitions.
Capitalized terms in this Plan are defined as set forth in this Plan (including
the definition provisions of Article 8).
ARTICLE 2 -
AWARDS
Section
2.1 General.
Any award under this Plan may be granted singularly, in combination with another
award (or awards), or in tandem whereby the exercise or vesting of one award
held by a Participant cancels another award held by the Participant. Each
award under this Plan shall be subject to the terms and conditions of this Plan
and such additional terms, conditions, limitations and restrictions as the
Committee shall provide with respect to such award and as evidenced in the Award
Agreement. Subject to the provisions of Section 2.7, an award may be
granted as an alternative to or replacement of an existing award under this Plan
or any other plan of the Company or any Subsidiary or as the form of payment for
grants or rights earned or due under any other compensation plan or arrangement
of the Company or its Subsidiaries, including without limitation the plan of any
entity acquired by the Company or any Subsidiary. The types of awards that
may be granted under this Plan include:
(a) Stock Options. A stock
option represents the right to purchase shares of Stock at an Exercise Price
established by the Committee. Any stock option may be either an incentive
stock option (an “ISO”) that is intended to satisfy the requirements applicable
to an “incentive stock option” described in Code Section 422(b), or a
non-qualified option that is not intended to be an ISO, provided, however, that no
ISOs may be: (i) granted after the day before the ten-year
anniversary of the Effective Date; or (ii) granted to a non-Employee.
Unless otherwise specified in the Award Agreement or prohibited by statute, an
option awarded to an Employee shall be an ISO. Any ISO granted under
this Plan that does not qualify as an ISO for any reason (whether at the time of
grant or as the result of a subsequent event) shall be deemed to be a
non-qualified option. In addition, any ISO granted under this Plan
may be unilaterally modified by the Committee to disqualify such option from ISO
treatment such that it shall become a non-qualified option.
(b) Stock Appreciation
Rights. A stock appreciation right (an “SAR”) is a right to
receive, in cash, shares of Stock or a combination of both (as shall be
reflected in the Award Agreement), an amount equal to or based upon the excess
of: (i) the Fair Market Value of a share of Stock at the time of exercise,
over (ii) an Exercise Price established by the Committee in accordance with
Section 2.2 hereof.
Section
2.2 Stock
Options and SARs.
(a) Grant of Options and
SARs. Each stock option or SAR shall be evidenced by an Award
Agreement that shall: (i) specify the number of stock options or SARs covered by
the award; (ii) specify the date of grant of the stock option or SAR; (iii)
specify the vesting period or performance-based conditions that must be achieved
in order to vest; and (iv) contain such other terms and conditions not
inconsistent with this Plan, including the effect of termination of a
Participant’s employment or Service with the Company as the Committee may, in
its discretion, prescribe. In addition, the Committee, in its sole
discretion, may condition the vesting or exercise of an award on the requirement
that the Participant not compete with the Company during the period that an
award is outstanding and such requirement shall be set forth in the Award
Agreement executed by the Participant and an authorized officer of the
Company.
(b) Terms and
Conditions. A stock option or SAR shall be exercisable in
accordance with such terms and conditions and during such periods as may be
established by the Committee. In no event, however, shall a stock option
or SAR be exercised later than ten (10) years after the date of its grant (or
five (5) years with respect to ISOs granted to an Employee who is a 10%
Stockholder). The “Exercise Price” of each stock option and SAR shall not
be less than 100% of the Fair Market Value of a share of Stock on the date of
grant (or, if greater, the par value of a share of Stock); provided, however, that the
Exercise Price of an ISO shall not be less than 110% of Fair Market Value of a
share of Stock on the date of grant if granted to a 10% Stockholder; and, provided further, that the
Exercise Price may be higher or lower in the case of options or SARs granted in
replacement of existing awards held by an Employee or Director of an acquired
entity. The payment of the Exercise Price of an option shall be by cash
or, subject to limitations imposed by applicable law, by such other means as the
Committee may from time to time permit, including: (a) by
tendering, either actually or constructively by attestation, shares of Stock
valued at Fair Market Value as of the day of exercise; (b) by irrevocably
authorizing a third party, acceptable to the Committee, to sell shares of Stock
(or a sufficient portion of the shares) acquired upon exercise of the option and
to remit to the Company a sufficient portion of the sale proceeds to pay the
entire Exercise Price and any tax withholding resulting from such exercise; (c)
by personal, certified or cashiers’ check; (d) by other property deemed
acceptable by the Committee; or (e) by any combination
thereof. The total number of shares that may be acquired upon the
exercise of an option or SAR shall be rounded down to the nearest whole
share.
Section
2.3. Performance-Based
Compensation. Any award under this Plan which is intended to be
“performance-based compensation” within the meaning of Code Section 162(m) shall
be conditioned on the achievement of one or more objective performance measures,
to the extent required by Code Section 162(m), as may be determined by the
Committee. The grant of any award and the establishment of
performance measures that are intended to be performance-based compensation
shall be made during the period required under Code Section 162(m) and shall
comply with all applicable requirements of Code Section 162(m).
(a) Performance Measures.
Such performance measures may be based on any one or more of the following:
earnings (e.g.,
earnings before interest and taxes, earnings before interest, taxes,
depreciation and amortization; or earnings per share); financial return ratios
(e.g., return on
investment, return on invested capital, return on equity or return on assets);
capital; increases in revenue, operating or net cash flows; cash flow return on
investment; total stockholder return; market share; net operating income,
operating income or net income; debt load reduction; expense management;
economic value added; stock price; assets, asset quality level, charge offs,
loan reserves, non-performing assets, loans, deposits, growth of loans, deposits
or assets; liquidity; interest sensitivity gap levels; regulatory compliance or
safety and soundness; improvement of financial rating; achievement of balance
sheet or income statement objectives and strategic business objectives,
consisting of one or more objectives, such as meeting specific cost, revenue or
other targets, business expansion goals and goals relating to acquisitions or
divestitures. Performance measures may be based on the performance of the
Company as a whole or of any one or more Subsidiaries or business units of the
Company or a Subsidiary and may be measured relative to a peer group, an index
or a business plan. In establishing any performance measures, the
Committee may provide for the exclusion of the effects of the following items,
to the extent identified in the audited financial statements of the Company,
including footnotes, or in the Management’s Discussion and Analysis section of
the Company’s annual report or in the Compensation Discussion and Analysis
section, if any, of the Company’s annual proxy
statement: (i) extraordinary, unusual, and/or nonrecurring items
of gain or loss; (ii) gains or losses on the disposition of a business; (iii)
changes in tax or accounting principles, regulations or laws; or (iv) mergers or
acquisitions. To the extent not specifically excluded, such effects shall
be included in any applicable performance measure.
(b) Partial Achievement.
The terms of any award may provide that partial achievement of the performance
measures may result in a payment or vesting based upon the degree of
achievement. In addition, partial achievement of performance measures
shall apply toward a Participant’s individual limitations as set forth in
Section 3.3.
(c) Adjustments. Pursuant
to this Section 2.3, in certain circumstances the Committee may adjust
performance measures; provided, however, no
adjustment may be made with respect to an award that is intended to be
performance-based compensation, except to the extent the Committee exercises
such negative discretion as is permitted under applicable law for purposes of an
exception under Code Section 162(m). If the Committee determines that
a change in the business, operations, corporate structure or capital structure
of the Company or the manner in which the Company or its Subsidiaries conducts
its business or other events or circumstances render current performance
measures to be unsuitable, the Committee may modify such performance measures,
in whole or in part, as the Committee deems appropriate. If a
Participant is promoted, demoted or transferred to a different business unit
during a performance period, the Committee may determine that the selected
performance measures or applicable performance period are no longer appropriate,
in which case, the Committee, in its sole discretion, may: (i) adjust, change or
eliminate the performance measures or change the applicable performance period;
or (ii) cause to be made a cash payment to the Participant in an amount
determined by the Committee.
Section
2.4 Vesting
of Awards. If the right to
become vested in an award under this Plan (including the right to exercise an
option) is conditioned on the completion of a specified period of Service with
the Company or its Subsidiaries, without achievement of performance measures or
other performance objectives (whether or not related to the performance
measures) being required as a condition of vesting, and without it being granted
in lieu of, or in exchange for, other compensation, then, unless otherwise
determined by the Committee and evidenced in the Award Agreement, the required
period of Service for full vesting shall be five (5) years (subject to
acceleration of vesting, to the extent permitted by the Committee, including in
the event of the Participant’s death, Disability, Retirement, or Involuntary
Termination of Employment following a Change in Control); provided, however, that
unless otherwise determined by the Committee and evidenced in the Award
Agreement, the required period of Service for full vesting with respect to an
award granted to Directors shall be five (5) years (subject to acceleration in
such similar events as applied to Employee Participants, and providing that
Service as a director emeritus or advisory director shall constitute Service for
purposes of vesting).
Section
2.5 Deferred
Compensation. If any award would be considered “deferred
compensation” as defined under Code Section 409A (“Deferred Compensation”), the
Committee reserves the absolute right (including the right to delegate such
right) to unilaterally amend this Plan or the Award Agreement, without the
consent of the Participant, to maintain exemption from, or to comply with, Code
Section 409A. Any amendment by the Committee to this Plan or an Award
Agreement pursuant to this Section 2.5 shall maintain, to the
extent practicable, the original intent of the applicable provision without
violating Code Section 409A. A Participant’s acceptance of any award
under this Plan constitutes acknowledgement and consent to such rights of the
Committee, without further consideration or action. Any discretionary
authority retained by the Committee pursuant to the terms of this Plan or
pursuant to an Award Agreement shall not be applicable to an award that is
determined to constitute Deferred Compensation, if such discretionary authority
would contravene Code Section 409A.
Section
2.6 Prohibition
Against Option Repricing. Except for adjustments pursuant to
Section 3.4, and reductions of the Exercise Price approved by the Company’s
stockholders, neither the Committee nor the Board shall have the right or
authority to make any adjustment or amendment that reduces or would have the
effect of reducing the Exercise Price of a stock option or SAR previously
granted under this Plan.
Section
2.7. Effect of
Termination of Service on Awards. The Committee shall
establish the effect of a Termination of Service on the continuation of rights
and benefits available under an award or this Plan and, in so doing, may make
distinctions based upon, among other things, the cause of Termination of Service
and type of award. Unless the Committee shall specifically state
otherwise at the time an award is granted, all awards to an Employee or Director
shall vest immediately upon such individual’s death, Disability or Retirement,
provided, however, that awards intended to be performance-based awards subject
to Code Section 162(m) (other than option awards) will not immediately vest on
Retirement. Unless otherwise provided in an Award Agreement, the
following provisions shall apply to each award granted under this
Plan:
(a) Upon
a Participant’s Termination of Service for any reason other than Disability,
Retirement, death or termination for Cause, options and SARs shall be
exercisable only as to those shares that were immediately exercisable by such
Participant at the date of termination, and options and SARs may be exercised
only for a period of three months following termination (or the remaining term,
if less).
(b) In
the event of a Termination of Service for Cause, all options and SARs granted to
a Participant under this Plan not exercised or vested shall expire and be
forfeited.
(c) Upon
the Termination of Service for reason of Disability, Retirement or death, all
options and SARs shall be exercisable as to all shares subject to an outstanding
award, whether or not then exercisable, at the date of Termination of Service,
and options and SARs may be exercised for a period of one year following
Termination of Service (or the remaining term, if less), provided, however, that no
option shall be eligible for treatment as an ISO in the event such option is
exercised more than one year following termination of employment due to
Disability and, provided
further, in order to obtain ISO treatment for options exercised by heirs
or devisees of an optionee, the optionee’s death must have occurred while
employed or within three (3) months after termination of
employment.
(d) The
effect of a Change in Control on the vesting/exercisability of options and SARs
is as set forth in Article 4.
ARTICLE 3 - SHARES SUBJECT TO
PLAN
Section
3.1 Available
Shares. The shares of Stock with respect to which awards may be
made under this Plan shall be shares currently authorized but unissued,
currently held or, to the extent permitted by applicable law, subsequently
acquired by the Company as treasury shares, including shares purchased in the
open market or in private transactions.
Section
3.2 Share
Limitations.
(a) Share
Reserve. Subject to the following provisions of this Section
3.2, the maximum number of shares of Stock that may be delivered to Participants
and their beneficiaries under this Plan shall be 180,000. The
aggregate number of shares available for grant under this Plan and the number of
shares of Stock subject to outstanding awards shall be subject to adjustment as
provided in Section 3.4.
(b) Computation of Shares
Available. For purposes of this Section 3.2 and in connection
with the granting of an option or SAR (other than a tandem SAR), shares of Stock
covered by an Award shall only be counted as used to the extent they are
actually issued. Any shares of Stock related to awards that terminate
by expiration, forfeiture, cancellation, or otherwise without the issuance of
such shares, that are settled in cash in lieu of shares of Stock, or that are
exchanged with the Committee’s permission, prior to the issuance of shares, for
awards not involving shares of Stock, shall be available again for grant under
this Plan. However, the full number of SARs granted that are to be
settled by the issuance of shares of Stock shall be counted against the number
of shares available for award under this Plan, regardless of the number of
shares actually issued upon settlement of such SARs. Further, any
shares of Stock withheld to satisfy tax withholding obligations on Awards issued
under this Plan, shares of Stock tendered to pay the exercise price of awards
under this Plan, and shares of Stock repurchased on the open market with the
proceeds of an Option exercise will no longer be eligible to be returned as
available shares of Stock under this Plan.
Section
3.3 Limitations
on Grants to Individuals.
(a) Options and SARs. The
maximum number of shares of Stock that may be subject to option awards under
this Plan shall be 180,000, all of which may be designated as
ISOs. The maximum number of shares of Stock that may be subject to
options or SARs granted to any one Participant during any calendar year shall be
100,000. For purposes of this Section 3.3(a), if an option is in
tandem with an SAR, such that the exercise of the option or SAR with respect to
a share of Stock cancels the tandem SAR or option right, respectively, with
respect to such share, the tandem option and SAR rights with respect to each
share of Stock shall be counted as covering but one share of Stock for purposes
of applying the limitations of this Section
3.3.
(b) SARs Settled in Cash. The
maximum annual dollar amount that may be payable to a Participant pursuant to
cash-settled SARs described under Section 2.1(b) that are granted to any
one Participant during any calendar year and are intended to be
“performance-based compensation” (as that term is used for purposes of Code
Section 162(m)) and then only to the extent that such limitation is required by
Code Section 162(m), shall be $500,000.
(c) Director
Awards. The maximum number of shares of stock that may be
covered by awards granted to all non-Employee Directors, in the aggregate,
pursuant to Section 2.1(a) and Section 2.1(b) (relating to options and
SARs) shall be thirty percent (30%) of all shares of Stock to be granted
pursuant to Section 2.1(a) and Section 2.1(b) (relating to options and
SARs). The foregoing limitations shall not apply to cash-based
Director fees that a non-Employee Director elects to receive in the form of
shares of Stock or with respect to enticement awards made to new
Directors.
(d) Partial
Performance. Notwithstanding the preceding provisions of
this Section 3.3,
if in respect of any performance period or restriction period, the Committee
grants to a Participant awards having an aggregate number of shares less than
the maximum number of shares that could be awarded to such Participant based on
the degree to which the relevant performance measures were attained, the excess
of such maximum number of shares over the number of shares actually subject to
awards granted to such Participant shall be carried forward and shall increase
the number of shares that may be awarded to such Participant in respect of the
next performance period in respect of which the Committee grants to such
Participant an award intended to qualify as “performance-based compensation” (as
that term is used for purposes of Code Section 162(m)), subject to adjustment
pursuant to Section 3.4.
Section
3.4 Corporate
Transactions.
(a) General. In
the event any recapitalization, forward or reverse split, reorganization,
merger, consolidation, spin-off, combination, repurchase, or exchange of shares
of Stock or other securities, stock dividend or other special and nonrecurring
dividend or distribution (whether in the form of cash, securities or other
property), liquidation, dissolution, or other similar corporate transaction or
event, affects the shares of Stock such that an adjustment is appropriate in
order to prevent dilution or enlargement of the rights of Participants under
this Plan and/or under any award granted under this Plan, then the Committee
shall, in an equitable manner, adjust any or all of (i) the number and kind of
securities deemed to be available thereafter for grants of options and SARs in
the aggregate to all Participants and individually to any one Participant, (ii)
the number and kind of securities that may be delivered or deliverable in
respect of outstanding options and SARs, and (iii) the Exercise Price of options
and SARs. In addition, the Committee is authorized to make
adjustments in the terms and conditions of, and the criteria included in,
options or SARs (including, without limitation, cancellation of options or SARs
in exchange for the in-the-money value, if any, of the vested portion thereof,
or substitution of options and SARs using stock of a successor or other entity)
in recognition of unusual or nonrecurring events (including, without limitation,
events described in the preceding sentence) affecting the Company or any parent
or Subsidiary or the financial statements of the Company or any parent or
Subsidiary, or in response to changes in applicable laws, regulations, or
accounting principles. Unless otherwise determined by the Committee, any such
adjustment to an option or SAR intended to qualify as “performance-based
compensation” shall conform to the requirements of Section 162(m) of the Code
and the regulations thereunder then in effect.
(b) Merger in which Company is Not
Surviving Entity. In the event of any merger, consolidation, or other
business reorganization (including, but not limited to, a Change in Control) in
which the Company is not the surviving entity, unless otherwise determined by
the Committee at any time at or after grant and prior to the consummation of
such merger, consolidation or other business reorganization, any options or SARs
granted under this Plan that remain outstanding shall be converted into options
to purchase voting common equity securities of the business entity that survives
such merger, consolidation or other business reorganization or SARs having
substantially the same terms and conditions as the outstanding options under
this Plan and reflecting the same economic benefit (as measured by the
difference between the aggregate Exercise Price and the value exchanged for
outstanding shares of Stock in such merger, consolidation or other business
reorganization), all as determined by the Committee prior to the consummation of
such merger, provided, however, that the Committee may, at any time prior to the
consummation of such merger, consolidation or other business reorganization,
direct that all, but not less than all, outstanding options and SARs be canceled
as of the effective date of such merger, consolidation or other business
reorganization in exchange for a cash payment per share of Stock equal to the
excess (if any) of the value exchanged for an outstanding share of Stock in such
merger, consolidation or other business reorganization over the Exercise Price
of the option or SAR being canceled.
(c) The
Committee may make adjustments in the terms and conditions of, and the criteria
included in, Awards in recognition of unusual or nonrecurring events, other than
those described above, affecting the Company or the financial statements of the
Company or of changes in applicable laws, regulations, or accounting principles,
whenever the Committee determines that such adjustments are appropriate in order
to prevent unintended dilution or enlargement of the benefits or potential
benefits intended to be made available under this Plan. The
determination of the Committee as to the foregoing adjustments, if any, shall be
conclusive and binding on the Participants under this Plan.
Section
3.5 Delivery
of Shares. Delivery of shares of Stock or other amounts under this
Plan shall be subject to the following:
(a) Compliance with Applicable
Laws. Notwithstanding any other provision of this Plan, the Company
shall have no obligation to deliver any shares of Stock or make any other
distribution of benefits under this Plan unless such delivery or distribution
complies with all applicable laws (including, the requirements of the Securities
Act), and the applicable requirements of any securities exchange or similar
entity.
(b) Certificates. To the
extent that this Plan provides for the issuance of shares of Stock, the issuance
may be effected on a non-certificated basis, to the extent not prohibited by
applicable law or the applicable rules of any stock exchange.
ARTICLE 4 - CHANGE IN
CONTROL
Section
4.1 Consequence
of a Change in Control. Subject to the provisions of Section
3.4 (relating to
the adjustment of shares), and except as otherwise provided in this Plan or as
determined by the Committee and set forth in the in terms of any Award
Agreement:
(a) At
the time of an Involuntary Termination of Employment (as defined in Section 8.1)
(or as to a Director, Termination of Service as a Director) following a Change
in Control, all options and SARs then held by the Participant shall become fully
exercisable (subject to the expiration provisions otherwise applicable to the
option or SAR).
(b) In
the event of a Change in Control, any performance measure attached to an award
under this Plan shall be deemed satisfied as of the date of the Change in
Control.
Section
4.2 Definition
of Change in Control. For purposes of this Plan, unless otherwise
provided in an Award Agreement, a “Change in Control” shall be deemed to have
occurred upon the earliest to occur of the following:
(a) any
“person,” as such term is used in Sections 13(d) and 14(d) of the Exchange Act
(a “Person”), 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 twenty-five percent (25%) or more of the combined voting power of
the Company’s then outstanding Voting Securities, provided that, notwithstanding
the foregoing and for all purposes of this Plan: (a) the term “Person” shall not
include (1) Greene County Bancorp, MHC (the “MHC”), the Company or any of its
Subsidiaries, (2) an employee benefit plan of the Company or any of its
Subsidiaries (including this Plan), and any trustee or other fiduciary holding
securities under any such plan (but only with respect to the securities held
under any such plan), or (3) a corporation or other entity owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of Stock of the Company; (b) no Person shall be
deemed the beneficial owner of any securities acquired by such Person in an
Excluded Transaction; and (c) no Director or officer of the Company or any
direct or indirect Subsidiary of the Company (or any affiliate of any such
Director or officer) shall, by reason of any or all of such Directors or
officers acting in their capacities as such, be deemed to beneficially own any
securities beneficially owned by any other such Director or officer (or any
affiliate thereof); or
(b) the
Incumbent Directors cease, for any reason, to constitute a majority of the Whole
Board; or
(c) a
plan of reorganization, merger, consolidation or similar transaction involving
the Company and one or more other corporations or entities is consummated, other
than a plan of reorganization, merger, consolidation or similar transaction that
is an Excluded Transaction, or the stockholders of the Company approve a plan of
complete liquidation of the Company, or a sale, liquidation or other disposition
of all or substantially all of the assets of the Company or any bank Subsidiary
of the Company is consummated; or
(d) a
tender offer is made for 25% or more of the outstanding Voting Securities of the
Company and the stockholders owning beneficially or of record 25% or more of the
outstanding Voting Securities of the Company have tendered or offered to sell
their shares pursuant to such tender offer and such tendered shares have been
accepted by the tender offeror; or
(e) a Potential Change in
Control occurs, and the Board determines, pursuant to the vote of a majority of
the Whole Board, with at least two-thirds (2/3) of the Incumbent Directors then
in office voting in favor of such determination, to deem the Potential Change in
Control to be a Change in Control for the purposes of this Plan.
Notwithstanding
the foregoing, a Change in Control shall not be deemed to occur solely because
any Person (the “Subject Person”) acquired beneficial ownership of more than the
permitted amount of the then outstanding common stock or Voting Securities as a
result of the acquisition of Stock or Voting Securities by the Company, which by
reducing the number of shares of Stock or Voting Securities then outstanding,
increases the proportional number of shares beneficially owned by the Subject
Person; provided,
however, that if a Change in Control would occur (but for the operation
of this sentence) as a result of the acquisition of Stock or Voting Securities
by the Company, and after such share acquisition by the Company, the Subject
Person becomes the beneficial owner of any additional Stock or Voting Securities
that increases the percentage of the then outstanding Stock or Voting Securities
beneficially owned by the Subject Person, then a Change in Control shall
occur. In addition, and notwithstanding the foregoing, a Change in
Control shall not be deemed to occur as a result of or in connection with a
second step conversion of the MHC, unless otherwise provided in the Award
Agreement. In the event that an award constitutes Deferred
Compensation, and the settlement of, or distribution of benefits under, such
award is to be triggered solely by a Change in Control, then with respect to
such award, a Change in Control shall be defined as required under Code Section
409A, as in effect at the time of such transaction.
ARTICLE 5 -
COMMITTEE
Section
5.1 Administration. This
Plan shall be administered by the members of the Compensation Committee of the
Company who are Disinterested Board Members. If the Committee
consists of fewer than two 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 two Disinterested
Board Members. Any members of the Committee who do not qualify as Disinterested
Board Members shall abstain from participating in any decision to make or
administer awards that are made to Participants who at the time of consideration
for such award (i) are persons subject to the short-swing profit rules of
Section 16 of the Exchange Act, or (ii) are reasonably anticipated to be Covered
Employees during the term of the award. The Board (or those
members of the Board who are “independent directors” under the corporate
governance statutes of any national securities exchange on which the Company
lists its securities) may, in its discretion, take any action and exercise any
power, privilege or discretion conferred on the Committee under this Plan with
the same force and effect under this Plan as if done or exercised by the
Committee.
Section
5.2 Powers of
Committee. The Committee’s administration of this Plan shall be
subject to the following:
(a) Subject
to the provisions of this Plan, the Committee will have the authority and
discretion to select from among the Company’s and its Subsidiaries’ Employees
and Directors those persons who shall receive awards, to determine the time or
times of receipt, to determine the types of awards and the number of shares
covered by the awards, to establish the terms, conditions, performance criteria,
restrictions (including without limitation, provisions relating to
non-competition, non-solicitation and confidentiality), and other provisions of
such awards (subject to the restrictions imposed by Article 6), to cancel or
suspend awards and to reduce, eliminate or accelerate any restrictions or
vesting requirements applicable to an award at any time after the grant of the
award.
(b) The
Committee will have the authority and discretion to interpret this Plan, to
establish, amend and rescind any rules and regulations relating to this Plan,
and to make all other determinations that may be necessary or advisable for the
administration of this Plan.
(c) The
Committee will have the authority to define terms not otherwise defined
herein.
(d) Any
interpretation of this Plan by the Committee and any decision made by it under
this Plan are final and binding on all persons.
(e) In
controlling and managing the operation and administration of this Plan, the
Committee shall take action in a manner that conforms to the charter and bylaws
of the Company and applicable state corporate law.
Section
5.3 Delegation
by Committee. Except to the extent prohibited by applicable law,
the applicable rules of a stock exchange or this Plan, or as necessary to comply
with the exemptive provisions of Rule 16b-3 promulgated under the Exchange Act
or Code Section 162(m), the Committee may allocate all or any portion of its
responsibilities and powers to any one or more of its members and may delegate
all or any part of its responsibilities and powers to any person or persons
selected by it, including: (a) delegating to a committee of one
or more members of the Board who are not “outside directors” within the meaning
of Code Section 162(m), the authority to grant awards under this Plan to
eligible persons who are either: (i) not then Covered Employees, and
are not expected to be Covered Employees at the time of recognition of income
resulting from such award; or (ii) not persons with respect to whom the
Company wishes to comply with Code Section 162(m); and/or (b) delegating to a
committee of one or more members of the Board who are not “non-employee
directors,” within the meaning of Rule 16b-3, the authority to grant awards
under this Plan to eligible persons who are not then subject to Section 16 of
the Exchange Act. The acts of such delegates shall be treated
hereunder as acts of the Committee and such delegates shall report regularly to
the Committee regarding the delegated duties and responsibilities and any awards
so granted. Any such allocation or delegation may be revoked by the
Committee at any time.
Section
5.4 Information
to be Furnished to Committee. As may be permitted by applicable
law, the Company and its Subsidiaries shall furnish the Committee such data and
information as the Committee determines may be required for it to discharge its
duties. The records of the Company and its Subsidiaries as to a
Participant’s employment, termination of employment, leave of absence,
reemployment and compensation shall be conclusive on all persons unless
determined by the Committee to be manifestly incorrect. Subject to
applicable law, Participants and other persons entitled to benefits under this
Plan must furnish the Committee such evidence, data or information as the
Committee considers desirable to carry out the terms of this Plan.
Section
5.5 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, Participants 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 a member
of the Committee or by a representative of the Committee authorized to sign the
same in its behalf.
ARTICLE 6 - AMENDMENT AND
TERMINATION
Section
6.1 General.
The Board may, as permitted by law, at any time, amend or terminate this Plan,
and may amend any Award Agreement, provided that no amendment or termination
(except as provided in Section 2.5, Section 3.4 and Section 6.2) may cause
the award to violate Code Section 409A or, in the absence of written consent to
the change by the affected Participant (or, if the Participant is not then
living, the affected beneficiary), adversely impair the rights of any
Participant or beneficiary under any award granted that was granted under this
Plan prior to the date such amendment is adopted by the Board; provided, however, that, no
amendment may (a) materially increase the benefits accruing to Participants
under this Plan; (b) materially increase the aggregate number of securities
that may be issued under this Plan, other than pursuant to Section 3.4, or
(c) materially modify the requirements for participation in this Plan,
unless the amendment under (a), (b) or (c) above is approved by the Company’s
stockholders.
Section
6.2 Amendment
to Conform to Law and Accounting Changes. Notwithstanding any
provision in this Plan or any Award Agreement to the contrary, the Committee may
amend this Plan or an Award Agreement, to take effect retroactively or
otherwise, as deemed necessary or advisable for the purpose of (i) conforming
this Plan or the Award Agreement to any present or future law relating to plans
of this or similar nature (including, but not limited to, Code Section 409A), or
(ii) avoiding an accounting treatment resulting from an accounting pronouncement
or interpretation thereof issued by the SEC or Financial Accounting Standards
Board subsequent to the adoption of this Plan or the making of the award
affected thereby, which, in the sole discretion of the Committee, may materially
and adversely affect the financial condition or results of operations of the
Company. By accepting an award under this Plan, each Participant
agrees and consents to any amendment made pursuant to this Section 6.2 or
Section 2.5 to any
award granted under this Plan without further consideration or
action.
ARTICLE 7 - GENERAL
TERMS
Section
7.1 No
Implied Rights.
(a) No Rights to Specific Assets.
Neither a Participant nor any other person shall by reason of
participation in this Plan acquire any right in or title to any assets, funds or
property of the Company or any Subsidiary whatsoever, including any specific
funds, assets, or other property that the Company or any Subsidiary, in its sole
discretion, may set aside in anticipation of a liability under this Plan.
A Participant shall have only a contractual right to the shares of Stock or
amounts, if any, payable or distributable under this Plan, unsecured by any
assets of the Company or any Subsidiary, and nothing contained in this Plan
shall constitute a guarantee that the assets of the Company or any Subsidiary
shall be sufficient to pay any benefits to any person.
(b) No Contractual Right to Employment
or Future Awards. This Plan does not constitute a contract of
employment, and selection as a Participant will not give any participating
Employee the right to be retained in the employ of the Company or any Subsidiary
or any right or claim to any benefit under this Plan, unless such right or claim
has specifically accrued under the terms of this Plan. No individual shall
have the right to be selected to receive an award under this Plan, or, having
been so selected, to receive a future award under this Plan.
(c) No Rights as a
Stockholder. Except as otherwise provided in this Plan, no
award under this Plan shall confer upon the holder thereof any rights as a
stockholder of the Company prior to the date on which the individual fulfills
all conditions for receipt of such rights.
Section
7.2 Transferability.
Except as otherwise so provided by the Committee, ISOs under this Plan are not
transferable except (i) as designated by the Participant by will or by the laws
of descent and distribution, (ii) to a trust established by the Participant, if
under Code Section 671 and applicable state law, the Participant is considered
the sole beneficial owner of the option while held in the trust, or (iii)
between spouses incident to a divorce or pursuant to a domestic relations order,
provided, however, in the case of a transfer within the meaning of this
sub-section (iii), the option shall not qualify as an ISO as of the day of such
transfer. The Committee shall have the discretion to permit the
transfer of non-qualified options under this Plan; provided, however, that such
transfers shall be limited to Immediate Family Members of Participants, trusts
and partnerships established for the primary benefit of such family members or
to charitable organizations, and; provided, further, that such
transfers are not made for consideration to the Participant.
Section
7.3 Designation
of Beneficiaries. A Participant hereunder may file with the Company
a written designation of a beneficiary or beneficiaries under this Plan and may
from time to time revoke or amend any such designation (“Beneficiary
Designation”). Any designation of beneficiary under this Plan shall
be controlling over any other disposition, testamentary or otherwise (unless
such disposition is pursuant to a domestic relations order); provided, however, that if
the Committee is in doubt as to the entitlement of any such beneficiary to any
award, the Committee may determine to recognize only the legal representative of
the Participant, in which case the Company, the Committee and the members
thereof shall not be under any further liability to anyone.
Section
7.4 Non-Exclusivity.
Neither the adoption of this Plan by the Board nor the submission of this Plan
to the stockholders of the Company for approval shall be construed as creating
any limitations on the power of the Board or the Committee to adopt such other
incentive arrangements as either may deem desirable, including, without
limitation, the granting of restricted stock or stock options otherwise than
under this Plan or an arrangement that is or is not intended to qualify under
Code Section 162(m), and such arrangements may be either generally applicable or
applicable only in specific cases.
Section
7.5 Award
Agreement. Each award granted under this Plan shall be evidenced by
an Award Agreement. A copy of the Award Agreement, in any medium
chosen by the Committee, shall be provided (or made available electronically) to
the Participant, and the Committee may but need not require that the Participant
sign a copy of the Award Agreement, provided, however, that an Award
Agreement that conditions the vesting or exercise of an award on a Participant’s
agreement not to compete with the Company must be executed by the Participant
and an authorized officer of the Company.
Section
7.6 Form and
Time of Elections. Unless otherwise specified herein, each election
required or permitted to be made by any Participant or other person entitled to
benefits under this Plan, and any permitted modification, or revocation thereof,
shall be filed with the Company at such times, in such form, and subject to such
restrictions and limitations, not inconsistent with the terms of this Plan, as
the Committee shall require.
Section
7.7 Evidence.
Evidence required of anyone under this Plan may be by certificate, affidavit,
document or other information that the person acting on it considers pertinent
and reliable, and signed, made or presented by the proper party or
parties.
Section
7.8 Tax
Withholding. Where a Participant is entitled to receive shares of
Stock upon the vesting or exercise of an award, the Company shall have the right
to require such Participant to pay to the Company the amount of any tax that the
Company is required to withhold with respect to such vesting or exercise, or, in
lieu thereof, to retain, or to sell without notice, a sufficient number of
shares of Stock to cover the minimum amount required to be withheld. To the
extent determined by the Committee and specified in an Award Agreement, a
Participant shall have the right to direct the Company to satisfy the minimum
required federal, state and local tax withholding by, (i) with respect to an
option or SAR settled in stock, reducing the number of shares of Stock subject
to the option or SAR (without issuance of such shares of Stock to the option
holder) by a number equal to the quotient of (a) the total minimum amount of
required tax withholding divided by (b) the excess of the Fair Market Value of a
share of Stock on the exercise date over the Exercise Price per share of Stock;
or (ii) with respect to an SAR settled in cash, withholding an amount of
cash. Provided there are no adverse accounting consequences to the
Company (a requirement to have liability classification of an award under FAS
123(R) is an adverse consequence), a Participant who is not required to have
taxes withheld may require the Company to withhold in accordance with the
preceding sentence as if the award were subject to minimum tax withholding
requirements.
Section
7.9 Action by
Company or Subsidiary. Any action required or permitted to be taken
by the Company or any Subsidiary shall be by resolution of its board of
directors, or by action of one or more members of the Board (including a
committee of the Board) who are duly authorized to act for the Board, or (except
to the extent prohibited by applicable law or applicable rules of any stock
exchange) by a duly authorized officer of the Company or such
Subsidiary.
Section
7.10 Successors.
All obligations of the Company under this Plan shall be binding upon and inure
to the benefit of any successor to the Company, whether the existence of such
successor is the result of a direct or indirect purchase, merger, consolidation
or otherwise, of all or substantially all of the business, stock, and/or assets
of the Company.
Section
7.11 Indemnification.
To the fullest extent permitted by law and the Company’s governing documents,
each person who is or shall have been a member of the Committee, or of the
Board, or an officer of the Company to whom authority was delegated in
accordance with Section 5.3, or an Employee of the Company shall be indemnified
and held harmless by the Company against and from any loss (including amounts
paid in settlement), cost, liability or expense (including reasonable attorneys’
fees) that may be imposed upon or reasonably incurred by him or her in
connection with or resulting from any claim, action, suit, or proceeding to
which he or she may be a party or in which he or she may be involved by reason
of any action taken or failure to act under this Plan and against and from any
and all amounts paid by him or her in settlement thereof, with the Company’s
approval, or paid by him or her in satisfaction of any judgment in any such
action, suit, or proceeding against him or her, provided he or she shall give
the Company an opportunity, at its own expense, to handle and defend the same
before he or she undertakes to handle and defend it on his or her own behalf,
unless such loss, cost, liability, or expense is a result of his or her own
willful misconduct or except as expressly provided by statute. The
foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company’s
charter or bylaws, as a matter of law, or otherwise, or any power that the
Company may have to indemnify them or hold them harmless.
Section
7.12 No
Fractional Shares. Unless otherwise permitted by the Committee, no
fractional shares of Stock shall be issued or delivered pursuant to this Plan or
any award. The Committee shall determine whether cash or other
property shall be issued or paid in lieu of fractional shares or whether such
fractional shares or any rights thereto shall be forfeited or otherwise
eliminated.
Section
7.13 Governing
Law. This Plan, all awards granted hereunder, and all actions taken
in connection herewith shall be governed by and construed in accordance with the
laws of the State of New York without reference to principles of conflict of
laws, except as superseded by applicable federal law. The federal and
state courts located in Greene County, New York, shall have exclusive
jurisdiction over any claim, action, complaint or lawsuit brought under the
terms of this Plan. By accepting any award under this Plan, each
Participant, and any other person claiming any rights under this Plan, agrees to
submit himself, and any such legal action as he shall bring under this Plan, to
the sole jurisdiction of such courts for the adjudication and resolution of any
such disputes.
Section
7.14 Benefits
Under Other Plans. Except as otherwise provided by the Committee or
as otherwise set forth in a Qualified Retirement Plan, awards to a Participant
(including the grant and the receipt of benefits) under this Plan shall be
disregarded for purposes of determining the Participant’s benefits under, or
contributions to, any Qualified Retirement Plan, non-qualified plan and any
other benefit plans maintained by the Participant’s employer. The
term “Qualified Retirement Plan” means any plan of the company or a Subsidiary
that is intended to be qualified under Code Section 401(a).
Section
7.15 Validity.
If any provision of this Plan is determined to be illegal or invalid for any
reason, said illegality or invalidity shall not affect the remaining parts
hereof, but this Plan shall be construed and enforced as if such illegal or
invalid provision has never been included herein.
Section
7.16 Notice.
Unless otherwise provided in an Award Agreement, all written notices and all
other written communications to the Company provided for in this Plan, any Award
Agreement, shall be delivered personally or sent by registered or certified
mail, return receipt requested, postage prepaid (provided that international
mail shall be sent via overnight or two-day delivery), or sent by facsimile or
electronic mail or prepaid overnight courier to the Company at its principal
executive office. Such notices, demands, claims and other
communications shall be deemed given:
(a) in
the case of delivery by overnight service with guaranteed next day delivery, the
next day or the day designated for delivery;
(b) in
the case of certified or registered U.S. mail, three (3) days after deposit in
the U.S. mail; or
(c) in
the case of facsimile, the date upon which the transmitting party received
confirmation of receipt by facsimile, telephone or otherwise, and in the case of
electronic mail, the date upon which the receiving party received the electronic
mail;
provided, however, that in no
event shall any such communications be deemed to be given later than the date
they are actually received, provided they are actually received. In
the event a communication is not received, it shall only be deemed received upon
the showing of an original of the applicable receipt, registration or
confirmation from the applicable delivery service. Communications
that are to be delivered by the U.S. mail or by overnight service to the Company
shall be directed to the attention of the Company’s Chief Executive Officer and
to the Corporate Secretary.
Section
7.17 Forfeiture
Events.
(a) The
Committee may specify in an Award Agreement that the Participant’s rights,
payments, and benefits with respect to an award shall be subject to reduction,
cancellation, forfeiture or recoupment upon the occurrence of certain specified
events, in addition to any otherwise applicable vesting or performance
conditions of an award. Such events include, but shall not be limited
to, termination of employment for cause, termination of the Participant’s
provision of services to the Company or any Subsidiary, violation of material
Company or Subsidiary policies, breach of noncompetition, confidentiality, or
other restrictive covenants that may apply to the Participant, or other conduct
of the Participant that is detrimental to the business or reputation of the
Company or any Subsidiary.
(b) If
the Company is required to prepare an accounting restatement due to the material
noncompliance of the Company, as a result of misconduct, with any financial
reporting requirement under the securities laws, any Participant who is subject
to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002
shall reimburse the Company the amount of any payment in settlement of an award
earned or accrued during the twelve (12)-month period following the first public
issuance or filing with the SEC (whichever just occurred) of the financial
document embodying such financial reporting requirement. In addition,
in the event of an accounting restatement, the Committee in its sole and
exclusive discretion may require that any Participant reimburse the Company for
all or any part of the amount of any payment in settlement of any award granted
hereunder.
ARTICLE 8 - DEFINED
TERMS;
CONSTRUCTION
Section
8.1 In
addition to the other definitions contained herein, unless otherwise
specifically provided in an Award Agreement, the following definitions shall
apply:
(a) “10%
Stockholder” means an individual who, at the time of grant, owns stock
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company.
(b) “Award
Agreement” means the document (in whatever medium prescribed by the Committee)
that evidences the terms and conditions of an award under this
Plan. Such document is referred to as an agreement regardless of
whether Participant signature is required.
(c) “Board”
means the Board of Directors of the Company.
(d) If
the Participant is subject to a written employment agreement (or other similar
written agreement) with the Company or a Subsidiary that provides a definition
of termination for “Cause,” then, for purposes of this Plan, the term “Cause”
shall have meaning set forth in such agreement. In the absence of
such a definition, “Cause” means (i) the conviction of the Participant of a
felony or of any lesser criminal offense involving moral turpitude; (ii) the
willful commission by the Participant of a criminal or other act that, in the
judgment of the Board, will likely cause substantial economic damage to the
Company or any Subsidiary or substantial injury to the business reputation of
the Company or any Subsidiary; (iii) the commission by the Participant of an act
of fraud in the performance of his duties on behalf of the Company or any
Subsidiary; (iv) the continuing willful failure of the Participant to perform
his duties to the Company or any Subsidiary (other than any such failure
resulting from the Participant’s incapacity due to physical or mental illness)
after written notice thereof; or (v) an order of a federal or state regulatory
agency or a court of competent jurisdiction requiring the termination of the
Participant’s Service with the Company.
(e) “Change
in Control” has the meaning ascribed to it in Section 4.2.
(f) “Code”
means the Internal Revenue Code of 1986, as amended, and any rules, regulations
and guidance promulgated thereunder, as modified from time to time.
(g) “Code
Section 409A” means the provisions of Section 409A of the Code and any rules,
regulations and guidance promulgated thereunder, as modified from time to
time.
(h) “Committee”
means the Committee acting under Article 5.
(i) “Covered
Employee” has the meaning given the term in Code Section 162(m), and shall also
include any other Employee who may become a Covered Employee prior to the
vesting date of an award, as the Committee may determine in its sole
discretion.
(j) “Director”
means a member of the Board of Directors of the Company or a Subsidiary, and
also includes advisory directors and directors emeritus.
(k) “Disinterested
Board Member” means a member of the Board who: (a) is not a current Employee of
the Company or a Subsidiary, (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 or a
Subsidiary, either directly or indirectly, in any capacity other than as a
Director except in an amount for which disclosure would not be required pursuant
to Item 404 of SEC Regulation S-K in accordance with the proxy solicitation
rules of the SEC, as amended or any successor provision thereto and (e) does not
possess an interest in any other transaction, and is not engaged in a business
relationship for which disclosure would be required pursuant to Item 404(a) of
SEC Regulation S-K under the proxy solicitation rules of the SEC, as amended or
any successor provision thereto. 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, Rule 16b-3 promulgated under the Exchange Act and
the corporate governance standards imposed on compensation committees under the
listing requirements imposed by any national securities exchange on which the
Company lists or seeks to list its securities.
(l) If
the Participant is subject to a written employment agreement (or other similar
written agreement) with the Company or a Subsidiary that provides a definition
of “Disability” or “Disabled,” then, for purposes of this Plan, the terms
“Disability” or “Disabled” shall have the meaning set forth in such
agreement. In the absence of such a definition, “Disability” or
“Disabled” means that a Participant: (i) is unable to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than twelve (12) months; or
(ii) is, by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than twelve (12) months, receiving income
replacement benefits for a period of not less than three (3) months under an
accident and health plan covering the Company’s Employees. Except to
the extent prohibited under Code Section 409A, if applicable, the Committee
shall have discretion to determine if a termination due to Disability has
occurred.
(m) “Employee”
means any person employed by the Company or any Subsidiary. Directors who are
also employed by the Company or a Subsidiary shall be considered Employees under
this Plan.
(n) “Exchange
Act” means the Securities Exchange Act of 1934, as amended from time to
time.
(o) “Excluded
Transaction” means: (I) a plan of reorganization, merger, consolidation or
similar transaction that would result in the Voting Securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of the
surviving corporation or any parent thereof) at least 50% of the combined voting
power of the Voting Securities of the entity surviving the plan of
reorganization, merger, consolidation or similar transaction (or the parent of
such surviving entity) immediately after such plan of reorganization, merger,
consolidation or similar transaction; and (II) a second-step conversion of the
MHC.
(p) “Exercise
Price” means the price established with respect to an option or SAR pursuant to
Section 2.2.
(q) “Fair
Market Value” means, with respect to a share of Stock on a specified
date:
(I) the final reported
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 of Stock are listed or admitted to
trading, as of the close of the market in New York City and without regard to
after-hours trading activity; or
(II) if the shares of
Stock are not listed or admitted to trading on any such exchange, the closing
bid quotation with respect to a share of Stock on such date, as of the close of
the market in New York City and without regard to after-hours trading activity,
or, if no such quotation is provided, on another similar system, selected by the
Committee, then in use; or
(III) if
(I) and (II) are not applicable, the Fair Market Value of a share of Stock as
the Committee may determine in good faith and in accordance with Code Section
422. For purposes of the exercise of an option, Fair Market Value on
such date shall be the date a notice of exercise is received by the Company, or
if not a day on which the market is open, the next day that it is
open.
(r) Following
a Change in Control, a termination of employment by an Employee Participant
shall be deemed a termination of employment for “Good Reason” as a result of the
Participant’s resignation from the employ of the Company or any Subsidiary upon
the occurrence of any of the following events: (a) the failure of the Company or
Subsidiary to appoint or re-appoint or elect or re-elect the Employee
Participant to the position(s) with the Company or Subsidiary held immediately
prior to the Change in Control; (b) a material change in the functions, duties
or responsibilities of the Employee Participant compared to those functions,
duties or responsibilities in effect immediately prior to a Change in Control;
(c) any reduction of the rate of the Employee Participant’s base salary in
effect immediately prior to the Change in Control; (d) any failure (other than
due to reasonable administrative error that is cured promptly upon notice) to
pay any portion of the Employee Participant’s compensation as and when due; (e)
any change in the terms and conditions of any compensation or benefit program in
which the Employee Participant participated immediately prior to the Change in
Control which, either individually or together with other changes, has a
material adverse effect on the aggregate value of his total compensation
package; or (f) a change in the Employee Participant’s principal place of
employment, without his consent, to a place that is both more than twenty-five
(25) miles away from the Employee Participant’s principal residence and more
than fifteen (15) miles away from the location of the Employee Participant’s
principal executive office prior to the Change in Control.
(s) “Incumbent
Directors” means:
(I) the
individuals who, on the date hereof, constitute the Board; and
(II) any
new Director whose appointment or election by the Board or nomination for
election by the Company’s stockholders was approved or recommended: (a) by the
vote of at least two-thirds of the Whole Board, with at least two-thirds of the
Incumbent Directors then in office voting in favor of such approval or
recommendation; or (b) by a Nominating Committee of the Board whose members were
appointed by the vote of at least two-thirds of the Whole Board, with at least
two-thirds of the Incumbent Directors then in office voting in favor of such
appointments
(t) “Involuntary
Termination of Employment” means the Termination of Service by the Company or
Subsidiary other than a termination for Cause, or termination of employment by a
Participant Employee for Good Reason.
(u) “ISO”
has the meaning ascribed to it in Section 2.1(a).
(v) “Participant”
means any individual who has received, and currently holds, an outstanding award
under this Plan.
(w) “Potential
Change in Control” means:
(I) the
public announcement by any Person of an intention to take or to consider taking
actions which, if consummated, would constitute a Change in Control;
or
(II) one
or more transactions, events or occurrences that result in a change in control
of the Company or any Subsidiary within the meaning of the Home Owners’ Loan
Act, as amended, and the applicable rules and regulations promulgated
thereunder, as in effect at the time of the Change in Control; or
(III) a
proxy statement soliciting proxies from stockholders of the Company is filed or
distributed, seeking stockholder approval of a plan of reorganization, merger,
consolidation or similar transaction involving the Company and one or more other
entities, but only if such plan of reorganization, merger, consolidation or
similar transaction has not been approved by the vote of at least two-thirds of
the Whole Board, with at least two-thirds of the Incumbent Directors then in
office voting in favor of such plan of reorganization, merger, consolidation or
similar transaction.
(x) “Retirement”
means retirement from employment as an Employee or Service as a Director on or
after the occurrence of any of the following:
(I) with
respect to an Employee, attainment of age 65; or
(II) with
respect to a Director, attainment of age 75 with 10 years of Continuous
Service.
Years of
employment as an Employee or Service as a Director shall be aggregated for the
purposes of this definition for any years of employment as an Employee or
Service as a Director that did not occur simultaneously.
(y) “SAR”
has the meaning ascribed to it in Section 2.1(b).
(z) “SEC” means the Securities and
Exchange Commission.
(aa) “Securities Act” means the
Securities Act of 1933, as amended from time to time.
(bb) “Service” means service as an Employee
or non-employee Director of the Company or a Subsidiary, as the case may be, and
shall include service as a director emeritus or advisory director.
(cc) “Stock”
means the common stock of the Company, $0.10 par value per share.
(dd) “Subsidiary”
means any corporation, affiliate, bank or other entity that would be a
subsidiary corporation with respect to the Company as defined in Code
Section 424(f) and, other than with respect to an ISO, shall also mean any
partnership or joint venture in which the Company and/or other Subsidiary owns
more than fifty percent (50%) of the capital or interests in the
profits.
(ee) “Termination
of Service” means the first day occurring on or after a grant date on which the
Participant ceases to be an Employee or Director of the Company or any
Subsidiary, regardless of the reason for such cessation, subject to the
following:
(I) The
Participant’s cessation as an Employee shall not be deemed to occur by reason of
the transfer of the Participant between the Company and a Subsidiary or between
two Subsidiaries.
(II) The
Participant’s cessation as an Employee shall not be deemed to occur by reason of
the Participant’s being on a bona fide leave of absence from the Company or a
Subsidiary approved by the Company or Subsidiary otherwise receiving the
Participant’s services, provided such leave of absence does not exceed six
months, or if longer, so long as the Employee retains a right to reemployment
with the Company or Subsidiary under an applicable statute or by
contract. For these purposes, a leave of absence constitutes a bona
fide leave of absence only if there is a reasonable expectation that the
Employee will return to perform services for the Company or
Subsidiary. If the period of leave exceeds six months and the
Employee does not retain a right to reemployment under an applicable statute or
by contract, the employment relationship is deemed to terminate on the first day
immediately following such six month period. For purposes of this
sub-section (dd), to the extent applicable, an Employee’s leave of absence shall
be interpreted by the Committee in a manner consistent with Treasury Regulation
Section 1.409A-1(h)(1).
The employment relationship of a
Participant shall be treated as continuing intact for any period that the
Participant is on military or sick leave or other bona fide leave of absence,
provided that such leave does not exceed 90 day as, or if longer, as long as the
Employee’s right to reemployment is guaranteed either by statute or
contract.
(III) If,
as a result of a sale or other transaction, the Subsidiary for whom Participant
is employed ceases to be a Subsidiary, and the Participant is not, following the
transaction, an Employee of the Company or an entity that is then a Subsidiary,
then the occurrence of such transaction shall be treated as the Participant’s
Termination of Service caused by the Participant being discharged by the entity
for whom the Participant is employed.
(IV) Except
to the extent Code Section 409A may be applicable to an Award, and subject to
the foregoing paragraphs of this sub-section (dd),the Committee shall have
discretion to determine if a Termination of Service has occurred and the date on
which it occurred. In the event that any award under this Plan
constitutes Deferred Compensation, the term Termination of Service shall be
interpreted by the Committee in a manner consistent with the definition of
“Separation from Service” as defined under Code Section 409A and under Treasury
Regulation Section 1.409A-1(h)(ii). For purposes of this Plan, a
“Separation from Service” within the meaning of Code Section 409A shall have
occurred if the Bank and Participant reasonably anticipate that no further
services will be performed by the Participant after the date of the Termination
of Service or the level of further services performed will not exceed 49% of the
average level of bona fide services in the 36 months immediately preceding the
Termination of Service. If a Participant is a “Specified Employee,” as defined
in Code Section 409A and any payment to be made hereunder shall be determined to
be subject to Code Section 409A, then if required by Code Section 409A, such
payment or a portion of such payment (to the minimum extent possible) shall be
delayed and shall be paid on the first day of the seventh month following
Participant’s Separation from Service.
(V) With
respect to a Participant Director, cessation as a Director will not be deemed to
have occurred if the Participant continues as a director emeritus or advisory
director.
(ee) “Voting
Securities” means any securities that ordinarily possess the power to vote in
the election of directors without the happening of any pre-condition or
contingency.
(ff) “Whole
Board” means the total number of Directors that the Company would have if there
were no vacancies on the Board at the time the relevant action or matter is
presented to the Board for approval.
(gg) “Immediate Family Member” means with respect to any
Participant: (a) any of the Participant’s children, stepchildren, grandchildren,
parents, stepparents, grandparents, spouses, former spouses, siblings, nieces,
nephews, mothers-in-law, fathers-in-law, sons-in-law, daughters-in-law,
brothers-in-law or sisters-in-law, including relationships created by adoption;
(b) any natural person sharing the Participant’s household (other than as a
tenant or employee, directly or indirectly, of the Participant); (c) a trust in
which any combination of the Participant and persons described in section (a)
and (b) above own more than fifty percent (50%) of the beneficial interests; (d)
a foundation in which any combination of the Participant and persons described
in sections (a) and (b) above control management of the assets; or (e) any other
corporation, partnership, limited liability company or other entity in which any
combination of the Participant and persons described in sections (a) and (b)
above control more than fifty percent (50%) of the voting
interests.
Section
8.2 In
this Plan, unless otherwise stated or the context otherwise requires, the
following uses apply:
(a) actions
permitted under this Plan may be taken at any time and from time to time in the
actor’s reasonable discretion;
(b) references
to a statute shall refer to the statute and any successor statute, and to all
regulations promulgated under or implementing the statute or its successor, as
in effect at the relevant time;
(c) in
computing periods from a specified date to a later specified date, the words
“from” and “commencing on” (and the like) mean “from and including,” and the
words “to,” “until” and “ending on” (and the like) mean “to, but
excluding”;
(d) references
to a governmental or quasi-governmental agency, authority or instrumentality
shall also refer to a regulatory body that succeeds to the functions of the
agency, authority or instrumentality;
(e) indications
of time of day mean New York time;
(f) “including”
means “including, but not limited to”;
(g) all
references to sections, schedules and exhibits are to sections, schedules and
exhibits in or to this Plan unless otherwise specified;
(h) all
words used in this Plan will be construed to be of such gender or number as the
circumstances and context require;
(i) the
captions and headings of articles, sections, schedules and exhibits appearing in
or attached to this Plan have been inserted solely for convenience of reference
and shall not be considered a part of this Plan nor shall any of them affect the
meaning or interpretation of this Plan or any of its provisions;
(j) any
reference to a document or set of documents in this Plan, and the rights and
obligations of the parties under any such documents, shall mean such document or
documents as amended from time to time, and any and all modifications,
extensions, renewals, substitutions or replacements thereof; and
(k) all
accounting terms not specifically defined herein shall be construed in
accordance with generally accepted accounting principles (GAAP).
REVOCABLE
PROXY
GREENE
COUNTY BANCORP, INC.
SPECIAL
MEETING OF STOCKHOLDERS
July
29, 2008
The undersigned hereby appoints the
official proxy committee consisting of the Board of Directors with full powers
of substitution to act as attorneys and proxies for the undersigned to vote all
shares of common stock of the Company that the undersigned is entitled to vote
at a Special Meeting of Stockholders (“Special Meeting”) to be held at the
Company’s Lending/Operations Center, located at 288 Main Street, Catskill, New
York on July 29, 2008, at 2:00 p.m. The official proxy committee is
authorized to cast all votes to which the undersigned is entitled as
follows:
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FOR
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AGAINST
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ABSTAIN
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1. The
approval of the Greene County Bancorp, Inc. 2008
Equity Incentive Plan,
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The
Board of Directors recommends a vote “FOR” Proposal 1.
THIS
PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR PROPOSAL 1. IF ANY OTHER BUSINESS IS
PRESENTED AT SUCH SPECIAL MEETING, THIS PROXY WILL BE VOTED AS DIRECTED BY A
MAJORITY OF THE BOARD OF DIRECTORS. AT THE PRESENT TIME, THE BOARD OF
DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE SPECIAL
MEETING.
___________________________________________________________________________________________________________
THIS
PROXY IS SOLICITED BY THE BOARD OF DIRECTORS.
Should
the undersigned be present and elect to vote at the Special Meeting or at any
adjournment thereof and after notification to the Secretary of the Company at
the Special Meeting of the stockholder’s decision to terminate this proxy, then
the power of said attorneys and proxies shall be deemed terminated and of no
further force and effect. This proxy may also be revoked by sending
written notice to the Secretary of the Company at the address set forth on the
Notice of Special Meeting of Stockholders, or by the filing of a later proxy
prior to a vote being taken on a particular proposal at the Special
Meeting.
The
undersigned acknowledges receipt from the Company prior to the execution of this
proxy of notice of the Special Meeting and a proxy statement dated June 19,
2008.
Dated:
_________________________ o Check
Box if You Plan
to Attend Special Meeting
_______________________________ ___________________________________
PRINT
NAME OF
STOCKHOLDER PRINT
NAME OF STOCKHOLDER
_______________________________ ___________________________________
SIGNATURE
OF
STOCKHOLDER
SIGNATURE OF STOCKHOLDER
Please
sign exactly as your name appears on this card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title.
____________________________________________________________________________________________________________
Please
complete and date this proxy and return it promptly
in
the enclosed postage-prepaid envelope.
____________________________________________________________________________________________________________