<PAGE>
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from ____ to ____
Commission file number 0-27474
American Bancshares, Inc.
(Exact Name of Registrants Specified in its Charter)
Florida 65-0624640
(State or other Jurisdiction of (IRS Employer Id. No.)
Incorporation or Organization)
4502 Cortez Road West, Bradenton, Florida 34210
(Address of Principal Executive Offices)
(941) 795-3050
(Registrant's telephone number including area code)
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer has (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.
Yes X No .
--- ---
Number of shares outstanding of the issuer's Common Stock, par value $1.175 as
of September 30, 1999: 5,032,584 shares.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
Part I FINANCIAL INFORMATION
Item 1
-Financial Statements 1-4
-Notes to Consolidated Condensed Financial Statements 5-7
Item 2
-Management's Discussion and Analysis
of Financial Condition and Results of
Operations 8-10
Item 3
-Quantitative and Qualitative Disclosure 11
About Market Risk
Part II OTHER INFORMATION
Item 1 Legal Proceedings
(Not applicable) n/a
Item 2 Changes in Securities and Use of Proceeds
(Not applicable) n/a
Item 3 Defaults Upon Senior Securities
(Not applicable) n/a
Item 4 Submission of Matters to a Vote
of Security Holders
(Not applicable) n/a
Item 5 Other Information 12
Item 6 Exhibits and Reports on Form 8-K 13
</TABLE>
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
American Bancshares, Inc. and Subsidiaries
Consolidated Condensed Balance Sheets
(unaudited, $ in thousands)
<TABLE>
<CAPTION>
September 30, December 31, % $
Assets 1999 1998 Change Change
------------- ------------ -------- ----------
<S> <C> <C> <C> <C>
Cash and due from banks 17,357 20,215 (14.14) (2,858)
Interest bearing deposits in banks 43 104 (58.65) (61)
Mortgage loans held for sale 102,220 88,158 15.95 14,062
Investment securities, available for sale 37,065 48,323 (23.30) (11,258)
Mortgage-backed securities, available for sale 34,275 28,755 19.20 5,520
Loans (net of allowance for credit losses and
deferred loan fees of $1,651 as of
September 30, 1999 and $1,620 as of
December 31, 1998) 257,467 248,808 3.48 8,659
Premises and equipment, net 12,682 12,894 (1.64) (212)
Other real estate owned, net 318 1,003 (68.30) (685)
Goodwill 70 74 (5.41) (4)
Other assets 9,962 6,830 45.86 3,132
--------- --------- --------- --------
Total assets 471,459 455,164 3.58 16,295
========= ========== ========= ========
Liabilities and shareholders' equity
Liabilities
Deposits 352,138 344,845 2.11 7,293
Securities sold under agreements to repurchase 29,195 29,592 (1.34) (397)
Federal funds purchased and FHLB borrowings 43,150 34,900 23.64 8,250
Guaranteed Preferred Beneficial Interests in
the Company's Junior Subordinated Debentures 16,249 16,249 0.00 0
Other liabilities 3,734 2,151 73.59 1,583
--------- --------- --------- --------
Total liabilities 444,466 427,737 3.91 16,729
Shareholders' equity
Preferred shares, 5,000,000 shares authorized,
0 shares issued and outstanding as of
September 30,1999 0 0 0.00 0
Common shares, $1.175 par value, 20,000,000
shares authorized, 5,032,584 shares issued
and outstanding as of September 30, 1999
and 4,994,984 as of December 31, 1998 5,914 5,870 0.75 44
Additional paid in capital 15,716 15,551 1.06 165
Accumulated other comprehensive income, net (2,455) (143) 1,616.78 (2,312)
Retained earnings 7,818 6,149 27.14 1,669
--------- --------- --------- --------
Total shareholders' equity 26,993 27,427 (1.58) (434)
--------- --------- --------- --------
Total liabilities and shareholders' equity 471,459 455,164 3.58 16,295
========= ========= ========= ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 1
<PAGE>
American Bancshares, Inc. and Subsidiaries
Consolidated Condensed Statements of Income
(unaudited, $ in thousands)
<TABLE>
<CAPTION>
Three Month's Ended September 30, % $
1999 1998 Change Change
----------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Interest income
Interest and fees on loans 7,480 6,851 9.18 629
Interest on mortgage backed securities, taxable 591 86 587.21 505
Interest on investment securities, taxable 629 1,260 (50.08) (631)
Interest on investment securities, nontaxable 8 30 (73.33) (22)
Other interest income 34 14 142.86 20
-------- -------- --------- ---------
Total interest income 8,742 8,241 6.08 501
Interest expense
Deposits 3,421 3,335 2.58 86
Securities sold under agreements to repurchase 292 332 (12.05) (40)
Federal funds purchased and FHLB advances 419 531 (21.09) (112)
Trust preferred securities 354 331 6.95 23
Other borrowed money 0 (2) (100.00) (2)
-------- -------- --------- ---------
Total interest expense 4,486 4,527 (0.91) (41)
Net interest income 4,256 3,714 14.59 542
Provision for loan losses 375 154 143.51 221
-------- -------- --------- ---------
Net interest income after loan loss 3,881 3,560 9.02 321
Noninterest income
Service charges & fees 838 476 76.05 362
Gain on sale of mortgage loans 51 510 (90.61) (492)
Gain on sale of securities 0 58 (100.00) (58)
Gain on sale of servicing 195 15 1,200.00 180
Broker loan fees 23 27 (14.81) (4)
Merchant fees 238 172 38.87 66
Other income 232 219 24.73 46
-------- -------- --------- ---------
Total noninterest income 1,577 1,477 6.77 100
Noninterest expense
Salaries & employee benefits 1,920 1,863 3.06 57
Net occupancy expense 293 232 26.29 61
Furniture and equipment expenses 369 274 34.67 95
Data processing fees 204 220 (7.27) (16)
Interchange fee expenses 161 114 41.23 47
Legal fees 95 114 (16.67) (19)
Litigation settlement 0 0 0.00 0
Other expense 1,272 1,243 2.33 29
-------- -------- --------- ---------
Total noninterest expense 4,314 4,060 6.26 254
Income before income taxes 1,144 977 17.09 167
Provision for income taxes 440 342 28.65 98
-------- -------- --------- ---------
Net income 704 635 10.87 69
======== ======== ========= =========
Earnings per share (actual $'s)
Basic 0.14 0.13
Diluted 0.14 0.13
Average number of shares outstanding
Basic 5,031,497 4,994,984
Diluted 5,047,836 5,015,921
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 2
<PAGE>
American Bancshares, Inc. and Subsidiaries
Consolidated Condensed Statements of Income
(unaudited, $ in thousands)
<TABLE>
<CAPTION>
Nine Months ended September 30, % $
1999 1998 Change Change
----------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Interest income
Interest and fees on loans 22,272 19,136 16.39 3,136
Interest on mortgage backed securities, taxable 1,409 208 577.40 1,201
Interest on investment securities, taxable 2,223 3,202 (30.57) (979)
Interest on investment securities, nontaxable 49 78 (37.18) (29)
Other interest income 47 200 (76.50) (153)
--------- --------- -------- --------
Total interest income 26,000 22,824 13.92 3,176
Interest expense
Deposits 9,751 9,823 (0.73) (72)
Securities sold under agreements to repurchase 865 880 (1.70) (15)
Federal funds purchased and FHLB advances 1,655 726 127.96 929
Trust preferred securities 1,061 331 220.54 730
Other borrowed money (1) 25 (104.00) (26)
--------- --------- -------- --------
Total interest expense 13,331 11,785 13.12 1,546
Net interest income 12,669 11,039 14.77 1,630
Provision for loan losses 1,203 429 180.42 774
--------- --------- -------- --------
Net interest income after loan loss 11,466 10,610 8.07 856
Noninterest income
Service charges & fees 2,102 1,352 55.47 750
Gain on sale of loans 617 949 (34.98) (332)
Gain on sale of securities 28 186 (84.95) (158)
Gain on sale of servicing 206 87 136.78 119
Broker loan fees 83 115 (27.83) (32)
Merchant fees 811 564 43.79 247
Other income 761 500 52.20 261
--------- -------- --------- -------
Total noninterest income 4,608 3,753 22.78 855
Noninterest expense
Salaries & employee benefits 6,124 5,131 19.35 993
Net occupancy expense 863 650 32.77 213
Furniture and equipment expenses 1,053 726 45.04 327
Data processing fees 674 707 (4.67) (33)
Interchange fee expense 531 363 46.28 168
Legal fees 287 604 (52.48) (317)
Litigation settlement 0 525 (100.00) (525)
Other expense 3,911 3,761 3.99 150
--------- --------- --------- -------
Total noninterest expense 13,443 12,467 7.83 976
Income before income taxes 2,631 1,896 38.77 735
Provision for income taxes 961 664 44.73 297
--------- --------- --------- -------
Net income 1,670 1,232 35.55 438
========== ========= ========= =======
Earnings per share (actual $'s)
Basic 0.33 0.25
Diluted 0.33 0.25
Average Number of shares outstanding
Basic 5,023,535 4,994,691
Diluted 5,031,406 5,022,425
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 3
<PAGE>
American Bancshares, Inc. and Subsidiaries
Consolidated Condensed Statement of Cashflows
(unaudited, $ in thousands)
<TABLE>
<CAPTION>
Nine Months ended September 30,
1999 1998
---------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income 1,670 1,232
-------- --------
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 1,203 429
Net gain on sale of investment securities (20) (170)
Net gain on sale of loans (617) (949)
Net gain on sale of mortgage servicing rights (206) (87)
Net loss on sale of foreclosed real estate 50 0
Depreciation 964 689
Origination of loans held for sale (net of repayments) (58,451) (95,199)
Proceeds from sales of loans held for sale 44,389 52,191
Net amortization of premiums and accretion of
discounts on investment securities 39 3
Increase in other liabilities 1,583 1,049
(Increase) decrease in other assets (2 287) (2,413)
-------- --------
Total adjustments (13,353) (44,457)
-------- --------
Net cash provided by/(used in) operating activities (11,683) (43,225)
-------- --------
Cash flows from investing activities:
Loan originations, net of repayments (9,412) (21,088)
Purchases of bank premises and equipment (752) (3,983)
Proceeds from sales and maturities of available for
sale investment securities 18,321 54,201
Purchases of available for sale investment
securities, net of repayments (14,914) (66,405)
Recoveries on loans charged off 166 83
--------- --------
Net cash used in investing activities (6,591) (37,192)
--------- --------
Cash flows from financing activities:
Net increase (decrease) in demand deposits, NOW
and savings accounts (662) 25,644
Net increase (decrease) in time deposits 7,955 (1,533)
Net increase (decrease) in securities sold under
agreements to repurchase (397) 12,850
Proceeds from issuance of trust preferred securities 0 16,249
Net proceeds from advances (repayments)from the
FHLB and Federal Funds purchased 8,250 27,000
Proceeds from issuance of stock 209 0
--------- ---------
Net cash provided by financing activities 15,355 80,210
--------- ---------
Net increase (decrease) in cash and cash equivalents (2,919) (207)
Cash and cash equivalents at beginning of period 20,319 18,396
--------- ---------
Cash and cash equivalents at end of period 17,400 18,189
========= =========
Supplemental disclosures:
Interest paid 12,988 11,422
========= =========
Income taxes paid 415 915
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 4
<PAGE>
AMERICAN BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Note 1. Holding Company and Subsidiaries Background Information
American Bancshares, Inc. (Company), is a one bank holding company, operated
under the laws of the state of Florida. Its wholly-owned banking subsidiary is
American Bank (Bank), a state chartered bank. The Holding Company, a Florida
corporation organized June 30, 1995, is a registered holding company under the
Bank Holding Company Act of 1956, as amended, and on December 1, 1995 became the
bank holding company for the Bank. The Bank was incorporated on December 6, 1988
and opened for business on May 8, 1989. The Bank is a general commercial bank
with all the rights, powers, privileges granted and conferred by the Florida
Banking Code. Although the Holding Company was not formed until June 30,1995 and
did not acquire the Bank until December 1, 1995, the financial statements have
been presented as if the Company had been in existence since the Bank was formed
in 1988 and as if the Bank was it's wholly owned subsidiary since that time.
The Company organized a wholly-owned Florida subsidiary corporation, Freedom
Finance Company, ("Finance Company"), pursuant to which it engages in full
service consumer financing. The Finance Company was incorporated on March 26,
1997 and opened for business on March 31, 1998. The Finance Company offers
consumer-driven products and services ranging from mortgages to automobile
loans, home equity loans and education financing. The Finance Company has the
ability to extend financing to individuals and entities which may not be able to
satisfy the Bank's underwriting requirements or loan standards.
ABI Capital Trust ("ABICT"), a Delaware statutory trust, was created on May
21,1998. The ABICT exists for the exclusive purpose of (i) issuing and selling
Common Securities and Preferred Securities of ABICT (together the "Trust
Securities"), (ii) using the proceeds of the sale of Trust Securities to acquire
Deferrable Interest Debentures ("Junior Subordinated Debentures") issued by the
Company, and (iii) engaging only in those other activities necessary,
convenient, or incidental thereto (such as registering the transfer of Trust
Securities). Accordingly the Junior Subordinated Debentures will be the sole
assets of the ABICT. The Company owns all of the Common Securities of ABICT, the
only voting security, and as a result it is a subsidiary of the Company.
On September 6, 1999 the Company entered into an Agreement and Plan of
Reorganization with Gold Banc Corporation, Inc., a Kansas corporation ("Gold
Banc"), and Gold Banc Acquisition Corporation XI, Inc., a Kansas corporation
which will be a wholly-owned subsidiary of Gold Banc, ("Acquisition Subsidiary")
pursuant to which, among other things the Company will be merged with and into
Acquisition Subsidiary, with Acquisition Subsidiary as the surviving
corporation. Exhibit 2.1 is incorporated herein by reference.
Note 2. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements, in the
opinion of management, include all adjustments, consisting only of normal
recurring adjustments necessary for a fair presentation of the results for the
interim periods. Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to SEC rules and
regulations, although the Company believes that the disclosures included herein
are adequate to make the information presented not misleading. The results of
operations for the three and nine month periods ended September 30, 1999 are
not necessairly indicative of the results expected for the full year.
The organization and business of the Company, accounting policies followed by
the Company and other information are contained in the Company's December 31,
1998 Form 10-K. This quarterly report should be read in conjunction with such
annual report.
Note 3. Investments
The Company's investments and mortgage-backed securities are classified as
available for sale and recorded at fair value as required by the provisions of
Statement of Financial Accounting Standards No. 115. Unrealized gains and losses
are reflected as a separate component of shareholders' equity on the
consolidated statement of condition. At September 30, 1999, an unrealized loss,
net of tax, of $2,455,000 was reflected as a decrease of shareholders' equity.
Page 5
<PAGE>
AMERICAN BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Note 4. Earnings Per Share
Basic earnings per common share is calculated by dividing net income by the
sum of the weighted average number of shares of common stock outstanding.
Diluted earnings per common share is calculated by dividing net income by the
weighted average number of shares of common stock outstanding, assuming the
exercise of stock options and warrants using the treasury stock method. Such
adjustments to the weighted average number of shares of common stock outstanding
are made only when such adjustments dilute earnings per common share. The
diluted earnings per share is summarized as follows:
<TABLE>
<CAPTION>
Nine Months Three Months
ended September 30, ended September 30,
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Weighted average common shares outstanding........... 5,023,535 4,994,691 5,031,497 4,994,984
Weighted average common shares equivalents........... 7,871 27,734 16,339 20,937
--------- --------- --------- ---------
Shares used in diluted earnings per share calculation 5,031,406 5,022,245 5,047,836 5,015,921
========= ========= ========= =========
</TABLE>
Note 5. Comprehensive Income
Effective January 1, 1998 the Company has adopted Financial Accounting Standards
("FAS") No. 130 "Reporting Comprehensive Income," which requires that all items
that are required to be recognized under accounting standards as components of
comprehensive income be reported in the financial statements. Prior periods will
be reclassified as required. The Company's total comprehensive earnings are as
follows:
<TABLE>
<CAPTION>
Comprehensive Earnings (unaudited, $ in thousands)
Nine Months ended September 30, Three Months ended September 30,
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income (loss) 1,670 1,232 704 635
Other comprehensive earnings (losses):
Unrealized gains (losses) on securities (2,312) 336 (769) 408
------- ------- ------- -------
Comprehensive income (642) 1,568 (65) 1,043
</TABLE>
Note 6. Impact of Recently Issued Accounting Standards
Financial Accounting Standards Board Statement (FAS) No. 137, "Accounting for
Derivative Instruments and Hedging Activities -- Deferral of the Effective Date
of FASB Statement No. 133 -- an amendment of FASB Statement No. 133," was
issued in June 1999 and was effective upon issuance. As issued, FAS No. 133 was
to be effective for all fiscal quarters of all fiscal years beginning after June
15, 1999, with earlier application encouraged. This statement amends FAS No.133
by deferring the effective date of FAS No. 133 to all fiscal quarters of all
fiscal years beginning after June 15, 2000. See additional analysis below for
the impact of FAS No. 133.
Page 6
<PAGE>
AMERICAN BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Note 6. Impact of Recently Issued Accounting Standards (continued)
FAS No. 134, "Accounting for Mortgage-Backed Securities retained after the
Securitization of Mortgage Loans Held for Sale by a Mortgage Banking Entity,"
amends FAS No. 65 allowing mortgage-backed securities or other retained
interests arising from the securitization of mortgage loans to be classified
based on the mortgage banking entities' ability and intent to sell of hold those
securities. Previously these securities had to be held within a trading account.
This statement became effective in the first quarter of 1999 and had no impact
on the financial statements.
FAS No. 133, "Accounting for Derivative Instruments and Hedging Activities,"
requires all derivatives to be recorded on the balance sheet at fair value and
establishes standard accounting methodologies for hedging activities. The
standard will result in the recognition of offsetting changes in value or cash
flows of both the hedge and the hedged item in earnings or comprehensive income
in the same period. The statement, as amended by FAS No. 137, is effective for
the Company's fiscal year ending December 31, 2001. Because the Company does not
currently hold any derivative investments, the adoption of this statement is not
expected to have an impact on the financial statements.
Securities and Exchange Commission Staff Accounting Bulletin No. 99 ("SAB 99"),
"Materiality," was issued in September 1999 and discusses materiality in the
financial statements. SAB 99 emphasizes that quantitative measurements should be
coupled with a qualitative analysis when assessing and evaluating materiality.
It further states that known, recurring errors should not be permitted if
management's reason for not adjusting is that they know that it falls below the
quantitative rules of thumb, except when they are truly insignificant. The
Company believes that it is currently in compliance with this bulletin.
Page 7
<PAGE>
PART I.
ITEM 2.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
American Bancshares, Inc. and Subsidiaries
Forward Looking Statements
This Quarterly Report on Form 10-Q (including the Exhibits hereto) contains
certain "forward-looking statements" within the meaning of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995, such as
statements relating to, among other things, the financial condition and
prospects, results of operations, plans for future business development
activities, capital spending and financing sources, capital structure, the
effects of regulation and competition, year 2000 readiness, and the business of
the Company and its subsidiaries. Where used in this filing, the words
"anticipate", "believe", "estimate", "expect", "intend", "plan", and similar
words and expressions, as they relate to the Company, or the management of the
Company, identify forward-looking statements. Such forward-looking statements
reflect the current views of the Company and are based on information currently
available to the management of the Company and upon current expectations,
estimates, and projections about the Company and its industry, management's
beliefs with respect thereto, and certain assumptions made by management. These
forward-looking statements are not guarantees of future performance and are
subject to risks, uncertainties, and other factors which could cause actual
results to differ materially from those expressed or implied by such
forward-looking statements as a result of various factors. Potential risks and
uncertainties include, but are not limited to: (i) competitive pressure in the
banking and financial services industries increasing significantly; (ii) changes
in the interest rate environment which reduce margins; (iii) changes in
political conditions or changes occurring in the legislative or regulatory
environment; (iv) general economic conditions, either nationally or regionally,
becoming less favorable than expected resulting in, among other things, a
deterioration in credit quality; (v) changes occurring in business conditions
and inflation; (vi) acquisitions and integration of acquired businesses or
assets; (vii) changes in technology; (viii) changes in monetary and tax
policies; (ix) changes occurring in the securities markets; (x) year 2000
related issues and (xi) other risks and uncertainties detailed from time to time
in the filings of the Company with the Commission including the report on Form
10-K for the year ended December 31, 1998.
Liquidity and Capital Resources
Total assets of the Company increased by 3.58% to $471,459,000 as of September
30, 1999 from $455,164,000 as of December 31, 1998 and 7.7% from $437,739,000 as
of September 30, 1998. The increase in assets from December 31, 1998, was
primarily the result of increases in net loans of $22,721,000 to $359,687,000
and mortgage backed securities of $5,520,000 to $34,275,000. The increases in
assets from December 31,1998 to September 30,1999 were funded through increases
in Deposits of $7,293,000 to $352,138,000 and increases in borrowings of
$8,250,000 to $43,150,000.
As of September 30, 1999, the Bank's Tier 1 leverage ratio was 8.45%, Tier 1 to
risk weighted assets was 11.51% and total risk based capital was 12.17%,
resulting in a classification of "Well Capitalized" under FDIC guidelines. The
Bank, through its Asset/Liability Committee, monitors, among other things, the
Bank's capital and liquidity position, making adjustments to deposit, loan, and
investment strategies as necessary. The Bank continues to maintain adequate
liquidity levels with a liquidity ratio at September 30, 1999 of 41.66%. The
Bank is a member of the Federal Home Loan Bank of Atlanta (FHLB). The FHLB has
approved a line of credit for the Bank totaling $89,393,000 collateralized by
qualifying mortgages and all of the Bank's FHLB stock. As of September 30, 1999,
advances totaling $43,150,000 were outstanding. The Bank also maintains Federal
Funds Purchased agreements with several correspondent banks to provide sources
of overnight funds. As of September 30, 1999, the Bank had no federal funds
purchased.
Management believes that there are adequate funding sources to meet its future
liquidity needs for the foreseeable future. Primary among these funding sources
are the repayment of principal and interest on loans, the renewal of time
deposits, and the growth in the deposit base. Management does not believe that
the terms and conditions that will be present at the time of renewal of these
funding sources will significantly impact the Company's operations, due to its
management of the maturities of its assets and liabilities.
Page 8
<PAGE>
Management's Discussion and Analysis of Financial Condition and Results of
Operations
PART I.
ITEM 2. (continued)
Results of Operations
The Company's net income for the quarter ended September 30, 1999 was $704,000
or $.14 per share, compared to net income of $635,000 or $.13 per share for the
same period for 1998. Net interest income increased $542,000 to $4,256,000 for
the quarter ended September 30, 1999, over the same quarter in 1998, as a result
of the increase in interest earning assets. Non-interest income increased from
$1,477,000 for the quarter ended September 30, 1998 to $1,577,000 for the same
period in 1999. The increase in non-interest income is primarily attributable to
increases in service charges and fees on deposits of $362,000; gain on sale of
servicing of $180,000; credit card merchant services fee income of $66,000 and
other income of $46,000 partially offset by decreases in gain on the sale of
mortgage loans of $492,000; gain on sale of securities of $58,000 and broker
loan fees of $4,000.
Total general and administrative expenses for the quarter ended September 30,
1999, increased $254,000 over the same period in 1998. This increase resulted
primarily from increases in furniture and fixtures expense of $95,000; net
occupancy expense of $61,000; salaries expense of $57,000; interchange fee
expenses of $47,000 and other operating expenses of $29,000 related to the
growth in the Company's assets, the number of Bank branches, and the operation
of the Finance Company. These increases were partially offset by decreases in
legal fees of $19,000 and data processing fees of $16,000.
For the three months ended September 30,1999, net interest income increased
$542,000 to $4,256,000, compared to $3,714,000 for the same period in 1998, as a
result of the 7.7% asset growth and the repricing of certain deposit
liabilities. Loan loss provision increased from $154,000 for the three month
period ended September 30, 1998 to $375,000 for the same period in 1999.
Management uses a procedure on a monthly basis for evaluating the adequacy of
the allowance for loan loss. Based on that review management considers the
allowance sufficient to cover expected loan losses.
For the nine months ended September 30, 1999, net income was $1,670,000 or $.33
per share, compared to net income of $1,232,000 or $.25 per share for the same
period for 1998. In 1998 earnings per share were affected by the settlement of
certain litigation of $525,000 and associated legal fees of $235,000, costs
associated with the acquisition of Murdock Florida Bank of $541,000 and costs
associated with the opening of the Ruskin branch of $67,000 net of the
associated income tax benefit of $479,000. In 1999 earnings per share were
affected by approximately $124,000, after tax, as a result of a severance
payment to former CEO and President Gerald Anthony.
Net interest income increased $1,630,000 to $12,669,000 compared to $11,039,000
for the same period in 1998 as a result of the 7.7% asset growth and the
repricing of certain deposit liabilities. The provision for loan loss expense
increased from $429,000 for the nine month period ended September 30, 1998 to
$1,203,000 for the same period in 1999. During the nine months ended September
30,1999 the Bank charged-off $593,000 of bad debt that was part of a loan
relationship totaling approximately $1 million. Management believes the
remaining loan balances in this relationship are adequately collateralized and
that additional write-downs should not be necessary. Management continues to
monitor the status of this relationship and intends to take action as
appropriate. Management uses a procedure on a monthly basis for evaluating the
adequacy of the allowance for loan loss. Based on that review management
considers the allowance sufficient to cover expected loan losses.
Noninterest income increased to $4.6 million for the nine months ended September
30,1999 from $3.8 million for the same period for 1998. Significant increases
include service charges and fees of $750,000; merchant fees of $247,000 and gain
on sale of servicing of $119,000.
Noninterest expenses increased $976,000 to $13.4 million for the nine months
ended September 30,1999 from $12.5 million for the same period for 1998.
Salaries and employee benefits increased $993,000 to $6.1 million from $5.1
million due to increased staff size and furniture and equipment expenses
increased $327,000 (including $190,000 of increased depreciation expenses).
These increases were partially offset by decreases in litigation settlement of
$525,000 and associated legal fees of $235,000, costs associated with the
acquisition of Murdock Florida Bank of $541,000 and costs associated with the
opening of the Ruskin branch of $67,000.
Page 9
<PAGE>
Management's Discussion and Analysis of Financial Condition and Results of
Operations
PART I.
ITEM 2. (continued)
Year 2000 Compliance
Year 2000 issues and state of readiness: The Company is aware of the issues
associated with existing computer-controlled systems properly recognizing and
processing information relating to dates in and after the Year 2000. Systems
that cannot adequately process dates beyond the year 1999 could generate
erroneous data or cause a system to fail. Because the Year 2000 issue poses an
unprecedented enterprise wide challenge for every organization, the Company
formed a Year 2000 Committee ("Y2K Committee"). The Y2K Committee developed a
Year 2000 Project Plan ("Y2K Plan") which addresses both internal and external
technology. The data processing systems and software include those developed and
maintained by the Company's third-party data processing vendors and purchased
software which is run on in-house computer networks.
In 1997 the Company, through the Y2K Committee, initiated a review and
assessment of all hardware and software to confirm that it will function
properly in the Year 2000. Each system was evaluated for its degree of
significance to the operations of the Company and detailed test plans were
developed for those systems determined to be of a critical nature.
Third-party data processing vendors (primarily M&I Data Services, Inc. for its
general ledger, deposits, and portfolio loans; Essex Home Mortgage Servicing
Corp. for its loans held for sale; Compass Bank for its investment portfolio,
and Contour, Inc. for its mortgage loan processing systems) have been contacted
and the Company has obtained verification from these vendors that these systems
will function properly in the Year 2000.
With respect to purchased software and electronic hardware devices currently in
use, the Company has inventoried these items to determine which of these devices
rely on a valid date in order to function. The Company has contacted those
vendors identified through this inventory, who have indicated that their
hardware and software is or will be Year 2000 compliant in time frames that meet
regulatory requirements.
Non-information technology embedded systems consisting primarily of security
systems, HVAC controls and elevators have also been reviewed. These systems were
found to be generally year 2000 compliant.
The Company also has relationships with suppliers and other companies. The
Company has contacted key suppliers of goods or services regarding their Year
2000 readiness. They are in the process of reviewing their systems. The Company
will continue to monitor these suppliers as to their Year 2000 readiness.
Risks associated with year 2000 and contingency plan: Based on information
currently available to the Company, the Company believes that the most
reasonably likely worst case Year 2000 scenario with respect to the Company
relates to the potential failure of third party data processing vendors to
become Year 2000 compliant. The inability of these third party data processing
vendors to complete their Year 2000 remediation processes in a timely fashion
could result in delays in processing daily transactions and could result in a
material adverse effect on the Company's results of operations and financial
condition. The Company has developed a contingency plan to address potential
failures in these systems. The Company believes that modifications to existing
systems, conversion to new systems, and vendor compliance upgrades will be
resolved on a timely basis.
Expenses related to year 2000 compliance. The Company's current assessment of
cost associated with the completion of its Y2K Plan is not considered by
management to be material to the Company's future operations. Through September
30, 1999, the Company has expended $71,000 on its Y2K Plan and anticipates
additional costs of approximately $25,000, to be incurred in 1999. The cost of
completing the Company's Y2K Plan and the dates on which all procedures will be
completed are based on management's best estimates. These estimates were derived
utilizing various assumptions about future events, including the continued
availability of resources, external technology, modification plans and other
significant factors. However, there can be no guarantee that these estimates
will be achieved and actual results could differ materially from those currently
anticipated.
Page 10
<PAGE>
Management's Discussion and Analysis of Financial Condition and Results of
Operations
PART 1.
ITEM 3. Quantitative and Qualitative Disclosure About Market Risk
MARKET RISK
One of the Company's primary objectives is to control fluctuations in the
Economic Value of Equity ("EVE") caused by changes in interest rates. The Bank's
Asset/Liability Committee ("ALCO") is responsible for addressing fluctuations in
the EVE. The ALCO utilizes a model that takes into account and evaluates the
market risk of the Bank's financial position. Market risk represents possible
risk of loss from adverse changes in market prices and interest rates. ALCO
monitors the impact of changes in the interest rates through the use of an EVE
model. EVE is the net present value of the balance sheet cash flows. This
measures a sudden increase or decrease in interest rates in 100 basis point
increments and the effect of such change on the net present value of equity. The
following table sets forth the estimated impact of immediate changes in interest
rates as of September 30, 1999:
<TABLE>
<CAPTION>
RATE CHANGE EVE % CHANGE
----------- --------- --------
<S> <C> <C>
- 400 $ 52,593 11.35%
- 300 49,766 5.37
- 200 47,444 0.45
- 100 46,387 (1.79)
0 47,231 0.00
+ 100 48,360 2.39
+ 200 49,610 5.04
+ 300 50,913 7.80
+ 400 52,251 10.63
</TABLE>
The preceding table indicates that at September 30, 1999, in the event of a
sudden and sustained increase or decrease in market rates the EVE would be
expected to increase, with the exception of a 100 basis point drop where the EVE
would be expected to decrease. These changes are the result of repricing
opportunities inherent in the balance sheet. Computations of forecasted efforts
of interest rates are based on numerous assumptions, such as market interest
rates, loan growth and prepayment, deposit maturities and retention and should
not be relied upon as indicative of future results. Also, the computations do
not take into effect any actions that the ALCO could undertake in response to
changes in interest rates.
Page 11
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable this filing.
Item 2. Changes in Securities and Use of Proceeds
Not applicable this filing.
Item 3. Defaults Upon Senior Securities
Not applicable this filing.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable this filing.
Item 5. Other Information
On September 6, 1999, the Company entered into an Agreement and Plan of
Reorganization (the "Merger Agreement") with Gold Banc Corporation, Inc., a
Kansas corporation ("Gold Banc"), and Gold Banc Acquisition Corporation XI,
Inc., a Kansas corporation which will be a wholly-owned subsidiary of Gold Banc
("Acquisition Subsidiary"), pursuant to which the Company will be merged with
and into Acquisition Subsidiary. Concurrently with the execution of the Merger
Agreement, on September 6, 1999, Gold Banc and all of the directors of the
Company executed a Voting Agreement. For additional information regarding the
terms and conditions of the Merger Agreement and the Voting Agreement, see the
Company's Current Report on Form 8-K filed with the Securities and Exchange
Commission (the "Commission") on September 21, 1999 as referenced in Item 6(b)
of this Form 10-Q.
Page 12
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
2.1 -- Agreement and Plan of Reorganization, dated September 6, 1999, by
and among American Bancshares, Inc., Gold Banc Corporation, Inc.
and Gold Banc Acquisition Corporation XI, Inc., incorporated
herein by reference to Exhibit 2.1 to the Company's Current Report
on Form 8-K filed with the Commission on September 21,1999.
10.1 -- Voting Agreement, dated September 6, 1999, by and among Gold Banc
Corporation, Inc. and all of the directors of the Company,
incorporated herein by reference to Exhibit 10.1 to the Company's
Current Report on Form 8-K filed with the Commission on September
21, 1999.
10.2 -- American Bancshares, Inc. 1999 Stock Option and Equity Incentive
Plan, dated March 23, 1999.*
- ----------------
* Exhibit filed herewith.
(b) Reports on Form 8-K
A Current Report on Form 8-K was filed by the Company with the
Commission on September 21, 1999 pursuant to Item 5 thereof to report the
execution of a definitive Agreement and Plan of Reorganization, dated September
6, 1999, by and between American Bancshares, Inc., Gold Banc Corporation, Inc.
and Gold Banc Acquisition Corporation XI, Inc. pursuant to which American
Bancshares, Inc. will be merged with and into Gold Banc Acquisition Corporation
XI, Inc.
Page 13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
/s/ Jerry L. Neff
-----------------------------------
Jerry L. Neff, President and
Chief Executive Officer
Date: November 12, 1999
-------------------
/s/ Brian M. Watterson
-----------------------------------
Brian M. Watterson
Senior Vice President and
Chief Financial Officer
Date: November 12, 1999
-------------------
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA FROM THE COMPANY'S
GENERAL LEDGER AND BOARD OF DIRECTORS FINANCIAL REPORT PACKAGE AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-START> Jun-30-1999
<PERIOD-END> Sep-30-1999
<CASH> 17,357
<INT-BEARING-DEPOSITS> 43
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 71,340
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 362,008
<ALLOWANCE> (2,321)
<TOTAL-ASSETS> 471,459
<DEPOSITS> 352,138
<SHORT-TERM> 17,150
<LIABILITIES-OTHER> 49,178
<LONG-TERM> 26,000
0
0
<COMMON> 5,914
<OTHER-SE> 21,079
<TOTAL-LIABILITIES-AND-EQUITY> 471,459
<INTEREST-LOAN> 22,272
<INTEREST-INVEST> 3,681
<INTEREST-OTHER> 47
<INTEREST-TOTAL> 26,000
<INTEREST-DEPOSIT> 9,751
<INTEREST-EXPENSE> 13,331
<INTEREST-INCOME-NET> 12,669
<LOAN-LOSSES> 1,203
<SECURITIES-GAINS> 28
<EXPENSE-OTHER> 13,443
<INCOME-PRETAX> 2,631
<INCOME-PRE-EXTRAORDINARY> 1,670
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,670
<EPS-BASIC> 0.33
<EPS-DILUTED> 0.33
<YIELD-ACTUAL> 8.01
<LOANS-NON> 887
<LOANS-PAST> 225
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 2,850
<ALLOWANCE-OPEN> 2,323
<CHARGE-OFFS> 1,422
<RECOVERIES> 166
<ALLOWANCE-CLOSE> 2,266
<ALLOWANCE-DOMESTIC> 2,266
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
AMERICAN BANCSHARES, INC.
1999 STOCK OPTION AND EQUITY INCENTIVE PLAN
ARTICLE I
The Plan
1.1 Establishment of the Plan. American Bancshares, Inc., a Florida
corporation (the "Company"), hereby establishes the "American Bancshares, Inc.
1999 Stock Option and Equity Incentive Plan" (hereinafter referred to as the
"Plan"). The Plan permits the grant of incentives in the form of Nonqualified
Stock Options, Incentive Stock Options, Reload Options, Stock Appreciation
Rights, Restricted Stock, or Unrestricted Stock Awards, and any combination
thereof. Unless otherwise defined, all capitalized terms have the meaning
ascribed to them in Article II.
1.2 Purpose. The purpose of the Plan is to advance the interests of the
Company and its shareholders by offering officers, employees, and directors
incentives that will promote the identification of their personal interests with
the long-term financial success of the Company and with growth in shareholder
value. The Plan is designed to strengthen the Company's ability to recruit,
attract, and retain, highly qualified managers, consultants, and staff, and
qualified and knowledgeable independent directors capable of furthering the
future success of the Company by encouraging the ownership of Shares by such
employees and directors and to strengthen the mutuality of interest between
employees and directors, on one hand, and the Company's shareholders, on the
other hand. The equity investments granted under the Plan are expected to
provide employees with an incentive for productivity and to provide both
employees and directors with an opportunity to share in the growth and value of
the Company.
ARTICLE II
Definitions
As used in this Plan, unless the context otherwise requires, the
following capitalized terms are defined as follows:
2.1 "Award" shall mean any award under this Plan of any Stock Option,
Reload Options, SARs, Restricted Stock, or Unrestricted Stock Awards. Each
separate grant of a Stock Option, Reload Option, an SAR, Restricted Stock, or an
Unrestricted Stock Award to an Employee or a Director, and each group of Stock
Options, Reload Options, SARs, Restricted Stock, or an Unrestricted Stock Award
which mature on a separate date is treated as a separate Award.
2.2 "Award Agreement" means the written agreement between the Company
and a Participant implementing the grant of, and evidencing and reflecting the
terms of, an Award.
2.3 "Board" or "Board of Directors" means the Board of Directors of the
Company, as constituted from time to time.
2.4 "Cause" means a determination by the Board of Directors that a
Participant has: (a) engaged in any type of disloyalty to the Company, including
without limitation fraud, embezzlement, theft, or dishonesty in the course of
his or her employment or service, or has otherwise breached a duty owed to the
Company, (b) been convicted of a misdemeanor involving moral turpitude or a
felony, (c) pled nolo contendere to a felony, (d) disclosed trade secrets or
confidential information of the Company to unauthorized parties, except as may
be required by law, or (e) materially breach any material agreement with the
Company, unless such agreement was materially breached first by the Company.
2.5 "Change of Control" shall have the meaning set forth in Section 9.2
of this Plan.
2.6 "Code" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations thereunder. Reference to any provision of the Code or rule
or regulation thereunder shall be deemed to include any amended or successor
provision, rule, or regulation.
2.7 "Committee" means the committee appointed by the Board in
accordance with Section 3.1 of the Plan, if one is appointed, to administer this
Plan. If no such committee has been appointed, the term Committee shall refer to
the Board of Directors.
2.8 "Common Shares" or "Shares" means the common shares, $1.175 par
value per share, of the Company.
2.9 "Company" shall mean American Bancshares, Inc., or any successor
thereto as provided in Section 13.8 hereto.
<PAGE>
2.10 "Date of Exercise" means the date on which the Company receives
notice of the exercise of a Stock Option in accordance with the terms of Section
6.8 of this Plan or of an SAR in accordance with the terms of Article VII of
this Plan.
2.11 "Date of Grant" or "Award Date" shall be the date on which an
Award is made by the Committee under this Plan. Such date shall be the date
designated in a resolution adopted by the Committee pursuant to which the Award
is made; provided, however, that such date shall not be earlier than the date of
such resolution and action thereon by the Committee. In the absence of a date of
grant or award being specifically set forth in the Committee's resolution, or a
fixed method of computing such date, then the Date of Grant shall be the date of
the Committee's resolution and action.
2.12 "Director" means any person who is a member of the Board of
Directors.
2.13 "Employee" means any person who is an officer or full-time
employee of the Company or any of its Subsidiaries and who receives from it
regular compensation (other than pension, retirement allowance, retainer, or fee
under contract). An Employee does not include independent contractors or
temporary employees.
2.14 "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
2.15 "Exercise Period" means the period during which a Stock Option or
a SAR may be exercised.
2.16 "Exercise Price" means the price for Shares at which a Stock
Option may be exercised.
2.17 "Fair Market Value" of a Common Share on a particular date shall
be the closing price for a Common Share as quoted on the National Association of
Securities Dealers Automated Quotation System National Market ("Nasdaq-NMS"), or
any national securities exchange on which the Common Shares are listed (as
reported by the Wall Street Journal or, if not reported thereby, any other
authoritative source selected by the Committee), or if there is no trading on
that date, on the next preceding date on which there were reported share prices.
If the Common Shares are quoted on any other inter-dealer quotation system (but
not quoted by Nasdaq-NMS or any national securities exchange), then the Fair
Market Value per Common Share on a particular date shall be the mean of the bid
and asked prices for a Common Share as reported in the Wall Street Journal or,
if not reported thereby, any other authoritative source selected by the
Committee. If the Common Shares are not quoted by the Nasdaq-NMS or any other
inter-dealer quotation system, and are not listed on any national securities
exchange, then the "Fair Market Value" of a Common Share shall be determined by
the Committee pursuant to any reasonable method adopted by it in good faith for
such purpose. In the case of an Incentive Stock Option, if the foregoing method
of determining the fair market value is inconsistent with Section 422 of the
Code, "Fair Market Value" shall be determined by the Committee in a manner
consistent with the Code and shall mean the value as so determined.
2.18 "Incentive Stock Option" or "ISO" means any Stock Option awarded
under this Plan intended to be and designated as an incentive stock option
within the meaning of Section 422 of the Code.
2.19 "Non-Employee Director" shall have the meaning as set forth in,
and interpreted under, Rule 16b-3(b)(3) promulgated by the SEC under the
Exchange Act, or any successor definition adopted by the SEC.
2.20 "Nonqualified Stock Option" means any Stock Option awarded under
this Plan which is not an Incentive Stock Option.
2.21 "Participant" means each Employee or Director to whom an Award
has been granted under this Plan.
2.22 "Payment Shares" shall have the meaning set forth in Section
6.8(c) of this Plan.
2.23 "Person" shall mean an individual, partnership, corporation,
limited liability company or partnership, trust, joint venture, unincorporated
association, or other entity or association.
2.24 "Plan" means this American Bancshares, Inc. 1999 Stock Option and
Equity Incentive Plan as defined in Section 1.1 hereof.
2.25 "Related Option" means an Incentive Stock Option or a Nonqualified
Stock Option granted in conjunction with the grant of a Stock Appreciation
Right.
2.26 "Reload Option" shall have the meaning set forth in Section 6.12
of this Plan.
<PAGE>
2.27 "Restricted Period" shall have the meaning set forth in Section
8.3(b) of the Plan.
2.28 "Restricted Stock" shall mean the Award of Common Shares to a
Participant pursuant to Article VIII of this Plan.
2.29 "SEC" means the Securities and Exchange Commission.
2.30 "Securities Act" means the Securities Act of 1933, as amended from
time to time.
2.31 "Stock Appreciation Right" or "SAR" means an Award designated as a
Stock Appreciation Right, granted to a Participant pursuant to Article VII of
this Plan.
2.32 "Stock Option" means any Incentive Stock Option or Nonqualified
Stock Option to purchase Common Shares that is awarded under this Plan, or a
Reload Option.
2.33 "Subsidiary" or "Subsidiaries" means any corporation or
corporations other than the Company organized under the laws of the United
States or any other jurisdiction that the Board of Directors designates, in an
unbroken chain of corporations beginning with the Company if each corporation
other than the last corporation in the unbroken chain owns more than 50% of the
total combined voting power of all classes of stock in one of the other
corporation in such chain.
2.34 "Unrestricted Stock Award" means an Award of Shares pursuant to
Section 8.9 of this Plan.
ARTICLE III
Administration of the Plan
3.1 The Committee. This Plan shall be administered by the Committee,
subject to such terms and conditions as the Board may prescribe from time to
time. Pursuant to applicable provisions of the Company's Amended and Restated
Articles of Incorporation and Amended and Restated Bylaws, the Committee, which
shall be appointed by the Board, shall consist of no fewer than two (2) members
of the Board. Members of the Committee shall serve for such period of time as
the Board may determine. From time to time the Board may increase the size of
the Committee and appoint additional members, remove members (with or without
cause) and appoint new members, fill vacancies however caused, and remove all
members and thereafter directly administer the Plan. During such times as the
Company's Common Shares are registered under the Exchange Act, all members of
the Committee shall be Non-Employee Directors and "outside directors" as defined
under Section 162(m)(4)(C)(i) of the Code.
3.2 Duties and Powers of the Committee. Subject to the express
provisions of this Plan, the Committee shall have all the power and authority
to, and shall be authorized to take any and all actions required, necessary, or
desirable to administer the Plan. In addition to any other powers, subject to
the provisions of the Plan, the Committee shall have the following powers:
(a) to select the Employees and Directors to whom Awards
may from time to time be granted pursuant to this Plan;
(b) to determine all questions as to eligibility;
(c) to determine the number of Common Shares to be covered
by each Award granted under this Plan;
(d) subject to the limitations set forth in Section 4.1 of
this Plan, to determine whether and to what extent Incentive Stock Options,
Nonqualified Stock Options, SARs, Reload Options, Restricted Stock, and
Unrestricted Stock Awards, or any combination thereof, are to be granted or
awarded hereunder;
(e) to determine the terms and conditions (to the extent not
inconsistent with this Plan) of any Award granted hereunder, all provisions of
each Award Agreement, which provisions need not be identical (including, but not
limited to, the Exercise Price, the Exercise Period, any restriction or
limitation, any vesting schedule or acceleration thereof, or any forfeiture
restrictions or waiver thereof, regarding any Stock Option or other Award and
the Common Shares relating thereto, based on such factors as the Committee shall
determine, in its sole discretion);
<PAGE>
(f) to determine whether, and to what extent, and under what
circumstances grants of Stock Options and other Awards under this Plan are to
operate on a tandem basis and/or in conjunction with or apart from other cash
awards made by the Company outside of this Plan;
(g) to determine whether and under what circumstances a Stock
Option may be settled in cash, Common Shares (other than Restricted Stock), or
any combination thereof under Section 6.8 of this Plan;
(h) to determine whether, and to what extent, and under what
circumstances Common Shares under this Plan shall be deferred either
automatically or at the election of the Participant;
(i) to prescribe, amend, waive, or rescind rules or
regulations relating to the Plan's administration;
(j) to accelerate the vesting or Exercise Date of any Award,
or to waive compliance by a holder of an Award of any obligation to be performed
by such holder or the terms and conditions of an Award;
(k) to construe and interpret the provisions of the Plan or
any Award Agreement;
(l) to amend the terms of previously granted Awards so long as
the terms as amended are consistent with the terms of the Plan and provided that
the consent of the Participant is obtained with respect to any amendment that
would be detrimental to the Participant;
(m) require, whether or not provided for in the pertinent
Award Agreement, of any person exercising a Stock Option, or otherwise receiving
an Award, at the time of such exercise or receipt, the making of any
representations or agreements that the Board of Directors or Committee may deem
necessary or advisable in order to comply with the securities laws of the United
States or of any applicable jurisdiction;
(n) to delegate to an appropriate officer of the Corporation
the authority to select Employees for Awards and to recommend to the Committee
the components of the Award to each, including vesting requirements, subject in
each case to final approval by the Committee of the selection of the Employee
and the Award;
(o) to authorize any person to execute on behalf of the
Company any instrument required to effectuate an Award or to take such other
actions as may be necessary or appropriate with respect to the Company's rights
pursuant to Awards or agreements relating to the Awards or the exercise thereof;
and
(p) to make all other determinations and take all other
actions necessary or advisable for the administration of the Plan.
3.3 Awards to Members of the Committee. Each Award granted to a
Director or members of the Committee shall be approved by the entire Board of
Directors and shall be evidenced by minutes of a meeting or the written consent
of the Board of Directors and an Award Agreement.
3.4 Requirements Relating to Section 162(m) of the Code. Any provision
of this Plan notwithstanding: (a) transactions with respect to persons whose
remuneration is subject to the provisions of Section 162(m) of the Code shall
conform to the requirements of Section 162(m)(4)(C) of the Code unless the
Committee determines otherwise; (b) the Plan is intended to give the Committee
the authority to grant Awards that qualify as performance-based compensation
under Section 162(m)(4)(C) of the Code as well as Awards that do not qualify;
and (c) any provision of the Plan that would prevent the Committee from
exercising the authority referred to in Section 3.4(b) of this Plan or that
would prevent an Award that the Committee intends to qualify as
performance-based compensation under Section 162(m)(4)(C) of the Code from so
qualifying shall be administered, interpreted, and construed to carry out the
Committee's intention and any provision that cannot be so administered,
interpreted, and construed shall to that extent be disregarded.
3.5 Decisions Final and Binding. All decisions, determinations, and
actions taken by the Committee, and the interpretation and construction of any
provision of the Plan or any Award Agreement by the Committee shall be final,
conclusive, and binding, unless otherwise determined by the Board.
3.6 Limitation on Liability. Notwithstanding anything herein to the
contrary, except as otherwise provided under applicable Florida law, no member
of the Board of Directors or of the Committee shall be liable for any good faith
determination, act, or failure to act in connection with the Plan or any Award
hereunder.
<PAGE>
ARTICLE IV
Shares Subject to the Plan
4.1 Number of Shares. Subject to adjustment as provided in Section 4.4,
the maximum aggregate number of Shares that may be issued under this Plan shall
not exceed 250,000 Shares, which Shares may be either authorized but unissued
Shares or Shares issued and thereafter reacquired by the Company. Subject to
Section 4.4, the maximum aggregate number of Shares or SARs which may be awarded
and issued under the Plan to the Non-Employee Directors as a group is 50,000
Common Shares. Stock Options awarded under the Plan may be either Incentive
Stock Options or Nonqualified Stock Options, as determined by the Committee.
Except as provided in Sections 4.2 and 4.3 of this Plan, Shares issued upon the
exercise of an Award granted pursuant to the Plan shall not again be available
for the grant of an Award hereunder.
4.2 Lapsed Awards or Forfeited Shares. If any Award granted under this
Plan shall terminate, expire, lapse, or be cancelled for any reason without
having been exercised in full, or if Shares or Restricted Stock are forfeited,
any unissued or forfeited Shares which had been subject to the Award Agreement
relating thereto shall again become available for the grant of an Award under
this Plan; provided, that in the case of forfeited Shares, the grantee has
received no dividends or other distributions prior to forfeiture with respect to
the Shares.
4.3 Delivery of Shares as Payment. In the event a Participant pays the
Exercise Price for Shares pursuant to the exercise of an Stock Option with
previously acquired Shares, the number of Shares available for future Awards
under the Plan shall be reduced only by the net number of new Shares issued upon
the exercise of the Stock Option. Notwithstanding anything to the contrary
herein, no fractional Shares will be delivered under the Plan.
4.4 Capital Adjustments.
(a) If by reason of a merger, consolidation, reorganization,
recapitalization, combination of Shares, stock split, reverse stock split, stock
dividend, separation (including a spin-off or split-off), or other such similar
event, the number of outstanding Shares of the Company are increased, decreased,
changed into, or been exchanged for a different number or kind of shares, or if
additional shares or new and different shares are issued in respect of such
Shares, the Committee in its sole discretion may adjust proportionately (i) the
aggregate maximum number of Shares available for issuance under the Plan, (ii)
the aggregate maximum number of Shares and SARs for which Awards can be granted
to Non-Employee Directors under the Plan, (iii) the number and class of Shares
covered by outstanding Awards denominated in Shares or units of Shares
(including, but not limited to Awards of Restricted Stock), (iv) the Exercise
Price and grant prices related to outstanding Awards, and (v) the appropriate
Fair Market Value and other price determinations for such Awards.
(b) In the event of any other change in corporate structure
affecting the Common Shares or any distribution (other than normal cash
dividends) to holders of Common Shares, such adjustments in the number and kind
of shares and the exercise, grant, or conversion prices of the affected Awards
as may be deemed equitable by the Committee shall be made to give proper effect
to such event.
(c) In the event of a corporate merger, consolidation, or
acquisition of property or stock, separation (including spin-offs and
split-offs), reorganization or liquidation, the Committee shall be authorized to
cause the Company to issue or assume stock options, whether or not in a
transaction to which Section 424(a) of the Code applies, by means of
substitution of new Stock Options for previously issued stock options or an
assumption of previously issued stock options. In such event, the aggregate
maximum number of Shares available for issuance under Section 4.1 of the Plan
will be increased to reflect such substitution or assumption.
(d) If any adjustment made pursuant to this Article IV would
result in the possible issuance of fractional Shares under any then-outstanding
Award, the Committee may adjust the outstanding Awards so as to eliminate
fractional Shares.
(e) Any adjustment to be made with respect to Incentive Stock
Options shall comply with Sections 422 and 424 of the Code.
<PAGE>
ARTICLE V
Eligibility
Awards may be made to any Employee or Director except that (a) only
Employees (including Directors who are also Employees) may receive an Incentive
Stock Options; and (b) the grant of Awards to Directors must comply with Section
3.3. A Participant who has been granted an Award may be granted additional
Awards; provided, however, that grants of Awards to Non-Employee Directors are
subject to the limitations in Section 4.1.
ARTICLE VI
Stock Options
6.1 Stock Options. Stock Options may be granted alone or in addition to
other Awards granted under this Plan. Each Stock Option granted under this Plan
shall be either an Incentive Stock Option or a Nonqualified Stock Option.
6.2 Grant of Stock Options.
(a) Subject to the terms and provisions of this Plan, the
Committee shall have the authority to grant to any Participant one or more
Incentive Stock Options, Nonqualified Stock Options, or both kinds of Stock
Options. Subject to Section 4.1 and Article V, the Committee has complete and
sole discretion in determining the number of Shares subject to Stock Options
granted to a Participant; provided, however, that the aggregate Fair Market
Value (determined at the time the Award is made) of Shares with respect to which
a Participant may first exercise ISOs granted under the Plan during any calendar
year may not exceed $100,000 or such amount as shall be specified under Section
422 of the Code and the rules and regulations promulgated thereunder. To the
extent that any Stock Option does not qualify as an Incentive Stock Option
(whether because of its provisions or the time and manner of its exercise or
otherwise), such Stock Options or portion thereof which does not qualify shall
constitute a Nonqualified Stock Option. Stock Options granted at different times
need not contain similar provisions.
(b) Non-Employee Directors may only be granted Stock Options
under this Article VI which are Nonqualified Stock Options.
6.3 Incentive Stock Options. Anything in the Plan to the contrary
notwithstanding, no term of this Plan relating to Incentive Stock Options shall
be interpreted, amended, or altered, nor shall any discretion or authority
granted under this Plan be so exercised, so as to disqualify the Plan under
Section 422 of the Code, or, without the consents of the Participants affected,
to disqualify any Incentive Stock Option under Section 422 of the Code.
6.4 Award Agreement. Each Stock Option granted under this Plan shall be
evidenced by an Award Agreement between the Company and the Participant in
accordance with Section 6.2 that specifies the Exercise Price, the Exercise
Period, the number of Shares to which the Stock Option pertains, method of
exercise and the form of consideration payable therefor, any vesting
requirements, any conditions imposed upon the exercise of the Stock Options in
the event of retirement, death, disability, or other termination of service, and
such other provisions and conditions, not inconsistent with this Plan, as the
Committee may determine. Each Award Agreement relating to a grant of Stock
Options shall clearly specify whether the Stock Option is intended to be an
Incentive Stock Option within the meaning of Section 422 of the Code, or a
Nonqualified Stock Option not intended to be within the provisions of Section
422 of the Code.
6.5 Exercise Price. The Exercise Price per Share purchasable under any
Stock Option granted under this Plan shall be determined by the Committee at the
Date of Grant, subject to the following limitations:
(a) In the case of a Stock Option intended to be an Incentive
Stock Option, the Exercise Price shall not be less than 100% of the Fair Market
Value of the Common Shares on the Date of Grant or, in the case of any optionee
who, at the time such Incentive Stock Option is granted, owns Common Shares
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or of its parent corporation or Subsidiaries, not less than
110% of the of the Fair Market Value of the Common Shares on the Date of Grant.
(b) In the case of a Stock Option intended to be a
Nonqualified Stock Option, the Exercise Price shall not be less than 85% of the
Fair Market Value of the Common Shares on the Date of Grant.
(c) In no event shall the Exercise Price of any Stock Option
be less than the par value of the Common Shares.
<PAGE>
6.6 Exercise Period. The Exercise Period of each Stock Option granted
shall be fixed by the Committee and shall be specified in the Award Agreement;
provided, however, that no Incentive Stock Option shall be exercisable later
than ten years after the Award Date, and no Incentive Stock Option which is
granted to any optionee who, at the time such Stock Option is granted, owns
stock possessing more than 10% of the total combined voting power of all classes
of stock of the Company or of its parent corporation or Subsidiaries, shall be
exercisable after the expiration of five years from the Award Date.
6.7 Exercise of Stock Options. Stock Options granted under the Plan
shall be exercisable at such time or times and be subject to such terms and
conditions as shall be set forth in the Award Agreement (as may determined by
the Committee at the time of such grant), which need not be the same for all
Participants. Such terms and conditions may include performance criteria with
respect to the Company or the Participant, and as shall be permissible under the
other terms of the Plan. No Stock Option, however, shall be exercisable until
the expiration of the vesting period set forth in the Award Agreement, except
such limitation shall not apply (i) in the case of death, disability, or
retirement of a Participant covered by Sections 6.10(a), (b), or (c) hereof,
(ii) a termination of service covered by the last sentence of Section 6.10(e)
hereof, or (iii) as set forth in Article IX of this Plan. To the extent that no
vesting conditions are stated in the Award Agreement, the Stock Options
represented thereby shall be fully vested at the Date of Grant.
6.8 Method of Exercise.
(a) Subject to the provisions of the Award Agreement, Stock
Options may be exercised in whole at any time, or in part from time to time with
respect to whole Shares only, during the Exercise Period by the delivery to the
Company of a written notice of intent to exercise the Stock Option, in such form
as the Committee may prescribe, setting forth the number of Shares with respect
to which the Stock Option is to be exercised. The Exercise Price, which shall
accompany the written notice of exercise, shall be payable to the Company in
full (along with the taxes described in the last sentence of this Section 6.8)
by the Participant who, if so provided in the Award Agreement, may: (i) deliver
cash or a check (acceptable to the Committee in accordance with guidelines
established for this purpose) in satisfaction of all or any part of the Exercise
Price; (ii) deliver, or cause to be withheld from the Stock Option, Shares
(except for Restricted Shares) valued at Fair Market Value on the Date of
Exercise in satisfaction of all or any part of the Exercise Price, or (iii) any
combination of cash and Shares, or (v) any other consideration and method of
payment permitted under any laws to which the Company is subject, in each such
case as the Committee may determine. In addition to and at the time of payment
of the Exercise Price, the Participant shall pay to the Company in cash the full
amount of all federal and state withholding or other employment taxes applicable
to the taxable income of the Participant resulting from such exercise.
(b) If the Exercise Price is to be paid by the surrender of
previously acquired and owned Common Shares, the Participant will make
representations and warranties satisfactory to the Company regarding his title
to the Common Shares used to effect the purchase (the "Payment Shares"),
including without limitation, representations and warranties that the
Participant has good and marketable title to such Payment Shares free and clear
of any and all liens, encumbrances, charges, equities, claims, security
interests, options or restrictions, and has full power to deliver such Payment
Shares without obtaining the consent or approval of any person or governmental
authority other than those which have already given consent or approval in a
manner satisfactory to the Company. If such Payment Shares were acquired upon
previous exercise of Incentive Stock Options granted within two years prior to
the exercise of the Stock Option or acquired by the Participant within one year
prior to the exercise of the Stock Option, such Participant shall be required,
as a condition to using the Payment Shares in payment of the Exercise Price of
the Stock Option, to acknowledge the tax consequences of doing so, in that such
previously exercised Incentive Stock Options may have, by such action, lost
their status as Incentive Stock Options, and the Participant may recognize
ordinary income for tax purposes as a result. In no event can Restricted Stock
be used as Payment Shares.
6.9 Transfer Restrictions. Neither the Stock Options granted under the
Plan nor any rights or interest in such Stock Options may be sold, pledged,
hypothecated, assigned, or otherwise disposed of or transferred by such
Participant, other than by will or by the laws of descent and distribution.
Except as permitted by the Committee, during the lifetime of Participant to whom
a Stock Option is granted, the Stock Options shall be exercisable only by him or
her or, in the event of the Participant's permanent and total disability as
determined by the Committee in accordance with applicable Company policies, by
his or her legal representative.
<PAGE>
6.10 Termination of Stock Options.
(a) Termination by Death. If a Participant's employment by the
Company or its Subsidiaries, or his or her service as a Non-Employee Director
terminates by reason of death, any Stock Option held by such Participant, unless
otherwise determined by the Committee at grant, shall be fully vested and,
subject to the limitations of Section 6.11 with respect to Incentive Stock
Options, may thereafter be exercised by the legal representative of the estate
or by a person who acquires the right to exercise such Stock Options by bequest
or inheritance, for a period of one year (or such other period as the Committee
may specify at grant) from the date of such death or until the end of the
Expiration Period of such Stock Option, whichever period is shorter.
(b) Termination by Disability. If a Participant's employment
by the Company or its Subsidiaries, or his or her service as a Non-Employee
Director terminates by reason of permanent and total disability, as determined
by the Committee in accordance with applicable Company personnel policies, any
Stock Options held by such Participant, unless otherwise determined by the
Committee at grant, shall be fully vested and, subject to the limitations of
Section 6.11 with respect to Incentive Stock Options, may thereafter be
exercised by the Participant or his or her legal representative for a period of
one year (or such other period as the Committee may specify at grant) from the
date of such termination of employment or until the end of the Expiration Period
of such Stock Option, whichever period is shorter; provided, however, that, if
the Participant dies within such one year period (or such other period as the
Committee may specify at grant), any unexercised Stock Options held by such
Participant shall thereafter be exercisable to the extent to which it was
exercisable at the time of death for a period of one year from the date of death
or until the end of the Expiration Period of such Stock Option, whichever period
is shorter. In the event of termination of employment by reason of permanent and
total disability, as determined by the Committee in accordance with applicable
Company personnel policies, if an Incentive Stock Option is exercised after the
expiration of the exercise periods that apply for purposes of Section 422 of the
Code (currently one year from such termination), such Stock Option will
thereafter be treated as a Nonqualified Stock Option.
(c) Termination by Retirement. If an Employee Participant's
employment by the Company or its Subsidiaries, or his or her service as a
Non-Employee Director terminates by reason of normal or late retirement under
any retirement plan of the Company or its Subsidiaries or, with the consent of
Committee, any Stock Options held by such Participant, unless otherwise
determined by the Committee at grant, shall be fully vested and, subject to the
limitations of Section 6.11 with respect to Incentive Stock Options, may
thereafter be exercised by the Participant or his or her legal representative
for a period of one year (or such other period as the Committee may specify at
grant) from the date of such termination of employment or until the end of the
Expiration Period of such Stock Option, whichever period is shorter; provided,
however, that, if the Participant dies within such one year period (or such
other period as the Committee may specify at grant), any unexercised Stock
Options held by such Participant shall thereafter be exercisable to the extent
to which it was exercisable at the time of death for a period of one year from
the date of death or until the end of the Expiration Period of such Stock
Option, whichever period is shorter. In the event of termination of employment
by reason of retirement pursuant to any retirement plan of the Company or its
Subsidiaries or with the consent of the Committee, if an Incentive Stock Option
is exercised after the expiration of the exercise periods that apply for
purposes of Section 422 of the Code (currently three months from such
termination), such Stock Option will thereafter be treated as a Nonqualified
Stock Option.
(d) Other Termination of Employee. Unless otherwise determined
by the Committee at or after grant and except as provided in Section 9.1 hereof,
if an Employee Participant's employment by the Company terminates for any reason
other than death, disability, or retirement covered by Sections 6.10 (a), (b),
or (c) of this Plan: (i) any Stock Options that were not exercisable at the date
of such termination (which date shall be determined by the Committee in its sole
discretion) will expire automatically, and (ii) any exercisable Stock Options
will remain exercisable only for the lesser of three months or the balance of
such Stock Option's Exercise Period; provided, however, that the Participant was
not involuntarily terminated by the Company for Cause. Notwithstanding any other
provision of this Plan except for Section 9.1 hereof, upon termination of a
Participant's employment within the Company or any of its Subsidiaries for
Cause, all of the Participant's unexercised Stock Options will terminate
immediately upon the date of such termination (which date shall be determined by
the Committee in its sole discretion) and the Participant shall forfeit all
Shares for which the Company has not yet delivered share certificates to the
Participant. In such event, the Company shall refund to the Participant the
Exercise Price paid to it, if any, in the same form as it was paid (or in cash
at the Company's discretion). The Company may withhold delivery of share
certificates pending resolution of any inquiry that could lead to a finding that
a termination of a participant's employment was for Cause.
<PAGE>
(e) Resignation of Director. Except as covered by Sections
6.10(a), (b), or (c) of this Plan, if a Participant serving as a Non-Employee
Director terminates his or her service by resigning from the Board of Directors
of the Company or by failing to run for election to an additional term as a
Director after being offered nomination for such additional term by a nominating
or similar committee of the Board of Directors (or in lieu of such Committee, by
the entire Board of Directors), (i) any Stock Options that were not exercisable
at the date of such termination will expire automatically, and (ii) any
exercisable Stock Options held by such Participant may thereafter be exercised
by the Participant for a period of three months from the date of such
resignation or, in the case of a failure to run for an additional term, the date
of the shareholder meeting at which such election of Directors takes place, or
until the end of the Exercise Period of such Stock Option, whichever period is
shorter (or such other period as the Committee may specify at grant). If a
Participant serving as Non-Employee Director does not resign and is not offered
nomination for an additional term, all Stock Options shall immediately vest on
the date of the shareholder meeting at which such election of Directors takes
place and the Participant thereafter is no longer a Director, and such Stock
Options shall be exercisable until the end of the Exercise Period for such Stock
Options.
6.11 Incentive Stock Option Limitations.
(a) To the extent that the aggregate Fair Market Value
(determined as of the Date of Grant) of the Common Shares with respect to which
Incentive Stock Options are exercisable for the first time by a Participant
during any calendar year under the Plan and/or any other stock option plan of
the Company or any Subsidiary or parent corporation (within the meaning of
Section 425 of the Code) exceeds $100,000, such Stock Options shall be treated
as Stock Options which are not Incentive Stock Options.
(b) To the extent (if any) permitted under Section 422 of the
Code, or the applicable rules and regulations promulgated thereunder or any
applicable Internal Revenue Service pronouncement, if (i) a Participant's
employment with the Company or any Subsidiary is terminated by reason of death,
disability, or retirement covered by Section 6.10(a), (b), or (c) of this Plan,
and (ii) the portion of the Incentive Stock Option that is otherwise exercisable
during the post-termination period specified under Sections 6.10(a), (b), or
(c), applied without regard to the $100,000 limitation currently contained in
Section 422(d) of the Code, is greater than the portion of the Stock Option that
is immediately exercisable as an "incentive stock option" during such
post-termination period under Section 422 of the Code, such excess shall be
treated as a Nonqualified Stock Option.
(c) In the event that the application of any of the provisions
of Section 6.11 (a) or (b) of this Plan not be necessary in order for Stock
Options to qualify as Incentive Stock Options, or should additional provisions
be required, the Committee may amend the Plan accordingly, without the necessity
of obtaining the approval of the shareholders of the Company.
6.12 Reload Options.
(a) Without any way limiting the authority of the Committee to
make grants hereunder, and in order to induce Employees and Directors to retain
ownership of the Common Shares, concurrently with the award of Stock Options the
Committee shall have the authority (but not the obligation) to include in any
Award Agreement a provision entitling the optionee to a further reload option (a
"Reload Option") in the event the optionee exercises the Stock Option evidenced
by such Award Agreement, in whole or in part, by surrendering other Common
Shares in accordance with the Plan and the Award Agreement as payment for the
Exercise Price. The number of Reload Options shall equal: (i) the number of
Common Shares surrendered in payment of the Exercise Price of the underlying
Stock Option, and (ii) to the extent authorized by the Committee, the number of
Common Shares used to satisfy any tax withholding requirement incident to the
exercise of the underlying Stock Options. The grant of the Reload Option will
become effective upon the exercise of the underlying Stock Options or Reload
Options through the use of Common Shares held by the optionee at least 12
months. Notwithstanding the fact that the underlying Stock Option maybe an
Incentive Stock Option, a Reload Option is not intended to qualify as an
"Incentive Stock Option" under Section 422 of the Code.
(b) Each Award Agreement shall state whether the Committee has
authorized Reload Options with respect to the underlying Stock Options. Upon the
exercise of an underlying Stock Option or other Reload Option, the Reload Option
will be evidenced by an amendment to the underlying Award Agreement.
(c) The Exercise Price per Common Share deliverable upon
exercise of a Reload Option shall be the Fair Market Value per Common Share on
the date the grant of the Reload Option becomes effective.
(d) Each Reload Option shall be fully exercisable six months
from the date the grant of the Reload Option becomes effective. The term of each
Reload Option shall be equal to the remaining Exercise Period of the underlying
Stock Option.
(e) No additional Reload Options shall be granted to any
optionee upon exercise of Stock Options or Reload Options following any
termination of employment covered by Section 6.10 of this Plan or the
termination of services on the Board by a Non-Employee Director optionee.
<PAGE>
6.13 Buy-Out and Settlement Provisions. The Committee may at any time
offer to buy-out a Stock Option previously granted, based on such terms and
conditions as the Committee shall establish and communicate to the Participant
at the time that such offer is made.
6.14 No Rights as Shareholder. No Participant or transferee of a Stock
Option shall have any rights as a shareholder of the Company with respect to any
Shares subject to a Stock Option (including without limitation, rights to
receive dividends, vote, or receive notice of meetings) prior to the purchase of
such Shares by the exercise of such Stock Option as provided in this Plan. A
Stock Option shall be deemed to be exercised and the Common Share thereunder
purchased when written notice of exercise has been delivered to the Company in
accordance with Section 6.8 of the Plan and the full Exercise Price for the
Share with respect to which the Stock Options is exercised has been received by
the Company, accompanied with any agreements required by the terms of the Plan
and the applicable Award Agreement; provided, however, that if the Participant
has been terminated for Cause, only those Common Shares for which a certificate
has been delivered to the Participant by the Company will be deemed to be
purchased by such Participant. Full payment may consist of such consideration
and method of payment allowable under this Article VI of the Plan. No adjustment
will be made for a cash dividend or other rights for which the record date
precedes the Date of Exercise, except as provided in Section 4.4 of the Plan.
ARTICLE VII
Stock Appreciation Rights
7.1 Grant of Stock Appreciation Rights. Subject to the terms and
conditions of the Plan, Stock Appreciation Rights may be granted to
Participants, at the discretion of the Committee, in any of the following forms:
(a) in connection with the grant, and exercisable in lieu of Stock Options
("Tandem SARs"), (b) in connection with and exercisable in addition to the grant
of Stock Options ("Additive SARs"), (c) independent of the grant of Stock
Options ("Freestanding SARs"), or (d) in any combination of the foregoing.
Non-Employee Directors may not be granted any SARs under this Plan other than
Tandem SARs and Additive SARs.
7.2 Exercise of Tandem SARs
(a) Tandem SARs may be exercised with respect to all or part
of the Shares subject to the Related Option. The exercise of Tandem SARs shall
cause a reduction in the number of Shares subject to the Related Option equal to
the number of Shares with respect to which the Tandem SAR is exercised.
Conversely, the exercise, in whole or part, of a Related Option, shall cause a
reduction in the number of Shares subject to the Tandem SAR equal to the number
of Shares with respect to which the Related Option is exercised. Shares with
respect to which the Tandem SAR shall have been exercised may not be subject
again to an Award under the Plan.
(b) Notwithstanding any other provision of the Plan to the
contrary, a Tandem SAR shall expire no later than the expiration of the Related
Option and shall be exercisable only when the Related Option is eligible to be
exercised. In addition, if the Related Option is an ISO, a Tandem SAR shall be
exercised for no more than 100% of the difference between the Fair Market Value
of Shares subject to the Related Option at the time the Tandem SAR is exercised
and the Option Price of the Related Option.
7.3 Exercise of Additive SARs. Additive SARs shall be deemed to be
exercised upon, and in addition to, the exercise of the Related Option. The
deemed exercise of Additive SARs shall not reduce the number of Shares with
respect to which the Related Option remains unexercised.
7.4 Exercise of Freestanding SARs. Freestanding SARs may be exercised
upon whatever terms and conditions the Committee, in its sole discretion,
imposes upon such SARs.
7.5 Other Conditions Applicable to SARs.
(a) No SAR granted under the Plan shall be exercisable until the
expiration of at least one year after the Date of Grant, except that such
limitation shall not apply (i) in the case of death, disability, or retirement
of a Participant covered by Sections 6.10(a), (b), or (c) hereof, (ii) a
termination of service covered by the last sentence of Section 6.10(e) hereof,
or (iii) as set forth in Article IX of this Plan. In no event shall the term of
any SAR granted under the Plan exceed seven years from the Award Date. A SAR may
be exercised only when the Fair Market Value of a Share exceeds either (i) the
Fair Market Value per Share on the Award Date in the case of a Freestanding SAR,
or (ii) the Exercise Price of the Related Option in the case of either a Tandem
SAR or Additive SAR. A SAR shall be exercised by delivery to the Committee of a
notice of exercise in the form prescribed by the Committee.
<PAGE>
(b) In the event of a termination of service for any reason of death,
disability or retirement covered by Section 6.10(a), (b), or (c) of this Plan,
or pursuant to the last sentence of Section 6.10(e) hereof, unless otherwise
determined by the Committee at grant, all Additive SARs and Freestanding SARs
shall be fully vested and thereafter may be exercised by the participant or his
or her legal representatives for a period of one year from the date of such
termination of service or until the end of the Exercise Period for such SAR,
whichever is shorter; provided, however, that the Participant was not
involuntarily terminated for Cause. Notwithstanding any other provision of this
Plan, upon termination of a Participant's service with the Company or it
Subsidiaries for Cause, all of the Participant's unexercised Additive SARs and
Freestanding SARs will terminate immediately upon the date of such termination
as determined in accordance with Section 6.10(d) hereof.
(c) In the event of a termination of service for any reason other than
death, disability or retirement covered by Section 6.10(a), (b), or (c), or
pursuant to the last sentence of Section 6.10(e) hereof, unless otherwise
determined by the Committee at grant: (i) any Additive SAR and any Freestanding
SAR that was not exercised at the date of termination will expire automatically,
and (ii) any exercisable Additive SARs and Freestanding SARs will remain
exercisable for a period of three months from the date of such termination of
service until the end of the Exercise Period for such SAR, whichever is shorter;
provided, however, that the Participant was not involuntarily terminated for
Cause. Notwithstanding any other provision of this Plan, upon termination of a
Participant's service with the Company or it Subsidiaries for Cause, all of the
Participant's unexercised Additive SARs and Freestanding SARs will terminate
immediately upon the date of such termination as determined in accordance with
Section 6.10(d) hereof.
7.6 Payment Upon Exercise of SARs. (a) Subject to the provisions of the
Award Agreement, upon the exercise of a SAR, the Participant is entitled to
receive, without any payment to the Company (other than required tax withholding
amounts), an amount equal to the product of multiplying (i) the number of Shares
with respect to which the SAR is exercise by (ii) an amount equal to the excess
of: (A) the Fair Market Value per Share on the Date of Exercise of the SAR over
(B) either (x) Freestanding SAR or (y) the Exercise Price of the Related Option
in the case of either a Tandem SAR or Additive SAR.
(b) Payment to the Participant shall be made in Shares, valued
at the Fair Market Value of the Date of Exercise, in cash if the Participant has
so elected in his written notice of exercise, or a combination thereof.
7.7 Non-Transferability of SARs. Except as specifically provided in the
Award Agreement pursuant to Section 7.7(b) hereof, no SARs 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.
Further, all SARs granted to a Participant under the Plan shall be exercisable
during his lifetime only by such Participant or his guardian or legal
representative.
<PAGE>
ARTICLE VIII
Restricted Stock and Unrestricted Stock Awards
8.1 Awards of Restricted Stock. Subject to the terms and provisions of
this Plan, 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
may determine. Shares of Restricted Stock may be issued either alone or in
addition to other Awards granted under the Plan. The Committee shall determine
the eligible persons to whom, and the time or times at which, grants of
Restricted Stock will be made, the number of shares to be awarded, the price (if
any) to be paid by the recipient (subject to Section 8.2), the time or times
within which such Awards may be subject to forfeiture, the vesting schedule and
rights to acceleration thereof, and all other terms and conditions of the
Awards. The Committee may condition the grant of Restricted Stock upon the
attainment of specified performance goals or such other factors as the Committee
may determine, in its sole discretion. The provisions of Restricted Stock Awards
need not be the same with respect to each Participant, and such Awards to
individual Participants need not be the same in subsequent years.
8.2 Award Agreement for Restricted Stock. The prospective Participant
selected to receive a Restricted Stock Award shall not have any rights with
respect to such Award, unless and until such Participant has executed an Award
Agreement evidencing the Award and has delivered a fully executed copy thereof
to the Company, and has otherwise complied with the applicable terms and
conditions of such Award. Each Award Agreement relating to Restricted Stock
shall specify the Restricted Period (as defined in Section 8.3(b) below), the
conditions to be satisfied prior to removal of such restrictions, the number of
shares of Restricted Stock granted, and such other provisions as the Committee
shall determine. The Award Agreement relating to Restricted Stock Award shall
set forth the purchase price for such shares, which purchase price shall be
equal to or less than their par value and may be zero. Each Award Agreement
shall contain at least one term, condition, or restriction constituting a
"substantial risk of forfeiture" as defined in Section 83(c) of the Code.
8.3 Certain Conditions and Restrictions. The shares of Restricted Stock
awarded pursuant to this Plan shall be subject to the following minimum
restrictions and conditions:
(a) Acceptance. Awards of Restricted Stock must be accepted
within a period of sixty (60) days (or such shorter period as the Committee may
specify at grant) after the Award Date, by executing an Award Agreement relating
to the Restricted Stock which is the subject of such Award and by paying
whatever price (if any) the Committee has designated hereunder.
(b) Restriction Period. Subject to the provisions of this Plan
and the Award Agreement, during a period set by the Committee commencing with
the Award Date (the "Restriction Period"), the Participant shall not be
permitted to sell, transfer, pledge, assign, hypothecate, or otherwise dispose
of shares of Restricted Stock awarded under this Plan. Within these limits, the
Committee, in its sole discretion, may provide for the lapse of such
restrictions in installments and may accelerate or waive such restrictions in
whole or in part, based on service, performance and/or such other factors or
criteria as the Committee may determine in its sole discretion. No such
restrictions shall be removed until the expiration of at least one year after
the Award Date, except that such limitation shall not apply as set forth in
Article IX of this Plan.
(c) Legend. Each Participant receiving a Restricted Stock
Award shall be issued a stock certificate in respect of such shares of
Restricted Stock. Such certificate shall be registered in the name of such
Participant, and shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Award, substantially in the
following form:
"The sale, transferability, pledge, assignment, hypothecation,
or other disposition of this certificate and the shares of
stock represented hereby are subject to the terms and
conditions (including forfeiture) of American Bancshares, Inc.
(the "Company") 1999 Equity Incentive Plan, including the
rules and administrative procedures adopted pursuant to such
plan, and an Agreement entered into between the registered
owner and the Company dated __________. Copies of such Plan
and Agreement are on file in the offices of the Company at
4702 Cortez Road West, Bradenton, FL 34210."
(d) Custody. The Committee may require that the stock
certificates evidencing such shares of Restricted Stock be held in custody by
the Company until the restrictions thereon shall have lapsed, and that, as a
condition of any Restricted Stock Award, the Participant shall have delivered a
duly signed stock power, endorsed in blank, relating to the Restricted Stock
covered by such Award.
<PAGE>
8.4 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 laws, and may legend the certificates
representing Restricted Stock to give appropriate notice of such restrictions.
8.5 Lapse of Restrictions. Except as otherwise provided in this Article
VIII, if and when the Restriction Period expires without a prior forfeiture of
the Restricted Stock subject to such Restriction Period, the certificates for
such shares shall be delivered to the Participant. All legends shall be removed
from said certificates at the time of delivery to the Participant.
8.6 Rights as Shareholder. Except as provided in this Section 8.6,
during the Restriction Period, Participants in whose name shares of Restricted
Stock are granted hereunder: (a) shall have, with respect to such Restricted
Stock, full voting rights with respect to such shares, and (b) shall be entitled
to receive all dividends and other distributions paid with respect to such
shares. If any such dividends or distributions are paid in Shares, the Shares
shall be subject to the same restrictions on transferability as the Shares of
Restricted Stock with respect to which they were distributed. Furthermore, the
Committee, in its sole discretion, as determined at the time of Award, may
permit or require the payment of dividends to be deferred.
8.7 Termination of Employment or Resignation of Director. Subject to
the applicable provisions of the Award Agreement and this Article VIII, upon
termination of a Participant's employment with, the Company for any reason
during the Restricted Period, all Restricted Shares still subject to restriction
shall vest or be forfeited in accordance with the terms and conditions
established by the Committee at or after grant. Unless otherwise provided in the
Award Agreement:
(a) Termination of Service by Death, Disability, or
Retirement. In the event a Participant's employment is terminated during the
Restriction Period, because of death, disability, or retirement covered by
Sections 6.10(a), (b), (c), or (e) of this Plan, any remaining portion of the
Restriction Period applicable to the Restricted Stock pursuant to Section 8.3
herein shall automatically terminate and, except as otherwise provided in
Section 8.4 herein, the shares of Restricted Stock shall thereby be released and
free of restrictions.
(b) Termination of Service for Other Reasons. In the event
that a Participant terminates his employment of the Company during the
Restriction Period for any reason other than for death, disability, or
retirement, as set forth in Sections 8.7(a) herein, then any shares of
Restricted Stock still subject to restrictions as of the date of such
termination shall automatically be forfeited and, if held by the Participant,
returned to the Company.
(c) Hardship. In the event of hardship or other special
circumstances of a Participant whose employment with the Company or a Subsidiary
is involuntarily terminated (other than for cause), the Committee may, in its
sole discretion, waive in whole or in part any or all remaining restrictions
with respect to such Participant's shares of Restricted Stock, based on such
factors as the Committee may deem appropriate.
8.8 Notice of Section 83(b) Election. Any Participant making an
election under Section 83(b) of the Code with respect to Restricted Stock must
provide a copy thereof to the Company within 10 days of filing such election
with the Internal Revenue Service.
8.9 Unrestricted Stock Awards. Subject to the terms and conditions of
this Plan, the Committee, at any time and from time to time, may grant
Unrestricted Stock Awards free of restrictions under the Plan to such
Participants in such amounts, on such terms and conditions, and for such
consideration, including no consideration or such minimum consideration as may
be required by law, as it shall determine.
ARTICLE IX
Change of Control
9.1 Acceleration of Options; Lapse of Restrictions.
(a) In the event of a Change of Control of the Company: (i)
each Stock Option and SAR then-outstanding under the Plan shall be fully
exercisable, regardless of any unsatisfied vesting requirements established
under the terms of the pertinent Award Agreements, and remain so for the
duration of the Stock Option as specified in the Award Agreement, (ii) all
restrictions or conditions related to grants of Restricted Stock shall be deemed
to be immediately and fully satisfied and all certificates representing such
shares of Restricted Stock shall be released and have any legend removed by the
Secretary of the Company, and thereby become freely transferable, and (iii) all
conditions or restrictions related to an Award shall be accelerated or released;
all in such a manner, in the case of persons subject to the provisions of
Section 16(b) of the Exchange Act, as to conform to the provisions of Rule 16b-3
thereunder.
<PAGE>
(b) Awards that remain outstanding after a Change of Control shall not
be terminated as a result of a termination of service covered by Section 6.10,
7.2, 7.5, or 8.7, and shall continue to be exercisable in accordance with their
original terms, except in the case of a Participant's death in which case
termination shall occur within one-year from the date of death.
(c) Notwithstanding the foregoing, if any right granted pursuant to
this Section 9.1 would make a Change of Control transaction ineligible for
pooling of interests accounting treatment under applicable accounting principles
that, but for this Section 9.1, would have been available for such accounting
treatment, then the Committee shall have the authority to substitute stock for
cash which would otherwise be payable pursuant to this Section 9.1 having a Fair
Market Value equal to such cash.
9.2 Definition of Change of Control. For purposes of this Plan, a
"Change of Control" is deemed to have occurred if:
(a) any individual, entity, or group (within the meaning of
Sections 13(d)(3) or 14(d)(2) of the Exchange Act) is or becomes, directly or
indirectly, the "beneficial owner" (as defined by Rule 13d-3 promulgated under
the Exchange Act) of 25% or more of the combined voting power of the then
outstanding securities of the Company entitled to vote generally in the election
of Directors ("Voting Securities"); provided, however, that any acquisition by
the following will not constitute a Change of Control:
(i) the Company or any of its Subsidiaries,
(ii) any employee benefit plan (or related
trust) of the Company or its Subsidiaries, or
(iii) any corporation with respect to which,
following such acquisition, more than
50% of the combined voting power of the outstanding voting securities of such
corporation entitled to vote generally in the election of directors is then
beneficially owned by the Persons who were the beneficial owners of the Voting
Securities immediately prior to such acquisition in substantially the same
proportion as their ownership immediately prior to such acquisition of the
Voting Securities; or
(b) (i) a tender offer or an exchange offer is made to acquire
securities of the Company whereby following such offer the offerees will hold,
control, or otherwise have the direct or indirect power to exercise voting
control over 50% or more of the Voting Securities, or (ii) Voting Securities are
first purchased pursuant to any other tender or exchange offer.
(c) as a result of a tender offer or exchange offer for the
purchase of securities of the Company (other than such an offer by the Company
for its own securities), or as a result of a proxy contest, merger,
consolidation, or sale of assets, or as a result of a combination of the
foregoing, during any period of two consecutive years, individuals who, at the
beginning of such period constitute the Board, plus any new Directors of the
Company whose election or nomination for election by the Company's shareholders
was or is approved by a vote of at least two-thirds of the Directors of the
Company then still in office who either were Directors of the Company at the
beginning of such two year period or whose election or nomination for election
was previously so approved (but excluding for this purpose, any individual whose
initial assumption of office was or is in connection with the actual or
threatened election contest relating to the election of Directors of the Company
(as such term is used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act)), cease for any reason during such two year period to constitute
at least two-thirds of the members of the Board; or
(d) the shareholders of the Company approve a reorganization,
merger, consolidation, or other combination, with or into any other corporation
or entity regardless of which entity is the survivor, other than a
reorganization, merger, consolidation, or other combination, which would result
in the Voting Securities outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or being converted into Voting
Securities of the surviving entity) at least 60% of the combined voting power of
the Voting Securities or of the voting securities of the surviving entity
outstanding immediately after such reorganization, merger, consolidation; or
other combination; or
(e) the shareholders of the Company approve a plan of
liquidation or winding-up of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's assets,
or any distribution to security holders of assets of the Company having a value
equal to 30% or more of the total value of all assets of the Company.
<PAGE>
9.3 Occurrence of a Change of Control. A Change of Control will be
deemed to have occurred:
(a) with respect to any acquisition referred to in Section
9.2(a) above, the date on which the acquisition of such percentage shall have
been completed;
(b) with respect to a tender or exchange offer, the date the
offer referred to in Section 9.2(b)(i) above is made public or when documents
are filed with the SEC in connection therewith pursuant to Section 14(d) of the
Exchange Act, or the date of the purchase referenced in Section 9.2(b)(ii);
(c) with respect to a change in the composition of the Board
of Directors referred to in Section 9.2(c), the date on which such change is
adopted or is otherwise effective, whichever first occurs; or
(d) with respect to any shareholder approval referred to in
Section 9.2(d) or (e), the date of any approval.
9.4 Application of this Article IX. The provisions of this Article IX
shall apply to successive events that may occur from time to time but shall only
apply to a particular event if it occurs prior to the expiration of this Plan.
ARTICLE X
Amendment, Modification, or Termination of Plan
Insofar as permitted by applicable law, the Board, by resolution, shall
have the power at any time, and from time to time, to amend, modify, suspend,
terminate or discontinue the Plan or any part thereof (including any amendment
deemed necessary to ensure that the Company may comply with an regulatory
requirements referred to in Article XIII). The Board is specifically authorized
to amend the Plan and take such other action as it deems necessary or
appropriate to comply with Section 162(m) of the Code and the rules and
regulations promulgated thereunder. Such amendment or modification may be
without shareholder approval except to the extent that such approval is required
by the Code, or pursuant to the rules and regulations under the Section 16 of
the Exchange Act, by any national securities exchange or inter-dealer quotation
system on which the Shares are then listed, quoted, or reported, by any
regulatory authority or board having jurisdiction with respect thereto, or under
any applicable laws, rules, or regulations. Notwithstanding the provisions of
this Article X, no termination, amendment, or modification of the Plan, other
than those pursuant to Article IV hereof, shall in any manner adversely affect
any Award theretofore granted under the Plan, without the written consent of the
Participant so affected.
ARTICLE XI
Modification, Extension, and Renewal of Stock Options and Awards
Subject to the terms and conditions, and within the limitations, of the
Plan, the Committee may modify, extend, or renew outstanding Stock Options or
other Awards, prospectively or retroactively, or accept the surrender of
outstanding Stock Options (to the extent not theretofore exercised) granted
under the Plan or any other plan of the Company or a Subsidiary, and authorize
the granting of new Stock Options pursuant to the Plan in substitution therefor
(to the extent not theretofore exercised), and the substituted Stock Options may
specify a lower exercise price or a longer term than the surrendered Stock
Options or have any other provisions that are authorized by the Plan.
Notwithstanding the foregoing provisions of this Article XI, (a) no amendment or
modification of an Award which adversely affects the Participant shall not be
made without the consent of the affected Participant, and (b) no Incentive Stock
Option may be modified, amended, extended, or reissued if such action would
cause it to cease to be an "Incentive Stock Option" within the meaning of
Section 422 of the Code, unless the Participant specifically acknowledges and
consents to the tax consequences of such action.
ARTICLE XII
Indemnification of the Committee
In addition to such other rights of indemnification as they may have as
Directors or as members of the Committee, the members of the Committee shall not
be liable for any act, omission, interpretation, construction, or determination
made in good faith in connection with their administration of and
responsibilities with respect to the Plan, and the Company hereby agrees to
indemnify the members of the Committee against any claim, loss, damage, or
reasonable expense, including attorneys' fees, actually and reasonably incurred
in connection with the defense of any action, suit, or proceeding, or in
connection with any appeal therein, to which they or any of them may be a party
by reason of any action taken or failure to act under or in connection with the
Plan or any Award granted or made hereunder, and against all amounts reasonably
paid by them in settlement thereof or paid by them in satisfaction of a judgment
in any such action, suit, or proceeding, if such members acted in good faith and
in a manner which they believed to be in, and not opposed to, the best interests
of the Company and its Subsidiaries.
<PAGE>
ARTICLE XIII
General Provisions
13.1 Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Stock Option unless the exercise of such Stock
Option and the issuance and delivery of such Shares pursuant thereto shall
comply with all relevant provisions of law, including, without limitation, the
Securities Act, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the Shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance. The Committee may require each person
purchasing or otherwise acquiring Shares pursuant to a Stock Option under the
Plan to represent to and agree with the Company in writing that the Participant
is acquiring the Shares for his or her own personal account, for investment
purposes only, and not with an intent or a view to distribution within the
meaning of Section 2(11) of the Securities Act (unless such shares have been
issued to the Participant pursuant to a registration statement declared
effective by the SEC). In addition to any legend required by this Plan, the
certificates for the Shares may include any legend which the Committee deems
appropriate to reflect any restrictions on transfer.
13.2 Reservation of Shares. The Company shall at all times reserve and
keep available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan. The Company shall use its best efforts to seek to
obtain from appropriate regulatory agencies any requisite authorization in order
to issue and sell such number of Shares as shall be sufficient to satisfy the
requirements of the Plan. The inability of the Company to obtain from any such
regulatory agency having jurisdiction the requisite authorization(s) deemed by
the Company's counsel to be necessary for the lawful issuance and sale of any
Shares hereunder, or the inability of the Company to confirm to its satisfaction
that any issuance and sale of any Shares hereunder will meet applicable legal
requirements, shall relieve the Company of any liability in respect to the
failure to issue or sell such Shares as to which such requisite authority shall
not have been obtained.
13.3 Limitation on Legal Rights. The establishment of the Plan shall
not confer upon any Employee or Director any legal or equitable right against
the Company, except as expressly provided in the Plan.
13.4 Not a Contract of Employment. This Plan is purely voluntary on the
part of the Company, and the continuation of the Plan shall not be deemed to
constitute a contract between the Company and any Participant, or to be
consideration for or a condition of the employment or service of any
Participant. Participation in the Plan shall not give any Employee or Director
any right to be retained in the service of the Company or any of its
Subsidiaries, nor shall anything in this Plan affect the right of the Company or
any of its Subsidiaries to terminate any such Employee or Director with or
without cause.
13.5 Other Compensation Plans. The adoption of the Plan shall not
affect any other Stock Option or incentive or other compensation plans in effect
for the Company or any of its Subsidiaries, nor shall the Plan preclude the
Company or any Subsidiary from establishing any other forms of incentive or
other compensation plan or arrangements for Employees or Directors of the
Company or any of its Subsidiaries.
13.6 Assumption by the Company. The Company or its Subsidiaries may
assume options, warrants, or rights to purchase shares issued or granted by
other companies whose shares or assets shall be acquired by the Company or its
Subsidiaries or which shall be merged into or consolidated with the Company or
its Subsidiaries. The adoption of this Plan shall not be taken to impose any
limitations on the powers of the Company or its Subsidiaries or affiliates to
issue, grant, or assume options, warrants, rights, or restricted shares,
otherwise than under this Plan, or to adopt other Stock Option or restricted
share plans or to impose any requirements of shareholder approval upon the same.
13.7 Creditors. The interests of any Director under this Plan is not
subject to the claims of creditors and may not, in any way, be assigned,
alienated, or encumbered.
13.8 Plan Binding on Successors. All obligations of the Company under
this Plan and any Awards granted hereunder shall be binding upon any successor
and assign of the Company, whether the existence of such successor or assign is
a result of a direct or indirect purchase, merger, consolidation, or otherwise,
of all or substantially all of the business or assets of the Company.
13.9 Unfunded Status of Plan. This Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With respect to any
payments not yet made to a Participant by the Company, nothing contained herein
shall give any Participant any rights that are greater than those of a general
creditor of the Company.
<PAGE>
13.10 Withholding.
(a) Tax Withholding. The Company shall have the power and the
right to deduct or withhold, or require a Participant to remit to the Company,
an amount sufficient to satisfy federal, state, and local taxes (including the
Participant's FICA obligation) required by law to be withheld with respect to
any grant, exercise, or payment under or as a result of this Plan.
(b) Share Withholding. To the extent the Code requires
withholding upon the exercise of Nonqualified Stock Options, or upon the
occurrence of any other similar taxable event, the Committee may permit or
require, subject to any rules it deems appropriate, the withholding requirement
to be satisfied, in whole or in part, with or without the consent of the
participant, by having the Company withhold Shares having a Fair Market Value
equal to the amount required to be withheld. The value of the Shares to be
withheld shall be based on Fair Market Value of the Shares on the date that the
amount of tax to be withheld is to be determined.
13.11 Singular, Plural; Gender. Whenever used in this Plan, nouns in
the singular shall include the plural, and vice versa, and the masculine pronoun
shall include the feminine gender.
13.12 Headings. Headings to the Sections and subsections are included
for convenience and reference and do not constitute part of the Plan.
13.13 Costs. The Company shall bear all expenses incurred in
administrating this Plan, including original issue, transfer, and documentary
stamp taxes, and other expenses of issuing the Shares pursuant to Awards granted
hereunder.
13.14 Governing Law. This Plan and the actions taken in connection
herewith shall be governed, construed, and administered in accordance with the
laws of the State of Florida (regardless of the law that might otherwise govern
under applicable Florida principles of conflicts of laws).
ARTICLE XIV
Effectiveness of the Plan
This Plan shall become effective on the date that it is adopted by the
Board; provided, however, that it shall become limited to a Nonqualified Stock
Option plan if it is not approved by the shareholders of the Company within one
year (365 days) of its adoption by the Board, by a majority of the voting cast
at a duly held shareholder meeting at which a quorum representing a majority of
the Company's outstanding voting shares is present, either in person or by
proxy. The Committee may make Awards hereunder prior to shareholder approval of
the Plan; provided, however, that any and all Stock Options so awarded
automatically shall be converted into Nonqualified Stock Options if the Plan is
not approved by such shareholders within 365 days of its adoption.
ARTICLE XV
Term of the Plan
Unless sooner terminated by the Board pursuant to Article X hereof,
this Plan shall terminate ten (10) years from its effective date and no Awards
may be granted after termination, but Awards granted prior to such termination
may extend beyond that date. The Board of Directors may terminate this Plan at
any time. The termination shall not affect the validity of any Stock Option
outstanding on the date of termination.
Date Approved by Board of Directors: March 23, 1999
/s/Brian M. Watterson__________
Secretary Certification
Date Approved by the Shareholders: May 21, 1999
/s/Brian M. Watterson__________
Secretary Certification
