<PAGE>
As filed with the Securities and Exchange Commission on June 10, 1997
Registration No. 33-_____
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
---------------------
REGISTRATION STATEMENT
ON FORM S-8
UNDER THE SECURITIES ACT OF 1933
---------------------
ITLA CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 95-2864
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
7979 IVANHOE AVENUE, LA JOLLA, CALIFORNIA 92037
(Address of principal executive offices) (Zip Code)
ITLA CAPITAL CORPORATION
1995 EMPLOYEE STOCK INCENTIVE PLAN
(Full title of the plan)
DAVE M. MUCHNIKOFF, P.C.
SILVER, FREEDMAN & TAFF, L.L.P.
(a limited liability partnership including professional corporations)
SUITE 700 EAST
1100 NEW YORK AVENUE, N.W.
WASHINGTON, D.C. 20005-3934
(Name and address of agent for service)
(202) 414-6100
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==============================================================================================
Proposed maximum Proposed maximum
Title of securities to Amount to be offering price aggregate Amount of
be registered registered(1) per share offering price registration fee
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par
value $.01 per share 949,500 $15.25/(2)/ $12,242,828/(2)/ $5,760/(2)/
==============================================================================================
</TABLE>
/(1)/ Pursuant to Rule 416 under the Securities Act of 1933, as amended, this
Registration Statement covers, in addition to the number of shares set
forth above, an indeterminate number of shares which, by reason of certain
events specified in the Plan, may become subject to the Plan.
/(2)/ Estimated in accordance with Rule 457(h), solely for the purpose of
calculating the registration fee. Of the 941,250 shares being registered
hereby, (i) 590,250 shares are subject to options with a weighted average
exercise price of $11.46 per share ($6,764,265 in the aggregate) and (ii)
the remaining 359,250 shares which have not been awarded to date and are
being registered based upon the average of the high and low prices of the
Common Stock as quoted on The Nasdaq National Market System of $15.25 per
share on June 5, 1997 ($5,478,563 in the aggregate).
<PAGE>
PURPOSE
-------
The purpose of this registration statement is to register on Form S-8
shares of common stock, par value $.01 per share (the "Common Stock") of ITLA
Capital Corporation (the "Corporation") to be granted under the 1995 Employee
Stock Incentive Plan of Imperial Thrift and Loan Association (the
"Association"), which it assumed pursuant to the terms and conditions of a
Merger Agreement and Plan of Reorganization (the "Reorganization") dated as of
May 3, 1996 by and between the Corporation, ITLA Corp. and the Association,
whereby the Association became a wholly-owned subsidiary of the Corporation. The
Reorganization occurred on October 1, 1996.
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The document(s) containing the information specified in Part I of Form
S-8 will be sent or given to participants in the ITLA Capital Corporation 1995
Employee Stock Incentive Plan (the "Plan") as specified by Rule 428(b)(1)
promulgated by the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Securities Act").
Such document(s) are not being filed with the Commission, but constitute
(along with the documents incorporated by reference into the Registration
Statement pursuant to Item 3 of Part II hereof) a prospectus that meets the
requirements of Section 10(a) of the Securities Act.
I-1
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference.
------------------------------------------------
The following documents previously or concurrently filed by the Corporation
with the Commission are hereby incorporated by reference in this Registration
Statement:
(a) the Annual Report of the Corporation on Form 10-K for the year ended
December 31, 1996 (File No. 0-26960) filed pursuant to Rule 13a-1 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act");
(b) all other reports filed by the Corporation or Association pursuant to
Section 13 or 15(d) of the Exchange Act since the end of the period covered
by the Report referred to above; and
(c) the description of the Common Stock of the Corporation contained in the
Corporation's Registration Statement on Form S-4 (File No. 333-03551) filed
with the Commission on May 10, 1996 and all amendments or reports filed for
the purpose of updating such description.
All documents subsequently filed by the Corporation with the Commission
pursuant to Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act, after the
date hereof, and prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold or which deregisters
all securities then remaining unsold, shall be deemed incorporated by reference
into this Registration Statement and to be a part thereof from the date of the
filing of such documents. Any statement contained in the documents incorporated,
or deemed to be incorporated, by reference herein or therein shall be deemed to
be modified or superseded for purposes of this Registration Statement and the
Prospectus to the extent that a statement contained herein or therein or in any
other subsequently filed document which also is, or is deemed to be,
incorporated by reference herein or therein 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 and the Prospectus.
The Corporation shall furnish without charge to each person to whom the
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the documents incorporated by reference, other than exhibits to
such documents (unless such exhibits are specifically incorporated by reference
to the information that is incorporated). Requests should be directed to Mr.
Michael L. Mayer, Secretary, ITLA Capital Corporation, 7979 Ivanhoe Avenue, La
Jolla, California 92037, (619) 551-0990.
II-1
<PAGE>
All information appearing in this Registration Statement and the
Prospectus is qualified in its entirety by the detailed information, including
financial statements, appearing in the documents incorporated herein or therein
by reference.
Item 4. Description of Securities.
--------------------------
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
---------------------------------------
Not Applicable.
Item 6. Indemnification of Directors and Officers.
------------------------------------------
Article ELEVENTH of the Corporation's Certificate of Incorporation
provides for indemnification of directors and officers of the Registrant against
any and all liabilities, judgments, fines and reasonable settlements, costs,
expenses and attorneys' fees incurred in any actual, threatened or potential
proceeding, except to the extent that such indemnification is limited by
Delaware law and such law cannot be varied by contract or bylaw. Article
ELEVENTH also provides for the authority to purchase insurance with respect
thereto.
Section 145 of the General Corporation Law of the State of Delaware
authorizes a corporation's board of directors to grant indemnity under certain
circumstances to directors and officers, when made, or threatened to be made,
parties to certain proceedings by reason of such status with the corporation,
against judgments, fines, settlements and expenses, including attorneys' fees.
In addition, under certain circumstances such persons may be indemnified
against expenses actually and reasonably incurred in defense of a proceeding by
or on behalf of the corporation. Similarly, the corporation, under certain
circumstances, is authorized to indemnify directors and officers of other
corporations or enterprises who are serving as such at the request of the
corporation, when such persons are made, or threatened to be made, parties to
certain proceedings by reason of such status, against judgments, fines,
settlements and expenses, including attorneys' fees; and under certain
circumstances, such persons may be indemnified against expenses actually and
reasonably incurred in connection with the defense or settlement of a
proceeding by or in the right of such other corporation or enterprise.
Indemnification is permitted where such person (i) was acting in good faith,
(ii) was acting in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation or other corporation or enterprise, as
appropriate, (iii) with respect to a criminal proceeding, had no reasonable
cause to believe his conduct was unlawful, and (iv) was not adjudged to be
liable to the corporation or other corporation or enterprise (unless the court
where the proceeding was brought determines that such person is fairly and
reasonably entitled to indemnity).
Unless ordered by a court, indemnification may be made only following a
determination that such indemnification is permissible because the person being
indemnified has met the requisite standard of conduct. Such determination may
be made (i) by the corporation's board of directors by a majority vote of a
II-2
<PAGE>
quorum consisting of directors not at the time parties to such proceeding; or
(ii) if such a quorum cannot be obtained or the quorum so directs, then by
independent legal counsel in a written opinion; or (iii) by the stockholders.
Section 145 also permits expenses incurred by directors and officers in
defending a proceeding to be paid by the corporation in advance of the final
disposition of such proceedings upon the receipt of an undertaking by the
director or officer to repay such amount if it is ultimately determined that he
is not entitled to be indemnified by the corporation against such expenses.
Under a directors' and officers' liability insurance policy, directors
and officers of the Corporation are insured against certain liabilities.
Item 7. Exemption from Registration Claimed.
------------------------------------
Not Applicable.
Item 8. Exhibits.
---------
<TABLE>
<CAPTION>
REFERENCE TO SEQUENTIAL PAGE
PRIOR FILING OR NUMBER WHERE
REGULATION PRIOR FILING OR ATTACHED EXHIBITS
S-K EXHIBIT EXHIBIT NUMBER ARE LOCATED IN
NUMBER DOCUMENT ATTACHED HERETO THIS FORM S-8
- ----------- ----------------------------- --------------- -------------------
<S> <C> <C> <C>
4.1 ITLA Capital Corporation 1995 Attached as Page 13
Employee Stock Incentive Plan Exhibit
and form of Restricted Stock 4.1
Agreement
4.2 Specimen form of common stock * Not applicable
certificate of ITLA Capital
Corporation
4.3 ITLA Capital Corporation * Not applicable
Certificate of Incorporation
4.4 Bylaws of ITLA Capital * Not applicable
Corporation
5 Opinion of Silver, Freedman Attached as Page 39
& Taff, L.L.P. Exhibit
5
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
REFERENCE TO SEQUENTIAL PAGE
PRIOR FILING OR NUMBER WHERE
REGULATION PRIOR FILING OR ATTACHED EXHIBITS
S-K EXHIBIT EXHIBIT NUMBER ARE LOCATED IN
NUMBER DOCUMENT ATTACHED HERETO THIS FORM S-8
- ----------- ----------------------------- --------------- -------------------
<S> <C> <C> <C>
23.1 Consent of Silver, Freedman Attached as Page 41
& Taff, L.L.P. Exhibit
23.1
23.2 Consent of Arthur Andersen Attached as Page 43
Exhibit
23.2
23.3 Consent of Grant Thornton Attached as Page 45
Exhibit
23.3
24 Power of Attorney Contained on Page 8
Signature Page
</TABLE>
* Filed as an exhibit to the Corporation's S-4 registration statement filed
on May 1, 1996 (File No. 333-03551) pursuant to Section 5 of the Securities Act
of 1933. Such previously filed documents are hereby incorporated herein by
reference in accordance with Item 601 of Regulation S-K.
Item 9. Undertakings.
------------
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material
change to such information in the registration statement.
(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 at
that time shall be deemed to be the initial bona fide offering thereof.
(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.
(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
II-4
<PAGE>
Securities Exchange Act of 1934 that is incorporated by reference in the
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.
---- ----
(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 Act
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
of expenses incurred or paid by a director, officer or controlling person 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 Act and will be governed by the final adjudication of
such issue.
II-5
<PAGE>
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
the requirements for filing on Form S-8 and the Registrant has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of La Jolla, State of California, on June 5, 1997.
ITLA CAPITAL CORPORATION
By: /s/ George W. Haligowski
--------------------------------------
George W. Haligowski
President, Chief Executive Officer and
Chairman of the Board
(Duly Authorized Representative)
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints George W. Haligowski and Michael A. Sicuro and
either of them, our true and lawful attorneys-in-fact and agents, with full
power of substitution and re-substitution, for him or her in his or her name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto, and all other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
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 below by the following person in the
capacities and on the dates indicated.
/s/ George W. Haligowski /s/ Michael A. Sicuro
- ------------------------------------------ -----------------------------------
George W. Haligowski Michael A. Sicuro
President, Chief Executive Officer and Senior Vice President and Chief
Chairman of the Board Financial Officer
(Principal Executive and Operating Officer)
Date: June 5, 1997 Date: June 5, 1997
-------------------------------------- ------------------------------
/s/ Sandor X. Mayuga /s/ Hirotaka Oribe
- ------------------------------------------ -----------------------------------
Sandor X. Mayuga Hirotaka Oribe
Director Director
Date: June 5, 1997 Date: June 5, 1997
-------------------------------------- ------------------------------
/s/ Jeffrey L. Lipscomb /s/ Robert R. Reed
- ------------------------------------------ -----------------------------------
Jeffrey L. Lipscomb Robert R. Reed
Director Director
Date: June 5, 1997 Date: June 5, 1997
-------------------------------------- ------------------------------
II-6
<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
EXHIBITS
TO
REGISTRATION STATEMENT ON FORM S-8
UNDER
THE SECURITIES ACT OF 1933
-------------------------
ITLA CAPITAL CORPORATION
================================================================================
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL PAGE
REFERENCE TO NUMBER WHERE
REGULATION PRIOR FILING OR ATTACHED EXHIBITS
S-K EXHIBIT EXHIBIT NUMBER ARE LOCATED IN
NUMBER DOCUMENT ATTACHED HERETO THIS FORM S-8
- ------------- ----------------------------------------------------- --------------- ------------------
<S> <C> <C> <C>
4.1 ITLA Capital Corporation 1995 Employee Stock Attached as Page 13
Incentive Plan and Form of Incentive Stock Option Exhibit
Agreement 4.1
4.2 Specimen form of common stock certificate of ITLA * Not applicable
Capital Corporation
4.3 ITLA Capital Corporation Certificate of * Not applicable
Incorporation
4.4 Bylaws of ITLA Capital Corporation * Not applicable
5 Opinion of Silver, Freedman & Taff, L.L.P. Attached as Page 39
Exhibit
5
23.1 Consent of Silver, Freedman & Taff, L.L.P. Attached as Page 41
Exhibit
23.1
23.2 Consent of Arthur Andersen LLP
Attached as Page 43
Exhibit
23.2
23.3 Consent of Grant Thornton, LLP Attached as Page 45
Exhibit
23.3
24 Power of Attorney Contained on Page 8
Signature Page
</TABLE>
* Filed as an exhibit to the Corporation's S-4 registration statement filed on
May 1, 1996 (File No. 333-03551) pursuant to Section 5 of the Securities Act of
1933. Such previously filed documents are hereby incorporated herein by
reference in accordance with Item 601 of Regulation S-K.
<PAGE>
Exhibit 4.1
<PAGE>
ITLA CAPITAL CORPORATION
1995 EMPLOYEE STOCK INCENTIVE PLAN
SECTION 1
ESTABLISHMENT, PURPOSE, AND EFFECTIVE DATE OF PLAN
1.1 ESTABLISHMENT. ITLA Capital Corporation, a Delaware corporation,
hereby establishes the "ITLA CAPITAL CORPORATION 1995 EMPLOYEE STOCK INCENTIVE
PLAN" (the "Plan") for Participants. The Plan permits the grant of any type of
arrangement, security or benefit that, by its terms, involves the issuance of
Stock (as defined below) or provides a benefit that derives its value from
Stock, including, without limitation, stock options, stock appreciation rights,
restricted stock, performance units and performance shares.
1.2 PURPOSE. The purpose of the Plan is to advance the interests of the
Company, by encouraging and providing for the acquisition of an equity interest
in the success of the Company by Participants, by providing additional
incentives and motivation toward superior performance of the Company, and by
enabling the Company to attract and retain the services of Participants, upon
whose judgment, interest, and special effort and successful conduct of its
operations is largely dependent.
1.3 EFFECTIVE DATE. The Plan shall become effective immediately upon
its adoption by the Board of Directors of the Company, subject to its
ratification by the shareholders of the Company and the receipt of any necessary
governmental approvals. Notwithstanding any other provision hereof, this Plan
shall immediately terminate and all Awards granted hereunder shall immediately
be cancelled in the event the First Closing, as that term is defined in the
Underwriting Agreement (defined below), does not occur.
SECTION 2
DEFINITIONS
2.1 DEFINITIONS. Whenever used herein, the following terms shall have
their respective meanings set forth below:
2.1.1 "Agreement" means a written agreement (including any
amendment or supplement thereto) between the Company and a Participant
specifying the terms and conditions of an Award granted to such Participant.
2.1.2 "Award" means any arrangement, security or benefit that, by
its terms, involves the issuance of Common Stock or provides a benefit that
derives its value from Common Stock granted under this Plan, including, without
limitation, Options, Stock Appreciation Rights, Restricted Stocks or Performance
Shares.
2.1.3 "Board" means the Board of Directors of the Company.
2.1.4 "Code" means the Internal Revenue Code of 1986, as amended.
1
<PAGE>
2.1.5 "Committee" means the Compensation Committee of the Board,
comprised of at least two directors, each of whom is a Non-Employee Director.
2.1.6 "Company" means ITLA Capital Corporation, a Delaware corporation.
2.1.7 "Consultant" means any individual, other than an Employee or
Director, who renders services to the Company.
2.1.8 "Director" means any member of the Board.
2.1.9 "Disability" means a condition of total and permanent disability
whereby one is unable to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment which can be expected
to result in death or can be expected to last for a continuous period of not
less than 12 months, as defined by Section 22(e) of the Internal Revenue Code of
1986, as amended.
2.1.10 "Discounted Stock Option" means an Option granted pursuant to
Section 11 of the Plan.
2.1.11 "Employee" means any full-time or part-time employee of the
Company or one of its Subsidiaries (including any officer or director who is
also an employee) that was not hired for a specific job of limited duration, or
for a position slotted for students.
2.1.12 "Fair Market Value" means with respect to the Stock the closing
sales price of the Stock, as reported on the Nasdaq National Market or, if not
so reported, the closing sales price as reported by any other appropriate
reporting system of general circulation, on the date for which the value is to
be determined, or if there is no closing sales price on such date, then on the
last day for which transactions in Stock were so reported prior to the date on
which the value is to be determined.
2.1.13 "Incentive Stock Option" means any Option intended to be and
designated as an "Incentive Stock Option" within the meaning of Section 422 of
the Code.
2.1.14 "Non-Employee Director" means a director who a) is not currently
an officer or employee of the Company; b) is not a former employee of the
Company who receives compensation for prior services (other than from a tax-
qualified retirement plan); c) has not been an officer of the Company; d) does
not receive remuneration from the Company in any capacity other than as a
director; and e) does not possess an interest in any other transactions or is
not engaged in a business relationship for which disclosure would be required
under Item 404(a) or (b) of Regulation S-K.
2.1.15 "Non-Qualified Stock Option" means any Option that is not an
Incentive Stock Option.
2.1.16 "Option" means the right to purchase Stock at a stated price for
a specified period of time. For purposes of the Plan an Option may be either
2
<PAGE>
(i) an Incentive Stock Option, (ii) a Non-Qualified Stock Option (which may
include Discounted Options), or (iii) any other type of option encompassed by
the Code.
2.1.17 "Outside Director" means a Director of the Company who qualifies
as such under Section 162(m) of the Code and regulations promulgated thereunder.
2.1.18 "Participant" means an Employee of the Company or one of its
subsidiaries, including an Employee who is a Director, or a Consultant, and is
selected by the Committee to receive an Award.
2.1.19 "Performance Period," stated with reference to a Performance
Share, means the time period during which the performance goals must be met, as
determined by the Committee.
2.1.20 "Performance Share" means the right to receive payment equal to
the value of Performance Shares as determined by the Committee.
2.1.21 "Performance Unit" means the right to receive payment equal to
the value of Performance Unit as determined by the Committee.
2.1.22 "Performance Share Value" means the lowest Fair Market Value of
Stock during a Valuation Period.
2.1.23 "Period of Restriction" means the period during which shares of
Restricted Stock are subject to restrictions pursuant to Section 9 of the Plan.
2.1.24 "Restricted Stock" means Stock granted to a Participant pursuant
to Section 9 of the Plan.
2.1.25 "Retirement" (including "Early Retirement" and "Normal
Retirement") means termination of employment on or after such Employee's early,
normal or late retirement date or age as applicable under the terms of the
Company's 401(k) Plan.
2.1.26 "Stock" means the Common Stock, par value $.01 per share, of the
Company.
2.1.27 "Stock Appreciation Right" and "SAR" mean the right to receive a
payment from the Company equal to the excess of the Fair Market Value of the
share of Stock at the date of exercise over a specified price fixed by the
Committee, which shall not be less than 100% of the Fair Market Value of the
Stock on the date of grant. In the case of a Stock Appreciation Right which is
granted in conjunction with an Option, the specified price shall be the Option
exercise price.
2.1.28 "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations (other than the last corporation in the unbroken chain) owns stock
3
<PAGE>
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other Companies in the chain.
2.1.29 "Underwriting Agreement" means that certain Underwriting
Agreement between Friedman, Billings, Ramsey & Co., Inc., as representative of
the several underwriters named therein, Imperial Thrift and Loan Association and
Lake Co., Ltd. and Lake America Corporation dated October 23, 1995.
2.2 GENDER AND NUMBER. Except when otherwise indicated by the context,
words in the masculine gender when used in the Plan shall include the feminine
gender, the singular shall include the plural, and the plural shall include the
singular.
SECTION 3
ELIGIBILITY AND PARTICIPATION
All Employees (including Employee-Directors, but excluding Outside
Directors) and Consultants are eligible to participate in the Plan and to
receive Awards. The Committee shall select and determine, in its sole
discretion, those Employees and Consultants who will participate in the Plan and
the extent of their participation. Notwithstanding the foregoing, Consultants
shall not be eligible to receive Incentive Stock Options.
SECTION 4
ADMINISTRATION
The Committee shall be responsible for the administration of the Plan.
The Committee, by majority action thereof, is authorized to interpret the Plan,
to prescribe, amend, and rescind rules and regulations relating to the Plan, to
provide for conditions and assurances deemed necessary or advisable to protect
the interests of the Company, and to make all other determinations necessary or
advisable for the administration of the Plan, but only to the extent not
contrary to the express provisions of the Plan. Determinations, interpretations,
or other actions made or taken by the Committee in good faith pursuant to the
provisions of the Plan shall be final, binding and conclusive for all purposes
and upon all persons whomsoever. The Committee shall have the authority, in its
discretion, to determine the Employees to whom Awards shall be granted, the
times when such Awards shall be granted, the number of Awards, the purchase
price or exercise price, the period(s) during which such Awards shall be
exercisable (whether in whole or in part), the restrictions applicable to
Awards, and the other terms and provisions thereof (which need not be
identical). The Committee shall have the authority to modify existing Awards,
subject to Section 15.1.
SECTION 5
STOCK SUBJECT TO PLAN
5.1 NUMBER. The maximum number of shares of Stock subject to Awards
under the Plan may not exceed 950,000, subject to increases and adjustments as
4
<PAGE>
provided in this Section 5. The shares to be delivered under the Plan may
consist, in whole or in part, of authorized but unissued Stock or treasury
Stock, not reserved for any other purpose.
5.2 LIMITATION ON ANNUAL GRANTS. The number of shares of Stock subject
to Awards under the Plan shall be limited to 500,000 during the first year after
the effective date hereof and 100,000 in each of the second through sixth years
after the effective date hereof, subject to adjustment as provided in Section
5.5; provided, however, that if in any one year the shares available for
granting during that year are not fully granted, such ungranted shares shall
remain available in addition to the shares that become available during
succeeding years.
5.3 INCENTIVE STOCK OPTIONS. Section 5.1 to the contrary
notwithstanding, the maximum aggregate number of shares of Stock that may be
issued pursuant to the exercise of Options that are Incentive Stock Options
granted under this Plan is 950,000, subject to adjustment as provided in Section
5.5.
5.4 LAPSED AWARDS. Subject to the express provisions of the Plan, if any
Award granted under the Plan terminates, expires or lapses for any reason, or is
paid in cash, any Stock subject to such Award again shall be Stock available for
the grant of an Award. With respect to Awards made to Section 16 insiders,
shares of such Stock may be reused to the maximum extent permitted under Section
16 of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
5.5 ADJUSTMENT IN CAPITALIZATION. In the event of any change in the
outstanding shares of Stock by reason of a Stock dividend or split,
recapitalization, merger, consolidation, combination, exchange of shares, or
other similar corporate change, the aggregate number of shares of Stock
available under the Plan and subject to each outstanding Award, and its stated
exercise price or the basis upon which the Award is measured, shall be adjusted
appropriately by the Committee, whose determination shall be conclusive;
provided, however, that fractional shares shall be rounded to the nearest whole
share. Any adjustment to an Incentive Stock Option shall be made consistent with
the requirements of Section 424(b) of the Code.
SECTION 6
DURATION OF PLAN
The Plan shall remain in effect, subject to the Board's right to earlier
terminate the Plan pursuant to Section 15.1 hereof, until all Awards hereunder
shall have expired or terminated or shall have been exercised or fully vested,
and any Stock subject thereto shall have been purchased or acquired pursuant to
the provisions thereof. Notwithstanding the foregoing, no Award may be granted
under the Plan after October 18, 2005.
SECTION 7
STOCK OPTIONS
7.1 GRANT OF OPTIONS. Subject to the provisions of Sections 5 and 6,
Options may be granted to Participants at any time and from time to time as
shall be determined by the Committee. The Committee shall have complete
5
<PAGE>
discretion in determining the number of Options granted to each Participant. The
Committee may grant any type of Option to purchase Stock that is permitted by
law at the time of grant. To the extent the aggregate Fair Market Value
(determined at the time the Option is granted) of the Stock with respect to
which Incentive Stock Options are exercisable for the first time by a
Participant in any calendar year (under this Plan and any other plans of the
Company) exceeds $100,000, such Options shall not be deemed Incentive Stock
Options. In determining which Options may be treated as Non-Qualified Options
under the preceding sentence, Options will be taken into account in the order of
their dates of grant. Nothing in this Section 7 shall be deemed to prevent the
grant of Non-Qualified Stock Options in amounts which exceed the maximum
established by Section 422 of the Code.
7.2 OPTION AGREEMENT. Each Option shall be evidenced by an Agreement
that shall specify the type of Option granted, the Option exercise price, the
duration of the Option, the number of shares of Stock to which the Option
pertains, and such other provisions as the Committee shall determine.
7.3 EXERCISE PRICE. Except for Discounted Stock Options no Option shall
be granted pursuant to the Plan at an exercise price that is less than the Fair
Market Value of the Stock on the date the Option is granted, except that no
Option shall be granted to any person who owns Stock possessing more than 10% of
the total combined voting power of the Stock at an exercise price which is less
than 110% of the Fair Market Value on the date of the grant.
7.4 DURATION OF OPTIONS. Each Option shall expire at such time or times
as the Committee shall determine at the time it is granted; provided, however,
that no Incentive Stock Option shall be exercisable later than ten years from
the date of its grant.
7.5 EXERCISE OF OPTIONS. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which need not be the same for all
Participants; provided, however, that Options granted pursuant to the Plan shall
not vest at a rate of less than 20% per year.
7.6 PAYMENT. The purchase price of Stock upon exercise of any Option
shall be paid in full either (i) in cash, (ii) in Stock valued at its Fair
Market Value on the date of exercise, or (iii) by a combination of (i) and (ii).
The Committee in its sole discretion may also permit payment of the purchase
price upon exercise of any Option to be made by (i) having shares withheld from
the total number of shares of Stock to be delivered upon exercise or (ii)
delivering a properly executed notice together with irrevocable instructions to
a broker to promptly deliver to the Company the amount of sale or loan proceeds
to pay the exercise price. The proceeds from the exercise of Options shall be
added to the general funds of the Company and shall be used for general
corporate purposes.
7.7 RESTRICTIONS ON STOCK TRANSFERABILITY. The Committee shall impose
such restrictions on any shares of Stock acquired pursuant to the exercise of an
Option under the Plan as it may deem advisable, including, without limitation,
restrictions under applicable federal securities law, under the requirements of
any stock exchange upon which such shares of Stock are then listed and under any
blue sky or state securities laws applicable to such shares.
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7.8 EARLY TERMINATION OF OPTIONS ON TERMINATION OF EMPLOYMENT DUE TO
DEATH, DISABILITY, OR RETIREMENT. If a Participant holds any outstanding Option
upon a termination of employment due to death, Disability or Retirement, such
Option shall remain exercisable and shall continue to vest following such
termination of employment in accordance with its terms until the earlier of (i)
the expiration date of the term of the Option, or (ii) the last date on which
such Option is exercisable as specified below, after which date such Option
shall terminate.
7.8.1 DEATH OR DISABILITY. If the termination of employment is
due to the Participant's death or Disability, any outstanding Option
then held by such Participant shall continue to be exercisable (subject
to Section 7.8.3 below) until six (6) months following the Participant's
termination of employment.
7.8.2 RETIREMENT. If the Participant's termination of employment
is due to Retirement, any outstanding Option then held by such
Participant shall continue to be exercisable (subject to Section 7.8.3
below) for six (6) months after such Participant's termination of
employment.
7.8.3 INCENTIVE STOCK OPTION LIMIT. Notwithstanding the
foregoing, in the case of an Incentive Stock Option, the favorable tax
treatment described in Section 422 of the Code shall not be available if
such Option is exercised after three (3) months following a termination
of employment due to Retirement.
7.9 EARLY TERMINATION OF OPTIONS ON TERMINATION OF EMPLOYMENT OTHER THAN
FOR DEATH, DISABILITY, OR RETIREMENT. If a Participant holds any outstanding
Option upon termination of employment due to a reason other than death,
Disability or Retirement, such Option shall remain exercisable and shall
continue to vest following such termination of employment until the earlier of
(i) the expiration of the term of the Option, or (ii) the last date on which
such Option is exercisable as specified below, after which date such Option
shall terminate.
7.9.1 RESIGNATION, LAYOFF AND OTHER EVENTS. If the Participant's
termination of employment is due to any reason other than the
Participant's death, Disability, Retirement or the action of the Company
for cause, as determined (either before or after such event) by the
Committee in its sole discretion, any outstanding Option then held by
such Participant shall continue to be exercisable for three (3) months
following such Participant's termination of employment.
7.9.2 TERMINATION BY THE COMPANY FOR CAUSE. If the Participant's
employment is terminated by action of the Company for cause, as
determined (either before or after such event) by the Committee in its
sole discretion, any outstanding Option held by such Participant shall
terminate immediately upon such Participant's termination of employment.
Termination for cause is defined as termination for conduct that would
be punishable as a felony if such conduct occurred outside the
workplace, or conduct that could be damaging to either the Company's
reputation or financial status. The Committee has the authority to make
the final determination as to whether a termination is for cause for
purposes of the Plan.
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7.10 NON-TRANSFERABILITY OF OPTIONS. No Option granted under the Plan
may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, otherwise than by will or by the laws of descent and distribution
or pursuant to a qualified domestic relations order as defined by the Code or
Title I of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or the rules thereunder. Further, all Incentive Stock Options granted
to a Participant under the Plan shall be exercisable only by such Participant
during his or her lifetime.
SECTION 8
STOCK APPRECIATION RIGHTS
8.1 GRANT OF STOCK APPRECIATION RIGHTS. Subject to the provisions of
Sections 5 and 6, SARs may be granted to Participants at any time and from time
to time as shall be determined by the Committee. An Award of SARs shall be
pursuant to an Agreement.
8.2 PAYMENT OF SAR AMOUNT. Upon exercise of the SAR, the holder shall be
entitled to receive payment of an amount determined by multiplying:
(a) The difference between the Fair Market Value of a share of Stock
at the date of exercise over the price fixed by the Committee at the
date of grant, by
(b) The number of shares with respect to which the SAR is exercised.
8.3 FORM AND TIMING OF PAYMENT. At the sole discretion of the Committee,
payment for SARs may be made in cash or Stock, or in a combination thereof.
8.4 TERM OF SAR. The term of an SAR under the Plan shall not exceed ten
years.
8.5 TERMINATION OF EMPLOYMENT. In the event the employment of a
Participant is terminated by reason of death, Disability, Retirement, or any
other reason, any SARs outstanding shall terminate in the same manner as
specified for Options under Sections 7.8 and 7.9 herein.
8.6 NON-TRANSFERABILITY OF SARS. No SAR granted under the Plan may be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
otherwise than by will or by the laws of descent and distribution or pursuant to
a qualified domestic relations order as defined by the Code or Title I of ERISA,
or the rules thereunder. Further, all SARs granted to a Participant under the
Plan shall be exercisable only by such Participant during his lifetime .
SECTION 9
RESTRICTED STOCK
9.1 GRANT OF RESTRICTED STOCK. Subject to the provisions of Sections 5
and 6, the Committee, at any time and from time to time, may grant shares of
Restricted Stock under the Plan to such Participants and in such amounts as it
shall determine. Each Award of Restricted Stock shall be pursuant to an
Agreement.
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9.2 RESTRICTIONS ON TRANSFERABILITY. Except as provided in Sections 9.6
and 9.7 hereof, or pursuant to a qualified domestic relations order as defined
by the Code or Title I of ERISA, or the rules thereunder, the shares of
Restricted Stock granted hereunder may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated for such period of time as
shall be determined by the Committee and shall be specified in the Restricted
Stock grant, or upon earlier satisfaction of other conditions as specified by
the Committee in its sole discretion and set forth in the Restricted Stock
Agreement.
9.3 OTHER RESTRICTIONS. The Committee shall impose such other
restrictions on any shares of Restricted Stock granted pursuant to the Plan as
it may deem advisable including, without limitation, restrictions under
applicable Federal or state securities law, and may legend the certificates
representing Restricted Stock to give appropriate notice of such restrictions.
9.4 VOTING RIGHTS. Participants holding shares of Restricted Stock
granted hereunder may exercise full voting rights with respect to those shares
during the Period of Restriction.
9.5 DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of Restriction,
Participants holding shares of Restricted Stock granted hereunder shall be
entitled to receive all dividends and other distributions paid with respect to
those shares while they are so held. If any such dividends or distributions are
paid in shares of Stock, the shares shall be subject to the same restrictions on
transferability as the shares of Restricted Stock with respect to which they
were paid.
9.6 TERMINATION OF EMPLOYMENT DUE TO RETIREMENT. In the event that a
Participant attains normal Retirement age under the Company's 401(k) Plan, the
Period of Restriction applicable to the Restricted Stock pursuant to Subsection
9.2 hereof shall automatically terminate and, except as otherwise provided in
Subsection 9.3, the shares of Restricted Stock shall thereby be free of
restrictions and freely transferable. In the event that a Participant
terminates his employment with the Company because of Early Retirement under
the Company's 401(k) Plan, any shares of Restricted Stock still subject to
restrictions shall be forfeited and returned to the Company; provided, however,
that the Committee in its sole discretion may waive the restrictions remaining
on any or all shares of Restricted Stock or add such new restrictions to those
shares of Restricted Stock as it deems appropriate.
9.7 TERMINATION OF EMPLOYMENT DUE TO DEATH OR DISABILITY. In the event a
Participant terminates his employment with the Company because of death or
Disability during the Period of Restriction, the restrictions applicable to the
shares of Restricted Stock pursuant to Section 9.2 hereof shall terminate
automatically with respect to that number of shares (rounded to the nearest
whole number) equal to the number of shares of Restricted Stock granted to such
Participant multiplied by the number of full months which have elapsed since the
date of grant divided by the maximum number of full months of the Period of
Restriction. All remaining shares still subject to restrictions shall be
forfeited and returned to the Company; provided, however, that the Committee in
its sole discretion, may waive the restrictions remaining on any or all such
remaining shares.
9.8 TERMINATION OF EMPLOYMENT FOR REASONS OTHER THAN DEATH, DISABILITY,
OR RETIREMENT. In the event that a Participant terminates his employment with
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the Company for any reason other than those set forth in Sections 9.6 and 9.7
hereof during the Period of Restriction, then any shares of Restricted Stock
still subject to restrictions at the date of such termination automatically
shall be forfeited and returned to the Company; provided, however, that, in the
event of an involuntary termination of the employment of a Participant by the
Company, the Committee in its sole discretion may waive the automatic
forfeiture of any or all such shares and/or may add such new restrictions to
such shares of Restricted Stock as it deems appropriate.
SECTION 10
PERFORMANCE SHARES AND PERFORMANCE UNITS
10.1 GRANT OF PERFORMANCE SHARES AND PERFORMANCE UNITS. Subject to the
provisions of Sections 5 and 6, Performance Shares and Performance Units made
to persons subject to Section 16 of the Exchange Act shall be based on
performance goals established by the Committee prior to the start of a
Performance Period of 12 months' duration or longer with respect to which such
an Award is made. After the start of a Performance Period, the Committee may
not increase the compensation payable under an Award that is otherwise due upon
attainment of a performance goal. The committee shall certify that the
performance goals have been achieved before payment of any such Award.
10.2 VALUE OF PERFORMANCE SHARES AND PERFORMANCE UNITS. Each Performance
Unit and each Performance Share shall have a value determined by the Committee
at the time of grant. The Committee shall set performance goals in its
discretion which, depending on the extent to which they are met, will determine
the ultimate value of the Performance Unit or Performance Share to the
Participant.
10.3 PERFORMANCE GOALS. Performance goals shall be established by the
Committee as the Committee in its sole discretion deems appropriate, and may be
based upon one or more of the following business criteria: (i) Company or
Subsidiary EBITDA (earnings before interest, taxes, depreciation and
amortization); (ii) Company or Subsidiary earnings or earnings per share; (iii)
market prices of Stock; or (iv) division level operating income (operating
income less general and administrative expenses and extraordinary expenses);
and the Committee may, in its discretion, determine whether an Award will be
paid under any one or more of such business criteria. In setting performance
goals, such criteria may be measured against one or more of the following: (i)
the prior year or years' performance of the Company, a Subsidiary or a
division; (ii) the performance of a broad based group of stocks with risk
profiles similar to the Company's and; (iii) the performance of a peer group of
two or more companies. Such performance goals may be (but need not be)
different for each performance period. The Committee may set different (or the
same) goals for different Participants and for different Awards, and
performance goals may include standards for minimum attainment, target
attainment, and maximum attainment. In all cases, however, performance goals
shall include a minimum performance standard below which no part of the
relevant Award will be earned. Each Performance Share shall have a value
determined by the Committee at the time of grant.
10.4 FORM AND TIMING OF PAYMENT. Payment shall be made in cash, Stock,
or combination thereof as determined by the Committee. Payment may be made in a
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lump sum or installments as prescribed by the Committee. If any payment is to be
made on a deferred basis, the Committee may provide for the payment of dividend
equivalents or interest during the deferral period.
10.5 TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR RETIREMENT.
In the case of death, Disability, or Retirement, the holder of a Performance
Share (or his beneficiary in the event of death) shall receive pro rata payment
based on the number of months' service during the Performance Period but based
on the achievement of performance goals during the entire Performance Period.
Payment shall be made at the time payments are made to Participants who did not
terminate service during the Performance Period.
10.6 TERMINATION OF EMPLOYMENT FOR REASONS OTHER THAN DEATH, DISABILITY
OR RETIREMENT. In the event that a Participant terminates employment with the
Company for any reason other than death, Disability or Retirement, all
Performance Shares shall be forfeited; provided, however, that in the event of
an involuntary termination of the employment of the Participant by the Company,
the Committee in its sole discretion may waive the automatic forfeiture
provisions and pay out on a pro rata basis as set forth in Section 10.4.
10.7 NON-TRANSFERABILITY. No Performance Shares granted under the Plan
may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, otherwise than by will or by the laws of descent and distribution
or pursuant to a qualified domestic relations order as defined by the Code or
Title I of ERISA, or the rules thereunder, until the termination of the
applicable Performance Period. All rights with respect to Performance Shares
granted to a Participant under the Plan shall be exercisable only by such
Participant during his lifetime.
SECTION 11
DISCOUNTED STOCK OPTIONS
11.1 GRANT OF DISCOUNTED Stock Options. Subject to the provisions of
Sections 5 and 6 of the Plan, Discounted Stock Options may be granted to
Participants hereunder. Such Discounted Stock Options shall satisfy each of
the requirements set forth in Section 7 hereof and the other provisions of this
Plan which are applicable to Option Awards which are not intended to be
Incentive Stock Options, except Section 7.3 of the Plan (which requires the
exercise price of an Option to be not less than the Fair Market Value of the
Stock covered by the Option).
11.2 PRICING OF DISCOUNTED STOCK OPTIONS. The exercise price of a
Discounted Stock Option shall be determined by the Committee and set forth in
the stock option agreement with the Participant, but in no event shall such
price be less than 85% of the Fair Market Value of the Stock covered by the
Option on the date the Discounted Stock Option is granted.
SECTION 12
BENEFICIARY DESIGNATION
Each Participant under the Plan may name, from time to time, any
beneficiary or beneficiaries (who may be named contingently or successively) to
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whom any benefit under the Plan is to be paid in case of his or her death before
he or she receives any or all of such benefit. Each designation will revoke all
prior designations by the same Participant, shall be in a form prescribed by the
Committee, and will be effective only when filed by the Participant in writing
with the Committee during his lifetime. In the absence of any such designation,
benefits remaining unpaid at the Participant's death shall be paid to his or her
estate.
SECTION 13
RIGHTS OF EMPLOYEES
13.1 EMPLOYMENT. Nothing in the Plan shall interfere with or limit in
any way the right of the Company to terminate any Participant's employment at
any time, nor confer upon any Participant any right to continue in the employ of
the Company.
13.2 PARTICIPANT. No Employee shall have a right to be selected as a
Participant, or, having been so selected, to be selected again as a Participant.
SECTION 14
CHANGE IN CONTROL
14.1 IN GENERAL. In the event of a change in control of the Company as
defined in Section 14.2 below, all Awards under the Plan shall vest 100%. All
Performance Shares shall be paid out based upon the extent to which performance
goals during the Performance Period have been met up to the date of the change
in control, or at target, whichever is higher. Restrictions on Restricted
Stock shall lapse. Options and SARs shall be immediately exercisable by the
holder.
14.2 DEFINITION. For purposes of the Plan, a "change in control" shall
mean any of the following events:
(a) the Company receives a report on Schedule 13D filed with the
Securities and Exchange Commission pursuant to Section 13(d) of
the Exchange Act disclosing that any person, group, corporation
or other entity is the beneficial owner directly or indirectly
of 30% or more of the outstanding Stock;
(b) any person (as such term is defined in Section 13(d) of the
Exchange Act), group, corporation or other entity other than
the Company or a wholly-owned Subsidiary or any corporation
owned directly or indirectly by the shareholders of the Company
in substantially the same proportions as their ownership of
stock in the Company, purchases shares pursuant to a tender
offer or exchange offer to acquire any Stock of the Company,
(or securities convertible into Stock) for cash, securities or
any other consideration, provided that after consummation of
the offer, the person, group, corporation or other entity in
question is the beneficial owner (as such term is defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of
30% or more of the outstanding Stock of the Company (calculated
as provided in paragraph (d) of Rule 13d-3 under the Exchange
Act in the case of rights to acquire Stock);
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(c) the stockholders of the Company approve (a) any consolidation or
merger of the Company in which the Company, or any corporation owned
directly or indirectly by the shareholders of the Company in substantially
the same proportions as their ownership of stock in the Company, is not the
continuing or surviving corporation or pursuant to which shares of Stock
would be converted into cash, securities or other property, or (b) 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; or
(d) there shall have been a change in a majority of the members of the
Board of Directors of the Company within a 12 month period unless the
election or nomination for election by the Company's stockholders of each
new director was approved by the vote of two-thirds of the directors then
still in office who were in office at the beginning of the 12 month period.
SECTION 15
AMENDMENT, MODIFICATION, AND TERMINATION OF PLAN
15.1 AMENDMENT, MODIFICATION, AND TERMINATION OF PLAN. The Board may amend,
alter, or discontinue the Plan, but no amendment, alteration or discontinuation
shall be made which would impair the rights of any Participant with respect to
an Award theretofore granted without the Participant's consent or which, without
the approval of the Company's stockholders, would:
(a) except as expressly provided in this Plan, increase the total number
of shares of Stock reserved for the purpose of the Plan;
(b) decrease the option exercise price of any Option granted to an
Employee (except Discounted Stock Options) to less than 100% of the Fair
Market Value on the date of grant, or change the pricing terms of Section
7.3;
(c) change the Participants eligible to participate in the Plan;
(d) extend the maximum option period under Section 7.4 of the Plan; or
(e) modify those terms of the Plan required by Section 162(m) of the
Code to be approved by shareholders.
15.2 EFFECT ON AWARDS. The Committee may amend the terms of any Award
theretofore granted, prospectively or retroactively, but, subject to Section
15.1 above, no such amendment shall impair the rights of any holder without the
holder's consent. The Committee may also substitute new Options for previously
granted Options (on a one for one or other basis), including previously granted
Options having higher option exercise prices.
15.3 BROAD AUTHORITY. Subject to the above provisions, the Committee shall
have broad authority to amend the Plan to take into account changes in
applicable securities and tax laws and accounting rules, as well as other
developments.
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SECTION 16
TAX WITHHOLDING
16.1 TAX WITHHOLDING. The Company shall have the power to withhold, or
require a Participant to remit to the Company, an amount sufficient to satisfy
federal, state, and local withholding tax requirements on any Award under the
Plan.
16.2 PAYMENT OF WITHHOLDING OBLIGATION. To the extent permissible under
applicable tax, securities, and other laws, the Company may, in its sole
discretion, permit the Participant to satisfy a tax withholding requirement by
(i) using already owned shares; (ii) through a cashless transaction; or (iii)
directing the Company to apply shares of stock to which the Participant is
entitled as a result of the exercise of an option or the lapse of a Period of
Restriction (including, for this purpose, the filing of an election under
Section 83(b) of the Code), to satisfy such requirement.
16.3 DISPOSITION OF SHARES. In the event that a Participant shall
dispose (whether by sale, exchange, gift, the use of a qualified domestic
relations order as defined by the Code or Title I of ERISA, or the rules
thereunder, or any like transfer) of any shares of Common Stock of the Company
(to the extent such shares are deemed to be purchased pursuant to an Incentive
Stock Option) acquired by such Participant within two years of the date of grant
of the related option or within one year after the acquisition of such shares,
the Participant will notify the secretary of the Company no later than 15 days
from the date of such disposition of the date or dates and the number of shares
disposed of by the Participant and the consideration received, if any, and, upon
notification from the Company, promptly forward to the secretary of the Company
any amount requested by the Company for the purpose of satisfying its liability,
if any, to withhold federal, state or local income or earnings tax or any other
applicable tax or assessment (plus interest or penalties thereon, if any, caused
by delay in making such payment) incurred by reason of such disposition.
SECTION 17
INDEMNIFICATION
Each person who is or shall have been a member of the Committee or of
the Board 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 him or her in connection with or resulting from any claim, action,
suit, or proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him or her in settlement thereof,
with the Company's approval, or paid by him or her in satisfaction of any
judgment in any such action, suit, or proceeding against him or her, provided he
or she shall give the Company an opportunity, at its own expense, to handle and
defend the same before he or she undertakes to handle and defend it on his or
her own behalf. The foregoing right of indemnification shall not be exclusive of
any other rights of indemnification to which such persons may be entitled under
the Company's Article of Incorporation or Bylaws, 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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SECTION 18
REQUIREMENTS OF LAW
18.1 REQUIREMENTS OF LAW. The grant of Awards and the issuance of shares
of Stock upon the exercise of an Option shall be subject to all applicable laws,
rules, and regulations, and to such approvals by any governmental agencies or
national securities exchanges as may be required.
18.2 GOVERNING LAW. The Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the State of Delaware.
SECTION 19
FUNDING
Except in the case of Awards of Restricted Stock, the Plan shall be
unfunded. The Company shall not be required to segregate any of its assets to
assure the payment of any Award under the Plan. Neither the Participant nor
any other persons shall have any interest in any fund or in any specific asset
or assets of the Company or any other entity by reason of any Award, except to
the extent expressly provided hereunder. The interests of each Participant and
former Participant hereunder are unsecured and shall be subject to the general
creditors of the Company.
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ITLA CAPITAL CORPORATION
1995 EMPLOYEE STOCK INCENTIVE PLAN
STOCK OPTION AGREEMENT
----------------------
ISO NO. ___
This option is granted on _______ __, 199_ (the "Grant Date") by ITLA
Capital Corporation (the "Corporation") to ______________________ (the
"Optionee"), in accordance with the following terms and conditions:
1. Option Grant and Exercise Period. The Corporation hereby grants to
--------------------------------
the Optionee an Option (the "Option") to purchase, pursuant to the Corporation's
1995 Employee Stock Incentive Plan, as the same may be from time to time amended
(the "Plan"), and upon the terms and conditions therein and hereinafter set
forth, an aggregate of ______ shares (the "Option Shares") of the Common Stock,
par value $.01 per share ("Common Stock"), of the Corporation at the price (the
"Exercise Price") of $______ per share. A copy of the Plan as currently in
effect, is incorporated herein by reference and is attached hereto.
This Option shall be exercisable only during the period (the "Exercise
Period") commencing on _______ __, 199_ and ending at 5:00 p.m., La Jolla,
California time, on the date ten years after date of Award under the Plan (the
"Grant Date"), such later time and date being hereinafter referred to as the
"Expiration Date," provided the Optionee has continued to serve as a Director
of the Corporation since the Grant Date. This option shall vest and become
exercisable according to the following schedule:
Amount
of Initial
Date of Vesting Award Vested
--------------- ------------
During the Exercise Period, only the vested portion of this Option shall be
exercisable in whole at any time or in part from time to time subject to the
provisions of this Agreement, and further subject to the condition that the
aggregate Fair Market Value (as defined in the Plan and as determined as of the
Grant Date) of the Option Shares with respect to which Incentive Stock Options
(as defined in the Plan) are exercisable for the first time by the Optionee in
any calendar year shall not exceed One Hundred Thousand Dollars ($100,000.00).
To the extent that this Option, or any part thereof, does not qualify as an
Incentive Stock Option for any reason, it shall become a Non-Qualified Stock
Option under the Plan.
2. Method of Exercise of This Option. This Option may be exercised
---------------------------------
during the Exercise Period by giving written notice to the Corporation
specifying the number of Option Shares to be purchased. The notice must be in
the form prescribed by the committee referred to in Section 4 of the Plan or its
successor (the "Committee") and directed to the address set forth in Section 10
below. The date of exercise is the date on which such notice is received by
<PAGE>
the Corporation. Such notice must be accompanied by payment in full of
the Exercise Price for the Option Shares to be purchased upon such exercise.
Payment shall be made either (i) in cash, which may be in the form of a check,
bank draft, or money order payable to the Corporation, or (ii) by delivering a
properly executed notice together with irrevocable instructions to a broker to
promptly deliver to the Corporation the amount of sale or loan proceeds to pay
the exercise price.
3. Non-Transferability of This Option. This Option may not be sold,
----------------------------------
transferred, pledged, assigned, or otherwise alienated or hypothecated, except,
in the event of the death of the Optionee, by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order, as described
in the Plan, to the extent provided in Section 5 below. Except as provided
herein, this Option is exercisable during the Optionee's lifetime only by the
Optionee. The provisions of this Option shall be binding upon, inure to the
benefit of and be enforceable by the parties hereto, the successors and assigns
of the Corporation and any person to whom this Option is transferred by will or
by the laws of descent and distribution or pursuant to a qualified domestic
relations order, as described in the Plan. In addition, all Incentive Stock
Options (as defined in the Plan) awarded to a Participant are exercisable only
by that Participant during his or her lifetime.
4. Restrictions on Stock Transferability. The Committee shall impose
-------------------------------------
such restrictions on any shares of Stock acquired pursuant to the exercise of an
Option under the Plan as it may deem advisable, including, without limitation,
restrictions under applicable federal securities law, under the requirements of
any stock exchange upon which such shares of Stock are then listed and under any
blue sky or state securities laws applicable to such shares.
5. Early Termination of Options. Except as provided in this Section 5
----------------------------
and notwithstanding any other provision of this Option to the contrary, this
Option shall not be exercisable unless the Optionee, at the time he exercises
this Option, has remained continuously in the service of the Corporation (as
described in the Plan) since the Grant Date.
If the Optionee shall cease to be employed by the Corporation for any
reason (excluding death, disability, retirement and termination of employment by
the Corporation or any Affiliate for cause), the Optionee may, but only within
the period of three months immediately succeeding such cessation of service and
in no event after the Expiration Date, exercise this Option to the extent the
Optionee was entitled to exercise this Option at the date of cessation. If the
Optionee shall cease to work for the Corporation because of termination of
employment by the Corporation or Affiliate for cause, all rights under this
Option shall expire immediately upon the giving to the Optionee of notice of
such termination.
In the event of the death of the Optionee while in continuous service of
the Corporation or during the three-month period referred to in the immediately
preceding paragraph, the person to whom the Option has been transferred by will
or by the laws of descent and distribution may, but only to the extent the
Optionee was entitled to exercise this Option immediately prior to his death,
exercise this Option at any time within six months following the death of the
Optionee, but in no event later than ten years from the Grant Date.
ISO-2
<PAGE>
6. ADJUSTMENTS FOR CHANGES IN CAPITALIZATION OF THE CORPORATION. In the
------------------------------------------------------------
event of any change in the outstanding shares of Stock by reason of any stock
dividend or split, recapitalization, merger, consolidation, combination,
exchange of shares, or other similar corporate change, the aggregate number of
shares of Stock available under the Plan and subject to each outstanding Award,
and its stated exercise price or the basis upon which the Award is measured,
shall be adjusted appropriately by the Committee, whose determination shall be
conclusive; provided, however, that fractional shares shall be rounded to the
nearest whole share.
7. CHANGE IN CONTROL. Change in Control, as defined in the Plan,
-----------------
encompasses: (a) the acquisition of beneficial ownership by any person,
corporation, group or other entity of 30% or more of the outstanding Stock; (b)
the stockholders of the Corporation approve a merger, consolidation, or
combination in which the Corporation is the not the continuing entity and which
does not result in the outstanding shares of Common Stock being converted into
or exchanged for different securities, cash or other property, or any
combination thereof, or the sale, lease or exchange or other transfer of all or
substantially all of the assets of the Corporation; or (c) a change in a
majority of the members of the Board of Directors of the Corporation within a 12
month period unless the election or nomination for election by the Corporation's
stockholders of each new director was approved by the vote of two-thirds of the
directors then still in office who were in office at the beginning of the 12
month period. In the event of any Change in Control of the Corporation, the
Options shall vest 100% and shall be immediately exercisable.
8. STOCKHOLDER RIGHTS NOT GRANTED BY THIS OPTION. The Optionee is not
---------------------------------------------
entitled by virtue hereof to any rights of a stockholder of the Corporation or
to notice of meetings of stockholders or to notice of any other proceedings of
the Corporation.
9. WITHHOLDING TAX. Upon the exercise of this Option, the Corporation
---------------
shall have the right to require the Optionee or such other person as is
entitled to exercise this Option to pay to the Corporation the amount of any
taxes which the Corporation or any of its Affiliates is required to withhold
with respect to such Option Shares, or, in lieu thereof, to retain, or sell
without notice, a sufficient number of such shares to cover the amount required
to be withheld or in lieu of any of the foregoing, to withhold a sufficient sum
from the Optionee's compensation payable by the Corporation to satisfy the
Corporation's tax withholding requirements. The Corporation's method of
satisfying its withholding obligations shall be solely in the discretion of the
Corporation, subject to applicable federal, state and local law.
10. NOTICES. All notices hereunder to the Corporation shall be delivered
-------
or mailed to it addressed to the Secretary of the Corporation at 7979 Ivanhoe
Avenue, La Jolla, California 92037. Any notices hereunder to the Optionee shall
be delivered personally or mailed to the Optionee's address noted below. Such
addresses for the service of notices may be changed at any time provided written
notice of the change is furnished in advance to the Corporation or to the
Optionee, as the case may be.
11. PLAN AND PLAN INTERPRETATIONS AS CONTROLLING. This Option and the
--------------------------------------------
terms and conditions herein set forth are subject in all respects to the terms
and conditions of the Plan, which are controlling. All determinations and
interpretations of the Committee shall be binding and conclusive upon the
ISO-3
<PAGE>
Optionee or his legal representatives with regard to any question arising
hereunder or under the Plan.
12. OPTIONEE SERVICE. Nothing in this Option shall limit the right of
----------------
the Corporation or any of its Affiliates to terminate the Optionee's service as
an officer or employee, or otherwise impose upon the Corporation or any of its
Affiliates any obligation to employ or accept the services of the Optionee.
13. OPTIONEE ACCEPTANCE. The Optionee shall signify his acceptance of
-------------------
the terms and conditions of this Option by signing in the space provided below
and returning a signed copy hereof to the Corporation at the address set forth
in Section 10 above.
ISO-4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this INCENTIVE STOCK
OPTION AGREEMENT to be executed as of the date first above written.
ITLA CAPITAL CORPORATION
By:
-------------------------------------------
George W. Haligowski, President and Chief
Executive Officer
ACCEPTED:
-----------------------------------------
-----------------------------------------
(Street Address)
-----------------------------------------
(City, State and Zip Code)
ISO-5
<PAGE>
ITLA CAPITAL CORPORATION
1995 EMPLOYEE STOCK INCENTIVE PLAN
RESTRICTED STOCK AGREEMENT
--------------------------
RS No. __
Shares of Restricted Stock are hereby awarded on ________________, by
ITLA Capital Corporation (the "Corporation"), to __________________ (the
"Grantee"), in accordance with the following terms and conditions, and the
conditions contained in the ITLA Capital Corporation Employee Stock Incentive
Plan (the "Plan"):
1. Share Award. The Corporation hereby awards the Grantee _____ shares
-----------
(the "Shares") of Common Stock, par value $.01 per share ("Common Stock"), of
the Corporation pursuant to the Plan, as the same may from time to time be
amended, and upon the terms and conditions and subject to the restrictions
therein and hereinafter set forth. A copy of the Plan as currently in effect is
incorporated herein by reference and is attached hereto.
2. Restrictions on Transfer and Restricted Period. During the period
----------------------------------------------
(the "Restricted Period") commencing on ____________, 199_, and terminating on
________________, the Shares may not be sold, assigned, transferred, pledged, or
otherwise encumbered by the Grantee, except as hereinafter provided.
Except as set forth below, the Shares will vest at a rate of __% of the
Shares per year of Continuous Service (as defined in the Plan) commencing on
________________ pursuant to the following schedule:
% of the
Date of Vesting Shares Vested
--------------- -------------
Notwithstanding the foregoing, no portion of the Shares shall vest on
any of the foregoing dates if as of the preceding fiscal year end, the
Association fails to meet the following: a) a return on average assets of 50
basis points for the fiscal; and b) the Association is treated as adequately
capitalized (as defined by FDIC regulations). Subject to the restrictions set
forth in the Plan, the Committee referred to in Section 7 of the Plan or its
successor (the "Committee") shall have the authority, in its discretion, to
accelerate the time at which any or all of the restrictions shall lapse with
respect to any Shares thereto, or to remove any or all of such restrictions,
whenever the Committee may determine that such action is appropriate by reason
of changes in applicable tax or other laws, or other changes in circumstances
occurring after the commencement of the Restricted Period as described in the
Plan.
3. Termination of Service. If the Grantee ceases to be continuously
----------------------
employed by the Corporation (hereinafter "Continuous Service") for any reason
other than change of control, as described in Section 5 of the Plan, death,
total or partial disability, or normal or early retirement, all shares which at
<PAGE>
the time of such termination of Continuous Service are subject to the
restrictions imposed by Section 2 above shall upon such termination of
Continuous Service be forfeited to the Corporation. If the Grantee ceases to
maintain "Continuous Service" (as defined in the Plan) by reason of change of
control, as described in Section 5 of the Plan, death, total or partial
disability or normal or early retirement, the Shares then still subject to
restrictions imposed by Section 2 of this Agreement shall be free of those
restrictions as provided in the Plan.
4. Certificates for the Shares. The Corporation shall issue ____
---------------------------
certificates in the name of the Grantee, each in respect of __% of the Shares,
and shall hold each such certificate on deposit for the account of the Grantee
until the expiration of the Restricted Period with respect to the Shares
represented thereby. Such certificates shall bear the following legend:
The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions
(including forfeiture) contained in the Recognition and Retention
Plan of ITLA Capital Corporation. Copies of such Plan are on file
in the offices of the Secretary of ITLA Capital Corporation, 7979
Ivanhoe Avenue, La Jolla, California 92037.
The Grantee further agrees that simultaneously with the execution of
this Agreement, the Grantee shall execute ____ stock powers in favor of the
Corporation, each with respect to __% of the Shares, and shall promptly deliver
such stock powers to the Corporation.
5. Grantee's Rights. Except as otherwise provided herein, the
----------------
Grantee, as owner of the Shares, shall have all rights of a stockholder. During
the Restricted Period, the Grantee shall not vote such Shares as to which the
Restricted Period has not yet lapsed or expired (the "Restricted Shares"). The
Grantee hereby appoints a Trust Officer at _________________________________ to
vote all Restricted Shares, in [his/her] sole discretion, at any annual and
special meetings of the stockholders of the Corporation and at any continuations
and adjournments of such meetings, upon any matters coming before such meetings
or adjournments. The Grantee agrees that [he/she] shall from time to time
appoint such other person or persons to vote the Restricted Shares as the
Committee in its sole discretion may designate. The Grantee further agrees that
with respect to Restricted Shares, [he/she] shall grant no proxy to vote such
shares except pursuant to this Section 5 of this Agreement, nor shall [he/she]
revoke any proxy granted pursuant to this Section 5 except with the consent of
the Committee.
Dividends, if any, paid on the Restricted Shares shall be held by the
Corporation for the account of the Grantee. All such withheld dividends shall
earn interest at an annual rate determined by the Committee. Such dividends
and accrued interest thereon shall be paid to the Grantee as provided in the
Plan.
6. Expiration of Restricted Period. Upon the lapse or expiration of
-------------------------------
the Restricted Period with respect to a portion of the Shares, the Corporation
shall deliver to the Grantee (or in the case of a deceased Grantee, to [his/her]
legal representative) the certificate in respect of such shares and the related
stock power held by the Corporation pursuant to Section 4 above.
RS-2
<PAGE>
The Shares as to which the Restricted Period shall have lapsed or expired shall
be free of the restrictions referred to in Section 2 above and such certificate
shall not bear the legend provided for in Section 4 above.
7. Adjustments for Changes in Capitalization of the Corporation. In
------------------------------------------------------------
the event of any change in the outstanding shares of Common Stock by reason of
any reorganization, recapitalization, stock split, stock dividend, combination
or exchange of shares, merger, consolidation, or any change in the corporate
structure of the Corporation or in the shares of Common Stock, the number and
class of shares covered by this Agreement shall be appropriately adjusted by the
Committee, whose determination shall be conclusive. Any shares of Common Stock
or other securities received, as a result of the foregoing, by the Grantee with
respect to Shares subject to the restrictions contained in Section 2 above also
shall be subject to such restrictions and the certificate or other instruments
representing or evidencing such shares or securities shall be legended and
deposited with the Corporation in the manner provided in Section 4 above.
8. Plan and Plan Interpretations as Controlling. The Shares hereby
--------------------------------------------
awarded and the terms and conditions herein set forth are subject in all
respects to the terms and conditions of the Plan, which are controlling. All
determinations and interpretations of the Committee shall be binding and
conclusive upon the Grantee or [his/her] legal representatives with regard to
any question arising hereunder or under the Plan.
9. Grantee Service. Nothing in this Agreement shall limit the right
---------------
of the Corporation or any of its Affiliates to terminate the Grantee's service
as a director, advisory director, director emeritus, officer or employee, or
otherwise impose upon the Corporation or any of its Affiliates any obligation to
employ or accept the services of the Grantee.
10. Withholding and Social Security Taxes. Upon the termination of the
-------------------------------------
Restricted Period with respect to any Shares the Corporation may, in its sole
discretion, withhold a sufficient number of Shares or withhold sufficient cash
to cover any applicable withholding and employment taxes. Alternatively, the
Corporation may require the Grantee to pay the Corporation the amount of any
taxes which the Corporation is required to withhold with respect to the Shares.
The Corporation shall have the right to deduct from all dividends paid on the
Restricted Stock the amount of any taxes which the Corporation is required to
withhold with respect to such dividend payments. The Corporation's method of
satisfying its withholding obligations shall be solely in the discretion of the
Corporation, subject to applicable federal, state and local laws.
11. Grantee Acceptance. The Grantee shall signify [his/her] acceptance
------------------
of the terms and conditions of this Agreement by signing in the space provided
below and signing the attached stock powers and returning a signed copy thereof
and of the attached stock powers to the Corporation. IF A FULLY EXECUTED COPY
HEREOF AND THE ATTACHED STOCK POWERS HAVE NOT BEEN RECEIVED BY THE CORPORATION,
THE CORPORATION MAY REVOKE THIS AWARD, AND AVOID ALL OBLIGATIONS UNDER THIS
AGREEMENT.
RS-3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this RESTRICTED STOCK
AGREEMENT to be executed as of the date first above written.
ITLA CAPITAL CORPORATION
By:
----------------------------------
ACCEPTED:
--------------------------------------
--------------------------------------
(Street Address)
--------------------------------------
(City, State & Zip Code)
RS-4
<PAGE>
STOCK POWER
-----------
For value received, I hereby sell, assign, and transfer to ITLA Capital
Corporation (the "Corporation") ____ shares of the capital stock of the
Corporation, standing in my name on the books and records of the aforesaid
Corporation, represented by Certificate No. ____, and do hereby irrevocably
constitute and appoint the Secretary of the Corporation attorney, with full
power of substitution, to transfer this stock on the books and records of the
aforesaid Corporation.
----------------------------
Dated:
-----------------------------
In the presence of:
- -----------------------------------
SP-1
<PAGE>
Exhibit 5
<PAGE>
June 6, 1997
Board of Directors
ITLA Capital Corporation
7979 Ivanhoe Avenue,
La Jolla, California 92037
Members of the Board:
We have acted as counsel to ITLA Capital Corporation (the "Corporation")
in connection with the preparation and filing with the Securities and Exchange
Commission of a registration statement on Form S-8 under the Securities Act of
1933 (the "Registration Statement") relating to 941,250 shares of the
Corporation's Common Stock, $.01 par value per share (the "Common Stock"), to be
offered pursuant to the 1995 Employee Stock Incentive Plan of the Corporation
(the "Plan").
In this connection, we have reviewed originals or copies, certified or
otherwise identified to our satisfaction, of the Plan and agreements thereto,
the Corporation's Certificate of Incorporation, Bylaws, resolutions of its
Board of Directors and such other documents and corporate records as we deem
appropriate for the purpose of rendering this opinion.
Based upon the foregoing, it is our opinion that:
1. The shares of Common Stock being so registered have been duly
authorized.
2. The shares of Common Stock to be offered by the Corporation will be,
when and if issued, sold and paid for as contemplated by the Plan, legally
issued, fully paid and non-assessable shares of Common Stock of the Corporation.
Very truly yours,
/s/SILVER, FREEDMAN & TAFF, L.L.P.
----------------------------------
SILVER, FREEDMAN & TAFF, L.L.P.
<PAGE>
Exhibit 23.1
<PAGE>
June 6, 1997
Board of Directors
ITLA Capital Corporation
7979 Ivanhoe Avenue
La Jolla, California 92037
Members of the Board:
We hereby consent to the inclusion of our opinion as Exhibit 5 of this
Registration Statement and the reference to our firm in the Prospectus. In
giving this consent, we do not admit that we are within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended, or the rules and regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
/s/SILVER, FREEDMAN & TAFF, L.L.P.
----------------------------------
SILVER, FREEDMAN & TAFF, L.L.P.
<PAGE>
Exhibit 23.2
<PAGE>
ARTHUR ANDERSEN LLP
Board of Directors
ITLA Capital Corporation
7979 Ivanhoe Avenue
La Jolla, California 92037
Members of the Board:
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our report dated
February 19, 1997 included in ITLA Capital Corporation's Form 10-K for the year
ended December 31, 1996 and to all references to our Firm included in this
registration statement.
/s/ARTHUR ANDERSEN LLP
----------------------
ARTHUR ANDERSEN LLP
Los Angeles, California
June 9, 1997
<PAGE>
Exhibit 23.3
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated February 23, 1996 (except for the sixth
paragraph of Note 13, as to which the date is March 11, 1996), accompanying the
consolidated financial statements incorporated by reference in the Annual
Report of ITLA Capital Corporation on Form 10-K for the year ended December 31,
1996. We hereby consent to the incorporation by reference of said report in
the Registration Statement of ITLA Capital Corporation on Form S-8 (effective
June 9, 1997).
/s/Grant Thornton LLP
---------------------
Grant Thornton LLP
Los Angeles, California
June 9, 1997
