Deferred Delivery Agreement

 

Exhibit 10.24(a)
DEFERRED DELIVERY AGREEMENT
     This DEFERRED DELIVERY AGREEMENT (this “Agreement”), by and between ___(“Executive”) andNorth Fork Bancorporation, Inc., a Delaware corporation (the “Company”), is entered into on___.
     WHEREAS, pursuant to a Notice of Deferred Delivery Exercise of Options, dated ___(the“Notice of Exercise”), Executive notified the Company that he intended to exercise certaincompensatory stock options to acquire shares of the common stock, par value $.01 per share, of theCompany (“Common Stock”) at a future exercise date specified in the Notice of Exercise, which isthe date hereof, by his surrender to the Company on such date of shares of Common Stock previouslyowned by him, on the condition that the net new shares deliverable to him by the Company upon suchexercise would not be delivered on the exercise date but rather at a later date also specified byhim in the Notice of Exercise; and
     WHEREAS, the particular stock options that Executive elected to exercise, as well as thenumber of shares of Common Stock subject to such exercise and the exercise price thereof(respectively, the “Options,” the “Exercise Shares,” and the “Exercise Price”), were set forth inExhibit A to the Notice of Exercise (and also are set forth on Exhibit 1 hereto), and theultimate delivery date for deferred delivery by the Company of the net new shares was set forth inExhibit C to the Notice of Exercise; and
     WHEREAS, this method of option exercise, sometimes referred to as a “deferred deliveryexercise,” is permitted under the compensatory stock plans of the Company under which the Optionswere granted to Executive (the “Plans”), provided the agreements relating to such Options (the“Option Agreements”) specifically authorize such method of exercise and subject to the terms andconditions

 


 

imposed upon such exercises from time to time by the Stock and Compensation Committee of theBoard of Directors of the Company (the “Committee”), which serves as the administrator of thePlans; and
     WHEREAS, the Option Agreements between the Company and Executive relating to the Optionsauthorized the deferred delivery exercise thereof by Executive, and the Notice of Exercisedelivered by Executive complied with the terms and conditions established by the Committee for suchexercise; and
     WHEREAS, all terms and conditions for the deferred delivery exercise of the Optionsestablished in the Notice of Exercise having been met, Executive this date is exercising theOptions by his surrender to the Company of shares of Common Stock previously owned by him inpayment of the aggregate Exercise Price of the Exercise Shares, in return for the agreement by theCompany to deliver to him at a later date the net new shares receivable by him upon such exercise,all as provided further herein; and
     WHEREAS, Executive and the Company wish to set forth certain other matters in connection withsuch exercise and deferred delivery;
     NOW, THEREFORE, in consideration of the premises and the mutual agreements and covenantscontained herein, the parties hereto agree as follows:
     1. Defined Terms. The following capitalized terms as used in this Agreement shall have themeanings provided below for each:
     (a) “Accelerated Delivery Date” means the date of any accelerated delivery of NetShares under Section 3(b).
     (b) “Additional Withholding Shares” means that number of Net Shares otherwisedeliverable to Executive on the Delivery Date that the Company then withholds under Section 3(c).

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     (c) “Affiliate” means any entity that is within a group of entities that includes theCompany, if such group of entities constitutes (I) a controlled group of corporations, as definedin Section 1563(a) of the Code, (II) a group of trades or businesses (whether or not incorporated)under common control, as defined in Section 414(c) of the Code and the regulations issuedthereunder, or (III) members of an affiliated service group within the meaning of Section 414(m) ofthe Code.
     (d) “Agreement” means this Deferred Delivery Agreement.
     (e) “Approved Early Retirement” means the “early retirement” of Executive as anEmployee under the early retirement provisions of the Retirement Plan as in effect from time totime, with the prior approval of the Board or the Committee, which prior approval of earlyretirement under this definition may be withheld for any reason or no reason (other than unlawfuldiscrimination) and shall be required in order for such early retirement to constitute the ApprovedEarly Retirement of Executive hereunder, even if such prior approval is not required for earlyretirement under the Retirement Plan generally.
     (f) “Board” means the Board of Directors of the Company.
     (g) “Code” means the Internal Revenue Code of 1986, as amended. All references inthis Agreement to provisions of the Code shall also include any successor provisions of federalincome tax law for the provisions referenced.
     (h) “Committee” means the Stock and Compensation Committee of the Board, or itssuccessor as administrator of the Plans.
     (i) “Common Stock” means the common stock, par value $.01 per share, of the Company.
     (j) “Company” means North Fork Bancorporation, Inc.

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     (k) “Current Market Value,” as of any day, means the last sale price for the CommonStock on the stock exchange or automated quotation system on which the Common Stock is then listed,for the last trading day preceding such day, as reported in The Wall Street Journal.
     (l) “Deferral Account” means the separate account maintained by the Company during theDeferral Period for Executive and for any Transferee in accordance with Section 4.
     (m) “Deferral Period” means the period of time from the date of this Agreement untilthe Delivery Date of the last Net Shares to be delivered hereunder.
     (n) “Delivery Date,” with respect to any Net Shares, means the date as of which suchshares are to be delivered hereunder by the Company to Executive or any Transferee, whether suchdate is the Normal Delivery Date or an Accelerated Delivery Date.
     (o) “Delivery Right” means the right to receive any of the Net Shares deliverablehereunder.
     (p) “Disability” means permanent and total disability as defined in Section 22(e)(3)of the Code, as determined by the Committee in good faith, upon receipt of and in reliance onsufficient competent medical advice.
     (q) “Dividend Equivalent Payment” means that cash amount that is payable to Executiveduring the Deferral Period as a result of and coincident with each and every payment by the Companyof a cash dividend on shares of Common Stock during such period, as provided under Section 5.
     (r) “Employee” means any full- or part-time employee of the Company or its Affiliateswho is eligible to participate, or with the passage of time will be eligible to participate, in theRetirement Plan.
     (s) “Exercise Price” means the exercise price per share of Common Stock under anOption. The Exercise Price of each of the Options is set forth on Exhibit 1 hereto.

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     (t) “Exercise Shares” means the number of shares of Common Stock as to which an Optionis being exercised this date. The Exercise Shares for each of the Options is set forth onExhibit 1 hereto.
     (u) “Family Member” of an individual means that individual’s parents, spouse,children, stepchildren, adoptive relationships, sisters, brothers and grandchildren.
     (v) “Financial Hardship” of Executive means any situation in which Executive is inneed of significant funds for reasons that were not fully anticipated by him, including withoutlimitation (I) uninsured medical expenses of Executive or any of his Family Members, (II) uninsuredcasualty losses suffered by Executive or any of his Family Members, or (III) other financialdifficulties of Executive or any of his Family Members of a sudden and serious nature.
     (w) “Net Shares” means those Exercise Shares that are deliverable on a deferred basisunder this Agreement, equal to the total number of Exercise Shares minus (I) the number ofReplacement Shares and (II) the number of Withholding Shares. The aggregate number of Net Sharesis identified on Exhibit 1 hereto.
     (x) “Normal Delivery Date” means the first to occur of the following:
  (I)   the date of death of Executive;
 
  (II)   the date of Disability of Executive;
 
  (III)   a Pre-Sale Date;
 
  (IV)   the first business day after the Retirement of Executive; or
 
  (V)   the first business day after the Approved Early Retirement of Executive;

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provided, however, if the Committee, in connection with the pending Retirement orApproved Early Retirement of Executive, makes a Section 162(m) Non-Deductibility Determinationregarding some or all of the Net Shares otherwise then deliverable, the Normal Delivery Date forsuch shares as determined under subsection (IV) or subsection (V) above shall not be the firstbusiness day following the Retirement or Approved Early Retirement of Executive but rather shall beFebruary 15 of the first calendar year that is (A) after the calendar year in which the Retirementor Approved Early Retirement of Executive occurs, and (B) a calendar year in which the delivery ofsuch Net Shares does not give rise to a Section 162(m) Non-Deductibility Determination.
     (y) “Notice of Exercise” means that certain notice, dated ___, given byExecutive to the Company, relating to the deferred delivery exercise of the Options, effected thisdate.
     (z) “Option Agreements” means those certain agreements by and between Executive andthe Company relating to the Options.
     (aa) “Option” means one of those certain nonqualified stock options of the Companythat Executive is exercising this date, in whole or in part, in a “deferred delivery exercise”pursuant to the Notice of Exercise. The Options are listed individually on Exhibit 1hereto.
     (bb) “Payment Shares” means those shares of Common Stock that Executive issurrendering this date to the Company, by way of a constructive surrender, in payment of theaggregate Exercise Price of the total number of Exercise Shares. The number of Payment Shares isset forth on Exhibit 1 hereto.
     (cc) “Plans” means the compensatory stock plans of the Company under which the Optionswere granted to Executive.
     (dd) “Pre-Sale Date” means the tenth (10th) business day preceding the date on which aSale of the Company is to be consummated (the “Sale Date”), if on such tenth (10th) business day(I) all

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corporate, regulatory and other prior approvals required for the consummation of such Sale ofthe Company have been received or, in the estimation of the Company, are reasonably certain to bereceived, and (II) in the estimation of the Company, the Sale of the Company is reasonably certainto be consummated on the Sale Date; provided, that, if both of the foregoingconditions (I) and (II) to such a Sale of the Company are not met on the tenth (10th) business dayprior to the Sale Date, “Pre-Sale Date” shall mean the earliest subsequent day prior to the SaleDate on which both of these conditions are met.
     (ee) “Replacement Shares” means those Exercise Shares that are being constructivelydelivered by the Company to Executive as of the date hereof pursuant to Executive’s exercise of theOptions. The number of Replacement Shares is equal to the number of Payment Shares, as identifiedon Exhibit 1 hereto.
     (ff) “Required Taxes” means the minimum amount of any taxes, fees or amounts that theCompany may become obligated to pay, under law and under this Agreement or any other agreement orarrangement, to any taxing or other governmental authority, federal, state or local, on behalf ofExecutive as a result of any actions taken that are the subject matter of this Agreement, includingwithout limitation, the exercise of the Options by Executive, the delivery of shares of CommonStock on or after such exercise to Executive or any other persons, including Transferees, or thepayment of any Dividend Equivalent Payments to Executive.
     (gg) “Retirement” means (I) the retirement of Executive as an Employee on or after Executive’shaving attained that age established as the normal retirement age under the Retirement Plan then ineffect, or (II) if Executive shall have retired as an Employee prior to attaining normal retirementage under the Retirement Plan and such early retirement did not qualify as an Approved EarlyRetirement hereunder, Executive’s subsequently attaining normal retirement age under the RetirementPlan.

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     (hh) “Retirement Plan” means the Company’s retirement plan qualified under Section 401of the Code as in effect on the date hereof or any successor plan qualified under Section 401 as ineffect from time to time; provided, that, in the event that any such plan isterminated and there is no successor qualified plan in effect, “Retirement Plan” shall mean anotherretirement benefit plan of the Company as designated by the Committee.
     (ii)  “Sale of the Company” means
     (I) any consolidation, merger or stock-for-stock-exchange involving the Company or thesecurities of the Company in which the holders of voting securities of the Companyimmediately prior to the consummation of such transaction will own, as a group, immediatelyafter such consummation
     (A) if the transaction does not affect the outstanding votingsecurities of the Company immediately prior thereto, voting securities of theCompany having less than fifty percent (50%) of the Voting Power of the Company, or
     (B) if the transaction does affect the outstanding voting securities ofthe Company immediately prior thereto, by virtue of the exchange or conversion ofsuch securities into some other consideration or the issuance of additionalsecurities with respect to such securities, voting securities of the SurvivingCorporation, if any, having less than fifty percent (50%) of the Voting Power of theSurviving Corporation,
excluding, in the case of subsection (I)(B), above, any securities of the SurvivingCorporation owned by any members of such group prior to such transaction and, in the case ofsubsections (I)(A) and (I)(B), above, any securities to be received in such transaction byany members of such group which represent disproportionate percentage increases in theirshare holdings vis-a-vis the other members of such group; or

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     (II) any sale, lease, exchange or other transfer (in one transaction or a series ofrelated transactions), of all, or substantially all, of the assets of the Company to anentity or entities which are not Affiliates of the Company prior to such transaction orseries of transactions.
     (jj) “Section 7 Delivery” means any delivery of Net Shares to Executive or anyTransferee that meets the conditions specified in any of subsections (a), (b) or (c) of Section 7.
     (kk) “Section 162(m) Non-Deductibility Determination,” for all purposes under thisAgreement, means a determination by the Board or the Committee, in the exercise of its reasonablejudgment, that delivery to Executive or any Transferee of Net Shares as of any day will result inrecognition by the Company of some amount of compensation expense and that some or all of suchexpense likely will be non-deductible to the Company for federal income tax purposes for thetaxable year of the Company in which such day falls, as a result of Section 162(m) of the Code.
     (ll) “Surviving Corporation,” for purposes of the definition of Sale of the Company inthis Agreement, means the corporation or other entity that issues securities and/or otherconsideration to the holders of voting securities of the Company in any transaction described insubsection (I)(B) of such definition, or, if such issuing corporation or entity is controlleddirectly or indirectly by another corporation or entity, the ultimate controlling corporation orentity of such issuing corporation or entity.
     (mm) “Tax Event” means any event relating directly or indirectly to Executive’sDelivery Rights under this Agreement or deferred delivery exercise of the Options, includingwithout limitation a ruling or decision on any case or matter by a court of competent jurisdiction,a release or statement by any taxing or governmental authority such as the Internal RevenueService, or an action taken by Executive or any Transferee relating to any Net Shares, as a resultof which event some or all of the Net Shares deliverable to Executive and/or any Transferee(s)under this Agreement likely would be deemed to have

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been constructively received by Executive and/or such Transferee(s) for purposes of federal orstate income tax law, such that Executive likely would be subject to taxation on such shares.
     (nn) “Transferee” means any person, other than Executive, to whom the Delivery Rightfor any of the Net Shares shall have been transferred pursuant to Section 9(b).
     (oo) “Voting Power” of a corporation or entity at a given time, for purposes of thedefinition of Sale of the Company in this Agreement, means the total number of votes entitled to becast generally in an election of directors of such corporation or entity at such time by allholders of outstanding equity securities of such corporation or entity.
     (pp) “Withholding Shares” means those Exercise Shares, if any, otherwise deliverableto Executive upon exercise of the Options this date that are being withheld by the Company,pursuant to Section 2(c), in payment of any Required Taxes now required to be paid by the Companyas a result of such exercise. The number of Withholding Shares is set forth on Exhibit 1hereto.
      2. Exercise of Options.
     (a) Surrender of Payment Shares. Executive this date has surrendered to the Company,in payment of the aggregate Exercise Price of the Exercise Shares as to which the Options this dateare being exercised, a certain number of shares of Common Stock owned by Executive (the “PaymentShares”). In lieu of physically surrendering to the Company one or more stock certificatesevidencing the Payment Shares, Executive has delivered to the Company an affidavit of ownershipwith respect thereto, and the Payment Shares, although not physically surrendered by Executive,have been constructively surrendered by Executive this date in full payment of the aggregateExercise Price. The Payment Shares have been deemed acceptable by the Committee based, in part, onExecutive’s representation that the Payment Shares meet those reasonable requirements establishedby the Company for such shares, in light of current accounting standards regarding those sharesthat may qualify as previously owned, “mature” shares for

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purposes of stock-for-stock exercises of stock options. The Payment Shares have been valuedfor purposes of payment under this Section 2(a) at the Current Market Value of the Common Stock.The number of Payment Shares is set forth on Exhibit 1 hereto.
     (b) Issuance of Replacement Shares. In connection with Executive’s exercise of theOptions, the Company this date is issuing to Executive the Replacement Shares. Because Executivehas not physically surrendered but has merely constructively surrendered the Payment Shares, theCompany also is not physically delivering but is merely constructively delivering the ReplacementShares. The number of Replacement Shares is equal to the number of Payment Shares. Effective thisdate, the Replacement Shares are evidenced by the stock certificates formerly evidencing thePayment Shares.
     (c) Withholding Shares. The Company is hereby deducting this date from the remainingnumber of Exercise Shares as to which the Options are being exercised, after deduction therefrom ofthe number of Replacement Shares, a number of shares of Common Stock (the “Withholding Shares”)having a Current Market Value equal to the Required Taxes, if any, now required to be paid by theCompany to any taxing or other governmental authority, federal, state or local, including any FICAtaxes, as a result of the exercise of the Options this date by Executive. The Company will pay, ona timely basis, all such Required Taxes. The number of Withholding Shares is set forth onExhibit 1 hereto.
     (d) Net Shares. In accordance with the terms and conditions of the Notice ofExercise, the Plans, the Option Agreements and the Company’s policies regarding deferred deliveryexercises, and subject to the other provisions of this Agreement, the parties hereto agree that theremaining Exercise Shares, after deducting from the total number of Exercise Shares the number ofReplacement Shares and the number of Withholding Shares (such remaining Exercise Shares, the “NetShares”), will not be delivered or constructively delivered by the Company to Executive or anyother person this date, but will only be delivered to Executive, any Transferee(s) subsequentlyidentified by Executive under Section 9(b), or the beneficiaries or heirs of Executive at the laterDelivery Date(s) for such Net Shares specified

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in this Agreement, pursuant to the terms of this Agreement and subject to any requireddeduction therefrom of Additional Withholding Shares at the time of deferred delivery as providedunder Section 3(c). The number of Net Shares is set forth on Exhibit 1 hereto. Althoughdelivery of the Net Shares is being deferred, all right to receive the Net Shares on the DeliveryDate (collectively, the “Delivery Rights”) are fully vested in Executive as of the date hereof, andthe consideration rendered by Executive for the Delivery Rights and for the Net Shares to whichsuch rights relate consists exclusively of services performed by Executive prior to the datehereof.
     3. Deferred Delivery.
     (a) Normal Deferral. Subject to the provisions of this Agreement, the Company willdeliver to Executive and/or any Transferee(s), as appropriate, the Net Shares less any AdditionalWithholding Shares on the Normal Delivery Date, except to the extent that any or all of such sharesmay become deliverable by the Company prior to such date pursuant to the accelerated deliveryprovisions of Section 3(b). The transfer by Executive to one or more Transferees of DeliveryRights for some or all of the Net Shares under Section 9(b) will not, in and of itself, result inany change in the Normal Delivery Date or the formulas by which such date is determined.
     (b) Acceleration of Deferred Delivery. Notwithstanding any other provision of thisAgreement to the contrary, the delivery of some or all of the Net Shares deliverable to Executiveand/or any Transferee(s) hereunder may be accelerated to a date or dates earlier than the NormalDelivery Date (any such date, an “Accelerated Delivery Date”) in accordance with and subject to thefollowing subsections of this Section 3(b):
     (I) Best Interests of the Company. If (A) the Company has reached anagreement, including an agreement in principle, with respect to a Sale of the Company andsuch Sale of the Company has not subsequently been terminated or abandoned, and (B) theCommittee

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determines, in its sole discretion, that the best interests of the Company and itsshareholders would be served by delivery of some or all of the Net Shares on a date prior tothe Pre-Sale Date or other Normal Delivery Date, the Committee may, in its sole discretion,at any time after making such determination and with or without the request or consent ofExecutive, elect to accelerate delivery of some or all of such Net Shares, whether such aredeliverable to Executive or to any one or more Transferees, to a date of the Committee’schoosing that is prior to the Pre-Sale Date or other Normal Delivery Date. Anydetermination by the Committee to accelerate delivery under this subsection (I) shall befinal and binding upon Executive and any affected Transferee(s) and, if the Committee soelects, may be made subject to the satisfaction of one or more conditions as specified bythe Committee. Any determination by the Committee under this subsection (I) thatacceleration of delivery of any Net Shares would be in the best interests of the Company andits shareholders shall not include any consideration of or be based in any way uponExecutive’s preference for such acceleration or the fact that such acceleration is likely tobe of direct benefit to Executive. The Committee shall give Executive and any affectedTransferee(s) notice of any determination to accelerate delivery under this subsection (I)at least ten (10) days prior to the date to which delivery is accelerated pursuant to suchdetermination.
     (II) Financial Hardship. In the event that Executive suffers FinancialHardship during the Deferral Period, the Committee, upon receipt of a written request fromExecutive for acceleration of delivery of some or all of the Net Shares, may elect in itssole discretion to accelerate the delivery of any or all of such shares to a date of theCommittee’s choosing that is prior to the Normal Delivery Date, if in its judgment theFinancial Hardship suffered by Executive so warrants. The written request for accelerationsubmitted by Executive shall contain reasonable detail regarding the nature andcircumstances of the Executive’s Financial Hardship, including a representation by Executivethat he has no other reasonably available sources of funds to defray the Financial Hardship.In its evaluation of any such request, the Committee shall

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consider any material effect on the Company of the requested acceleration, includingthe adverse impact of any Section 162(m) Non-Deductibility Determination regarding suchaccelerated delivery. If and as appropriate, the Committee shall establish uniform rulesand procedures for dealing with requests for accelerated delivery based upon FinancialHardship. Requests for acceleration under this subsection (II) may be submitted only byExecutive and not by any Transferee(s), although the Financial Hardship serving as the basisfor such a request may involve or include circumstances relating to one or moreTransferee(s) who are Family Members of Executive and the Net Shares as to which accelerateddelivery is sought and approved may include shares deliverable to such Transferee(s).
     (III) Adverse Tax Event. If the Committee determines, in its sole discretionupon the advice of tax counsel, that a Tax Event has occurred, the Committee shallaccelerate to the earliest practicable date the delivery of all Net Shares deliverable underthis Agreement and not previously delivered that are affected by such Tax Event, with orwithout the request or consent of Executive or any Transferee(s) to whom such shares aredeliverable. If the Committee accelerates delivery under this subsection (III), it shallsimultaneously accelerate the delivery of any other shares of Common Stock the delivery ofwhich is being deferred under circumstances and pursuant to arrangements substantiallysimilar to the circumstances and arrangements underlying the deferred delivery of the NetShares under this Agreement, unless the Committee shall have reasonably determined that thepersons to whom such other shares are deliverable or who are taxable with respect to suchdelivery would be less likely than Executive to be deemed to have constructively receivedsuch shares for purposes of federal or state income tax law and thus less likely to besubject to taxation thereon. The Committee shall give Executive and any affectedTransferee(s) notice of any determination to accelerate delivery under this subsection (III)at least ten (10) days prior to the date to which delivery is accelerated pursuant to suchdetermination.

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As a condition to its approval of any accelerated delivery of Net Shares to one or moreTransferee(s) under this Section 3(b), the Committee may require simultaneous, accelerated deliveryof a number of Net Shares to Executive, even if the accelerated delivery of such shares toExecutive would not otherwise have been approved by the Committee hereunder, so as to permit theCompany to utilize such shares otherwise deliverable to Executive on an accelerated basis asAdditional Withholding Shares, as necessary, for the payment of Required Taxes.
     (c) Additional Withholding Shares. Upon delivery of Net Shares to any person on anyDelivery Date, whether on the Normal Delivery Date under Section 3(a) or on an Accelerated DeliveryDate under Section 3(b), the Company will withhold from the number of shares otherwise deliverableto Executive on such Delivery Date a number of shares (the “Additional Withholding Shares”) havinga Current Market Value on such date equal to the amount of any Required Taxes then payable by theCompany on behalf of Executive as a result of such delivery, provided, however,that no Net Shares shall be withheld from delivery to Executive in connection with any delivery ofNet Shares that qualifies as a Section 7 Delivery, as defined under Section 7. Any AdditionalWithholding Shares required to be withheld under this Section 3(c) as a result of delivery of NetShares on a Delivery Date to any person, including to persons in addition to Executive, will bewithheld from the number of Net Shares otherwise then deliverable to Executive. If for any reasonthe number of Additional Withholding Shares required to be withheld under this Section 3(c) inconnection with any delivery exceeds the number of Net Shares otherwise then deliverable toExecutive, the Company shall have no obligation to deliver any Net Shares to any person at suchtime, including to any Transferee(s), unless and until Executive makes or consents to appropriatearrangements pursuant to which the Company is enabled to pay all Required Taxes at such time out ofNet Shares and/or other funds otherwise then deliverable by the Company to Executive plus any otherfunds or assets then furnished to the Company by Executive for such purpose.

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     (d) Payment of Required Taxes. In connection with any delivery of Net Shares, theCompany will make all payments of Required Taxes on a timely basis.
     (e) Fully Paid and Nonassessable Shares; Source; Registered Owners. Net Shares, whendelivered, will be legally and validly issued, fully paid and nonassessable shares. Such sharesmay be issued from authorized but unissued shares of Common Stock or from the treasury of theCompany. Such shares will be issued in the name of Executive or the Transferee(s) or other personsentitled to receive such shares, as appropriate, except to the extent that Executive or any suchother person may otherwise direct the Company, in writing, prior to issuance.
     4. Deferral Account.
     The Company will maintain a separate Deferral Account for Executive, and, if and asappropriate, for each Transferee. The Deferral Account will include the number of Net Sharesremaining to be delivered to the account holder under this Agreement, and may include any shares ofCommon Stock as to which delivery to the account holder has been deferred under any other similararrangement between the Company and Executive for deferred delivery of option shares. The accountholder will receive periodic statements from the Company for the Deferral Account, identifying asof the statement date the number of Net Shares remaining to be delivered, the Current Market Valueof such shares, and such other information as the Company deems necessary or relevant for purposesof the holder’s tax and financial records and filings. Account statements also may reference anyDividend Equivalent Payments that the account holder has received from the Company under Section 5during the time period covered by the statement.
     5. Dividend Equivalent Payments.
     (a) Obligation to Pay Dividend Equivalent Payments. During the Deferral Period, theCompany will pay to Executive, concurrently with the payment of each cash dividend declared andpaid

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on the Common Stock during such period, a Dividend Equivalent Payment, as defined in thefollowing sentence, subject to the conditions and restrictions set forth in this Agreement. A“Dividend Equivalent Payment” is a payment in cash of an amount equal to (I) the amount per shareof the cash dividend then being paid by the Company on the Common Stock, multiplied by (II) thenumber of Net Shares remaining to be delivered under the Agreement, to Executive and/or anyTransferee(s), on the date as of which the Dividend Equivalent Payment is payable. Each suchDividend Equivalent Payment shall be payable as of the payment date of the concurrent cash dividendor as soon as practicable thereafter, but in no event more than ten (10) days after such paymentdate. Dividend Equivalent Payments shall be payable by Company check made payable to Executive andshall constitute compensatory bonus payments to Executive for services previously rendered byExecutive.
     (b) Right to Payments Separate from Delivery Rights. The right to receive DividendEquivalent Payments under this Agreement is separate from and unrelated to possession of DeliveryRights, such that transfer by Executive of the Delivery Rights with respect to any Net Shares toany Transferee(s) shall not result in the simultaneous transfer by Executive of rights to receiveDividend Equivalent Payments. Any Required Taxes, including withholding taxes, required to be paidby the Company as a result of the payment of Dividend Equivalent Payments shall be satisfied by thewithholding of appropriate amounts from such payments or other compensatory payments then due toExecutive but not by the withholding of any Net Shares that may otherwise then be deliverable toExecutive.
     (c) No Right to Payments As a Result of Non-Cash Distributions. Subject to Section 8relating to adjustments, in the event the Company distributes to holders of shares of Common Stock,as a dividend or distribution with respect to such shares, assets other than cash, Executive shallnot thereby become entitled to receive from the Company any Dividend Equivalent Payment or otherpayment or distribution, as compensation or otherwise.

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     (d) No Effect on Other Compensation. The receipt by Executive of Dividend EquivalentPayments shall not necessarily result in a diminution of or delay in any other compensatorypayments receivable by Executive from the Company or its Affiliates under any other salary, bonusor benefit plan, arrangement or agreement then applicable to Executive.
     (e) No Transfer. Executive may not transfer to any person the right of Executive toreceive Dividend Equivalent Payments hereunder. Transfers of Delivery Rights with respect to NetShares will not result in the transfer to the Transferees or any other persons of the right toreceive Dividend Equivalent Payments with respect to such Net Shares, which latter rights willremain with Executive.
     6. No Ownership of Shares until Delivery.
     Until the Delivery Date for any Net Shares, the Company shall not issue or deliver, or bedeemed to have issued or delivered, such Net Shares, and neither Executive nor any Transferee shallbe treated or have any right to be treated as the owner, beneficially or otherwise, of such NetShares. Specifically, and without limitation, until the delivery of Net Shares, neither Executivenor any Transferee shall have any of the following rights with respect thereto: (a) the right toreceive dividends or other distributions declared on or with respect to shares of Common Stock asof a record date that is prior to the Delivery Date, (b) the right to exercise any voting rightswith respect to shares of Common Stock, if the record date for the exercise of such voting rightsis before the Delivery Date, (c) the right to use any Net Shares for purposes of exercising anystock option through a stock-for-stock exchange, including through any constructive surrender ofsuch Net Shares in payment of the exercise price of such options, or (d) any other rights inuringto persons who own, of record or beneficially, shares of Common Stock as of a date prior to theDelivery Date.

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     7. Tax Payments by Company On Certain Deliveries.
     In the event that a delivery of Net Shares to Executive or any Transferee qualifies as aSection 7 Delivery, as defined below, the Company will pay out of its own funds, in addition to allwithholding and other taxes payable by it as a matter of law as a result of such delivery, any andall federal, state or local taxes for which Executive becomes liable upon or as a result of suchdelivery, including any taxes for which Executive is or becomes liable as a result of amountsreceived under this Agreement or any other agreement, contract, plan or arrangement which wouldnot have been payable absent such delivery. The Company shall not offset or deduct anyamount of any such payment from any salary, bonus or other payment then or thereafter payable bythe Company to Executive. Taxes payable hereunder on behalf of Executive shall include, withoutlimitation, all income and excise taxes, including excise taxes under Section 4999(a) of the Code,and income and excise taxes payable as a result of the payment of taxes under this Section 7. A“Section 7 Delivery” is any delivery of Net Shares that occurs (a) after the Company has reached anagreement, including an agreement in principle, with respect to a Sale of the Company, providedsuch Sale of the Company has not been terminated or abandoned prior to such delivery, or (b) as aresult of the death of Executive, or (c) as a result of the Disability of Executive.
     8. Adjustments.
     In the event of any change in the outstanding shares of Common Stock during the DeferralPeriod, by reason of any stock dividend or stock split, recapitalization, merger, sale,consolidation, spin-off, reorganization, combination, delivery or issuance of stock rights orwarrants, exchange of shares, or other similar corporate change, or any other event for which theCommittee believes an adjustment is appropriate, an appropriate adjustment will be made by theCommittee to the number and/or type of securities deliverable hereunder, consistent with equitableconsiderations, such adjustment to be effective simultaneously with the change in the outstandingshares of Common Stock; provided, however, that if the Company shall issue sharesof Common Stock or other securities for consideration, no such

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adjustment shall be made. No such adjustment may materially reduce the value of benefitsavailable to Executive or any Transferee prior to such change.
     9. Restrictions on Transfer of Delivery Rights; Transferability of Delivered Shares;Beneficiary Designations.
     (a) General Restriction on Transfer of Delivery Rights. Except as provided inSections 9(b) and 9(c) below, or as otherwise may be permitted by the Committee, Executive may not,prior to the Delivery Date for any Net Shares, sell, assign, transfer, pledge, hypothecate orotherwise dispose of, the Delivery Rights for such Net Shares. Executive agrees to require anyTransferee to whom Delivery Rights for Net Shares are transferred under Section 9(b) to agree, as acondition to such transfer, not to further sell, assign, transfer, pledge, hypothecate or otherwisedispose of the transferred Delivery Rights, except for any designation by the Transferee ofbeneficiaries entitled to receive such transferred Delivery Rights upon the death of Transferee asthe Committee may permit.
     (b) Limited Transferability of Delivery Rights. At any time and from time to timeduring the Deferral Period, Executive may irrevocably transfer the Delivery Rights of Executive forsome or all of the Net Shares, for no consideration, to or for the benefit of one or more FamilyMembers of Executive, including, without limitation, to a trust exclusively for the benefit of oneor more Family Members or to a partnership consisting exclusively of Family Members. In the eventof any such transfer of Delivery Rights for Net Shares, the transferee (“Transferee”) shall receiveand possess all right under this Agreement to take delivery of such Net Shares on the Delivery Datetherefor, and shall be subject to the terms and conditions set forth herein relating to suchdelivery, including, without limitation, the terms and conditions governing the determination ofthe Delivery Date therefor, provided, however, that any such Transferee shall not,by virtue of such transfer, pay or become obligated to pay any taxes required to be paid byExecutive as a result of the delivery to Transferee of any Net Shares on the Delivery Date, or payor reimburse or become obligated to pay or reimburse the Company for any Required Taxes paid or

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payable by it on behalf of Executive as a result of such delivery. As a condition to anypermitted transfer of Delivery Rights under this Section 9(b), the Transferee shall execute anagreement with the Company relating to the transferred Delivery Rights in a form acceptable to theCompany. The Committee may specify from time to time other procedures applicable to any suchpermitted transfer of Delivery Rights by Executive to or for the benefit of Family Members, as wellas such limitations relating thereto as may be practical or necessary to protect the Company’sinterests, including but not limited to (I) limitations establishing a minimum or maximum number ofNet Shares subject to any such transfer of Delivery Rights and the maximum number of such transfersper year, and (II) a requirement that in connection with any such transfer, Executive must retainDelivery Rights for an appropriate number of Net Shares for the purpose of permitting the Companyto utilize such shares as Additional Withholding Shares to pay Required Taxes, as necessary, upondelivery of Net Shares to the Transferee.
     (c) Delivery of Shares Upon Death of Executive; Designation of Beneficiaries. If uponthe death of Executive any of the Net Shares subject hereto are deliverable to Executive (asopposed to being deliverable to any previously designated Transferee or Transferees), such shareswill be deliverable as follows: (I) in accordance with any effective beneficiary designation byExecutive as provided in the following sentence of this Section 9(c), and (II) if there is no sucheffective beneficiary designation as of the date of death, then in accordance with any last willand testament of Executive that is admitted to probate in a court of competent jurisdictionfollowing Executive’s death, and (III) if there is no such effective beneficiary designation as ofthe date of death and no such last will and testament is therafter admitted to probate, then inaccordance with any laws of descent and distribution governing the estate of Executive.Executive may specifically designate in the space provided at the end of this Agreement orupon designation of beneficiary forms supplied by and returned to the Company, a person or personsto receive, in the event of the death of Executive, any Net Shares then deliverable to Executiveunder this Agreement. Executive may revoke any such beneficiary designation by a later-datedinstrument in writing delivered to the Company prior to Executive’s death, which may, but need not,designate one or

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more new beneficiaries to receive such Net Shares. Only the last unrevoked beneficiarydesignation shall be an effective beneficiary designation for purposes of this Section 9(c). Inlieu of such designation, Executive may designate in a last will and testament one or more personsas beneficiaries to receive any Net Shares deliverable to Executive upon the death of Executive.
     (d) Transferability of Delivered Shares. Net Shares delivered to any person underthis Agreement shall not be subject to any further restrictions on transfer arising under thisAgreement, and such shares shall be subject only to those restrictions on transfer, if any, as mayarise under applicable law, including securities laws, or any other agreement then binding upon therecipient.
     10. No Claim on Specific Company Assets.
     Neither Executive nor any Transferee shall be deemed to have, by virtue of possession ofDelivery Rights with respect to any Net Shares, any claim on any specific assets of the Companysuch that Executive would be subject to income taxation on any of the Net Shares prior to theirdelivery. The right of Executive or any Transferee to delivery of any Net Shares hereunder shallbe those of an unsecured general creditor of the Company.
     11. Effect on Employment.
     Neither this Agreement nor any rights conferred hereunder shall, in and of themselves, conferupon Executive any right to continue in the employment of the Company or its Affiliates or tocontinue to perform services therefor and shall not in any way interfere with any right of theCompany or its Affiliates to terminate the services of Executive as an employee or officer at anytime.

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     12. Severability.
     If any provision of this Agreement is held invalid or unenforceable, such invalidity orunenforceability shall not affect any other provision of this Agreement, and this Agreement shallbe construed and enforced as if such provision had not been included.
     13. Address for Delivery.
     The Company shall deliver all Net Shares deliverable to Executive and all requireddocumentation relating thereto, including periodic account statements for the Deferral Account ofExecutive during the Deferral Period, and all Dividend Equivalent Payments and information relatingthereto, to the address of Executive listed adjacent to his signature below. Executive shallnotify the Company of any change in this address. Executive also shall notify the Company of themailing address applicable to any Transferee, and the Company shall deliver all Net Sharesdeliverable to such Transferee and all required documentation relating thereto, including periodicaccount statements for the Deferral Account of the Transferee during the Deferral Period, to suchaddress.
     14. Delaware Law.
     This Agreement shall be governed by and construed in accordance with the laws of the State ofDelaware, other than conflict of laws provisions.
     15. Successors and Assigns.
     This Agreement shall be binding upon and shall inure to the benefit of the successors andassigns of the Company. This Agreement shall be binding upon the assigns, heirs, executors andadministrators of Executive, but shall inure to the benefit of such assigns, heirs, executors andadministrators only as provided in this Agreement.

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     IN WITNESS WHEREOF, the parties hereto have, personally or by a duly authorizedrepresentative, executed this Agreement as of the date first above written.
                     
NORTH FORK BANCORPORATION, INC.       “EXECUTIVE”
 
                   
By:
                   
             
Title:               Address:     
 
                   
 
                   
 
                   
     

 

Designation of Beneficiary (Optional)

   
 
   

 

(Name of Beneficiary)

   
 
   

 

  (Relationship to Executive)

   
 
   

 

(Street Address)

   
 
   

 

(City, State, Zip Code)

   
 
   

 

  (Social Security Number)

   

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NORTH FORK BANCORPORATION, INC.
Notice of Deferred Delivery Exercise of Options
Name ofOptionee:                    
Date ofNotice:                    
TotalNumber of Shares Subject to Option Exercise:                    
AggregateExercise Price for Shares:                    
EarliestDate of Option Exercise:                    
MinimumNFB Stock Price on Exercise Date (Optional):                    
     1. Advance Notice of Exercise. The undersigned (“Optionee”), being a holder of one or moreoptions to acquire shares of the common stock par value $.01 per share (“Common Stock”), of NorthFork Bancorporation, Inc. (the “Company”), hereby gives notice to the Company, as of the date setforth above opposite the heading “Date of Notice,” of Optionee’s election to exercise those certainoptions held by Optionee as listed on Exhibit A hereto (the “Options”) with respect to that numberof shares of Common Stock as listed on said Exhibit A (the “Exercise Shares”), which total numberof Exercise Shares is also listed above opposite the heading “Total Number of Shares Subject toOption Exercise.” Such exercise will be a so-called “deferred delivery exercise,” and will besubject to the terms and conditions set forth in the agreement or agreements relating to theOptions (the “Option Agreements”), this Notice, and the written agreement to be entered intobetween Optionee and the Company as of the date of exercise relating to the deferred delivery ofcertain of the Exercise Shares (the “Deferred Delivery Agreement”).
     2. Date of Exercise. The date of exercise of the Options (the “Exercise Date”) will be (i)the date set forth above opposite the heading “Earliest Date of Option Exercise” (which date maynot be less than ninety (90) days after the Date of Notice set forth above), or (ii) in the eventthat Optionee has listed a minimum stock price above opposite the heading “Minimum NFB Stock Priceon the Exercise Date,” the first date on or after the Earliest Date of Option Exercise, as thusidentified, on which the Company Stock Price (as defined below) equals or exceeds such minimumstock price; provided, however, that, if on the date determined under either (i) or (ii), above,whichever is applicable, all conditions to exercise of any of the Options as established in theOption Agreement therefor shall not have been met, the Date of Exercise with respect to such Optionwill be the first subsequent date on which all such conditions have been met. For purposes of thisNotice, the “Company Stock Price” as of any day shall be the last sale price for the Common Stockon the New York Stock Exchange for the last trading day preceding such day, as reported in The WallStreet Journal.
     3. Payment of the Exercise Price.
     (a) Optionee acknowledges and understands that the provisions of the Option Agreementsrelating to “deferred delivery exercises” of Options require that the total exercise price for theExercise Shares (the “Aggregate Exercise Price,” which amount is set forth above opposite theheading “Aggregate Exercise Price for Shares”) must be paid by Optionee by the latter’s surrenderto the Company on or before the Exercise Date of a number of shares of Common Stock owned byOptionee having a market value on the Exercise Date, based on the Company Stock Price for suchdate, equal to the Aggregate

– 25 –


 

Exercise Price. Optionee further acknowledges and understands that the shares of Common Stock thussurrendered by Optionee in payment of the Aggregate Exercise Price (the “Payment Shares”) must beacceptable to the Stock and Compensation Committee of the Company’s Board of Directors (the“Committee”), which may reject any such shares for any valid concern of the Company, includinglegal and accounting considerations. Optionee also acknowledges and understands that any shares ofCommon Stock surrendered by Optionee to the Company in payment of the Aggregate Exercise Price may,with the consent of the Committee, be deemed surrendered even though not actually surrendered byOptionee (any such payment, a “Deemed Payment”), provided that in any such case Optionee furnishesto the Company a written statement affirming ownership of such shares, and that the Committee hasapproved such a Deemed Payment as payment of the Aggregate Exercise Price. By executing anddelivering this Notice, Optionee hereby advises the Company that payment by Optionee of theAggregate Exercise Price of the Options on the Exercise Date will be a Deemed Payment, that is,Optionee will be deemed to have surrendered to the Company on the Exercise Date a number of sharesof Common Stock then owned by Optionee (and acceptable to the Company) having a market value onsuch date, based on the Company Stock Price on such date, equal to the Aggregate Exercise Price ofthe Exercise Shares. Because the Company Stock Price changes daily, the number of Payment Sharesthus deemed surrendered by Optionee on the Exercise Date will not be finally determinable until theExercise Date.
     (b) As is required under the Option Agreements in connection with any Deemed Payment of theAggregate Exercise Price, Optionee will deliver to the Company on the Exercise Date a writtenstatement executed by Optionee, substantially in the form of the Written Statement attached heretoas Exhibit B, affirming that Optionee owns on such date, free and clear of any liens, encumbrancesor other restrictions, a number of shares of Common Stock having a market value on such date equalto the Aggregate Exercise Price and meeting such other requirements and conditions as are set forthin the form of Written Statement attached hereto.
     (c) Optionee acknowledges, understands and agrees that, as a result of the Deemed Payment byOptionee of the Exercise Price on the Exercise Date, the Company will deduct from the number ofExercise Shares ultimately deliverable to Optionee a number of shares equal to the number ofPayment Shares.
     (d) Optionee acknowledges, understands and agrees that, to the extent that exercise of theOptions on the Exercise Date may obligate the Company to pay on behalf of Optionee on the ExerciseDate any taxes or other amounts to any taxing or other governmental authorities, including withoutlimitation any FICA payments then payable (collectively, “Exercise Taxes”), the Company will paythe amount of any such Exercise Taxes and will deduct from the number of Exercise Shares ultimatelydeliverable to Optionee, in addition to the number of shares deductible therefrom under thepreceding subparagraph (c), a number of shares having a market value on the Exercise Date, based onthe Company Stock Price on such date, equal to the amount of such Exercise Taxes.
     (e) Optionee acknowledges, understands and agrees that the number of Exercise Shares as towhich the Options are being exercised on the Exercise Date, after the deduction therefrom of suchnumbers of shares as may be required under subparagraphs 3(c) and 3(d), above (such remainingnumber of Exercise Shares, the “Net Exercise Shares”), shall not be deliverable to Optionee on theExercise Date, but shall only be deliverable to Optionee, or to the designees, beneficiaries orrepresentatives of Optionee (collectively, “Optionee’s Successors”), on such later date or dates asmay be specified by Optionee pursuant to Section 4, below, and that the ultimate delivery of suchNet Exercise Shares to Optionee or Optionee’s Successors on such later date or dates shall besubject to the terms and conditions set forth in

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the Deferred Delivery Agreement to be entered into between Optionee and the Company on the ExerciseDate.
     4. Deferred Delivery Dates.
     (a) Optionee hereby specifies, as the date or dates on which Net Exercise Shares will bedeliverable to Optionee or Optionee’s Successors following the Exercise Date, the date or datesidentified or determinable under the formula or formulas set forth in Exhibit C attached hereto(the “Deferred Delivery Date(s)”), which specification may not be revised by Optionee prior to theExercise Date.
     (b) The Deferred Delivery Date(s) identified or determinable under the formula or formulasspecified in Exhibit C hereto shall also be identified or specified as such in the DeferredDelivery Agreement to he entered into between Optionee and the Company on the Exercise Date.
     (c) Notwithstanding anything herein or in the Deferred Delivery Agreement to the contrary,prior to the delivery to Optionee or Optionee’s Successors of Net Exercise Shares, neither Optioneenor any of Optionee’s Successors shall be treated as the owner of such Net Exercise Shares or ashaving any rights as a stockholder with respect thereto.
     5. Dividend Equivalent Payments.
     (a) Optionee acknowledges and understands that the Company has determined that Optionee willbe entitled to receive from the Company, commencing as of the Exercise Date and continuing untilthe Delivery Date(s) for the Net Exercise Shares (the “Deferral Period’), certain compensatorypayments from the Company based upon the number of Net Exercise Shares ultimately distributable toOptionee and the amount of any cash dividends or other distributions of cash or property as may bedeclared and paid from time to time by the Company with respect to its outstanding shares of CommonStock during the Deferral Period (“Dividend Equivalent Payments”).
     (b) Optionee acknowledges and understands that all Dividend Equivalent Payments shall be paidin accordance with the provisions and subject to the terms and conditions of the Deferred DeliveryAgreement to be entered into between Optionee and the Company on the Exercise Date.
     (c) To the extent Optionee may become entitled to receive Dividend Equivalent Payments duringthe Deferred Period, Optionee hereby elects to receive such Dividend Equivalent Payments in theform and subject to the terms and conditions set forth in Exhibit D attached hereto, which electionmay not be revised and rescinded by Optionee prior to the Exercise Date.
     6. Revocability/Termination. Optionee may revoke this Notice, in Optionee’s sole discretion,at any time prior to the Exercise Date. If prior to the Exercise Date, any of the Options to whichthis Notice relates is terminated or ceases to be exercisable, pursuant to the terms thereof or theplan or agreement under which the Option was issued, such Option shall not be exercised on theExercise Date and this Notice shall automatically terminate. If Optionee dies prior to theExercise Date, this Notice shall terminate and the subsequent exercisability of any of the Optionsto which this Notice relates will be subject to and governed by the terms and conditions of theOption Agreement relating to such Option, including any designation of beneficiary or beneficiariesset forth therein, as though this Notice had never been given by Optionee.
     7. Limitations on Transfer of Options. Optionee acknowledges, understands and agrees that,after the date of this Notice and prior to the Exercise Date, no Option to which this Noticerelates and

– 27 –


 

no interest in any such Option may be transferred by Optionee to any other party or parties,regardless of any provisions to the contrary in the Option Agreement relating to the Option,provided that, if this Notice should be revoked by Optionee or should otherwise terminate prior tothe Exercise Date, any such provisions in any Option Agreement regarding transferability of theOption shall once again have full force and effect, as though this Notice had never been given byOptionee.
     8. Option Agreement. Except as expressly provided herein, to the extent that the terms andconditions set forth in this Notice may conflict with the terms and conditions set forth in any ofthe Option Agreements, the latter shall prevail.
     9. Delaware law. This Notice shall be governed by and construed in accordance with the lawsof the State of Delaware, other than conflict of laws provisions.
     
 
  “OPTIONEE”
 
   
 
   
 
   
 
  [NAME]

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Exhibit C
Notice of Deferred Delivery Exercise of Options
Options To Be Exercised
     ThisExhibit A is being given ___ (“Optionee”) pursuant to Section 1 of the Notice ofDeferred Delivery Exercise of Options dated ___ (the “Notice”).
                             
  Options to be           Number of              
  Exercised (listed           Shares Subject to     Exercise Price Per     Total Option  
  by option no.)     Date of Grant     Exercise     Share     Exercise Price  
                             
 
 
                         
                             
 
 
                         
                             
 
 
                         
                             
 
 
                         
                             
 
 
                         
                             
 
 
                         
                             
 
 
                         
                             
 
 
                         
                             
 
 
                         
                             
 
 
                         
                             
 
 
                         
                             
     
                             
 
 
    Total No. of           Aggregate Exercise        
 
 
    Shares Subject to           Price for All        
 
 
    Option Exercise           Option Shares        
                             

 


 

Exhibit B
Notice of Deferred Delivery Exercise of Options
Statement Affirming Ownership of Payment Shares
     ThisExhibit B is being given by ___ (“Optionee”) pursuant to Section 3(b) of theNotice of Deferred Delivery Exercise of Options dated ___(the “Notice”). All capitalizedterms used herein that are not defined herein shall have the meanings given such terms in theNotice.
     Optionee hereby affirms and attests that:
  1.   Optionee owns as of the Exercise Date a number of shares of Common Stock havinga market value on such date equal to the Aggregate Exercise Price(such number of shares, defined in the Notice as the “Payment Shares”).
 
  2.   The Payment Shares are now owned and for the preceding six (6) months have beenowned, solely by Optionee, free and clear of any liens, encumbrances or otherrestrictions, on a fully vested, non-forfeitable basis, and no such shares are nowheld, or during such period have been held, in or subject to any tax-favored accountplan or arrangement, including any individual retirement account, qualified ornon-qualified retirement plan, 401-k plan, or similar arrangement.
 
  3.   Optionee has the authority, without any consent or other approval from anyperson or entity, to submit the Payment Shares as payment for the Option.
 
  4.   During the six months prior to the Date of Exercise, none of the Payment Shareshas been used by Optionee in connection with any stock-for-stock exercise of any otherstock option, as payment of all or part of the purchase price thereof, whether suchpayment would have involved actual or deemed surrender of such shares.
     INWITNESS WHEREOF, the undersigned executes this statement this ___ day of ___, ___.
         
    “OPTIONEE”
 
       
     
 
       
 
  Date:    
 
       

 


 

Exhibit C
Notice of Deferred Delivery Exercise of Options
Designation of Deferred Delivery Dates
     ThisExhibit C is being given by ___ (“Optionee”) pursuant to Section 4 of the Notice ofDeferred Delivery Exercise of Options dated ___(the “Notice”). All capitalized terms usedherein that are not defined herein shall have the meanings given such terms in the Notice.
     Under Section 4, Optionee is entitled to specify the date or dates following the Exercise Dateon which the Net Exercise Shares are to be delivered by the Company to Optionee or Optionee’sSuccessors (the “Delivery Date(s)”), subject to certain limitations on such Delivery Date(s) as maybe established from time to time by the Committee.
     Unless Optionee shall have elected to designate one or more alternative Deferred DeliveryDates, by checking the box opposite Paragraph B below and specifying in said Paragraph B suchalternative Deferred Delivery Date(s), Optionee shall be deemed to have designated, and herebydesignates, as the Deferred Delivery Date for all Net Exercise Shares deliverable to Optionee bythe Company (subject to any deductions therefrom at the time of delivery in accordance with andsubject to the terms and conditions of the Deferred Delivery Agreement to be entered into betweenOptionee and the Company on the Exercise Date) the standard Deferred Delivery Date specified inParagraph A below.
o  Paragraph A: Standard Deferred Delivery Date.
     1. The Deferred Delivery Date for all Net Exercise Shares shall be the earliest tooccur of the following:
     (a) The date of Optionee’s death or Disability, as such term is defined below;
     (b) The date of any Change in Control of the Company, as such term is defined below; or
     (c) The first business day following the date of Optionee’s Retirement, as such term isdefined below, provided, however, that, if the Board of Directors of the Company (the“Board”) or the Committee determines, in the exercise of its reasonable judgment, thatdelivery to Optionee or Optionee’s Successors of the Net Exercise Shares on the dayspecified in the first clause of this subparagraph 1(c) will result in recognition by theCompany of some amount of compensation expense as of such date some or all of which likelywill be non-deductible to the Company for federal income tax purposes for the taxable yearof the Company in which such date falls, as a result of Section 162(m) of the InternalRevenue Code of 1986, as amended (the “Code”), or any successor provision of federal incometax law then in effect (any such determination, a “Section 162(m) Non-DeductibilityDetermination”), then the Deferred Delivery Date under this subparagraph 1(c) shall beautomatically postponed until February 15 of the first subsequent calendar year in whichdelivery of the Net Exercise Shares does not give rise to a Section 162(m) Non-DeductibilityDetermination on the part of the Board or the Committee.

 


 

Exhibit C
Notice of Deferred Delivery Exercise of Options
     2. For purposes of this Paragraph A:
         (a) “Disability” shall mean permanent and total disability as defined in Section22(e)(3) of the Code, or any successor provision of federal income tax law then in effect,as determined by the Committee in good faith, upon receipt of and in reliance on sufficientcompetent medical advice;
         (b) “Change in Control of the Company” shall have the meaning set forth in Appendix 1this Exhibit C; and
         (c) “Retirement” shall mean (i) Optionee’s having attained that age established as thenormal retirement age under the principal retirement plan of the Company in effect at suchtime (the “Retirement Plan”), or (ii) the “early retirement” of Optionee as an Employee ofthe Company under the Retirement Plan prior to attaining normal retirement age with theapproval of the Board or the Committee, which approval for early retirement required underthis subparagraph 2(c) may be withheld for any reason or no reason (other than unlawfuldiscrimination) and shall be required in order for such early retirement to constituteOptionee’s Retirement hereunder even if such approval is not required for early retirementunder the Retirement Plan. For purposes of the preceding sentence, “Employee” shall mean anyfull- or part-time employee of the Company or its subsidiaries who is eligible toparticipate, or with the passage of time will be eligible to participate, in the Company’sRetirement Plan (as defined in the preceding sentence).
o   Paragraph B: Alternative Deferred Delivery Date(s).
     As an alternative to the Standard Deferred Delivery Date set forth in Paragraph Aabove, Optionee hereby specifies the following as the Deferred Delivery Date(s) for the NetExercise Shares deliverable to Optionee after the Exercise Date, provided that suchalternative date or dates are consistent with the limitations on deferred delivery dates ascurrently established by the Committee and that any delivery on any such date that may giverise to a Section 162(m) Non-Deductibility Determination by the Board or the Committee shallbe automatically postponed until February 15 of the first subsequent calendar year in whichdelivery shall not give rise to a Section 162(m) Non-Deductibility Determination, whichsubsequent February 15 shall become the Deferred Delivery Date for such delivery.
     (Complete either (a) or (b) as appropriate.)
     (a) Single Date for Distribution of all Net Exercise Shares (specified date or formulafor determining date):
     (b) Multiple Dates for Distribution of Net Exercise Shares (specified dates or formulafor determining dates, including specification of the number or percentage of Net ExerciseShares to be distributed on each such date):

 


 

Exhibit C
Notice of Deferred Delivery Exercise of Options
     The Deferred Delivery Date(s) designated in this Exhibit C shall also be included inthe Deferred Delivery Agreement to be entered into between Optionee and the Company on theExercise Date.

 


 

Appendix1 to Exhibit C
Notice of Deferred Delivery Exercise of Options
Definition of Change in Control
     (a) A “Change in Control of the Company,” for purposes of defining a potential DeferredDelivery Date under the Notice of Deferred Delivery Exercise of Option attached hereto (the“Notice”), shall be deemed to have occurred as of the first date that any of the following occurs(capitalized terms used below and not previously defined shall have the meanings given such termsin Section (b), below):
     (i) any Person becomes the Beneficial Owner, as the result of any one or moreTransactions, of securities of the Company possessing twenty-five percent (25%) or more ofthe Voting Power of the Company;
     (ii) Approved Directors constitute less than a majority of the entire Board; or
     (iii) The Company has entered into a binding agreement in a Sale of the Company, hasreceived all required corporate, regulatory and other approvals for consummating such Saleof the Company, and the consummation thereof is expected by the Company to occur withinfifteen (15) days.
     (b) For purposes of this Appendix 1:
     (i) “Approved Directors” shall mean the members of the Board as of the Date of Noticeand any individuals who subsequently become members of the Board (A) having been elected bystockholders after being nominated or approved by a majority of the Approved Directors onthe Board prior to such election, or (B) having been appointed to the Board to fill avacancy with the approval of a majority of Approved Directors on the Board prior to suchappointment.
     (ii) A “Beneficial Owner” of securities shall be determined as provided in Rule 13d-3promulgated by the Securities and Exchange Commission under the Securities Exchange Act of1934, as amended.
     (iii) “Person” shall mean any individual, corporation (other than the Company),partnership, trust, association, pool, syndicate, or any other entity or any group ofpersona acting in concert (other than any of the foregoing that is controlled by or undercommon control with the Company).
     (iv) “Sale of the Company” shall mean:
     (A) any consolidation, merger or stock-for-stock-exchange involving the Companyor the securities of the Company in which the holders of voting securities of theCompany immediately prior to the consummation of such transaction will own, as agroup, immediately after such consummation
     (1) if the transaction does not affect the outstanding votingsecurities of the Company immediately prior thereto, voting securities ofthe Company having less than fifty percent (50%) of the Voting Power of theCompany, or

 


 

Exhibit C
Notice of Deferred Delivery Exercise of Options
     (2) if the transaction does affect the outstanding voting securities ofthe Company immediately prior thereto, by virtue of the exchange orconversion of such securities into some other consideration or the issuanceof additional securities with respect to such securities, voting securitiesof the Surviving Corporation having less than fifty percent (50%) of theVoting Power of the Surviving Corporation,
excluding, in the case of subparagraph (b)(iv)(A)(2), above, any securities of theSurviving Corporation owned by any members of such group prior to such transactionand, in the case of subparagraphs (b)(iv)(A)(1) and (b)(iv)(A)(2), above, anysecurities to be received in such transaction by any members of such group whichrepresent disproportionate percentage increases in their share holdings vis-a-visthe other members of such group; or
     (B) any sale, lease, exchange or other transfer (in one transaction or a seriesof related transactions), of all, or substantially all, of the assets of the Companyto a party which is not controlled by or under common control with the Company priorto such transaction or series of transactions.
     (v) “Surviving Corporation” as used in subparagraph (b)(iv)(A)(2), above, shall meanthe corporation or other entity that issues securities and/or other consideration to theholders of voting securities of the Company in any transaction described in suchsubparagraph (b)(iv)(A)(2), or, if such issuing corporation or entity is controlled directlyor indirectly by another corporation or entity, the ultimate controlling corporation orentity of such issuing corporation or entity.
     (vi) “Transaction” as used in subsection (a)(i), above, shall mean any acquisition orpurchase of securities, including any repurchase of securities by the Company, but excludingany transaction constituting a Sale of the Company as defined in subsection (b)(iv), above.
     (vii) “Voting Power” of a corporation or entity at a given time shall mean the totalnumber of votes entitled to be cast generally in an election of directors of suchcorporation or entity at such time by all holders of outstanding equity securities of suchcorporation or entity.
     (c) All capitalized terms used in this Appendix 1 that are not defined herein shall have themeanings given such terms in the Notice.

 


 

Election with Respect to Dividend Equivalent Payments
     ThisExhibit D is being given by ___ (“Optionee pursuant to Section 5 of the Notice ofDeferred Delivery Exercise of Options dated ___ (the “Notice”). All capitalized terms usedherein that are not defined herein shall have the meanings given such terms in the Notice.
     Under Section 5, Optionee is entitled to designate the form in which any Dividend EquivalentPayments receivable by Optionee during the Deferral Period shall be received, subject to thelimitations on such payments as may be established from time to time by the Committee.
     Optionee hereby elects that such Dividend Equivalent Payments receivable by Optionee duringthe Deferral Period shall be paid to Optionee in the following forms:
     (Check one or more of the following four choices. If more than one box is checked,indicate on the adjacent line the percentage of each Dividend Equivalent Payment (“DEP’”) tobe received in the form of such choice, with such percentages for all boxes checked to total100%.)
     o Choice No. 1: Cash, Distributed Currently. DEP dollar amounts to be distributed to Optioneecurrently, by check made payable to Optionee.
     o Choice No. 2: Cash, Distributed on a Deferred Basis. DEP dollar amounts to be deferred, anddistributed to Optionee or Optionee’s Successors at such time or times as the Net Exercise Sharesmay be distributed (and in the case of multiple Deferred Delivery Dates, in proportions equal tothe proportionate amounts of Net Exercise Shares then distributable), with such deferred amounts toaccrue interest during the Deferral Period as specified in the Deferred Delivery Agreement.
     o Choice No. 3: Shares of Company Common Stock, Distributed Currently. DEP amounts to bedistributed to Optionee currently in the form of shares of the Company’s Common Stock, with thenumber of such shares to be determined based on the Company Stock Price on the date of each DEP andfractional shares to be distributed currently in the form of cash, based on such Company StockPrice.
     o Choice No. 4: Shares of Company Common Stock, Distributed on a Deferred Basis. DEP amounts tobe converted into a right to receive shares of the Company’s Common Stock on a deferred basis, with(i) the number of such shares (to four decimal places, rounded downward) to be determined based onthe Company Stock Price on the date of each DEP, (ii) the date or dates of the ultimatedistribution of such shares to be the Deferred Delivery Date(s) as established by Optionee withrespect to the Net Exercise Shares, and (iii) such shares otherwise to be treated during theDeferral Period in the same manner and with the same rights as apply to the Net Exercise Sharesduring such period (including the right to receive subsequent DEPs with respect thereto).
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