As filed with the Securities and Exchange Commission on May 26, 2015
Registration
No. 333-
UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Financial
Institutions, Inc.
(Exact name of registrant as specified in its charter)
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| New York |
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16-0816610 |
| (State or other jurisdiction of
incorporation or organization) |
|
(I.R.S. Employer
Identification No.) |
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| 220 Liberty Street
Warsaw, New York |
|
14569 |
| (Address of Principal Executive Offices) |
|
(Zip Code) |
Financial Institutions, Inc. 2015 Long-Term Incentive Plan
(Full title of the plan)
William L. Kreienberg, Esq.
Executive Vice President and General Counsel
220 Liberty Street
Warsaw, New York 14569
(Name and address of agent for service)
(585) 786-1100
(Telephone number, including area code, of agent for service)
With a copy to:
Craig S. Wittlin, Esq.
Alexander R. McClean, Esq.
Harter Secrest & Emery LLP
1600 Bausch & Lomb Place
Rochester, New York 14604
Tel: (585) 232-6500
Indicate by check mark whether
the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting
company” in Rule 12b-2 of the Exchange Act.
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| Large accelerated filer |
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¨ |
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Accelerated filer |
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x |
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| Non-accelerated filer |
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¨ (Do not check if a smaller reporting company) |
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Smaller reporting company |
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¨ |
CALCULATION OF REGISTRATION FEE
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| Title of securities
to be registered |
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Amount
to be
registered (1) |
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Proposed
maximum
offering price
per share (3) |
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Proposed
maximum
aggregate
offering price (3) |
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Amount of
registration fee |
| Common Stock, par value $.01 per share |
|
458,694 shares (2) |
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$23.71 |
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$10,875,635 |
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$250.86 (4) |
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| (1) |
Pursuant to Rule 416 under the Securities Act of 1933, as amended, there are also being registered such additional shares of common stock as may become issuable pursuant to stock splits, stock dividends,
recapitalizations and similar transactions. |
| (2) |
Represents 438,076 remaining shares available for issuance under the 2009 Management Stock Incentive Plan and the 2009 Directors’ Stock Incentive Plan (the “Prior Plans”) at the time the Financial
Institutions, Inc. 2015 Long-Term Incentive Plan (the “LTIP”) was approved by the holders of the Registrant’s stock and 20,618 shares subject to outstanding equity awards under the Prior Plans, which the Registrant reasonably
estimates may become available for future grant under the LTIP as a result of the expiration, termination, cancellation, forfeiture or settlement in case of such awards under the Prior Plans. |
| (3) |
Estimated solely for the purposes of computing the registration fee pursuant to Rule 457(c) under the Securities Act of 1933, as amended, and based on the average of the high and low prices reported on the NASDAQ Global
Select Market as of May 21, 2015. |
| (4) |
Pursuant to Rule 457(p) under the Securities Act of 1933, a portion of the registration fee is offset by: (i) registration fees of $262.52 previously paid with respect to 118,884 unissued shares of Common Stock that
were registered pursuant to a Registration Statement on Form S-8 (No. 333-172651) and (ii) registration fees of $750.37 previously paid with respect to 339,810 unissued shares of Common Stock that were registered pursuant to a Registration Statement
on Form S-8 (No. 333-172652), each filed by the Registrant on March 7, 2011, (the “Prior S-8s”). Pursuant to Rule 457(p), the $1,263.75 Registration Fee for this Registration Statement on Form S-8 is offset against the $1,012.89
Registration Fee previously paid in connection with such unsold securities on the Prior S-8s. As a result, a Registration Fee of $250.86 is being paid herewith. |
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I of Form S-8 have been or will be delivered to participants in the LTIP as
specified by Rule 428(b)(1) promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended.
Such
documents are not being filed with the Securities and Exchange Commission but constitute (along with the documents incorporated by reference into this registration statement pursuant to Item 3 of Part II hereof) a prospectus that meets the
requirements of Section 10(a) of the Securities Act of 1933, as amended.
i
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
| Item 3. |
Incorporation of Documents by Reference. |
The following documents previously filed with
the Securities and Exchange Commission by the Company are incorporated by reference into this registration statement:
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1. |
our annual report on Form 10-K for the year ended December 31, 2014 (including the information specifically incorporated by reference into such report from our Definitive Proxy Statement on Schedule 14A, filed on
March 25, 2015); |
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2. |
our current reports on Form 8-K filed on January 20, 2015, February 25, 2015, April 10, 2015, April 15, 2015, and May 8, 2015; and |
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3. |
the description of our common stock contained in our Registration Statement on Form 8-A filed on June 23, 1999. |
All documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as
amended, after the date of this registration statement, prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference into this registration statement and to be a part hereof from the date of filing of such documents. Nothing in this registration statement shall be deemed to incorporate information furnished, but not filed, with the
Securities and Exchange Commission pursuant to Item 2.02 or Item 7.01 of Form 8-K and corresponding information furnished under Item 9.01 of Form 8-K or included as an exhibit.
Any statement contained in a document incorporated or deemed to be incorporated herein by reference herein shall be deemed to be modified or
superseded for purposes of this registration statement to the extent that a statement contained herein or in any other subsequently filed document which also is, or is deemed to be, incorporated herein by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this registration statement.
| Item 4. |
Description of Securities. |
Not applicable.
| Item 5. |
Interests of Named Experts and Counsel. |
Not applicable.
| Item 6. |
Indemnification of Directors and Officers. |
Under Sections 721 through 725 of the
Business Corporation Law of the State of New York (the “NYBCL”), the Registrant has broad powers to indemnify its directors, officers and other employees. These sections (i) provide that the statutory indemnification and advancement
of expenses provision of the NYBCL are not exclusive, provided that no indemnification may be made to or on behalf of any director or officer if a judgment or other final adjudication adverse to the director or officer establishes that his acts were
committed in bad faith or were the result of active and deliberate dishonesty and were material to the cause of action adjudicated, or that he personally gained in fact a financial profit or other advantage to which he was not legally entitled,
(ii) establish procedures for indemnification and advancement of expenses that may be
ii
contained in the certificate of incorporation or by-laws, or, when authorized by either of the foregoing, set forth in a resolution of the shareholders or directors or an agreement providing for
indemnification and advancement of expenses, (iii) apply a single standard for statutory indemnification for third-party and derivative suits by providing that indemnification is available if the director or officer acted in good faith, for a
purpose which he reasonably believed to be in the best interests of the corporation, and, in criminal actions, had no reasonable cause to believe that his conduct was unlawful, and (iv) permit the advancement of litigation expenses upon receipt
of an undertaking to repay such advance if the director or officer is ultimately determined not to be entitled to indemnification or to the extent the expenses advanced exceed the indemnification to which the director or officer is entitled.
Section 726 of the NYBCL permits the purchase of insurance to indemnify a corporation or its officers and directors to the extent permitted.
As permitted by Section 721 of the NYBCL, our Amended and Restated By-laws, as amended, provide that we shall indemnify our officers and
directors, as such, to the fullest extent permitted by applicable law, and that expenses reasonably incurred by any such officer or director in connection with a threatened or actual action or proceeding shall be advanced or promptly reimbursed by
us in advance of the final disposition of such action or proceeding upon receipt of an undertaking by or on behalf of such officer or director to repay such amount if and to the extent that it is ultimately determined that such officer or director
is not entitled to indemnification.
Article SEVENTH of our Amended and Restated Certificate of Incorporation, as amended, provides that
none of our directors shall be held personally liable to us or our shareholders for damages for any breach of duty in his or her capacity as a director unless a judgment or other final adjudication adverse to him or her establishes that (i) his
or her acts or omissions were in bad faith or involved intentional misconduct or a knowing violation of law, (ii) he or she personally gained in fact a financial profit or other advantage to which he or she as not legally entitled, or
(iii) his or her acts violated Section 719 of the NYBCL.
In addition, we have purchased insurance policies which provide
coverage for our directors and officers in certain situations where we cannot directly indemnify such directors or officers.
Insofar as
indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
| Item 7. |
Exemption from Registration Claimed. |
Not applicable.
See the Exhibit Index, which is incorporated herein by reference.
iii
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(a) |
The undersigned registrant hereby undertakes: |
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(1) |
to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
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(i) |
to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended; |
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(ii) |
to reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
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(iii) |
to include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in this registration statement.
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provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply if this registration statement is on
Form S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Securities and Exchange Commission by the registrant pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in this registration statement; and
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(2) |
That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
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(3) |
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
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(b) |
The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in this registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
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iv
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(c) |
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. |
v
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the Village of Warsaw, State of New York, on May 26, 2015.
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| FINANCIAL INSTITUTIONS, INC. |
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| /s/ Martin K. Birmingham |
| Martin K. Birmingham |
| President and Chief Executive Officer |
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Martin K. Birmingham or Kevin B.
Klotzbach, jointly and severally, his or her true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and
all amendments to this Registration Statement, and to file the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all
that each of said attorneys-in-fact and agents, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
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| Signatures |
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Title |
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Date |
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| /s/ Martin K. Birmingham
Martin K. Birmingham |
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Director, President and Chief Executive Officer
(Principal Executive Officer) |
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May 20, 2015 |
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| /s/ Kevin B. Klotzbach
Kevin B. Klotzbach |
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Executive Vice President and Chief Financial Officer
(Principal Financial Officer) |
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May 20, 2015 |
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| /s/ Michael D. Grover
Michael D. Grover |
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Senior Vice President and Chief Accounting Officer
(Principal Accounting Officer) |
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May 20, 2015 |
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| /s/ Karl V. Anderson, Jr.
Karl V. Anderson, Jr. |
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Director |
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May 20, 2015 |
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| /s/ John E. Benjamin
John E. Benjamin |
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Director |
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May 20, 2015 |
vi
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| Signatures |
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Title |
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Date |
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| /s/ Andrew W. Dorn, Jr.
Andrew W. Dorn, Jr. |
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Director |
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May 20, 2015 |
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| /s/ Robert M. Glaser
Robert M. Glaser |
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Director |
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May 20, 2015 |
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| /s/ Samuel M. Gullo
Samuel M. Gullo |
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Director |
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May 20, 2015 |
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| /s/ Susan R. Holliday
Susan R. Holliday |
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Director |
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May 20, 2015 |
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| /s/ Erland E. Kailbourne
Erland E. Kailbourne |
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Director |
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May 20, 2015 |
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| /s/ Robert N. Latella
Robert N. Latella |
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Director, Chairman |
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May 22, 2015 |
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| /s/ James L. Robinson
James L. Robinson |
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Director |
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May 20, 2015 |
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James H. Wyckoff |
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Director |
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May 20, 2015 |
vii
EXHIBIT INDEX
TO
REGISTRATION
STATEMENT ON FORM S-8
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| 4.1 |
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Amended and Restated Certificate of Incorporation of the Company is incorporated herein by reference to Exhibits 3.1, 3.2 and 3.3 to our Annual Report on Form 10-K for the year ended December 31, 2008 |
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| 4.2 |
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Amended and Restated Bylaws of the Company are incorporated herein by reference to Exhibit 3.4 to our Annual Report on Form 10-K for the year ended December 31, 2008 |
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| *4.3 |
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2015 Long-Term Incentive Plan |
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| *5.1 |
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Opinion of Harter Secrest & Emery LLP |
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| *23.1 |
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Consent of Harter Secrest & Emery LLP (included in Exhibit 5.1) |
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| *23.2 |
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Consent of KPMG LLP |
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| *24 |
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Power of Attorney (included in the signature pages to the Registration Statement). |
| * |
Exhibits filed with this registration statement. |
Exhibit 4.3
FINANCIAL INSTITUTIONS, INC.
2015 LONG-TERM INCENTIVE PLAN
Approved by the MD&C Committee: January 14, 2015
Approved by the Board for Directors: January 28, 2015
Approved by Shareholders: May 6, 2015
FINANCIAL INSTITUTIONS, INC.
2015 LONG-TERM INCENTIVE PLAN
TABLE OF CONTENTS
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Page |
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| ARTICLE I PURPOSE AND EFFECTIVE DATE |
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1 |
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| 1.1 |
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Purpose |
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1 |
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| 1.2 |
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Effective & Expiration Date |
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1 |
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| 1.3 |
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Successor Plan |
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1 |
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| ARTICLE II DEFINITIONS |
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1 |
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| 2.1 |
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Award |
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1 |
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| 2.2 |
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Award Agreement |
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1 |
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| 2.3 |
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Board |
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1 |
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| 2.4 |
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Cash Awards |
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1 |
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| 2.5 |
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Cause |
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1 |
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| 2.6 |
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Change in Control |
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2 |
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| 2.7 |
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Code |
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2 |
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| 2.8 |
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Committee |
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2 |
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| 2.9 |
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Common Stock |
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2 |
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| 2.10 |
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Company |
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2 |
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| 2.11 |
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Director |
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2 |
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| 2.12 |
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Director Awards |
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2 |
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| 2.13 |
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Disability |
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2 |
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| 2.14 |
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Effective Date |
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2 |
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| 2.15 |
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Employee |
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2 |
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| 2.16 |
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Exchange Act |
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2 |
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| 2.17 |
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Exercise Price |
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2 |
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| 2.18 |
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Fair Market Value |
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2 |
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| 2.19 |
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Good Reason |
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3 |
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| 2.20 |
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Incentive Stock Option |
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3 |
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| 2.21 |
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Incumbent Board |
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3 |
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| 2.22 |
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Indemnified Person |
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3 |
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| 2.23 |
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Involuntary Termination |
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3 |
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| 2.24 |
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Non-Qualified Stock Option |
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3 |
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| 2.25 |
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Option |
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3 |
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| 2.26 |
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Over 10% Owner |
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3 |
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| 2.27 |
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Participant |
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3 |
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| 2.28 |
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Performance Goal |
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3 |
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| 2.29 |
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Performance Period |
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3 |
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| 2.30 |
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Performance Stock Award |
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3 |
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| 2.31 |
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Performance Stock Unit Award |
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4 |
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| 2.32 |
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Plan |
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4 |
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| 2.33 |
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Plan Year |
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4 |
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| 2.34 |
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Prior Plans |
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4 |
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| 2.35 |
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Replaced Award |
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4 |
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| 2.36 |
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Replacement Award |
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4 |
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| 2.37 |
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Reporting Person |
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4 |
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| 2.38 |
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Restricted Period |
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4 |
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| 2.39 |
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Restricted Stock Award |
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4 |
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| 2.40 |
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Restricted Stock Unit Award |
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4 |
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| 2.41 |
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Stock Appreciation Right |
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4 |
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| 2.42 |
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Strike Price |
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4 |
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| 2.43 |
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Subsidiary |
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4 |
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| 2.44 |
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Termination of Employment |
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4 |
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TABLE OF CONTENTS
(continued)
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Page |
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| ARTICLE III ELIGIBILITY AND PARTICIPATION |
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4 |
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| 3.1 |
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Eligibility |
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4 |
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| 3.2 |
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Participation |
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4 |
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| ARTICLE IV STOCK SUBJECT TO PLAN |
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5 |
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| 4.1 |
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Types of Shares |
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5 |
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| 4.2 |
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Aggregate Limit |
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5 |
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| 4.3 |
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Calculation of Shares |
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5 |
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| 4.4 |
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Participant Limits |
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5 |
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| ARTICLE V ADMINISTRATION |
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6 |
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| 5.1 |
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Action of the Committee |
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6 |
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| 5.2 |
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Duties and Powers of the Committee |
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6 |
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| 5.3 |
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Delegation |
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6 |
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| 5.4 |
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No Liability; Indemnification |
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6 |
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| ARTICLE VI AWARDS UNDER THE PLAN |
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7 |
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| 6.1 |
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Terms and Conditions of All Awards. |
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7 |
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| 6.2 |
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Options |
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8 |
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| 6.3 |
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Stock Appreciation Rights |
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10 |
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| 6.4 |
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Restricted Stock Awards |
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10 |
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| 6.5 |
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Restricted Stock Unit Awards |
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11 |
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| 6.6 |
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Qualified Performance Awards, Including Cash Awards |
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12 |
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| 6.7 |
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Director Awards |
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13 |
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| 6.8 |
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Other Awards |
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13 |
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| ARTICLE VII CHANGE IN CONTROL |
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13 |
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| 7.1 |
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Effect of a Change in Control |
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13 |
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| 7.2 |
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Definition |
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14 |
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| ARTICLE VIII TERMINATION AND AMENDMENT |
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15 |
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| 8.1 |
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Termination and Amendment of Plan |
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15 |
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| 8.2 |
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Amendment of Award Agreements |
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15 |
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| 8.3 |
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No Repricing |
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15 |
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| ARTICLE IX GENERAL PROVISIONS |
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16 |
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| 9.1 |
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Changes in Capitalization; Merger; Liquidation |
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16 |
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| 9.2 |
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Code Section 409A |
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16 |
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| 9.3 |
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Right to Terminate Employment or Service |
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16 |
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| 9.4 |
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Non-Alienation of Benefits |
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16 |
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| 9.5 |
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Restrictions on Delivery and Sale of Shares; Legends |
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17 |
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| 9.6 |
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FDIA Limitations |
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17 |
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| 9.7 |
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Compensation Recovery Policy |
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17 |
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| 9.8 |
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Listing and Legal Compliance |
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17 |
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| 9.9 |
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Choice of Law |
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17 |
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| 9.10 |
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Plan Binding on Successors |
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17 |
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| 9.11 |
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Interpretation |
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17 |
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FINANCIAL INSTITUTIONS, INC.
2015 LONG-TERM INCENTIVE PLAN
Financial Institutions, Inc. (the “Company”) hereby establishes the Financial Institutions, Inc. 2015 Long-Term
Incentive Plan (the “Plan”) for the benefit of eligible Employees and Directors.
ARTICLE I
PURPOSE AND EFFECTIVE DATE
1.1 Purpose. The purpose of the Plan is to advance the interests of the Company, its Subsidiaries, and its stockholders and to
promote the growth and profitability of the Company and its Subsidiaries by (a) providing incentives to certain Employees and Directors of the Company and its Subsidiaries to stimulate their efforts toward the continued success of the Company
and to operate and manage the business affairs of the Company in a manner that will provide for the long-term growth and profitability of the Company; (b) providing certain Employees and Directors with a means to acquire a proprietary interest
in the Company, acquire shares of Common Stock, or to receive compensation which is based upon appreciation in the value of Common Stock; and (c) providing a means of obtaining, rewarding, and retaining Employees and Directors.
1.2 Effective & Expiration Date. The Plan shall become effective as of May 6, 2015 (the “Effective
Date”), upon the approval of the Plan by the Company’s stockholders on that date. No Award will be granted under the Plan more than ten (10) years after the Effective Date, but all Awards granted on or prior to such date will
continue in effect thereafter subject to the terms thereof and of the Plan.
1.3 Successor Plan. The Plan is established as
a successor to the 2009 Management Incentive Plan and 2009 Directors’ Stock Incentive Plan (the “Prior Plans”). No additional awards shall be made under the Prior Plans after the Effective Date. As provided by Section 4.2,
shares of Common Stock authorized under the Prior Plans as of the Effective Date shall be available for issuance or transfer under this Plan. Outstanding awards under the Prior Plans shall continue in effect according to their terms as in effect
before the Effective Date (subject to such amendments as the Committee determines, consistent with the Prior Plans, as applicable).
ARTICLE II
DEFINITIONS
2.1
Award. Award shall mean, collectively, the Options, Restricted Stock Awards, Restricted Stock Unit Awards, Stock Appreciation Rights, Cash Awards, Director Awards, and other equity awards that may be granted under the Plan.
2.2 Award Agreement. Award Agreement shall mean a written or electronic agreement entered into between the Company and a
Participant setting forth the terms and conditions of an Award made to such Participant under this Plan, such Award Agreement to be in such form as shall be prescribed by the Committee from time to time.
2.3 Board. Board shall mean the board of directors of the Company.
2.4 Cash Awards. Cash Awards shall mean the cash awards that may be made to an eligible Participant pursuant to
Section 6.6.
2.5 Cause. Cause as a reason for the termination of a Participant’s employment shall have the
meaning assigned such term in the executive, employment, severance or similar agreement, if any, between the Participant and the Company or a Subsidiary. If the Participant is not a party to an executive, employment, severance, or similar agreement
with the Company or a Subsidiary in which such term is defined, then unless otherwise defined in the applicable Award Agreement, Cause shall mean the commission by the Participant of, or the determination by the Board, based on reasonable evidence
of misconduct as presented by a law enforcement agency, or as a result of an internal or external audit or investigation, that the Participant has committed: (a) a criminal offense involving the violation of state or federal law; (b) a
breach of fiduciary duty; (c) an act of
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dishonesty, fraud, or material misrepresentation; or (d) any act of moral turpitude which the Board determines has or may be reasonably expected to have a detrimental impact on the
Company’s business or operations, or which may prevent, because of its demonstrated or demonstrable effect on employees, regulatory agencies, or customers, the Participant from effectively performing his duties. Any reference to the Company in
this definition includes each of its Subsidiaries.
2.6 Change in Control. Change in Control shall have the meaning
specified in Section 7.2.
2.7 Code. Code shall mean the Internal Revenue Code of 1986, as amended from time to time,
and the regulations and other guidance issued thereunder, as such law, regulations, and guidance may be amended from time to time.
2.8
Committee. Committee shall mean the Management Development & Compensation Committee of the Board, each member of which is a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act, is an
“outside director” within the meaning of Code Section 162(m) and meets the independence requirements of the Nasdaq Stock Market listing standards.
2.9 Common Stock. Common Stock shall mean the common stock of the Company, $0.01 par value per share.
2.10 Company. Company shall mean Financial Institutions, Inc., a New York corporation, and its successors and assigns.
2.11 Director. Director shall mean any non-employee member of the board of directors of the Company or a Subsidiary.
2.12 Director Awards. Director Awards shall mean the director awards that may be made to an eligible Director pursuant to
Section 6.7.
2.13 Disability. Except as otherwise provided by this Section 2.13, Disability shall have the
meaning assigned such term in the executive, employment, severance, or similar agreement, if any, between the Participant and the Company or a Subsidiary, and if the Participant is not a party to an executive, employment, severance, or similar
agreement with the Company or a Subsidiary in which such term is defined, then unless otherwise defined in the applicable Award Agreement and except as otherwise provided by this Section 2.13, Disability shall have the meaning assigned such
term in the long-term disability plan or policy maintained, or if applicable, most recently maintained, by the Company or any Subsidiary for the Participant. If no long-term disability plan or policy was ever maintained on behalf of the Participant,
or if the determination of Disability relates to an Incentive Stock Option, Disability shall mean the condition described in Code Section 22(e)(3).
2.14 Effective Date. Effective Date shall have the meaning specified in Section 1.2.
2.15 Employee. Employee shall mean an employee of the Company or a Subsidiary.
2.16 Exchange Act. Exchange Act shall mean the Securities Exchange Act of 1934, as amended from time to time, and the rules and
regulations thereunder, as such law, rules and regulations may be amended from time to time.
2.17 Exercise Price. Exercise
Price shall mean the price at which a share of Common Stock may be purchased by a Participant pursuant to the exercise of an Option.
2.18
Fair Market Value. Fair Market Value of Common Stock shall mean the closing price of the Common Stock as reported on the Nasdaq Stock Market on the relevant valuation date or, if there were no Common Stock transactions on such day, on
the next preceding date on which there were Common Stock transactions.
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2.19 Good Reason. Good Reason as a reason for a Participant’s termination of
employment shall have the meaning assigned such term in the executive, employment, severance, or similar agreement, if any, between the Participant and the Company or a Subsidiary. If the Participant is not a party to an executive, employment,
severance, or similar agreement with the Company or a Subsidiary in which such term is defined, then unless otherwise defined in the applicable Award Agreement, “Good Reason” shall mean (a) a material diminution in the
Participant’s base salary from the level immediately prior to the Change in Control; or (b) a material change in the geographic location at which the Participant must primarily perform the Participant’s services (which shall in no
event include a relocation of the Participant’s current principal place of business to a location less than fifty (50) miles away) from the geographic location immediately prior to the Change in Control; provided, however, no
termination shall be deemed to be for Good Reason unless (i) the Participant provides the Company with written notice setting forth the specific facts or circumstances constituting Good Reason within ninety (90) days after the initial
existence of the occurrence of such facts or circumstances, (ii) to the extent curable, the Company has failed to cure such facts or circumstances within thirty (30) days of its receipt of such written notice, and (iii) the
effective date of the termination for Good Reason occurs no later than one hundred eighty (180) days after the initial existence of the facts or circumstances constituting Good Reason.
2.20 Incentive Stock Option. Incentive Stock Option shall mean an Option to purchase Common Stock which is granted under the
Plan with the intention that it qualify as an “incentive stock option” as that term is defined under Code Section 422.
2.21 Incumbent Board. Incumbent Board shall have the meaning specified in Section 7.2(d).
2.22 Indemnified Person. Indemnified Person shall have the meaning specified in Section 5.4(a).
2.23 Involuntary Termination. Involuntary Termination shall mean termination of a Participant’s employment or service by
the Company or a Subsidiary without Cause or by the Participant for Good Reason. For avoidance of doubt, an Involuntary Termination shall not include a termination of the Participant’s employment or service by the Company or a Subsidiary for
Cause or due to the Participant’s death, Disability, or voluntary resignation other than for Good Reason.
2.24 Non-Qualified
Stock Option. Non-Qualified Stock Option shall mean an Option to purchase Common Stock which is granted under the Plan and that is not an Incentive Stock Option.
2.25 Option. Option shall mean a Non-Qualified Stock Option or an Incentive Stock Option granted pursuant to Section 6.2.
2.26 Over 10% Owner. Over 10% Owner shall mean an individual who, at the time an Incentive Stock Option is granted to such
individual, owns Common Stock possessing more than ten percent (10%) of the total combined voting power of the Company or one of its Subsidiaries, determined by applying the attribution rules of Code Section 424(d).
2.27 Participant. Participant shall mean an Employee or Director who has been granted an Award.
2.28 Performance Goal. Performance Goal shall mean a performance goal for a Cash Award, Performance Stock Award or Performance
Stock Unit Award that is intended to satisfy the requirements for “performance-based compensation” under Code Section 162(m), and shall mean a performance goal described in Section 6.6(d).
2.29 Performance Period. Performance Period shall mean a performance period for a Cash Award, Performance Stock Award or
Performance Stock Unit Award that is intended to satisfy the requirements for “performance-based compensation” under Code Section 162(m), and shall mean a performance period described in Section 6.6(c).
2.30 Performance Stock Award. Performance Stock Award shall mean an Award as described in Section 6.4(c).
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2.31 Performance Stock Unit Award. Performance Stock Unit Award shall mean an Award
as described in Section 6.5(b).
2.32 Plan. Plan shall have the meaning assigned to such term in the Preamble hereof.
2.33 Plan Year. Plan Year shall mean the calendar year.
2.34 Prior Plans. Prior Plans shall have the meaning specified in Section 1.3.
2.35 Replaced Award. Replaced Award shall have the meaning specified in Section 7.1(a).
2.36 Replacement Award. Replacement Award shall have the meaning specified in Section 7.1(a).
2.37 Reporting Person. Reporting Person shall mean an officer or director of the Company or a Subsidiary subject to the
reporting requirements of Section 16 of the Exchange Act.
2.38 Restricted Period. Restricted Period shall mean the
period of time during which Restricted Stock Awards granted pursuant to Section 6.4 or Restricted Stock Unit Awards granted pursuant to Section 6.5 are subject to restrictions.
2.39 Restricted Stock Award. Restricted Stock Award shall mean an Award of Common Stock subject to restrictions determined by
the Committee as described in Section 6.4.
2.40 Restricted Stock Unit Award. Restricted Stock Unit Award shall mean an
Award as described in Section 6.5.
2.41 Stock Appreciation Right. Stock Appreciation Right shall mean an Award of a
stock appreciation right as described in Section 6.3.
2.42 Strike Price. Strike Price shall mean the measuring price
per share of Common Stock for a Stock Appreciation Right used to determine the payment of such Stock Appreciation Right.
2.43
Subsidiary. Subsidiary shall mean any corporation or other entity, whether domestic or foreign, in which the Company has or obtains, directly or indirectly, a proprietary interest of more than fifty percent (50%) by reason of
stock ownership or otherwise.
2.44 Termination of Employment. Termination of Employment shall mean the termination of the
employment or other service relationship between a Participant and the Company and its Subsidiaries, regardless of whether severance or similar payments are made to the Participant, for any reason, including, but not by way of limitation, a
termination by resignation, discharge, death, Disability, or retirement, as determined by the Committee pursuant to Section 6.1(i)(3).
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 Eligibility. Subject to the limitation on eligibility for Awards of Incentive Stock Options set forth in
Section 6.2(g), any Employee or Director of the Company or a Subsidiary, who is selected by the Committee is eligible to receive an Award under the Plan.
3.2 Participation. Unless otherwise determined by the Committee, as a condition precedent to participation in the Plan, each
Employee or Director selected to receive an Award shall enter into an Award Agreement with the Company, agreeing to the terms and conditions of the Plan and the Award granted.
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ARTICLE IV
STOCK SUBJECT TO PLAN
4.1 Types of Shares. The shares of Common Stock subject to the provisions of this Plan shall either be shares of authorized but
unissued Common Stock, shares of Common Stock held as treasury stock or previously issued shares of Common Stock reacquired by the Company, including shares purchased on the open market.
4.2 Aggregate Limit. Subject to adjustment in accordance with Section 9.1, the maximum number of shares of Common Stock
reserved exclusively for issuance upon an award of or exercise or payment pursuant to Awards under the Plan shall be the sum of the following: (a) the number of shares remaining available for issuance under the Prior Plans on the Effective
Date; and (b) any shares of Common Stock that are subject to outstanding awards under the Prior Plans on the Effective Date that are subsequently canceled, expired, forfeited, or otherwise not issued or are settled in cash. All or any of this
maximum number of shares of Common Stock reserved under the Plan may be issued pursuant to Awards of Incentive Stock Options or pursuant to any one or more other Awards.
4.3 Calculation of Shares.
(a) For purposes of calculating the total number of shares of Common Stock available for grants of Awards hereunder, the
following shall apply:
(1) The number of shares of Common Stock available for grants of Awards hereunder shall be reduced
by the number of shares for which Awards are actually granted; and
(2) The grant of a Performance Stock Award or
Performance Stock Unit Award shall be deemed to be equal to the maximum number of shares of Common Stock which may be issued under such Award.
(b) Shares Added Back. If less than the maximum number of shares of Common Stock which may be issued under a
Performance Stock Award or Performance Stock Unit Award are earned and issued, only the number of shares of Common Stock actually issued shall count against the above limit, and the excess of the maximum over the actual number of shares of Common
Stock issued shall again become available for grants under the Plan. Further, if any Award under the Plan shall expire, terminate, be canceled (including cancellation upon the Participant’s exercise of a related Award), or is unsettled for any
reason without having been exercised in full, or if any Award shall be forfeited to the Company, the unexercised, unsettled, or forfeited Award, shall not count against the aggregate limitations under Section 4.2 and shall again become available for
grants under the Plan.
(c) Shares NOT Added Back. Shares of Common Stock equal in number to the shares tendered or
withheld in payment of an Option Exercise Price or in settlement of any other Award, and shares of Common Stock that are tendered or withheld in order to satisfy any federal, state, or local tax liability, shall count against the aggregate
limitations in Section 4.2 and shall not become available again for grants under the Plan. Provided further, the full number of shares of Common Stock subject to a Stock Appreciation Right shall count against the above limit, and any shares that
were estimated to be used for such purposes and were not in fact so used shall not become available again for grants under the Plan.
(d) Cash settlements of Awards will not count against the above limits.
4.4 Participant Limits.
(a) Subject to adjustment in accordance with Section 9.1, the total number of shares of Common Stock for which Awards may be
granted in any Plan Year to any Employee shall not exceed three hundred thousand (300,000) shares of Common Stock.
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(b) The aggregate grant date fair value of Awards granted in any Plan Year to any
Director shall not exceed one hundred thousand dollars ($100,000); provided, however, such limit shall not apply to Awards granted to Directors pursuant to Section 6.7 in lieu of cash-based director fees that the Director elects to receive in
the form of shares of Common Stock equal in value to the cash-based director fees that the Director would otherwise have received.
ARTICLE V
ADMINISTRATION
5.1
Action of the Committee. The Plan shall be administered by the Committee. In administering the Plan, the Committee’s actions, determinations, and interpretations made in good faith shall not be subject to review and shall be
final, binding, and conclusive on all interested parties.
5.2 Duties and Powers of the Committee. The Committee shall have
the power to grant Awards in accordance with the provisions of the Plan and may grant Awards singly, in combination, or in tandem. Subject to the provisions of the Plan, including the prohibition against repricing set forth in Section 8.3, the
Committee shall have the discretion and authority to determine: (a) the Employees and Directors to whom Awards will be granted; (b) the number of shares of Common Stock subject to each Award; (c) the terms and conditions of each
Award, including, without limitation, the applicable vesting schedule and forfeiture provisions of the Award, Exercise Price, Strike Price, performance goals, performance periods; Restriction Periods and exercise periods; (d) the acceleration
of vesting, exercise, or payment and/or any other consequence under the Award in the event of an occurrence of a Change in Control; and (e) such other matters applicable to an Award as are permissible under the Plan. Except as otherwise
required by the Plan, the Committee shall have the authority to interpret and construe the provisions of the Plan and the Award Agreements, and to make determinations pursuant to any Plan provision or Award Agreement which shall be final and binding
on all persons.
5.3 Delegation. The Committee may designate and authorize individual officers or employees of the Company
or a Subsidiary who are not members of the Committee to carry out its responsibilities hereunder under such conditions or limitations as the Committee may set, other than its authority and responsibility with regard to Awards granted to a Reporting
Person or Awards that are intended to satisfy the requirements for “performance-based compensation” under Code Section 162(m). References in the Plan to Committee shall include the individuals to whom the Committee has delegated to
the extent of the authority so delegated.
5.4 No Liability; Indemnification.
(a) No Director, member of the Committee, or officer or employee to whom any duty or power relating to the administration or
interpretation of the Plan has been delegated (each, an “Indemnified Person”), shall be liable to any person for any act or determination made in good faith with respect to the Plan or any Award.
(b) Each Indemnified Person shall be indemnified and held harmless by the Company against and from any loss, cost, liability,
or expense that may be imposed upon or reasonably incurred by such Indemnified Person in connection with or resulting from any claim, action, suit or proceeding to which the Indemnified Person may be a party or in which the Indemnified Person may be
involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by the Indemnified Person in settlement thereof, with the Company’s approval, or paid by the Indemnified Person in
satisfaction of any judgment in any such action, suit, or proceeding against him or her, provided the Indemnified Person shall give the Company an opportunity, at its own expense, to handle, and defend the same before the Indemnified Person
undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such Indemnified Persons may be entitled under the Company’s Certificate
of Incorporation or policies, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.
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ARTICLE VI
AWARDS UNDER THE PLAN
6.1
Terms and Conditions of All Awards.
(a) Shares and Cash Awards Subject to Grant. The number of
shares of Common Stock and/or the amounts of Cash Awards as to which an Award may be granted will be determined by the Committee in its sole discretion, subject to the Participant limits in Section 4.4 and Section 6.6.
(b) Award Agreement. Each Award Agreement is subject to the terms of the Plan and any provisions contained in the Award
Agreement that are inconsistent with the Plan shall be superseded by the terms of the Plan.
(c) Date of Grant. The
date as of which an Award is granted will be the date on which the Committee has approved the terms and conditions of the Award and has determined the recipient of the Award and the number of shares of Common Stock or amount of cash covered by the
Award, and has taken all such other actions necessary to complete the grant of the Award.
(d) Transfer and
Exercise. Awards are not transferable or assignable except by will or by the laws of descent and distribution and are exercisable, during a Participant’s lifetime, only by the Participant, or in the event of the Disability of the
Participant, by the Participant or the legal representative of the Participant, or in the event of the death of the Participant, by the legal representative of the Participant’s estate, or if no legal representative has been appointed, by the
successor in interest determined under the Participant’s will. Any transfer or attempted transfer of an Award by a Participant not made in accordance with the Plan and the applicable Award Agreement will be void and of no effect, and the
Company will not recognize, or have the duty to recognize, any transfer not made in accordance with the Plan and the applicable Award Agreement, and an Award attempted to be transferred will continue to be bound by the Plan and the applicable Award
Agreement.
(e) Payment. Awards for which any payment is due from a Participant including, without limitation, the
Exercise Price of an Option or the tax withholding required with respect to an Award pursuant to Section 6.1(g), may be made in any form or manner authorized by the Committee in the Award Agreement or by amendment thereto, including, but not limited
to:
(i) U.S. dollars by personal check, bank draft, or money order payable to the Company, by money transfer or direct
account debits;
(ii) Delivery to the Company of a number of shares of Common Stock having an aggregate fair market value
of not less than the aggregate Exercise Price or minimum tax withholding required for the Award;
(iii) Involvement of a
stockbroker in accordance with the federal margin rules set forth in Regulation T;
(iv) A cashless exercise if and to the
extent permissible by applicable law; or
(v) Any combination of the above forms and methods.
(f) Dividend Equivalents. If the Committee so determines and provides in an Award Agreement, Participants may be
credited with any dividends paid with respect to the shares of Common Stock underlying an Award (other than an Option or Stock Appreciation Right) in a manner determined by the Committee in its sole discretion. The Committee may apply any
restrictions to such dividend equivalents that the Committee deems appropriate. The Committee, in its sole discretion, may determine the form of payment of dividend equivalents, including cash or shares of Common Stock. Notwithstanding the
foregoing, any dividend equivalents on an Award the vesting or payment of which is dependent upon the achievement of one or more performance goals shall accrue and be paid only if and to the extent the shares of Common Stock underlying the Award
become vested or payable.
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(g) Withholding. The Company shall deduct from all cash payments under the
Plan the amount of any federal, state, or local taxes required to be withheld. Whenever the Company proposes or is required to issue or transfer shares of Common Stock under the Plan, or upon the vesting of any Restricted Stock Award, the Company
has the right to require the recipient to remit to the Company an amount sufficient to satisfy the amount of any federal, state, or local taxes required to be withheld as a condition of and prior to the delivery or release of such shares.
(h) Deferred Compensation. Notwithstanding the Committee’s discretion to determine the terms and conditions of
Awards under the Plan, the Committee may require or permit the deferral of the receipt of Awards (other than an Option or Stock Appreciation Right) upon such terms as the Committee deems appropriate and in accordance with the requirements of Code
Section 409A.
(i) Treatment of Awards upon Termination of Employment.
(1) All Awards granted under the Plan, including all unexercised Options whether vested or non-vested, shall immediately be
forfeited and may not thereafter vest or be exercised in the event a Participant incurs a Termination of Employment for Cause.
(2) Except as otherwise provided by Section 6.1(i)(1), any Award under the Plan to a Participant who has experienced a
Termination of Employment or termination of some other service relationship with the Company and its Subsidiaries may be cancelled, accelerated, paid or continued, as provided in the applicable Award Agreement or as the Committee may otherwise
determine to the extent not prohibited by or inconsistent with the provisions of the Plan, taking into consideration such other factors as the Committee determines are relevant to its decision whether to continue an Award.
(3) Subject to Section 6.1(i)(1), the Committee will, in its absolute discretion, determine the effect of all matters and
questions relating to a Termination of Employment as it affects an Award, including, but not by way of limitation, the question of whether a leave of absence constitutes a Termination of Employment.
6.2 Options. At the time any Option is granted, the Committee will determine whether the Option is to be an Incentive Stock
Option or a Non-Qualified Stock Option. Each Incentive Stock Option granted under the Plan shall be clearly identified as to its status as an Incentive Stock Option and the applicable Award Agreement shall reflect such status. Subject to the special
conditions applicable to Incentive Stock Options set forth in Section 6.2(g) and the special conditions applicable to substitute Options set forth in Section 6.2(f), Options awarded under the Plan shall be subject to the following terms
and conditions:
(a) Exercise Price. Subject to adjustment in accordance with Section 9.1, the Exercise Price per
share of Common Stock purchasable under any Option shall be determined by the Committee in its sole discretion and set forth in the applicable Award Agreement; provided, however, the Exercise Price may not be less than the Fair Market Value of the
Common Stock subject to the Option on the date the Option is granted.
(b) Option Term. The exercise period for each
Option granted under the Plan shall be determined by the Committee in its sole discretion and set forth in the applicable Award Agreement.
(c) Conditions to Exercise. The Committee may impose such conditions and restrictions on the exercise of an Option as it
may deem appropriate. Each Option granted under the Plan shall be exercisable at such time or times, or upon the occurrence of such event or events, and for such number of shares of Common Stock as determined by the Committee in its sole discretion
and set forth in the applicable Award Agreement.
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(d) Exercise of Option. An Option shall be exercised by (i) delivery
to the Company of a written notice of exercise (on the form or in the manner specified by the Company for such notice) with respect to all or a specified number of shares of Common Stock subject to the Option, and (ii) payment to the Company of
the full amount of the Exercise Price in a manner permissible under Section 6.1(e) and the applicable Award Agreement.
(e) No Rights as a Stockholder. The holder of an Option, as such, shall have none of the rights of a stockholder of the
Company with respect to the shares of Common Stock underlying such Option until such time as the Option vests, is exercised and the shares of Common Stock are issued to the holder of the Option.
(f) Special Provisions for Substitute Options. Notwithstanding anything to the contrary in this Section 6.2, any Option
issued in substitution for an option previously issued by another entity, which substitution occurs in connection with a corporate transaction, may provide for an Exercise Price and may contain such other terms and conditions as the Committee may
prescribe to cause such substitute Option to contain as nearly as possible the same terms and conditions (including the applicable vesting and termination provisions) as those contained in the previously issued option being replaced thereby;
provided, however, the number of shares of Common Stock and the Exercise Price of any Option issued in substitution for an option previously issued by another entity shall be determined in accordance with the requirements of Code Section 409A.
(g) Special Conditions for Incentive Stock Options. Notwithstanding anything to the contrary in Section 6.1 or this
Section 6.2, Incentive Stock Options shall be subject to the following terms and conditions:
(i) Incentive Stock Options
may only be granted to Employees of the Company or of a Subsidiary that qualifies as a “subsidiary corporation” within the meaning given such term by Code Section 424.
(ii) The aggregate Fair Market Value (determined as of the date an Incentive Stock Option is granted) of the shares of Common
Stock with respect to which Options intended to meet the requirements of Code Section 422 become exercisable for the first time by an Employee during any calendar year (under all plans of the Company and its Subsidiaries) may not exceed one
hundred thousand dollars ($100,000); provided, however, if such limitation is exceeded, the portion of such Incentive Stock Option(s) which cause the limitation to be exceeded will be treated as Non-Qualified Stock Option(s).
(iii) No Incentive Stock Option may be granted after ten (10) years from the date that the Plan is approved by the
Company’s stockholders.
(iv) With respect to each grant of an Incentive Stock Option to a Participant who is an Over
10% Owner, the Exercise Price may not be less than one hundred ten percent (110%) of the Fair Market Value of the Common Stock subject to the Incentive Stock Option on the date the Incentive Stock Option is granted.
(v) The exercise period for an Incentive Stock Option must be no longer than ten (10) years from the date that the
Incentive Stock Option is granted, or in the case of an Incentive Stock Option granted to an Over 10% Owner, the exercise period may be no longer than five (5) years after the date that the Incentive Stock Option is granted.
(vi) For an Incentive Stock Option issued in substitution for an incentive stock option previously issued by another entity,
which substitution occurs in connection with a transaction to which Code Section 424(a) is applicable, both the number of shares of Common Stock and the Exercise Price of the substitute Incentive Stock Option shall be computed in accordance
with Code Section 424.
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(vii) Incentive Stock Options granted under the Plan are intended to comply with
Code Section 422, and the provisions of the Plan and the Award Agreements for any Incentive Stock Options granted under the Plan shall be construed in such manner as to effectuate that intent.
6.3 Stock Appreciation Rights. A Stock Appreciation Right shall entitle the Participant to receive at the time of payment or
exercise, for a specified or determinable number of shares of the Common Stock, an amount equal to a percentage (not to exceed 100%) of the excess of Fair Market Value of a share of Common Stock over the applicable Strike Price per share of Common
Stock. Each Stock Appreciation Right shall be subject to the following terms and conditions:
(a) Strike Price.
Subject to adjustment in accordance with Section 9.1, the Strike Price per share of Common Stock under any Stock Appreciation Right shall be determined by the Committee in its sole discretion and set forth in the applicable Award Agreement;
provided, however, the Strike Price may not be less than the Fair Market Value of the Common Stock subject to the Stock Appreciation Right on the date the Stock Appreciation Right is granted.
(b) Conditions to Exercise. The Committee may impose such conditions and restrictions on the exercise of a Stock
Appreciation Right as it may deem appropriate. Each Stock Appreciation Right granted under the Plan shall be exercisable or payable at such time or times, or upon the occurrence of such event or events, and in such amounts as determined by the
Committee in its sole discretion, and set forth in the applicable Award Agreement.
(c) No Rights as a Stockholder.
The holder of a Stock Appreciation Right, as such, shall have none of the rights of a stockholder of the Company with respect to the shares of Common Stock underlying such Stock Appreciation Right until such time as the Stock Appreciation Right
vests, is exercised, or paid and the shares of Common Stock are issued to the holder of the Stock Appreciation Right.
(d) Settlement. Upon settlement of a Stock Appreciation Right, the Company shall pay to the Participant the appreciation
in cash, shares of Common Stock (valued at the aggregate fair market value), or a combination thereof, as provided in the Award Agreement or, in the absence of such provision, as the Committee may determine.
6.4 Restricted Stock Awards. Each Restricted Stock Award shall be made in such number of shares of Common Stock, upon such terms
and conditions on such shares, for such Restricted Period and with such dividend or voting rights during the Restricted Period as determined by the Committee in its sole discretion and set forth in the applicable Award Agreement. Restricted Stock
Awards shall be subject to the following terms and conditions:
(a) Consideration. The Committee may require a
payment from the Participant in exchange for the grant of a Restricted Stock Award or may grant a Restricted Stock Award without any consideration from the Participant other than his service to or on behalf of the Company or its Subsidiaries.
(b) Shares. A Restricted Stock Award granted pursuant to the Plan may be evidenced by book entry or in such manner as
the Committee shall determine, and the Committee may take any action it deems necessary or advisable to reflect that the shares of Common Stock that are part of the Restricted Stock Award are subject to its applicable terms, conditions, and
restrictions applicable, until the restrictions thereon shall have lapsed.
(c) Vesting. Each Restricted Stock Award
shall vest over a Restricted Period based upon the passage of time or upon the achievement of performance goals (or a combination of both), as determined by the Committee. Restricted Stock Awards subject to performance goals may be designated as
Performance Stock Awards. A Restricted Stock Award may also, in the Committee’s discretion, provide for earlier termination of the Restricted Period in the event of the retirement, death, or Disability of the Participant, or in the event of a
Change in Control.
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(d) Rights as Stockholder. Unless otherwise determined by the Committee
and set forth in the applicable Award Agreement, a grant of a Restricted Stock Award shall immediately entitle the Participant to voting and dividend rights with respect to the shares of Common Stock subject to the Award. In addition, the Committee
may determine and set forth in an Award Agreement that any dividends or other distributions on the shares of Common Stock subject to the Award be deferred or that the Award be credited with an additional number of shares of Restricted Stock
determined using the amount of dividends that would have been paid on the number of shares of Common Stock underlying the Award and the Fair Market Value of a share of Common Stock on the applicable dividend payment date, and in each case subject to
the same vesting and forfeiture restrictions that apply to the shares of Common Stock subject to the Award; provided, however, with respect to a Restricted Stock Award the vesting of which is based on the achievement of performance goals, the
dividends and other distributions on the shares of Common Stock subject to the Award shall in all cases either (i) be deferred and payment thereof contingent on the vesting of the shares of Common Stock with respect to which such dividends and
other distributions are paid, or (ii) be credited with additional shares of Restricted Stock with the same vesting and forfeiture restrictions that apply to the shares of Common Stock subject to the Award with respect to which such dividends
and other distributions are paid.
(e) Qualified Performance Awards. The Committee may, but is not required to,
structure any Performance Stock Award so as to qualify as “performance-based compensation” under Code Section 162(m) by granting such Award pursuant to and in accordance with the requirements of Section 6.6.
6.5 Restricted Stock Unit Awards. Restricted Stock Unit Awards shall entitle the Participant to receive, at a specified future
date or event, payment of a specified number of shares of Common Stock or an amount equal to all or a portion of the Fair Market Value of a specified number of shares of Common Stock at the end of the applicable Restricted Period. Each Restricted
Stock Unit Award shall be made in such number of shares of Common Stock, upon such terms and conditions, for such Restricted Period and with such dividend equivalent rights during the Restricted Period as determined by the Committee in its sole
discretion and set forth in the applicable Award Agreement. Restricted Stock Unit Awards shall be subject to the following terms and conditions:
(a) Consideration. The Committee may require a payment from the Participant in consideration of a payment of a
Restricted Stock Unit Award or may grant a Restricted Stock Unit Award without any consideration from the Participant other than his service to or on behalf of the Company or its Subsidiaries.
(b) Vesting. Each Restricted Stock Unit Award shall vest over a Restricted Period based upon the passage of time or upon
the achievement of performance goals (or a combination of both), as determined by the Committee. Restricted Stock Unit Awards subject to performance goals may be designated as Performance Stock Unit Awards. A Restricted Stock Unit Award may also, in
the Committee’s discretion, provide for earlier termination of the Restricted Period in the event of the retirement, death, or Disability of the Participant, or in the event of a Change in Control.
(c) No Rights as a Stockholder. The holder of a Restricted Stock Unit Award, as such, shall have none of the rights of a
stockholder of the Company with respect to the shares of Common Stock underlying such Restricted Stock Unit Award until such time as the Restricted Stock Unit Award vests, is paid and the shares of Common Stock are issued to the holder of the
Restricted Stock Unit Award.
(d) Settlement. A Restricted Stock Unit Award may be settled by the delivery of shares
of Common Stock, their cash equivalent Fair Market Value, any combination thereof or in any other form of consideration, as determined by the Committee and set forth in the applicable Award Agreement.
(e) Qualified Performance Awards. The Committee may, but is not required to, structure any Performance Stock Unit Award
so as to qualify as “performance-based compensation” under Code Section 162(m) by granting such Award pursuant to and in accordance with the requirements of Section 6.6
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6.6 Qualified Performance Awards, Including Cash Awards. The Committee may grant
Performance Stock Awards, Performance Stock Unit Awards, and/or Cash Awards that are intended to qualify as “performance-based compensation” under Code Section 162(m) by conditioning the Award on the attainment of Performance Goals;
provided that the Committee shall establish the Performance Goals at such time required under Code Section 162(m), while the outcome of the Performance Goals are substantially uncertain. At the time of the grant of a Cash Award, Performance
Stock Award or Performance Stock Unit Award pursuant to this Section 6.6, the Committee will determine the following:
(a) Amount or Number of Shares. Subject to Section 6.6(b), the Committee will determine and specify the dollar value of
the Cash Award or the number of shares of the Performance Stock Award or Performance Stock Unit Award that will become payable upon the achievement of specified Performance Goals during a specified Performance Period.
(b) Award Limits. The maximum amount payable under the Plan to a Participant as a Cash Award for any Performance Period
that is intended to satisfy the requirements for “performance-based compensation” under Code Section 162(m) shall be five hundred thousand dollars ($500,000) per calendar year. In the case of an Award with a multiyear Performance
Period, this dollar limit shall apply separately to each calendar year (or portion thereof) in the Performance Period of such Cash Award. The grant of any Performance Stock Award or Performance Stock Unit Award that is intended to satisfy the
requirements for “performance-based compensation” under Code Section 162(m) shall be subject to the limit set forth in Section 4.4(a).
(c) Performance Period. The Committee will determine at the time of grant of an Award under this Section 6.6, the
Performance Period applicable to the Award during which the Performance Goals shall be measured, which may be subject to earlier lapse or other modification in the event of the retirement, death, or Disability of the Participant, or in the event of
a Change in Control, provided, however, that no such adjustment will be made where such action would result in the loss of the otherwise available exemption of the Award under Code Section 162(m).
(d) Performance Goals. Any grant of an Award under this Section 6.6 will specify one or more Performance Goals
established by the Committee which, if achieved, will result in payment of the Award, and may specify in respect of any such specified Performance Goal a minimum acceptable level or levels of achievement and a formula for determining the number of
shares or amount of the Award that will be earned if performance is at or above the specified minimum or threshold level or levels, or is at or above the target level or levels, but falls short of the specified maximum level or levels. The grant of
an Award under this Section 6.6 will specify that, before the Award will be earned and paid, the Committee must determine and certify that the Performance Goals and other material terms of the Award have been satisfied, and if applicable, the level
of performance achieved. Performance Goals shall mean any one or more of the following criteria:
(i) Share price,
including market price per share and share price appreciation.
(ii) Earnings, including (a) earnings per share;
(b) gross or pre-tax profits; (c) post-tax profits; (d) operating profit; (e) operating earnings; (f) growth in earnings or growth in earnings per share; and (g) total earnings.
(iii) Return on equity, including (a) return on invested capital; (b) return or net return on assets or net assets;
(c) return on investment; (d) return on capital; (e) financial return ratios; (f) value of assets; and (g) change in assets.
(iv) Cash flow(s), including (a) operating cash flow; (b) net cash flow; (c) free cash flow; and (d) cash
flow on investment.
(v) Revenue, including gross or net revenue and changes in annual revenues.
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(vi) Margins, including adjusted pre-tax margin and operating margins.
(vii) Income, including net income and consolidated net income.
(viii) Costs and expenses, including (a) operating or administrative expenses; (b) expense or cost levels;
(c) reduction of losses, loss ratios, or expense ratios; (d) reduction in fixed costs; (e) expense reduction levels; (f) operating cost management; and (g) cost of capital.
(ix) Financial ratings, including (a) credit rating; (b) capital expenditures; (c) debt; (d) debt
reduction; (e) working capital; (f) capital ratios; (g) average invested capital; and (h) attainment of balance sheet or income statement objectives.
(x) Market share, including (a) volume; and (b) market share or market penetration with respect to specific
geographic areas.
(xi) Shareholder return, including (a) total shareholder return; (b) shareholder return based
on growth measures or the attainment of a specified share price for a specified period of time; and (c) dividends.
Such Performance
Goals may be particular to an Employee or Director or the division, department, branch or line of business, Subsidiary, or other unit in which the Employee works, or may be based on the performance of the Company generally. In addition, the
Committee shall, in its discretion and to the extent consistent with Code Section 162(m), if applicable, include or exclude from a Performance Goal any of the following items: (1) asset write-downs; (2) litigation or claim judgments
or settlements; (3) the effect of changes in tax laws, accounting principles, regulations, or other laws or regulations affecting reported results; (4) any reorganization and restructuring programs; (5) acquisitions or divestitures;
(6) unusual nonrecurring or extraordinary items identified in the Company’s audited financial statements, including footnotes; (7) annual incentive payments or other bonuses; or (8) capital charges
6.7 Director Awards. Subject to the limitations in Section 4.4(b), in addition to the ability of Directors to receive
Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock Unit Awards, or other Awards under this Article VI, Directors may also (a) receive Awards of outright shares of Common Stock, and (b) be permitted to elect to
receive, pursuant to procedures established by the Committee, Awards of outright shares of Common Stock in lieu of cash-based director fees that the Director elects to receive in the form of shares of Common Stock with a fair market value equal to
the cash-based director fees that the Director would otherwise have received.
6.8 Other Awards. Subject to applicable law
and the limits set forth in Article IV, the Committee may grant to any Participant such other Awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, shares of Common Stock or
factors that may influence the value of such shares, including, without limitation, convertible or exchangeable debt securities, other rights convertible or exchangeable into shares of Common Stock, purchase rights for shares of Common Stock, Awards
with value and payment contingent upon performance of the Company or specified Subsidiaries, affiliates or other business units thereof or any other factors designated by the Committee, and Awards valued by reference to the book value of shares of
Common Stock or the value of securities of, or the performance of specified Subsidiaries or affiliates or other business units of the Company. The Committee will determine the terms and conditions of such Awards. Shares of Common Stock delivered
pursuant to an Award in the nature of a purchase right granted under this Section will be purchased for such consideration, paid for at such time, by such methods, and in such forms, including, without limitation shares of Common Stock, notes or
other property, as the Committee determines.
ARTICLE VII
CHANGE IN CONTROL
7.1 Effect of a Change in Control. In the event of a Change in Control, unless otherwise set forth in the applicable Award
Agreement, or as provided in an executive, employment, severance, or similar agreement, if any, between the Participant and the Company or a Subsidiary, the following acceleration, exercisability, and valuation provisions will apply:
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(a) Upon a Change in Control, each then-outstanding Option and Stock Appreciation
Right will become fully vested and exercisable, and the restrictions applicable to each outstanding Restricted Stock Award, Restricted Stock Unit, Other Award, or Cash Award will lapse, and each Award will be fully vested (with any applicable
performance goals deemed to have been achieved at a target level as of the date of such vesting), except to the extent that an Award meeting the requirements of Section 7.1(b) (a “Replacement Award”) is provided to the
Participant holding such Award in accordance with Section 7.1(b) to replace or adjust such outstanding Award (a “Replaced Award”);
(b) An Award meets the conditions of this Section 7.1(b) (and hence qualifies as a Replacement Award) if (i) it is of
the same type (e.g., stock option for Option, restricted stock award for Restricted Stock Award, restricted stock unit award for Restricted Stock Unit Award, etc.) as the Replaced Award, (ii) it has a value at least equal to the value of the
Replaced Award, (iii) it relates to publicly traded equity securities of the Company or its successor in the Change in Control or another entity that is affiliated with the Company or its successor following the Change in Control, (iv) the
federal tax consequences to the Participant holding the Replaced Award of the Replacement Award are not less favorable to such Participant than the federal tax consequences of the Replaced Award, and (v) its other terms and conditions are not
less favorable to the Participant holding the Replaced Award than the terms and conditions of the Replaced Award (including, but not limited to, the provisions that would apply in the event of a subsequent Change in Control). Without limiting the
generality of the foregoing, the Replacement Award may take the form of a continuation of the Replaced Award if the requirements of the preceding sentence are satisfied. The determination of whether the conditions of this Section 7.1(b) are
satisfied will be made by the Committee, as constituted immediately before the Change in Control, in its sole discretion (taking into account the requirements of Treasury Regulation 1.409A-3(i)(5)(iv)(B) and exemption or compliance of the
Replaced Award or Replacement Award from or with Code Section 409A). Without limiting the generality of the foregoing, the Committee may determine the value of Replaced Awards and Replacement Awards that are stock options by reference to either
their intrinsic value or their fair value; and
(c) Upon the Involuntary Termination, during the period of two
(2) years immediately following a Change in Control, of a Participant holding Replacement Awards, (i) all Replacement Awards held by the Participant will become fully vested and, if applicable, exercisable and free of restrictions (with
any applicable performance goals deemed to have been achieved at a target level as of the date of such vesting), and (ii) all Options and Stock Appreciation Rights held by the Participant immediately before such Involuntary Termination that the
Participant also held as of the date of the Change in Control and all stock options and stock appreciation rights that constitute Replacement Awards will remain exercisable for a period of 90 days following such Involuntary Termination or
until the expiration of the stated term of such stock option or stock appreciation right, whichever period is shorter (provided, however, if the applicable Award Agreement provides for a longer period of exercisability, that provision will control).
7.2 Definition. For purposes of this Plan, a “Change in Control” of the Company shall be deemed to have
occurred upon the happening of any of the following events:
(a) There shall be consummated (i) any consolidation or
merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which any shares of the Company’s common stock are to be converted into cash, securities or other property, provided that the consolidation
or merger is not with a corporation which was a wholly owned subsidiary of the Company immediately before the consolidation or merger, or (ii) any sale, lease, exchange, or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of the Company;
(b) The stockholders of the Company approve any
plan or proposal for the liquidation or dissolution of the Company;
(c) Any person (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) shall become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act), directly or
14
indirectly, of twenty percent (20%) or more of the Company’s then-outstanding common stock, provided that such person shall not be a wholly-owned subsidiary of the Company immediately
before it becomes such twenty percent (20%) beneficial owner; or
(d) Individuals who constitute the Board on the
date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election by the
Company’s stockholders, was approved by a vote of at least three quarters of the Directors comprising the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee
for director, without objection to such nomination) shall be, for purposes of this clause (d), considered as though such person were a member of the Incumbent Board.
ARTICLE VIII
TERMINATION AND AMENDMENT
8.1 Termination and Amendment of Plan.
(a) Subject to the limitations of Section 8.3, the Board may amend or terminate the Plan at any time; provided, however,
the Board shall obtain stockholder approval for any amendment to the Plan that increases the number of shares of Common Stock available under the Plan, materially expands the classes of individuals eligible to receive Awards, materially expands the
type of awards available for issuance under the Plan, or would otherwise require stockholder approval under the Code or other applicable laws, or the Nasdaq Stock Market listing standards.
(b) Notwithstanding Section 8.1(a), without the consent of the holder of an Award, no such termination or amendment of
the Plan may adversely affect the then value of the Award or the rights of the holder of such Award, and with respect to any Award which provides for the deferral of compensation subject to the provisions of Code Section 409A, no termination or
amendment of the Plan shall have the effect of accelerating the payment of such Award if and to the extent that such accelerated payment would violate Code Section 409A.
8.2 Amendment of Award Agreements. Subject to the limitations of Section 8.3, the Board or the Committee may amend an Award
Agreement at any time, in their sole discretion; provided, however, without the consent of the holder of an Award, no such amendment of an Award Agreement may adversely affect the then value of the Award or the rights of the holder of such Award,
and with respect to any Award which provides for the deferral of compensation subject to the provisions of Code Section 409A, no amendment of the Award Agreement shall have the effect of accelerating the payment of such Award if and to the
extent that such accelerated payment would violate Code Section 409A.
8.3 No Repricing. Except as provided by
Section 9.1, without the approval of the Company’s stockholders, the Exercise Price of an Option or the Strike Price of a Stock Appreciation Right may not be amended or modified after the grant of the Option or Stock Appreciation Right,
and an Option or Stock Appreciation Right may not be surrendered or cancelled in consideration of, or in exchange for, cash, other Awards, or the grant of a new Option or Stock Appreciation Right having an Exercise Price or Strike Price below that
of the Option or Stock Appreciation Right that was surrendered or cancelled, and without the approval of the Company’s stockholders, neither the Board nor the Committee may take any other action with respect to an Option or Stock Appreciation
Right that would be treated as a repricing under the rules and regulations of the principal securities exchange on which the shares of Common Stock are traded.
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ARTICLE IX
GENERAL PROVISIONS
9.1 Changes in Capitalization; Merger; Liquidation.
(a) The aggregate number of shares of Common Stock reserved for the grant of Awards, for issuance upon the exercise or
payment, as applicable, of each outstanding Award and upon vesting of an Award; the annual limit per Participant; the Exercise Price of each outstanding Option; the Strike Price of each outstanding Stock Appreciation Right and the specified number
of shares of Common Stock to which each outstanding Award pertains shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, stock dividend, combination or exchange of
shares, exchange for other securities, reclassification, reorganization, recapitalization, or any other increase or decrease in the number of outstanding shares of Common Stock effected without consideration to the Company.
(b) In the event of a merger, consolidation, reorganization, extraordinary dividend, spin-off, sale of substantially all of
the Company’s assets, other change in capital structure of the Company, or tender offer for shares of Common Stock, the Committee may make such adjustments with respect to awards and take such other action as it deems necessary or appropriate,
including, without limitation, the substitution of new Awards, or the adjustment of outstanding Awards, the acceleration of Awards, the removal of restrictions on outstanding Awards, or the termination of outstanding Awards in exchange for the cash
value determined in good faith by the Committee of the vested or unvested portion of the Award, all as may be provided in the applicable Award Agreement or, if not expressly addressed therein, as the Committee subsequently may determine in its sole
discretion. Any adjustment pursuant to this Section may provide, in the Committee’s discretion, for the elimination without payment therefor of any fractional shares that might otherwise become subject to any Award, but, except as set forth in
this Section, may not otherwise diminish the then value of the Award.
(c) The existence of the Plan and the Awards
granted pursuant to the Plan shall not affect in any way the right or power of the Company or a Subsidiary to make or authorize any adjustment, reclassification, reorganization or other change in its capital or business structure, any merger or
consolidation of the Company or a Subsidiary, any issue of debt or equity securities having preferences or priorities as to the Common Stock or the rights thereof, the dissolution or liquidation of the Company or a Subsidiary, any sale or transfer
of all or any part of its business or assets, or any other corporate act or proceeding.
9.2 Code Section 409A.
Options, Stock Appreciation Rights, Restricted Stock Awards, and Director Awards granted under the Plan are intended to be exempt from Code Section 409A, and Restricted Stock Unit Awards, Cash Awards, dividend equivalents, and all other Awards
awarded under the Plan are intended to be exempt from or comply with Code Section 409A, and the Plan, Award Agreements and the terms of Awards shall be administered and interpreted consistent with such intention. In the event any provisions of
the Plan or any Award Agreement are determined by the Committee potentially to violate Code Section 409A, such provisions shall be amended, as necessary, to be exempt from or comply with Section 409A; and until adoption of any such
amendment, the provisions shall be construed and interpreted, to the extent possible, to be exempt from or comply with Section 409A. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided
under the Plan are exempt from or comply with Section 409A, and in no event will the Company be liable for all or any portion of any taxes, penalties, interest, or other expenses that may be incurred by a Participant on account of
non-compliance with Section 409A.
9.3 Right to Terminate Employment or Service. Nothing in the Plan or in any Award
Agreement confers upon any Participant the right to continue as an officer, employee, director, consultant or other service provider of the Company or any of its Subsidiaries or affects the right of the Company or any of its Subsidiaries to
terminate a Participant’s employment or services at any time.
9.4 Non-Alienation of Benefits. Except as otherwise
expressly provided by the Plan, no Award or benefit under the Plan may be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
16
attachment, encumbrance, or charge; and any attempt to do so shall be void. No such Award or benefit may, prior to receipt by the Participant, be in any manner liable for or subject to the debts,
contracts, liabilities, engagements, or torts of the Participant.
9.5 Restrictions on Delivery and Sale of Shares; Legends.
Each Award is subject to the condition that if at any time the Committee, in its discretion, shall determine that the listing, registration, or qualification of the shares of Common Stock covered by such Award upon any securities exchange or under
any federal or state law is necessary or desirable as a condition of or in connection with the granting of such Award or the purchase or delivery of shares thereunder, the delivery of any or all shares of Common Stock pursuant to such Award may be
withheld unless and until such listing, registration, or qualification shall have been effected. If a registration statement is not in effect under the Securities Act of 1933 or any applicable state securities laws with respect to the shares of
Common Stock purchasable or otherwise deliverable under Awards then outstanding, the Committee may require, as a condition of exercise of any Option or as a condition to any other delivery of Common Stock pursuant to an Award, that the Participant
or other recipient of an Award represent, in writing, that the shares received pursuant to the Award are being acquired for investment and not with a view to distribution and agree that the shares will not be disposed of except pursuant to an
effective registration statement, unless the Company shall have received an opinion of counsel that such disposition is exempt from such requirement under the Securities Act of 1933 and any applicable state securities laws. The Company may include
on certificates representing shares delivered pursuant to an Award such legends referring to the foregoing representations or restrictions or any other applicable restrictions on resale as the Company, in its discretion, shall deem appropriate.
9.6 FDIA Limitations. Any actions by the Company under the Plan or any Award Agreement must comply with the law, including
regulations and other interpretive action, of the Federal Deposit Insurance Act, Federal Deposit Insurance Corporation, or other entities that supervise any of the activities of the Company. Specifically, any payments to the Participant by the
Company, whether pursuant to the Plan, an Award Agreement, or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act, 12. U.S.C. Section 1828(k), and the regulations
promulgated thereunder in 12 C.F.R. Part 359.
9.7 Compensation Recovery Policy. Notwithstanding any provision of the Plan
or an Award Agreement, the amount of any cash paid under an Award, any shares of Common Stock granted or issued under an Award, and any amount received with respect to any sale of any such shares of Common Stock, shall be subject to potential
cancellation, recoupment, rescission, payback, or other action in accordance with the terms of the Company’s compensation recovery policy, if any, or any similar policy that the Company may adopt from time to time, and the Committee shall
include a provision in Award Agreements to give effect to such policy.
9.8 Listing and Legal Compliance. The Committee may
suspend the exercise or payment of any Award so long as it determines that securities exchange listing or registration or qualification under any securities laws is required in connection therewith and has not been completed on terms acceptable to
the Committee.
9.9 Choice of Law. The laws of the State of New York shall govern the Plan, to the extent not preempted by
federal law, without reference to the principles of conflict of laws.
9.10 Plan Binding on Successors. The Plan shall be
binding upon the successors and assigns of the Company.
9.11 Interpretation. Whenever used in the Plan, nouns in the
singular shall include the plural and the plural shall include the singular, and the masculine pronoun shall include the feminine gender. Headings of Articles and Sections in the Plan are inserted for convenience and reference only, and they do not
constitute part of the Plan.
* * *
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FINANCIAL INSTITUTIONS, INC. |
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| Dated: May 6, 2015 |
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By: |
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/s/ Martin K. Birmingham |
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Name: |
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Martin K. Birmingham |
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Title: |
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President & Chief Executive Officer |
Date of Stockholder Approval: May 6, 2015
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Exhibit 5.1
May 22, 2015
Financial Institutions, Inc.
220 Liberty Street
Warsaw, New York 14569
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Re: |
Financial Institutions, Inc. Registration Statement on Form S-8 |
Ladies and Gentlemen:
We have acted as counsel to Financial Institutions, Inc., a New York corporation (the “Company”), in connection with its filing of a
Registration Statement on Form S-8 (the “Registration Statement”) with the Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “Securities Act”) with respect to the
registration of 458,694 shares of the Company’s common stock (the “Shares”), par value $0.01 per share (the “Common Stock”), reserved for issuance pursuant to the terms of the Financial Institutions, Inc. 2015 Long-Term
Incentive Plan (the “Plan”). This opinion is furnished to you at your request to enable you to fulfill the requirements of Item 601(b)(5) of Regulation S-K, 17 C.F.R. § 229.601(b)(5), in connection with the filing of the
Registration Statement.
As such counsel, and for purposes of our opinion set forth below, we have examined originals or copies, certified
or otherwise, identified to our satisfaction, of such other documents, corporate records, certificates of officers of the Company and of public officials and other instruments as we have deemed necessary or advisable to enable us to render this
opinion. We have not independently established such facts.
Based upon, subject to and limited by the foregoing, we are of the opinion
that following (i) effectiveness of the Registration Statement with the Securities and Exchange Commission, (ii) issuance of the Shares in accordance with the terms of the Plan, and (iii) receipt by the Company of the consideration
for the Shares as specified in the Plan in an amount no less than par value of such Shares, the Shares will be validly issued, fully paid, and nonassessable.
We express no opinion with respect to the effect of any law other than the law of the State of New York.
This opinion letter has been prepared in accordance with the customary practice of lawyers who regularly give, and lawyers who regularly
advise opinion recipients concerning, opinion of the type contained herein.
This opinion letter deals only with the specified legal
issues expressly addressed herein, and you should not infer any opinion that is not explicitly addressed herein from any matter stated in this letter.
We consent to the use of this opinion as an exhibit to the Registration Statement. In giving
such consent, we do not hereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act and the rules and regulations thereunder. This opinion is rendered to you as of the date
hereof and we assume no obligation to advise you or any other person hereafter with regard to any change after the date hereof in the circumstances or the law that may bear on the matters set forth herein even though the changes may affect the legal
analysis or legal conclusion or other matters in this letter.
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| Very truly yours, |
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| /s/ Harter Secrest & Emery LLP |
Exhibit 23.2
Consent of Independent Registered Public Accounting Firm
The Board of Directors
Financial Institutions, Inc.:
We consent to the incorporation by reference in the registration statement on Form S-8 of Financial Institutions, Inc. and subsidiaries of our reports dated
March 6, 2015, with respect to the consolidated statements of financial condition of Financial Institutions, Inc. and subsidiaries as of December 31, 2014 and 2013, and the related consolidated statements of income, comprehensive income,
changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2014, and the effectiveness of internal control over financial reporting as of December 31, 2014, which reports appear
in the December 31, 2014 annual report on Form 10-K of Financial Institutions, Inc.
/s/ KPMG LLP
Rochester, New York
May 26, 2015
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