As filed with the Securities and Exchange Commission on October 11, 1996.
Registration No. 333-___________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
WESTWOOD FINANCIAL CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
New Jersey 22-3413572
- ------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
700-88 Broadway
Westwood, New Jersey 07675
(Address of principal executive offices)
---------------------
Westwood Financial Corporation 1993 Stock Option Plan -- Plan A
Westwood Financial Corporation 1993 Stock Option Plan -- Plan B
-------------------------
(Full Title of the Plans)
Richard Fisch, Esq.
Malizia, Spidi, Sloane & Fisch, P.C.
1301 K Street, N.W.
Suite 700 East
Washington, D.C. 20005
(202) 434-4660
(Name, address and telephone number of agent for service)
---------------------
CALCULATION OF REGISTRATION FEE
================================================================================
Title of Proposed Maxi- Proposed Maxi- Amount of
Securities to Amount to mum Offering mum Aggregate Registration
be Registered be Registered Price Per Unit Offering Price (2) Fee (2)
- ------------- ------------- -------------- ------------------ -----------
Common Stock
$.10 par value 39,224(1) $(2) $276,660 $100.00(3)
================================================================================
(1) The maximum number of shares of Westwood Financial Corporation common stock
("Common Stock") issuable upon exercise of options granted or to be granted
under the Westwood Financial Corporation 1993 Stock Option Plan -- Plan A and --
Plan B (collectively, the "Option Plans") consists of 39,224 shares which are
being registered under this Registration Statement and for which a registration
fee is being paid.
(2) Under Rule 457(h) of the 1933 Act, the registration fee may be calculated,
inter alia, based upon the price at which the stock options may be exercised.
39,224 shares of Common Stock are being registered, of which 24,664 shares are
under option at an exercise price of $6.12 per share ($150,944 in the aggregate)
and 13,075 shares are under option at an exercise price of $8.11 per share
($106,039 in the aggregate). The remainder of the shares under the Option Plans,
which are not presently subject to options (1,485 shares), are being registered
based upon the last reported ask price of the Common Stock as reported on the
Nasdaq SmallCap Market on October 7, 1996, of $13.25 per share ($19,677 in the
aggregate) for a total offering of $276,660.
(3) Represents minimum filing fee.
Under Rule 462 of the 1933 Act, the Registration Statement on Form S-8 shall be
effective upon filing with the Commission.
<PAGE>
** THIS DOCUMENT CONSTITUTES THE PROSPECTUS COVERING SECURITIES THAT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.**
PROSPECTUS
- ----------
39,224 Shares
-------------
WESTWOOD FINANCIAL CORPORATION
COMMON STOCK
(Par Value $0.10 Per Share)
-------------
WESTWOOD FINANCIAL CORPORATION
1993 STOCK OPTION PLAN
PLAN A
(19,612 Shares of Common Stock)
-------------
WESTWOOD FINANCIAL CORPORATION
1993 STOCK OPTION PLAN
PLAN B
(19,612 Shares of Common Stock)
-------------
This Prospectus relates to 39,224 shares of common stock, par value $0.10
per share (the "Common Stock"), of Westwood Financial Corporation (the
"Company") which may be issued from time to time to holders of stock options
("Optionee") granted or to be granted by the Company to selected officers,
directors , key employees and other persons of the Company and any subsidiary of
the Company pursuant to the Westwood Financial Corporation 1993 Stock Option
Plan -- Plan A and -- Plan B (collectively, the "Option Plans"). Each offer made
under the Option Plans pursuant to this Prospectus is made at the price and on
the terms and conditions contained in the agreements entered into between the
Company and each Optionee.
This Prospectus is for use as of the date hereof and in subsequent years.
Information which is likely to change from year to year will be included in
appendices to this Prospectus.
The issued and outstanding Common Stock of the Company is traded in the
over-the-counter market, and transactions are reported on the Nasdaq SmallCap
Market under the symbol "WWFC." Shares of Common Stock which may be issued upon
exercise of options granted or to be granted under the Option Plans, will also
be traded in the Nasdaq SmallCap Market. On October 7, 1996, the last reported
ask price of the Common Stock on the Nasdaq SmallCap Market was $13.25 per
share.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
The date of this Prospectus is October 11, 1996
<PAGE>
No person has been authorized to give any information or to make any
representation not contained in this Prospectus, and, if given or made, such
information or representation must not be relied upon as having been authorized
by the Company. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any securities other than the Common Stock
offered by this Prospectus or an offer to sell or a solicitation of an offer to
buy such Common Stock in any jurisdiction to any person to whom it is unlawful
to make such offer or solicitation in such jurisdiction. Neither the delivery of
this Prospectus nor any sale made hereunder shall, under any circumstances,
create any implication that there has been no change in the affairs of the
Company or that the information contained herein is correct as of any time
subsequent to the date of this Prospectus.
<PAGE>
TABLE OF CONTENTS
Page
----
General Plan Information.....................................................1
Administration...............................................................2
Purpose......................................................................2
Securities to be Offered.....................................................2
Eligibility to Participate in Option Plans...................................3
Purchases of Securities Pursuant to the Plans
and Payment for Securities Offered...........................................3
Term of the Option Plans...............................................3
Stock Option Agreements................................................3
Option Price...........................................................3
Limitations on the Grant of Options....................................4
Option Period..........................................................4
Non-transferability....................................................5
Conditions of Exercise.................................................5
Payment for Options....................................................5
Issuance of Common Stock...............................................5
Awards to Directors....................................................5
Recapitalization, Merger, Consolidation, Change in
Control and Similar Transactions.............................................6
Amendment and Termination of Plans...........................................7
Restrictions on Resale.......................................................7
Federal Income Tax Consequences..............................................8
Annual Report to Shareholders................................................8
Additional Information.......................................................8
Legal Opinion................................................................9
Appendix A.................................................................A-1
Administration.......................................................A-1
Number of Shares Subject to the Option Plans.........................A-1
Participation in the Option Plans....................................A-1
Outstanding Awards...................................................A-1
<PAGE>
Westwood Financial Corporation 1993 Stock Option Plan -- Plan A
Westwood Financial Corporation 1993 Stock Option Plan -- Plan B
General Plan Information
- ------------------------
This Prospectus relates to 39,224 shares of the Common Stock, par value
$0.10 per share, of Westwood Financial Corporation (the "Company"). The 39,224
shares of Common Stock will be offered upon exercise of options granted or to be
granted under the Westwood Financial Corporation 1993 Stock Option Plan -- Plan
A and -- Plan B (collectively, the "Option Plans").
The Company was formed under the laws of the State of New Jersey for the
purpose of becoming a holding company and became the parent corporation of
Westwood Savings Bank (the "Bank") on June 6, 1996, at which time the Company
acquired all of the shares of capital stock of the Bank ("Reorganization"). The
Bank previously adopted the Option Plans in 1993. The Option Plans were approved
by stockholders of the Bank at the Annual Meeting of Stockholders of the Bank
held in July 1994. The Option Plans are to continue in effect for a period of
ten years from the date the Bank completed its mutual holding company
reorganization under New Jersey law in 1993 (i.e., December 9, 2003) unless
earlier terminated or extended by the Company.
Pursuant to the Option Plans, 39,224 shares of Common Stock are reserved
for issuance by the Company upon the exercise of options awarded to officers,
directors, key employees and other persons of the Company and any parent or
subsidiary corporations. Options granted under the Option Plans may be Incentive
Stock Options within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended ("Code") or options not so qualifying ("Non-Incentive Stock
Options").
Subject to certain limitations, no gain or loss is recognized for federal
income tax purposes by the Optionee upon the exercise of an Incentive Stock
Option, and no tax deduction is available to the Company as a result of the
exercise. Upon exercise of a Non-Incentive Stock Option, the Optionee generally
recognizes ordinary income to the extent that the exercise price is less than
the fair market value on the date of exercise. The Company is generally entitled
to a federal income tax deduction equal to the amount of ordinary income
recognized by Optionees at the time of such income recognition. See "Federal
Income Tax Consequences."
The Option Plans will not be qualified under Section 401(a) of the Code
and are exempt from the provisions of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA").
The statements herein concerning the terms and provisions of the Option
Plans are summaries and do not purport to be complete. All such statements are
qualified in their entirety by reference to the full text of the Option Plans as
filed as exhibits to the Registration Statement of which this Prospectus is a
part. Terms which are utilized herein which are not specifically defined shall
be construed in accordance with their definition contained in the Option Plans.
Additional updating and other information with respect to the Option Plans
and the Common Stock offered hereby may be provided in the future to holders of
Options by means of one or more supplements or appendices to this Prospectus.
Additional information about the Option Plans (including a copy of the Option
Plans), plan administration and the Company may be obtained at the Company's
principal offices, which are located at 700-88 Broadway, Westwood, New Jersey
07675. The Company's telephone number is (201) 666-5002.
<PAGE>
Administration
- --------------
The Option Plans are administered by committees of the Company's Board of
Directors (the "Committees"). The Option Plans provide that each such Committee
will consist of not less than three non-employee directors of the Company. The
members of each Committee are appointed by the Board. Members of the Committee
shall be "disinterested" within the meaning of Rule 16b-3 promulgated under Rule
16(b) of the Securities Exchange Act of 1934, as amended ("1934 Act"). A
majority of each Committee shall constitute a quorum, and the action of a
majority of the members present at any meeting at which a quorum is present
shall be deemed the action of such Committee.
Subject to the express provisions of the Option Plans and resolutions
adopted by the Board, each Committee has authority to interpret the terms of the
Option Plans, to prescribe, amend and rescind the rules and regulations relating
to the Option Plans, and to determine the form and content of options to be
issued under the Option Plans. In addition, each Committee is authorized to make
all other determinations deemed necessary or advisable for the administration of
the Option Plans and shall have and may exercise such other power and such
authority as may be delegated to it by the Board from time to time. All
decisions, determinations, and interpretations of such Committee shall be final
and conclusive to all persons affected thereby.
Additional information about the Option Plans and the Committees may be
obtained from the Company at the address of the Company as listed under "General
Plan Information." For a list of the current members of each Committee, see
"Administration" at Appendix A.
Purpose
- -------
The purpose of the Option Plans is to promote the interests of the Company
by attracting and retaining the best available personnel for positions of
substantial responsibility to serve as officers, directors and key employees of
the Company and to provide additional incentive to such officers, directors and
key employees of the Company to promote the success and profitability of the
Company's business.
Securities to be Offered
- ------------------------
Under the Option Plans, the aggregate number of shares of Common Stock
which may be issued pursuant to options granted or to be granted under the
Option Plans is 39,224 shares, subject to certain adjustments for changes in the
capital structure of the Company, as described below. See "Recapitalization,
Merger, Consolidation, Change in Control and Similar Transactions." Any shares
of Common Stock subject to an option pursuant to the Option Plans which expires
or is terminated unexercised will again be available for issuance under the
Option Plans.
Eligibility to Participate in Option Plans
- ------------------------------------------
Options to purchase Common Stock under the Option Plans may be awarded to
officers, directors, key employees and other persons of the Company, the Bank,
and any present or future parent or subsidiary corporations. Under the Option
Plans, Incentive Stock Options may only be granted to employees of the Company,
the Bank, and any of their parent or subsidiary corporations. In selecting
participants under the Option Plans (the "Participants") and in determining the
number of options to be granted to each Participant, the Committees may consider
the nature of the services rendered by each
2
<PAGE>
Participant, each Participant's current and potential contribution to the
Company, and such other factors as the Committee, in its sole discretion, shall
deem relevant. In addition, pursuant to the terms of the Option Plans, directors
of the Company were awarded options based upon a specific formula contained in
the Option Plans. (See "Purchases of Securities Pursuant to the Option Plans and
Payment for Securities Offered - Awards to Directors").
For a description of the number of persons currently eligible to
participate in the Option Plans and the number of persons actually participating
in the Option Plans, see "Participation in the Option Plans" at Appendix A.
Purchases of Securities Pursuant to the Plans and Payment for Securities Offered
- --------------------------------------------------------------------------------
Term of the Option Plans. The Option Plans became effective on December 9,
1993, and unless previously terminated, the Option Plans shall continue in
effect for a term of ten years, after which no further options may be granted.
The future expiration of the Option Plans, or its termination by the Board, will
not affect any option previously granted.
Stock Option Agreements. The options granted under the Option Plans are
evidenced by stock option agreements (the "Option Agreements") substantially in
the form of the Option Agreements filed as exhibits to the Registration
Statement of which this Prospectus is a part. Each Option Agreement, and any
amendment thereto, will contain such terms and conditions consistent with the
requirements of the Option Plans as the Committee shall determine. Option
Agreements shall constitute the only form of reports which Optionees shall
receive related to the status of options granted or which are exercisable under
the Option Plans.
The Option Plans provides that the Board of Directors of the Company may
authorize the Committee to direct the execution of an instrument providing for
the modification of any outstanding option, provided that no such modification,
extension or renewal shall confer on the Optionee any rights or benefit which
could not be conferred by the grant of a new Option at such time, and shall not
materially decrease the Optionee's benefits under the option without the
Optionee's consent, except as provided under the Option Plans, which permits
modification of the Option Plans. (See "Amendment and Termination of the Option
Plans" below.)
Option Price. The exercise price for the purchase of shares subject to an
Incentive Stock Option at the date of grant may not be less than 100 percent
(100%) of the fair market value of the Common Stock covered by the Incentive
Stock Option on that date. If an officer, director or employee owns Common Stock
representing more than ten percent (10%) of the outstanding Common Stock at the
time an Incentive Stock Option is granted, then the option price shall not be
less than 110 percent (110%) of the Fair Market Value of the Common Stock at the
time the Incentive Stock Option is granted. No more than $100,000 of Incentive
Stock Options (based upon the fair market value of such Common Stock as of the
date of grant) can become exercisable for the first time in any one year for any
one person. Pursuant to the Option Plans, the exercise price per share for
Non-Incentive Stock Options shall be the price as determined by the Committee.
The exercise price of Incentive Stock Options and Non-Incentive Stock Options
must be paid for in full in cash or shares of Common Stock, or a combination of
both.
3
<PAGE>
If the Common Stock is listed on a national securities exchange on the
date of grant, then the exercise price per share shall be not less than the
average of the highest and lowest selling price on such exchange on the date
such option is granted; or if there were no sales on said date, then the price
shall be not less than the mean between the bid and ask price on such date. If
no such bid and ask price is available, then the Fair Market Value per share
shall be determined by the Committee. If the Common Stock is traded otherwise
than on a national securities exchange at the time of the granting of an option,
then the price per share shall be not less than the mean between the bid and ask
price on the date the option is granted or, if there is no bid and ask price on
said date, then on the next prior business day on which there was a bid and ask
price. If no such bid and ask price is available, then the price per share shall
be determined by the Committee.
Notwithstanding anything herein to the contrary, the Committee shall have
the authority to cancel outstanding options granted under the Option Plans with
the consent of the Optionee and to reissue new options at a lower exercise price
equal to the then Fair Market Value per share of Common Stock in the event that
the Fair Market Value per share of Common Stock at any time prior to the date of
exercise of outstanding options falls below the exercise price of such options.
Limitations on Grant of Options. Except as may be specifically provided by
the terms of the Option Plans, the granting of options is made at the sole
discretion of the Committee. Further, the aggregate Fair Market Value of the
Common Stock for which an employee may be granted options which become first
exercisable in any calendar year may not exceed $100,000, or such other maximum
amount as may be permitted by Section 422 of the Code as the same may be
hereafter amended. Notwithstanding the foregoing limitation, the Committee may
grant options in excess of this limitation, provided said options are clearly
and specifically designated as not being Incentive Stock Options, as defined in
Section 422 of the Code.
Option Period. The term of exercisability of an option granted under the
Option Plans shall be established by the Committee, but may not be for more than
ten years from the date of grant of the Option, except in the case of a
Participant who owns stock representing more than 10% of the Common Stock
outstanding at the time the option is granted, the term of the Option shall not
exceed five years from the date of the grant of the option. In general, options
will not be exercisable after the expiration of their term as set forth in the
Option Plans or the Option Agreement.
In the event that a Participant ceases to serve as an employee of the
Company for any reason other than disability or death, an exercisable Incentive
Stock Option will continue to be exercisable for three months but in no event
after the expiration date of the option. In the event of the disability or death
of a Participant during such service, an exercisable Incentive Stock Option will
continue to be exercisable for one year and two years, respectively, to the
extent exercisable by the Participant immediately prior to his disability or
death. The terms and conditions of Non-Incentive Stock Options relating to the
impact of an Optionee's termination of employment, disability or death shall be
such terms as the Committee, in its own discretion, shall determine at the time
of the grant of such options or upon termination, disability or death.
Under the Option Plans, the Committee's determination regarding whether an
Optionee's employment has ceased, and the effective date thereof shall be final
and conclusive on all persons affected thereby. Notwithstanding anything herein
to the contrary, in no event shall any option granted pursuant to the Option
Plans be exercisable for a period of six months from the date of grant, except
in the event of the death or disability of the Optionee.
4
<PAGE>
Non-transferability. No option granted under the Option Plans is
transferable other than by will or the laws of descent and distribution.
Conditions of Exercise. Options may be exercised only during the periods
specified in the Option Plans or the Option Agreement, certain information as to
which is provided above (see "Option Period"). Except as described above and as
may be limited by agreement, there is no limitation upon the number of options
that may be exercised in any one year, and options not exercised in any one year
may be exercised in subsequent years over the term of the option.
Payment for Options. Under the Option Plans, full payment for each share
of Common Stock purchased upon the exercise of any option granted shall be made
at the time of exercise of each such option and shall be paid in cash (in United
States dollars), Common Stock, or a combination of cash and Common Stock. Common
Stock utilized in full or partial payment of the exercise price shall be valued
at its Fair Market Value on the date of exercise. The Company shall accept full
or partial payment in Common Stock only to the extent permitted by applicable
law. No shares of Common Stock shall be issued until full payment therefore has
been received by the Company, and no Optionee shall have any of the rights of a
shareholder of the Company until the shares of Common Stock are issued to him.
Issuance of Common Stock. Shares issued to Optionees upon exercise of
options shall be either newly issued shares of the Company or shares purchased
in the market, at the Company's discretion. In either case, the Optionee shall
not pay any fees, commissions or other charges for such Common Stock other than
the exercise price as stated in the Option Agreement. Cash proceeds from the
sale of Common Stock issued pursuant to the exercise of options will be added to
the general funds of the Company to be used for general corporate purposes.
Shares of Common Stock shall not be issued with respect to any option granted
under the Option Plans unless the issuance and delivery of such Common Stock
shall comply with all relevant provisions of law, including, without limitation,
the Securities Act of 1933, as amended (the "1933 Act"), the rules and
regulations promulgated thereunder, any applicable state securities law, and the
requirements of any stock exchange upon which the Common Stock may then be
listed.
Inability of the Company to obtain approval from any regulatory body or
authority deemed by the Company or counsel thereto to be necessary for the
lawful issuance and sale of any Common Stock hereunder shall relieve the Company
of any liability in respect of the non-issuance or sale of such Common Stock. As
a condition to the exercise of an option, the Company may require the Optionee
to make such representations and warranties as may be necessary to assure the
availability of an exemption from any additional registration requirements of
federal or state securities laws.
Awards to Directors. Pursuant to the terms of the Option Plans,
Non-Incentive Stock Options to purchase 1,681 shares of Common Stock were
granted to each Director who was not otherwise an employee as of December 12,
1995 at an exercise price equal to the fair market value of the Common Stock on
such date of grant (i.e., $8.11 per share as adjusted for the Reorganization).
On December 9, 1993, options to acquire 2,240 shares of Common Stock were
granted to each director at an exercise price equal to the fair market value of
the Common Stock on such date of grant (i.e., $6.12 per share as adjusted for
the Reorganization). The options shall be immediately exercisable on the date of
grant, and will remain exercisable for up to ten years from such date of each
grant. Such options may be exercised for a period of ten years from the
effective date of the Option Plans without regard to the continued status of
such Optionee as a Director of the Company, or in the event of such person's
death during the term of his directorship, by the personal representation of his
estate or person or persons to
5
<PAGE>
whom his rights under such option shall have passed by will or by laws of
descent and distribution. Unless otherwise inapplicable, or inconsistent with
the provisions of the Option Plans, the options granted to Directors shall be
subject to all other provisions of the Option Plans.
Recapitalization, Merger, Consolidation, Change in Control and Similar
- --------------------------------------------------------------------------------
Transactions
- ------------
Subject to any required action by the shareholders of the Company, the
aggregate number of shares of Common Stock for which options may be granted
under the Option Plans, the number of shares of Common Stock covered by each
outstanding option, and the exercise price per share of Common Stock of each
option shall all be proportionately adjusted for any increase or decrease in the
number of issued and outstanding shares of Common Stock resulting from a
subdivision or consolidation of shares or the payment of a stock dividend on the
Common Stock or any other increase or decrease in the number of such shares of
Common Stock effected without receipt of consideration by the Company. In the
event of any change in control, recapitalization, merger, consolidation,
exchange of shares, spin-off, reorganization, tender offer, liquidation or other
extraordinary corporate action, the Committees, in their sole discretion, shall
have the power, prior to or subsequent to such action or events, to (i)
appropriately adjust the number of shares of Common Stock subject to each
option, the exercise price per share of Common Stock, and the consideration to
be given or received by the Company upon the exercise of any outstanding
options; (ii) cancel any or all previously granted options, providing that
appropriate consideration is paid to the Optionee in connection therewith;
and/or (iii) make such other adjustments in connection with the Option Plans as
the Committees deem necessary, desirable, appropriate or advisable. However, no
action may be taken by the Committees which would cause Incentive Stock Options
granted pursuant to the Option Plans to fail to meet the requirements of Section
422 of the Code.
The Committees have at all times the power to accelerate the exercise date
of all options granted under the Option Plans. In the case of any change in
control of the Company or imminent change in control as determined by the
Committees, all outstanding options shall become immediately exercisable and
non-forfeitable. A change in control is defined to include (i) the execution of
an agreement for the sale of all, or a material portion, of the assets of the
Company; (ii) the execution of an agreement for merger or recapitalization
whereby the Company is not the surviving entity; (iii) a change of control of
the Company as otherwise defined by the New Jersey Department of Banking or
regulations promulgated by it; and (iv) the acquisition, directly or indirectly,
of the beneficial ownership (within the meaning of Section 13(d) of the 1934 Act
and rules and regulations promulgated thereunder) of 25% or more of the
outstanding voting securities of the Company by any person, trust, entity or
group. An "imminent change in control" is defined as an offer or announcement,
written or oral, by any person or persons acting as a group, to acquire control
of the Company.
Amendment and Termination of Option Plans
- -----------------------------------------
The Board of Directors may alter, suspend or discontinue the Option Plans,
except that no action of the Board may increase the maximum number of shares
permitted to be optioned under the Option Plans, materially increase the
benefits accruing to Participants under the Option Plans or materially modify
the requirements for eligibility for participation in the Option Plans unless
such action of the Board shall be subject to approval or ratification by the
shareholders of the Company. The Option Plan shall continue in effect for a term
of ten years from their respective effective dates, after which no future awards
may be granted.
6
<PAGE>
Restrictions on Resale
- ----------------------
Unless specifically included as a term and condition of any option, there
are no restrictions on the resale of Common Stock acquired upon the exercise of
options. The Option Plans permit the Committees to provide as a condition to the
exercise of an option that the Common Stock acquired upon the exercise of such
options may be subject to a "Right of Repurchase" by the Company. At this time,
the Company has no intention to grant options subject to such "Right of
Repurchase." Such shares of Common Stock, however, may be resold only in
compliance with the registration requirements of the 1933 Act, and applicable
state securities laws.
Under the 1933 Act, affiliates of the Company generally may resell shares
of Common Stock purchased pursuant to the Option Plans only (i) in accordance
with the provisions of Rule 144 under the 1933 Act, or (ii) pursuant to an
applicable current and effective registration statement under the 1933 Act.
As defined in Rule 405 under the 1933 Act, an affiliate of the Company is
a person who directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with the Company. The
determination of whether a person is an affiliate of the Company is primarily a
factual one based upon whether he possesses, directly or indirectly,
individually or in concert with others, the power to direct or cause the
direction of the management or policies of the Company, whether through the
ownership of voting stock, by executive position, by membership on the Board, by
contract or otherwise. Therefore, each Optionee should consult his counsel
concerning whether he is an affiliate of the Company and the attendant
restrictions on the resale under the 1933 Act of Common Stock acquired pursuant
to the Option Plans.
In addition, the receipt of an option to purchase Common Stock by an
officer or director of the Company, or the beneficial owner of 10% or more of
the outstanding Common Stock, is a reportable transaction under Section 16 of
the 1934 Act, and Forms 3, 4 or 5 are required to be filed with the Securities
and Exchange Commission in connection with such transaction. The sale by an
officer, director or 10% holder of Common Stock issued upon an exercise of an
option within six months after the receipt of such option may create liability
of such persons to the Company under the "short-swing profit" provisions of
Section 16(b) of the 1934 Act.
Federal Income Tax Consequences
Under present federal income tax laws, awards under the Option Plans will
have the following consequences:
1. The grant of an option will not by itself, result in the
recognition of taxable income to the Participant nor entitle the
Company to a deduction at the time of such grant.
2. The exercise of an Option which is an "Incentive Stock Option"
within the meaning of Section 422 of the Code generally will not,
by itself, result in the recognition of taxable income to the
participant nor entitle the Company to a deduction at the time of
such exercise. However, the difference between the exercise price
and the fair market value of the optioned shares on the date of
exercise is an item of tax preference which may, in certain
situations, trigger the alternative minimum tax. The Participant
will recognize capital gain or loss upon resale of the Common
Stock received upon such exercise, provided that he held such
shares for at least one year after transfer of the Common
7
<PAGE>
Stock to him or two years after the grant of the option,
whichever is later. Generally, if the Common Stock is not held
for that period, the Participant will recognize ordinary income
upon disposition in an amount equal to the difference between the
exercise price and the fair market value on the date of exercise,
or, if less, the sales proceeds of the shares acquired pursuant
to the option.
3. The exercise of a Non-Incentive Stock Option will result in the
recognition of ordinary income by the Participant on the date of
exercise in an amount equal to the difference between the
exercise price and the fair market value on the date of exercise
of the shares acquired pursuant to the option.
4. The Company will be allowed a tax deduction for federal tax
purposes equal to the amount of ordinary income recognized by a
Participant at the time the Participant recognizes such ordinary
income.
The foregoing provides a general summary of the federal income tax
consequences applicable to options under the Option Plans. Each Participant is
urged to consult his or her own tax advisor for information regarding federal
and state tax consequences applicable to them.
Annual Report to Shareholders
- -----------------------------
The Bank's audited financial statements for the fiscal year ended March
31, 1996 are incorporated by reference in the Registration Statement to which
this Prospectus is a part. In the future, the Company's latest Annual Report to
Stockholders, including financial statements, will be mailed to all stockholders
of record as of the close of business on such record date. Any person wishing to
receive a copy of such Annual Report may obtain a copy by writing the Company at
the address set forth below under "Additional Information."
Additional Information
- ----------------------
Additional updating information with respect to the Common Stock and the
Option Plans covered herein may be provided in the future to Participants under
the Option Plans by means of appendices to this Prospectus. The nature and
frequency of any reports to be made to Participants as to their participation in
the Option Plans will be determined by the Committee.
The Company, upon written or oral request, will provide without charge to
any person to whom this Prospectus is delivered: a copy of the Option Plans, a
copy of any exhibits to the Registration Statement of which this Prospectus is a
part, a copy of its latest Annual Report to Stockholders (when available) and a
copy of any and all of the documents that have been incorporated by reference in
Item 3 of Part II of the Registration Statement of which this Prospectus is a
part, and that such documents are deemed incorporated by reference in this 1933
Act Section 10(a) Prospectus. Further, other documents required to be delivered
to the Participants as specified in Item 9 of Part II of the Registration
Statement are available upon request. Any such request can be oral or in writing
and should be addressed to the Corporate Secretary, Westwood Financial
Corporation, 700-88 Broadway, Westwood, New Jersey 07675. The Registrant's
telephone number is (201) 666-5002.
8
<PAGE>
Legal Opinion
- -------------
The validity of the Common Stock offered hereby will be passed upon for
the Company by Malizia, Spidi, Sloane & Fisch, P.C., 1301 K Street, N.W., Suite
700 East, Washington, D.C. 20005.
9
<PAGE>
APPENDIX A
ADDITIONAL INFORMATION CONCERNING THE
WESTWOOD FINANCIAL CORPORATION
1993 STOCK OPTION PLAN -- PLAN A
and
WESTWOOD FINANCIAL CORPORATION
1993 STOCK OPTION PLAN -- PLAN B
(As of October 11, 1996)
Administration
- --------------
The Board has appointed three non-employee Directors as members of the
Committee responsible for administration of the Option Plans, consisting of
directors Caruso, Becker, and Durgin ("Committee"). Discretionary awards under
the Option Plans have been made by the Committee to management and employees of
Westwood Savings Bank and Westwood Financial Corporation. Non- discretionary
awards under the terms of the Option Plans have been made to members of the
Board.
Number of Shares Subject to Option Plans
- ----------------------------------------
On September 30, 1996, Stock Options covering 37,739 shares of the Common
Stock were outstanding, which were granted at an average exercise price of $6.81
per share as adjusted for the Reorganization. As of the date of this Appendix,
39,224 shares of Common Stock remain issuable under the Option Plan, of which a
total of 37,739 shares of Common Stock are subject to option thereunder.
Participation in the Plans
- --------------------------
As of September 30, 1996, the Company and its subsidiaries had eight (8)
employees holding outstanding options to purchase 19,815 shares of Common Stock.
Additionally, options to purchase 15,684 shares of Common Stock were held by the
non-employee members of the Board under the Option Plans. Further, 2,240 Options
are held by the estate of a deceased director.
Outstanding Awards
- ------------------
The following table presents information with respect to the outstanding
options under the Option Plans as of the date of this Appendix.
A-1
<PAGE>
WESTWOOD FINANCIAL CORPORATION
1993 STOCK OPTION PLAN
-- PLAN A and -- PLAN B
Number of Shares Number of Average
Presently Subject Persons Holding Exercise Price
Grant Date to Options Awards Per Share
- ---------- ---------- ------ ---------
December 9, 1993 24,664 11 $6.12
December 12, 1995 13,075 9 $8.11
------ ----
Total 37,739 13 $6.81
A-2
<PAGE>
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
- --------------------------------------------------------
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "1934 Act") and, accordingly, files
periodic reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
concerning the Company filed with the Commission may be inspected and copies may
be obtained (at present rates) at the Commission's Public Reference Section,
Room 1024, 450 Fifth Street, N.W., Washington, DC 20549.
The following documents are incorporated in this Registration Statement
by reference:
(1) The Company's Registration Statement on Form S-1 filed with the
Commission on December 20, 1995 and amendments thereto (Registration No.
33-80681);
(2) The Company's audited financial statements filed under cover of Form
10-KSB for the fiscal year ended March 31, 1996, filed with the Commission;
(3) The Company's Quarterly Financial Statements on Form 10-QSB for the
quarter ended June 30, 1996, filed with the Commission;
(4) The Company's Registration Statement on Form 8-A filed with the
Commission on April 12, 1996; and
(5) Information as to options which will be included in the future either
in the Company's proxy statements, annual reports or appendices to this
Prospectus.
All documents filed by the Company pursuant to Sections 13, 14 or 15(d)
of the Securities Exchange Act of 1934 after the date hereof and prior to the
termination of the offering of the shares of Common Stock shall be deemed to be
incorporated by reference in this Registration Statement herein and to be a part
hereof from the date of filing of such documents.
Item 4. Description of Securities.
- ----------------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel.
- -----------------------------------------------
Not applicable.
Item 6. Indemnification of Directors and Officers.
- --------------------------------------------------
The Certificate of Incorporation of the Company requires indemnification
of directors, officers and employees to the fullest extent permitted by New
Jersey law. New Jersey law provides that any corporation organized for any
purpose under any general or special law of New Jersey shall have the
II-1
<PAGE>
power to indemnify a director, officer, employee or agent ("corporate agent")
against his or her expenses and liabilities in connection with any proceeding
involving such person by reason of his or her being or having been a corporate
agent, other than a proceeding by or in the right of the corporation, if (i)
such corporate agent acted in good faith and in the manner he or she reasonably
believed to be in or not opposed to the best interests of the corporation; and
(ii) with respect to any criminal proceeding, such person had no reasonable
cause to believe his or her conduct was unlawful. The termination of any
proceeding by judgment, order, settlement, conviction or upon a plea of nolo
contendere or its equivalent, shall not of itself create a presumption that such
person did not meet the applicable standards of conduct set forth in (i) and
(ii) above (NJBCA 14A:3-5 (2)).
Further, any corporation organized for any purpose under any general or
special law of New Jersey would have the power to indemnify a corporate agent
against his or her expenses in connection with any proceeding by or in the right
of the corporation to procure a judgment in its favor which involves such person
by reason for the person being or having been a corporate agent, if he or she
acted in good faith and in a manner he or she reasonably believed to be in or
not opposed to the best interests of the corporation. However, in such
proceeding, no indemnification shall be provided for any claim, issue or matter
as to which such person shall have been adjudged to be liable to the
corporation, unless and only to the extent that the Superior Court or the court
in which such proceeding was brought shall determine upon application that
despite the adjudication of liability, but in view of all circumstances of the
case, such person is fairly and reasonably entitled to indemnity for such
expenses as the Superior Court or such other court shall deem proper (NJBCA
14A:3-5 (3)).
Any corporation organized for any purpose under any general or special
law of New Jersey must indemnify a corporate agent against expenses to the
extent that such corporate agent has been successful on the merits or otherwise
in any proceeding (referred to above) or in the defense of any claim, issue or
matter therein (NJBCA 14A:3-5 (4)).
In general, any indemnification may be made by the corporation only as
authorized in a specific case upon a determination that indemnification is
proper in the circumstances because the corporate agent met the applicable
standard of conduct as provided by statute. Unless otherwise provided in the
Certificate or bylaws, such determination shall be made (i) by the board of
directors or a committee thereof, acting by a majority vote of a quorum
consisting of directors who were not parties to or otherwise involved in the
proceeding; or (ii) if such a quorum is not obtainable, or, even if obtainable
and such quorum of the board of directors or committee by a majority vote of the
disinterested directors so directs, by independent legal counsel in a written
opinion, such counsel to be designated by the board of directors; or (iii) by
the shareholders if the certificate of incorporation or bylaws or a resolution
of the board of directors or of the shareholders so directs (NJBCA 14A:3-5(5)).
The New Jersey statute further provides that expenses incurred by a
corporate agent in connection with a proceeding may be paid by the corporation
in advance of the final disposition of the proceeding as authorized by the board
of directors upon receipt of an undertaking by or on behalf of the corporate
agent to repay such amount if it is ultimately determined that he or she is not
entitled to be indemnified as provided by statute (NJBCA 14A:3-5(6)).
The indemnification and advancement of expenses provided by the New
Jersey statute do not exclude any other rights, including the right to be
indemnified against liabilities and expenses incurred in proceedings by or in
the right of the corporation, to which a corporate agent may be entitled under
the certificate of incorporation, bylaws, agreement, vote of shareholders, or
otherwise; provided that no
II-2
<PAGE>
indemnification shall be made to or on behalf of a corporate agent if a judgment
or other final adjudication adverse to the corporate agent establishes that his
acts or omissions (i) were in breach of his duty of loyalty to the corporation
or its shareholders, (ii) were not in good faith or involved a knowing violation
of law, or (iii) resulted in receipt by the corporate agent of an improper
personal benefit (NJBCA 14A:3-5(8)). The New Jersey statute allows a corporation
to obtain insurance on behalf of a corporate agent against any expenses incurred
in any proceeding and any liabilities asserted against him or her by reason of
his or her being or having been a director, officer, employee or agent, whether
or not the corporation would have the power to indemnify him or her against such
expenses and liabilities under the provisions of the New Jersey statute (NJBCA
14A:3-5(9)). No indemnification can be made, however, if it is inconsistent with
the certificate of incorporation, bylaws, a resolution of the board or
shareholders, or an agreement or other proper corporate action in effect at the
time of the accrual of the alleged cause of action asserted in a proceeding
(NJBCA 14A:3-5(11)).
New Jersey law also allows for the limitation of liability of directors
and officers. NJBCA 14A:2-7(3). The Certificate of Incorporation provides in
accordance with New Jersey law that a director or officer will not be personally
liable to the Company or its stockholders for damages for breach of any duty
owed to the Company or its stockholders provided that, this provision in the
Certificate of Incorporation will not relieve a director or officer from
liability for any breach of duty based upon an act or omission (i) in breach of
the director's or officer's duty of loyalty to the Company or the stockholders,
(ii) not in good faith or knowing violation of the law, or (iii) resulting in
receipt by such person of an improper personal benefit.
The registrant believes that these provisions assist the registrant in,
among other things, attracting and retaining qualified persons to serve the
registrant and its subsidiary. However, a result of such provisions could be to
increase the expenses of the registrant and effectively reduce the ability of
stockholders to sue on behalf of the registrant since certain suits could be
barred or amounts that might otherwise be obtained on behalf of the registrant
could be required to be repaid by the registrant to an indemnified party.
The Company has in force a Directors and Officers Liability Policy
underwritten by Continental Casualty Co. with a $2.0 million aggregate limit of
liability and an aggregate deductible of $25,000.00 per loss both for claims
directly against officers and directors and for claims where the Company is
required to indemnify directors and officers.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 ("1933 Act") may be permitted to directors, officers, or persons
controlling the Company pursuant to the foregoing provisions, the Company has
been informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the 1933 Act and is
therefore unforceable.
Item 7. Exemption from Registration Claimed.
- --------------------------------------------
Not applicable.
Item 8. Exhibits
- -----------------
For a list of all exhibits filed or included as part of this Registration
Statement, see "Index to Exhibits" at the end of this Registration Statement.
II-3
<PAGE>
Item 9. Undertakings
- ---------------------
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
provided however, that paragraphs (a)(1)(i) and (a)(1)(ii) do no apply if the
registration statement is on Form S-3, Form S-8, and the information required to
be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) If the registrant is a foreign private issuer, to file a
post-effective amendment to the registration statement to include any financial
statements required by Rule 3-19 of Regulation S-X at the start of any delayed
offering or throughout a continuous offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes to deliver or cause to
be delivered with the prospectus, to each person to whom the prospectus is sent
or given, the latest annual report, to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
II-4
<PAGE>
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
(d) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the 1933 Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the 1933 Act and
will be governed by the final adjudication of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Westwood
Financial Corporation certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing a Registration Statement on Form S-8
and has duly caused this Registration Statement to be signed on its behalf by
the undersigned thereunto duly authorized, in the State of New Jersey, on the
11th day of October 1996.
Westwood Financial Corporation
By: /s/William J. Woods
---------------------------------------------
William J. Woods
President and Chief Executive Officer
(Duly Authorized Representative)
POWER OF ATTORNEY
We, the undersigned directors and officers of Westwood Financial
Corporation, do hereby severally constitute and appoint William J. Woods our
true and lawful attorney and agent, to do any and all things and acts in our
names in the capacities indicated below and to execute any and all instruments
for us and in our names in the capacities indicated below which said William J.
Woods may deem necessary or advisable to enable Westwood Financial Corporation
to comply with the Securities Act of 1933, as amended, and any rules,
regulations and requirements of the Securities and Exchange Commission, in
connection with the Registration Statement on Form S-8 relating to the offering
of the Company's Common Stock, including specifically, but not limited to, power
and authority to sign for us or any of us in our names in the capacities
indicated below the Registration Statement and any and all amendments (including
post-effective amendments) thereto; and we hereby ratify and confirm all that
said William J. Woods shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following person on October
11, 1996 in the capacities indicated.
<TABLE>
<CAPTION>
<S> <C>
/s/William J. Woods /s/George E. Niemczyk
- ------------------------------------- --------------------------------------------
William J. Woods George E. Niemczyk
President, Chief Executive Officer Vice President and Controller
and Chairman of the Board (Principal Financial and Accounting Officer)
(Principal Executive Officer)
/s/William J. Durgin /s/John M. Caruso
- ------------------------------------- --------------------------------------------
William J. Durgin John M. Caruso
Director Director
/s/Joanne Miller /s/Paul F. Becker
- ------------------------------------- --------------------------------------------
Joanne Miller Paul F. Becker
Executive Vice President and Director Director
/s/Sidney J. Hagan
- -------------------------------------
Sidney J. Hagan
Director
</TABLE>
<PAGE>
INDEX TO EXHIBITS
Exhibit Description
4.1 Westwood Financial Corporation
1993 Stock Option Plan -- Plan A
4.2 Westwood Financial Corporation
1993 Stock Option Plan -- Plan B
4.3 Form of Stock Option Agreement to be entered into
with Optionees with respect to Incentive Stock Options
4.4 Form of Stock Option Agreement to be entered into
with Optionees with respect to Non-Incentive Stock
Options
5.1 Opinion of Malizia, Spidi, Sloane & Fisch, P.C. as to the
validity of the Common Stock being registered
23.1 Consent of Malizia, Spidi, Sloane & Fisch, P.C. (appears
in their opinion filed as Exhibit 5.1)
23.2 Consents of Independent Accountants - RD Hunter & Company LLP
24 Reference is made to the Signatures section of this
Registration Statement for the Power of Attorney
contained therein
EXHIBIT 4.1
Westwood Financial Corporation
1993 Stock Option Plan -- Plan A
<PAGE>
WESTWOOD FINANCIAL CORPORATION
1993 STOCK OPTION PLAN
----------------------
PLAN A
1. Purpose of the Plan. The Plan shall be known as the Westwood Financial
Corporation 1993 Stock Option Plan -- Plan A (the "Plan"). The purpose of the
Plan is to attract and retain the best available personnel for positions of
substantial responsibility and to provide additional incentive to officers,
directors and key employees of Westwood Financial Corporation (the "Company"),
or any present or future parent or subsidiary of the Company to promote the
success of the business. The Plan is intended to provide for the grant of
"Incentive Stock Options," within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code") and Non-Incentive Stock Options,
options that do not so qualify. Each and every one of the provisions of the Plan
relating to Incentive Stock Options shall be interpreted to conform to the
requirements of Section 422 of the Code.
2. Definitions. As used herein, the following definitions shall apply.
(a) "Award" means the grant by the Committee of an Incentive Stock Option
or a Non-Incentive Stock Option, or any combination thereof, as provided in the
Plan.
(b) "Board" shall mean the Board of Directors of the Savings Bank.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(d) "Committee" shall mean the Stock Option Committee appointed by the
Board in accordance with paragraph 5(a) of the Plan.
(e) "Common Stock" shall mean common stock, par value $0.10 per share, of
the Savings Bank.
(f) "Company" shall mean Westwood Financial Corporation.
(g) "Continuous Employment" or "Continuous Status as an Employee" shall
mean the absence of any interruption or termination of employment with the
Company or any present or future Parent or Subsidiary of the Company. Employment
shall not be considered interrupted in the case of sick leave, military leave or
any other leave of absence approved by the Company (or its subsidiary) or in the
case of transfers between payroll locations, of the Savings Bank or between the
Savings Bank, its Parent, its Subsidiaries or a successor.
(h) "Director" shall mean a member of the Board of the Savings Bank or
the Company.
(i) "Effective Date" shall mean the date specified in Section 15 hereof.
(j) "Employee" shall mean any person employed by the Company or any
present or future Parent or Subsidiary of the Company.
A-1
<PAGE>
(k) "Incentive Stock Option" or "ISO" shall mean an option to purchase
Shares granted by the Committee pursuant to Section 8 hereof which is subject to
the limitations and restrictions of Section 8 hereof and is intended to qualify
under Section 422 of the Code.
(l) "Non-Incentive Stock Option" or "Non-ISO" shall mean an option to
purchase Shares granted pursuant to Section 9 hereof, which option is not
intended to qualify under Section 422 of the Code.
(m) "Option" shall mean an Incentive or Non-Incentive Stock Option
granted pursuant to this Plan providing the holder of such Option with the right
to purchase Common Stock.
(n) "Optioned Stock" shall mean stock subject to an Option granted
pursuant to the Plan.
(o) "Optionee" shall mean any person who receives an Option or Award
pursuant to the Plan.
(p) "Parent" shall mean any present or future corporation which would be
a "parent corporation" as defined in Subsections 424(e) and (g) of the Code.
(q) "Participant" means any director, officer or key employee of the
Company or any Parent or Subsidiary of the Company or any other person providing
a service to the Company who is selected by the Committee to receive an Award,
or who by the express terms of the Plan is granted an Award.
(r) "Plan" shall mean the Westwood Financial Corporation 1993 Stock
Option Plan -- Plan A.
(s) "Savings Bank" shall mean Westwood Savings Bank.
(t) "Share" shall mean one share of the Common Stock.
(u) "Subsidiary" shall mean any present or future corporation which would
be a "subsidiary corporation" as defined in Subsections 424(f) and (g) of the
Code.
3. Shares Subject to the Plan. Except as otherwise required by the provisions
of Section 13 hereof, the aggregate number of Shares with respect to which
Awards may be made pursuant to the Plan shall not exceed 19,611. Such Shares may
either be authorized but unissued shares or treasury shares.
An Award shall not be considered to be made under the Plan with respect to any
Option which terminates prior to its exercise, and new Awards may be granted
under the Plan with respect to the number of Shares as to which such termination
has occurred.
4. Six Month Holding Period.
A total of six months must elapse between the date of the grant of an
Option and the date of the sale of Common Stock received through the exercise of
an Option.
A-2
<PAGE>
5. Administration of the Plan.
(a) (i) Composition of the Committee. Except as indicated in paragraph
5(a)(ii) below, the Plan shall be administered by the Committee consisting of at
least three non-employee Directors of the Company appointed by the Board and
serving at the pleasure of the Board. Officers, Directors, key employees and
other persons who are designated by the Committee shall be eligible to receive
Awards under the Plan, and all persons designated as members of the Committee
shall be "disinterested persons" within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934.
(ii) For the purpose of granting Awards to directors, the selection
of any Director to whom Awards may be granted, as well as the number of Shares
subject to Awards, must be determined by a "disinterested committee", as defined
in Rule 16b-3 under the Securities Exchange Act of 1934.
(b) Powers of the Committee. The Committee is authorized (but only to the
extent not contrary to the express provisions of the Plan or to resolutions
adopted by the Board) to interpret the Plan to prescribe, amend and rescind
rules and regulations relating to the Plan, to determine the form and content of
Awards to be issued under the Plan and to make other determinations necessary or
advisable for the administration of the Plan, and shall have and may exercise
such other power and authority as may be delegated to it by the Board from time
to time. A majority of the entire Committee shall constitute a quorum and the
action of a majority of the members present at any meeting at which a quorum is
present shall be deemed the action of the Committee. In no event may the
Committee revoke outstanding Awards without the consent of the Participant.
The Chairman of the Company and such other officers as shall be
designated by the Committee are hereby authorized to execute instruments
evidencing Awards on behalf of the Company and to cause them to be delivered to
the Participants.
(c) Effect of Committee's Decision. All decisions, determinations and
interpretations of the Committee shall be final and conclusive on all persons
affected thereby.
6. Eligibility.
(i) Awards may be granted to officers, Directors, key employees and
other persons. The Committee shall from time to time determine the officers,
Directors, key employees and other persons who shall be granted Awards under the
Plan, the number to be granted to each such officer, Director, key employee and
other persons under the Plan, and whether Awards granted to each such
Participant under the Plan shall be Incentive and/or Non-Incentive Stock
Options. In selecting Participants and in determining the number of Shares of
Common Stock to be granted to each such Participant pursuant to each Award
granted under the Plan, the Committee may consider the nature of the services
rendered by each such Participant, each such Participant's current and potential
contribution to the Company and Savings Bank and such other factors as the
Committee may, in its sole discretion, deem relevant. Officers, Directors, key
employees or other persons who have been granted an Award may, if otherwise
eligible, be granted additional Awards.
(ii) The aggregate fair market value (determined as of the date the
Option is granted) of the Shares with respect to which Incentive Stock Options
are exercisable for the first time by each Employee during any calendar year
(under all Incentive Stock Option plans, as defined in Section 422 of the Code,
of the Company or any present or future Parent or Subsidiary of the Company)
shall not
A-3
<PAGE>
exceed $100,000. Notwithstanding the prior provisions of this Section 6, the
Committee may grant Options in excess of the foregoing limitations, provided
said Options shall be clearly and specifically designated as not being Incentive
Stock Options, as defined in Section 422 of the Code.
(iii) In no event shall Shares subject to Options granted to
non-employee Directors in the aggregate under this Plan exceed more than 40.0%
of the total number of Shares authorized for delivery under this Plan pursuant
to Section 3 herein.
7. Term of the Plan. The Plan shall continue in effect for a term of ten (10)
years from the Effective Date, unless sooner terminated pursuant to Section 18
hereof. No Option shall be granted under the Plan after ten (10) years from the
Effective Date.
8. Terms and Conditions of Incentive Stock Options. Incentive Stock Options
may be granted only to Participants who are Employees. Each Incentive Stock
Option granted pursuant to the Plan shall be evidenced by an instrument in such
form as the Committee shall from time to time approve. Each and every Incentive
Stock Option granted pursuant to the Plan shall comply with, and be subject to,
the following terms and conditions:
(a) Option Price.
(i) The price per Share at which each Incentive Stock Option
granted under the Plan may be exercised shall not, as to any particular
Incentive Stock Option, be less than the fair market value of the Common Stock
at the time such Incentive Stock Option is granted. For such purposes, if the
Common Stock is traded otherwise than on a national securities exchange at the
time of the granting of an Option, then the price per Share of the Optioned
Stock shall be not less than the mean between the bid and ask price on the date
the Incentive Stock Option is granted or, if there is no bid and ask price on
said date, then on the next prior business day on which there was a bid and ask
price. If no such bid and ask price is available, then the price per Share shall
be determined by the Committee. If the Common Stock is listed on a national
securities exchange at the time of the granting of an Incentive Stock Option,
then the price per Share shall be not less than the average of the highest and
lowest selling price on such exchange on the date such Incentive Stock Option is
granted or, if there were no sales on said date, then the price shall be not
less than the mean between the bid and ask price on such date.
(ii) In the case of an Employee who owns Common Stock representing
more than ten percent (10%) of the outstanding Common Stock at the time the
Incentive Stock Option is granted, the Incentive Stock Option price shall not be
less than one hundred and ten percent (110%) of the fair market value of the
Common Stock at the time the Incentive Stock Option is granted.
(b) Payment. Full payment for each Share of Common Stock purchased upon
the exercise of any Incentive Stock Option granted under the Plan shall be made
at the time of exercise of each such Incentive Stock Option and shall be paid in
cash (in United States Dollars), Common Stock or a combination of cash and
Common Stock. Common Stock utilized in full or partial payment of the exercise
price shall be valued at its fair market value at the date of exercise. The
Company shall accept full or partial payment in Common Stock only to the extent
permitted by applicable law. No Shares of Common Stock shall be issued until
full payment therefor has been received by the Company, and no Optionee shall
have any of the rights of a stockholder of the Company until Shares of Common
Stock are issued to him.
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(c) Term of Incentive Stock Option. The term of each Incentive Stock
Option granted pursuant to the Plan shall be not more ten (10) years from the
date each such Incentive Stock Option is granted, provided that in the case of
an Employee who owns stock representing more than ten percent (10%) of the
Common Stock outstanding at the time the Incentive Stock Option is granted, the
term of the Incentive Stock Option shall not exceed five (5) years.
(d) Exercise Generally. Except as otherwise provided in Section 10
hereof, no Incentive Stock Option may be exercised unless the Optionee shall
have been in the employ of the Company or the Savings Bank at all times during
the period beginning with the date of grant of any such Incentive Stock Option
and ending on the date three (3) months prior to the date of exercise of any
such Incentive Stock Option. The Committee may impose additional conditions upon
the right of an Optionee to exercise any Incentive Stock Option granted
hereunder which are not inconsistent with the terms of the Plan or the
requirements for qualification as an Incentive Stock Option under Section 422 of
the Code.
(e) Cashless Exercise. An Optionee who has held an Incentive Stock Option
for at least six months may engage in the "cashless exercise" of the Option. In
a cashless exercise, an Optionee gives the Company written notice of the
exercise of the Option together with an order to a registered broker-dealer or
equivalent third party, to sell part or all of the Optioned Stock and to deliver
enough of the proceeds to the Company to pay the Option price and any applicable
withholding taxes. If the Optionee does not sell the Optioned Stock through a
registered broker-dealer or equivalent third party, he can give the Company
written notice of the exercise of the Option and the third party purchaser of
the Optioned Stock shall pay the Option price plus any applicable withholding
taxes to the Company.
(f) Transferability. Any Incentive Stock Option granted pursuant to the
Plan shall be exercised during an Optionee's lifetime only by the Optionee to
whom it was granted and shall not be assignable or transferable otherwise than
by will or by the laws of descent and distribution.
9. Terms and Conditions of Non-Incentive Stock Options. Each Non-Incentive
Stock Option granted pursuant to the Plan shall be evidenced by an instrument in
such form as the Committee shall from time to time approve. Each and every
Non-Incentive Stock Option granted pursuant to the Plan shall comply with and be
subject to the following terms and conditions.
(a) Options Granted to Directors. Subject to the limitations of Section
6(iii), 1,120 Non-Incentive Stock Options will be granted to each Director as of
the Effective Date at an exercise price equal to the fair market value of the
Common Stock on such date of grant. The Option will be exercisable immediately
upon the date it is granted subject to stockholder ratification of the Plan and
will remain exercisable for up to ten years from such date of grant. The price
per Share at which such Options granted shall be equal to the fair market value
of the Common Stock at the time such Options are granted. For such purposes, if
the Common Stock is traded otherwise than on a national securities exchange at
the time of the granting of the Options, then the price per Share of the
Optioned Stock shall be not less than the mean between the bid and ask price on
the date the Options are granted or, if there is no bid and ask price on said
date, then on the next prior business day on which there was a bid and ask
price. If no such bid and ask price is available, then the price per Share shall
be determined by the Committee. If the Common Stock is listed on a national
securities exchange at the time of the granting of an Options, then the price
per Share shall be not less than the average of the highest and lowest selling
price on such exchange on the date such Options are granted or, if there were no
sales on said date, then the price shall be not less than the mean between the
bid and ask price on such date. Such Options may be exercised for a period of
ten years from the Effective Date of the Plan without
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regard to the continued status of such Optionee as a Director of the Company, or
in the event of such person's death during the term of his directorship, by the
personal representation of his estate or person or persons to whom his rights
under such Option shall have passed by will or by laws of descent and
distribution. Unless otherwise inapplicable, or inconsistent with the provisions
of this paragraph, the Options to be granted to Directors hereunder shall be
subject to all other provisions of this Plan. Notwithstanding anything herein to
the contrary, Options granted pursuant to this Section 9(a) to Directors who are
also Employees at the time of such grant shall be deemed Incentive Stock
Options; provided that if such Options shall not be exercised within 3 months of
the date of termination of employment, such Options shall thereafter be deemed
Non-Incentive Stock Options and shall remain exercisable for the remaining term
of exercisability without regard to employment status. Notwithstanding the
provisions of Section 9(a), additional Awards may be made to Directors who are
serving as Employees within the sole discretion of the Committee.
(b) Option Price. The exercise price per Share of Common Stock for each
Non-Incentive Stock Option granted pursuant to the Plan, shall be at such price
as the Committee may determine in its sole discretion.
(c) Payment. Full payment for each Share of Common Stock purchased upon
the exercise of any Non-Incentive Stock Option granted under the Plan shall be
made at the time of exercise of each such Non-Incentive Stock Option and shall
be paid in cash (in United States Dollars), Common Stock or a combination of
cash and Common Stock. Common Stock utilized in full or partial payment of the
exercise price shall be valued at its fair market value at the date of exercise.
The Company shall accept full or partial payment in Common Stock only to the
extent permitted by applicable law. No Shares of Common Stock shall be issued
until full payment therefor has been received by the Company and no Optionee
shall have any of the rights of a stockholder of the Company until the Shares of
Common Stock are issued to him.
(d) Term. The term of each Non-Incentive Stock Option granted pursuant to
the Plan shall be not more than ten (10) years from the date each such
Non-Incentive Stock Option is granted.
(e) Exercise Generally. The Committee may impose additional conditions
upon the right of any Participant to exercise any Non-Incentive Stock Option
granted hereunder which is not inconsistent with the terms of the Plan.
(f) Cashless Exercise. An Optionee who has held a Non-Incentive Stock
Option for at least six months may engage in the "cashless exercise" of the
Option. In a cashless exercise, an Optionee gives the Company written notice of
the exercise of the Option together with an order to a registered broker-dealer
or equivalent third party, to sell part or all of the Optioned Stock and to
deliver enough of the proceeds to the Company to pay the Option price and any
applicable withholding taxes. If the Optionee does not sell the Optioned Stock
through a registered broker-dealer or equivalent third party, he can give the
Company written notice of the exercise of the Option and the third party
purchaser of the Optioned Stock shall pay the Option price plus any applicable
withholding taxes to the Company.
(g) Transferability. Any Non-Incentive Stock Option granted pursuant to
the Plan shall be exercised during an Optionee's lifetime only by the Optionee
to whom it was granted and shall not be assignable or transferable otherwise
than by will or by the laws of descent and distribution.
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(h) Options Granted to Directors. Notwithstanding anything herein to the
contrary, as of December 12, 1995, ("Date of Grant") 840 Non-Incentive Stock
Options will be granted to each Director that is not then an Employee of the
Savings Bank at an exercise price equal to the fair market value of the Common
Stock on such date of grant. The Options will be exercisable immediately upon
the date it is granted and will remain exercisable for up to ten years from such
date of grant. The exercise price per Share at which such Options are granted
shall be equal to the fair market value of the Common Stock at the time such
Options are granted. For such purposes, the exercise price per Share of the
Optioned Stock shall be not less than the mean between the bid and ask price of
the Common Stock on the date the Options are granted or, if there is no bid and
ask price on said date, then on the next prior business day on which there was a
bid and ask price. If no such bid and ask price is available, then the price per
Share shall be determined by the Committee in good faith. Such Options may be
exercised for a period of ten years from the Date of Grant without regard to the
continued status of such Optionee as a Director or Director Emeritus of the
Company, or in the event of such person's death during the term of his
directorship, by the personal representation of his estate or person or persons
to whom his rights under such Option shall have passed by will or by laws of
descent and distribution. Unless otherwise inapplicable, or inconsistent with
the provisions of this paragraph, the Options to be granted to Directors
hereunder shall be subject to all other provisions of this Plan.
10. Effect of Termination of Employment, Disability or Death on Incentive
Stock Options.
(a) Termination of Employment. In the event that any Optionee's
employment with the Company or Savings Bank shall terminate for any reason,
other than Permanent and Total Disability (as such term is defined in Section
22(e)(3) of the Code) or death, all of any such Optionee's Incentive Stock
Options, and all of any such Optionee's rights to purchase or receive Shares of
Common Stock pursuant thereto, shall automatically terminate on the earlier of
(i) the respective expiration dates of any such Incentive Stock Options or (ii)
the expiration of not more than three (3) months after the date of such
termination of employment, but only if, and to the extent that, the Optionee was
entitled to exercise any such Incentive Stock Options at the date of such
termination of employment. In the event that a subsidiary ceases to be a
subsidiary of the Company, the employment of all of its employees who are not
immediately thereafter employees of the Company shall be deemed to terminate
upon the date such subsidiary so ceases to be a Subsidiary of the Company.
(b) Disability. In the event that any Optionee's employment with the
Company shall terminate as the result of the Permanent and Total Disability of
such Optionee, such Optionee may exercise any Incentive Stock Options granted to
him pursuant to the Plan at any time prior to the earlier of (i) the respective
expiration dates of any such Incentive Stock Options or (ii) the date which is
one (1) year after the date of such termination of employment, but only if, and
to the extent that, the Optionee was entitled to exercise any such Incentive
Stock Options at the date of such termination of employment.
(c) Death. In the event of the death of an Optionee, any Incentive Stock
Options granted to such Optionee may be exercised by the person or persons to
whom the Optionee's rights under any such Incentive Stock Options pass by will
or by the laws of descent and distribution (including the Optionee's estate
during the period of administration) at any time prior to the earlier of (i) the
respective expiration dates of any such Incentive Stock Options or (ii) the date
which is two (2) years after the date of death of such Optionee but only if, and
to the extent that, the Optionee was entitled to exercise any such Incentive
Stock Options at the date of death. For purposes of this Section 10(c), any
Incentive Stock Option held by an Optionee shall be considered exercisable at
the date of his death if the only unsatisfied condition precedent to the
exercisability of such Incentive Stock Option at the date of death is the
passage
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of a specified period of time. At the discretion of the Committee, upon exercise
of such Options the Optionee may receive Shares or cash or combination thereof.
If cash shall be paid in lieu of Shares, such cash shall be equal to the
difference between the fair market value of such Shares and the exercise price
of such Options on the exercise date.
(d) Incentive Stock Options Deemed Exercisable. For purposes of Sections
10(a), 10(b) and 10(c) above, any Incentive Stock Option held by any Optionee
shall be considered exercisable at the date of termination of his employment if
any such Incentive Stock Option would have been exercisable at such date of
termination of employment.
(e) Termination of Incentive Stock Options. To the extent that any
Incentive Stock Option granted under the Plan to any Optionee whose employment
with the Company or the Savings Bank terminates shall not have been exercised
within the applicable period set forth in this Section 10, any such Incentive
Stock Option, and all rights to purchase or receive Shares of Common Stock
pursuant thereto, as the case may be, shall terminate on the last day of the
applicable period.
11. Effect of Termination of Employment, Disability or Death on Non-Incentive
Stock Options. The terms and conditions of Non-Incentive Stock Options relating
to the effect of the termination of an Optionee's employment, disability of an
Optionee or his death shall be such terms and conditions as the Committee shall,
in its sole discretion, determine at the time of termination, unless
specifically provided for by the terms of the Agreement at the time of grant of
the Award.
12. Right of Repurchase and Restrictions on Disposition. The Committee, in its
sole discretion, may include, as a term of any Incentive Stock Option or
Non-Incentive Stock Option, the right (the "Repurchase Right"), but not the
obligation, to repurchase all or any amount of the Shares acquired by an
Optionee pursuant to the exercise of any such Options. The intent of the
Repurchase Right is to encourage the continued employment of the Optionee. The
Repurchase Right shall provide for, among other things, a specified duration of
the Repurchase Right, a specified price per Share to be paid upon the exercise
of the Repurchase Right and a restriction on the disposition of the Shares by
the Optionee during the period of the Repurchase Right. The Repurchase Right may
permit the Company to transfer or assign such right to another party. The
Company may exercise the Repurchase Right only to the extent permitted by
applicable law.
13. Recapitalization, Merger, Consolidation, Change in Control and Similar
Transactions.
(a) Adjustment. Subject to any required action by the stockholders of the
Company, within the sole discretion of the Committee, the aggregate number of
Shares of Common Stock for which Options may be granted hereunder, the number of
Shares of Common Stock covered by each outstanding Option, and the exercise
price per Share of Common Stock of each such Option, shall all be
proportionately adjusted for any increase or decrease in the number of issued
and outstanding Shares of Common Stock resulting from a subdivision or
consolidation of Shares (whether by reason of merger, consolidation,
recapitalization, reclassification, split-up, combination of shares, or
otherwise) or the payment of a stock dividend (but only on the Common Stock) or
any other increase or decrease in the number of such Shares of Common Stock
effected without the receipt of consideration by the Company (other than Shares
held by dissenting stockholders).
(b) Change in Control. All outstanding Awards shall become immediately
exercisable in the event of a change in control or imminent change in control of
the Company, as determined by the
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Committee. In the event of such a change in control or imminent change in
control, the Optionee shall, at the discretion of the Committee, be entitled to
receive cash in an amount equal to the fair market value of the Common Stock
subject to any Incentive or Non-Incentive Stock Option over the Option Price of
such Shares, in exchange for the surrender of such Options by the Optionee on
that date in the event of a change in control or imminent change in control of
the Company. For purposes of this Section 13, "change in control" shall mean:
(i) the execution of an agreement for the sale of all, or a material portion, of
the assets of the Company; (ii) the execution of an agreement for a merger or
recapitalization of the Company or any merger or recapitalization whereby the
Company is not the surviving entity; (iii) a change of control of the Company,
as otherwise defined or determined by the New Jersey Department of Banking or
regulations promulgated by it; or (iv) the acquisition, directly or indirectly,
of the beneficial ownership (within the meaning of that term as it is used in
Section 13(d) of the Securities Exchange Act of 1934 and the rules and
regulations promulgated thereunder) of twenty-five percent (25%) or more of the
outstanding voting securities of the Company by any person, trust, entity or
group. The term "person" refers to an individual or a corporation, partnership,
trust, association, joint venture, pool, syndicate, sole proprietorship,
unincorporated organization or any other form of entity not specifically listed
herein. For purposes of this Section 13, "imminent change in control" shall
refer to any offer or announcement, oral or written, by any person or persons
acting as a group, to acquire control of the Company. The decision of the
Committee as to whether a change in control or imminent change in control has
occurred shall be conclusive and binding.
(c) Extraordinary Corporate Action. Subject to any required action by the
stockholders of the Company, in the event of any change in control,
recapitalization, merger, consolidation, exchange of Shares, spin-off,
reorganization, tender offer, liquidation or other extraordinary corporate
action or event, the Committee, in its sole discretion, shall have the power,
prior or subsequent to such action or event to:
(i) appropriately adjust the number of Shares of Common Stock
subject to each Option, the exercise price per Share of Common Stock, and the
consideration to be given or received by the Company upon the exercise of any
outstanding Option;
(ii) cancel any or all previously granted Options, provided that
appropriate consideration is paid to the Optionee in connection therewith;
and/or
(iii) make such other adjustments in connection with the Plan as the
Committee, in its sole discretion, deems necessary, desirable, appropriate or
advisable; provided, however, that no action shall be taken by the Committee
which would cause Incentive Stock Options granted pursuant to the Plan to fail
to meet the requirements of Section 422 of the Code.
Except as expressly provided in Sections 13(a) and 13(b) hereof, no
Optionee shall have any rights by reason of the occurrence of any of the events
described in this Section 13.
(d) Acceleration. The Committee shall at all times have the power to
accelerate the exercise date of Options previously granted under the Plan.
14. Time of Granting Options. The date of grant of an Option under the Plan
shall, for all purposes, be the date on which the Committee makes the
determination of granting such Option. Except, however, for purposes of
compliance with Section 16 of the Securities Exchange Act of 1934, the date of
grant of an Option shall be deemed the later of the date of grant or the date of
stockholder approval
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of the Plan. Notice of the determination of the grant of an Option shall be
given to each individual to whom an Option is so granted within a reasonable
time after the date of such grant in a form determined by the Committee.
15. Effective Date. The Plan shall become effective upon the effective date of
the stock charter of the Savings Bank and simultaneous reorganization of the
Savings Bank under a State of New Jersey chartered mutual holding company.
Options may be granted prior to ratification of the Plan by the stockholders of
the Savings Bank if the exercise of such Options is subject to such stockholder
ratification.
16. Ratification by Stockholders. The Plan shall be ratified by stockholders
of the Savings Bank within twelve (12) months before or after the date the Plan
becomes effective.
17. Modification of Options. At any time and from time to time, the Board may
authorize the Committee to direct the execution of an instrument providing for
the modification of any outstanding Option, provided no such modification,
extension or renewal shall confer on the holder of said Option any right or
benefit which could not be conferred on him by the grant of a new Option at such
time, or shall not materially decrease the Optionee's benefits under the Option
without the consent of the holder of the Option, except as otherwise permitted
under Section 18 hereof. Notwithstanding anything herein to the contrary, the
Committee shall have the authority to cancel outstanding Options with the
consent of the Optionee and to reissue new Options at a lower exercise price
equal to the then fair market value per share of Common Stock in the event that
the fair market value per share of Common Stock at any time prior to the date of
exercise of outstanding Options falls below the exercise price of such Options.
18. Amendment and Termination of the Plan.
(a) Action by the Board. The Board may alter, suspend or discontinue the
Plan, except that no action of the Board may increase (other than as provided in
Section 13 hereof) the maximum number of Shares permitted to be optioned under
the Plan, materially increase the benefits accruing to Participants under the
Plan or materially modify the requirements for eligibility for participation in
the Plan unless such action of the Board shall be subject to approval or
ratification by the stockholders of the Savings Bank.
(b) Change in Applicable Law. Notwithstanding any other provision
contained in the Plan, in the event of a change in any federal or state law,
rule or regulation which would make the exercise of all or part of any
previously granted Incentive and/or Non-Incentive Stock Option unlawful or
subject the Company to any penalty, the Committee may restrict any such exercise
without the consent of the Optionee or other holder thereof in order to comply
with any such law, rule or regulation or to avoid any such penalty.
19. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to any Option granted under the Plan unless the issuance and delivery of
such Shares shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, the rules and regulations
promulgated thereunder, any applicable state securities law and the requirements
of any stock exchange upon which the Shares may then be listed.
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The inability of the Company to obtain from any regulatory body or authority
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder shall relieve the Company of any liability in respect of
the non-issuance or sale of such Shares.
As a condition to the exercise of an Option, the Company may require the
person exercising the Option to make such representations and warranties as may
be necessary to assure the availability of an exemption from the registration
requirements of federal or state securities law.
20. Reservation of Shares. During the term of the Plan, the Company will
reserve and keep available a number of Shares sufficient to satisfy the
requirements of the Plan.
21. Unsecured Obligation. No Participant under the Plan shall have any
interest in any fund or special asset of the Company by reason of the Plan or
the grant of any Incentive or Non-Incentive Stock Option under the Plan. No
trust fund shall be created in connection with the Plan or any grant of any
Incentive or Non-Incentive Stock Option hereunder and there shall be no required
funding of amounts which may become payable to any Participant.
22. Withholding Tax. The Company shall have the right to deduct from all
amounts paid in cash with respect to the cashless exercise of Options under the
Plan any taxes required by law to be withheld with respect to such cash
payments. Where a Participant or other person is entitled to receive Shares
pursuant to the exercise of an Option pursuant to the Plan, the Company shall
have the right to require the Participant or such other person to pay the
Company the amount of any taxes which the Company is required to withhold with
respect to such Shares, or, in lieu thereof, to retain, or sell without notice,
a number of such Shares sufficient to cover the amount required to be withheld.
23. Governing Law. The Plan shall be governed by and construed in
accordance with the laws of the State of New Jersey, except to the extent that
federal law shall be deemed to apply.
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Exhibit 4.2
Westwood Financial Corporation
1993 Stock Option Plan -- Plan B
<PAGE>
WESTWOOD FINANCIAL CORPORATION
1993 STOCK OPTION PLAN
----------------------
PLAN B
1. Purpose of the Plan. The Plan shall be known as the Westwood Financial
Corporation 1993 Stock Option Plan -- Plan B (the "Plan"). The purpose of the
Plan is to attract and retain the best available personnel for positions of
substantial responsibility and to provide additional incentive to officers,
directors and key employees of Westwood Financial Corporation (the "Company"),
or any present or future parent or subsidiary of the Company to promote the
success of the business. The Plan is intended to provide for the grant of
"Incentive Stock Options," within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code") and Non-Incentive Stock Options,
options that do not so qualify. Each and every one of the provisions of the Plan
relating to Incentive Stock Options shall be interpreted to conform to the
requirements of Section 422 of the Code.
2. Definitions. As used herein, the following definitions shall apply.
(a) "Award" means the grant by the Committee of an Incentive Stock Option
or a Non-Incentive Stock Option, or any combination thereof, as provided in the
Plan.
(b) "Board" shall mean the Board of Directors of the Savings Bank.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(d) "Committee" shall mean the Stock Option Committee appointed by the
Board in accordance with paragraph 5(a) of the Plan.
(e) "Common Stock" shall mean common stock, par value $0.10 per share,
of the Savings Bank.
(f) "Company" shall mean Westwood Financial Corporation.
(g) "Continuous Employment" or "Continuous Status as an Employee" shall
mean the absence of any interruption or termination of employment with the
Company or any present or future Parent or Subsidiary of the Company. Employment
shall not be considered interrupted in the case of sick leave, military leave or
any other leave of absence approved by the Company (or its subsidiary) or in the
case of transfers between payroll locations, of the Savings Bank or between the
Savings Bank, its Parent, its Subsidiaries or a successor.
(h) "Director" shall mean a member of the Board of the Savings Bank or
the Company.
(i) "Effective Date" shall mean the date specified in Section 15 hereof.
(j) "Employee" shall mean any person employed by the Company or any
present or future Parent or Subsidiary of the Company.
(k) "Incentive Stock Option" or "ISO" shall mean an option to purchase
Shares granted by the Committee pursuant to Section 8 hereof which is subject to
the limitations and restrictions of Section 8 hereof and is intended to qualify
under Section 422 of the Code.
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(l) "Non-Incentive Stock Option" or "Non-ISO" shall mean an option to
purchase Shares granted pursuant to Section 9 hereof, which option is not
intended to qualify under Section 422 of the Code.
(m) "Option" shall mean an Incentive or Non-Incentive Stock Option
granted pursuant to this Plan providing the holder of such Option with the right
to purchase Common Stock.
(n) "Optioned Stock" shall mean stock subject to an Option granted
pursuant to the Plan.
(o) "Optionee" shall mean any person who receives an Option or Award
pursuant to the Plan.
(p) "Parent" shall mean any present or future corporation which would be
a "parent corporation" as defined in Subsections 424(e) and (g) of the Code.
(q) "Participant" means any director, officer or key employee of the
Company or any Parent or Subsidiary of the Company or any other person providing
a service to the Company who is selected by the Committee to receive an Award,
or who by the express terms of the Plan is granted an Award.
(r) "Plan" shall mean the Westwood Financial Corporation 1993 Stock
Option Plan -- Plan B.
(s) "Savings Bank" shall mean Westwood Savings Bank.
(t) "Share" shall mean one share of the Common Stock.
(u) "Subsidiary" shall mean any present or future corporation which would
be a "subsidiary corporation" as defined in Subsections 424(f) and (g) of the
Code.
3. Shares Subject to the Plan. Except as otherwise required by the provisions
of Section 13 hereof, the aggregate number of Shares with respect to which
Awards may be made pursuant to the Plan shall not exceed 19,612. Such Shares may
either be authorized but unissued shares or treasury shares.
An Award shall not be considered to be made under the Plan with respect to any
Option which terminates prior to its exercise, and new Awards may be granted
under the Plan with respect to the number of Shares as to which such termination
has occurred.
4. Six Month Holding Period.
A total of six months must elapse between the date of the grant of an
Option and the date of the sale of Common Stock received through the exercise of
an Option.
5. Administration of the Plan.
(a) (i) Composition of the Committee. Except as indicated in paragraph
5(a)(ii) below, the Plan shall be administered by the Committee consisting of at
least three non-employee Directors of the Company appointed by the Board and
serving at the pleasure of the Board. Officers, Directors, key employees and
other persons who are designated by the Committee shall be eligible to receive
Awards under the Plan, and all persons designated as members of the Committee
shall be "disinterested persons" within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934.
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(ii) For the purpose of granting Awards to directors, the selection
of any Director to whom Awards may be granted, as well as the number of Shares
subject to Awards, must be determined by a "disinterested committee", as defined
in Rule 16b-3 under the Securities Exchange Act of 1934.
(b) Powers of the Committee. The Committee is authorized (but only to the
extent not contrary to the express provisions of the Plan or to resolutions
adopted by the Board) to interpret the Plan to prescribe, amend and rescind
rules and regulations relating to the Plan, to determine the form and content of
Awards to be issued under the Plan and to make other determinations necessary or
advisable for the administration of the Plan, and shall have and may exercise
such other power and authority as may be delegated to it by the Board from time
to time. A majority of the entire Committee shall constitute a quorum and the
action of a majority of the members present at any meeting at which a quorum is
present shall be deemed the action of the Committee. In no event may the
Committee revoke outstanding Awards without the consent of the Participant.
The Chairman of the Company and such other officers as shall be
designated by the Committee are hereby authorized to execute instruments
evidencing Awards on behalf of the Company and to cause them to be delivered to
the Participants.
(c) Effect of Committee's Decision. All decisions, determinations and
interpretations of the Committee shall be final and conclusive on all persons
affected thereby.
6. Eligibility.
(i) Awards may be granted to officers, Directors, key employees and
other persons. The Committee shall from time to time determine the officers,
Directors, key employees and other persons who shall be granted Awards under the
Plan, the number to be granted to each such officer, Director, key employee and
other persons under the Plan, and whether Awards granted to each such
Participant under the Plan shall be Incentive and/or Non-Incentive Stock
Options. In selecting Participants and in determining the number of Shares of
Common Stock to be granted to each such Participant pursuant to each Award
granted under the Plan, the Committee may consider the nature of the services
rendered by each such Participant, each such Participant's current and potential
contribution to the Company and Savings Bank and such other factors as the
Committee may, in its sole discretion, deem relevant. Officers, Directors, key
employees or other persons who have been granted an Award may, if otherwise
eligible, be granted additional Awards.
(ii) The aggregate fair market value (determined as of the date the
Option is granted) of the Shares with respect to which Incentive Stock Options
are exercisable for the first time by each Employee during any calendar year
(under all Incentive Stock Option plans, as defined in Section 422 of the Code,
of the Company or any present or future Parent or Subsidiary of the Company)
shall not exceed $100,000. Notwithstanding the prior provisions of this Section
6, the Committee may grant Options in excess of the foregoing limitations,
provided said Options shall be clearly and specifically designated as not being
Incentive Stock Options, as defined in Section 422 of the Code.
(iii) In no event shall Shares subject to Options granted to
non-employee Directors in the aggregate under this Plan exceed more than 40.0%
of the total number of Shares authorized for delivery under this Plan pursuant
to Section 3 herein.
7. Term of the Plan. The Plan shall continue in effect for a term of ten (10)
years from the Effective Date, unless sooner terminated pursuant to Section 18
hereof. No Option shall be granted under the Plan after ten (10) years from the
Effective Date.
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<PAGE>
8. Terms and Conditions of Incentive Stock Options. Incentive Stock Options
may be granted only to Participants who are Employees. Each Incentive Stock
Option granted pursuant to the Plan shall be evidenced by an instrument in such
form as the Committee shall from time to time approve. Each and every Incentive
Stock Option granted pursuant to the Plan shall comply with, and be subject to,
the following terms and conditions:
(a) Option Price.
(i) The price per Share at which each Incentive Stock Option
granted under the Plan may be exercised shall not, as to any particular
Incentive Stock Option, be less than the fair market value of the Common Stock
at the time such Incentive Stock Option is granted. For such purposes, if the
Common Stock is traded otherwise than on a national securities exchange at the
time of the granting of an Option, then the price per Share of the Optioned
Stock shall be not less than the mean between the bid and ask price on the date
the Incentive Stock Option is granted or, if there is no bid and ask price on
said date, then on the next prior business day on which there was a bid and ask
price. If no such bid and ask price is available, then the price per Share shall
be determined by the Committee. If the Common Stock is listed on a national
securities exchange at the time of the granting of an Incentive Stock Option,
then the price per Share shall be not less than the average of the highest and
lowest selling price on such exchange on the date such Incentive Stock Option is
granted or, if there were no sales on said date, then the price shall be not
less than the mean between the bid and ask price on such date.
(ii) In the case of an Employee who owns Common Stock representing
more than ten percent (10%) of the outstanding Common Stock at the time the
Incentive Stock Option is granted, the Incentive Stock Option price shall not be
less than one hundred and ten percent (110%) of the fair market value of the
Common Stock at the time the Incentive Stock Option is granted.
(b) Payment. Full payment for each Share of Common Stock purchased upon
the exercise of any Incentive Stock Option granted under the Plan shall be made
at the time of exercise of each such Incentive Stock Option and shall be paid in
cash (in United States Dollars), Common Stock or a combination of cash and
Common Stock. Common Stock utilized in full or partial payment of the exercise
price shall be valued at its fair market value at the date of exercise. The
Company shall accept full or partial payment in Common Stock only to the extent
permitted by applicable law. No Shares of Common Stock shall be issued until
full payment therefor has been received by the Company, and no Optionee shall
have any of the rights of a stockholder of the Company until Shares of Common
Stock are issued to him.
(c) Term of Incentive Stock Option. The term of each Incentive Stock
Option granted pursuant to the Plan shall be not more ten (10) years from the
date each such Incentive Stock Option is granted, provided that in the case of
an Employee who owns stock representing more than ten percent (10%) of the
Common Stock outstanding at the time the Incentive Stock Option is granted, the
term of the Incentive Stock Option shall not exceed five (5) years.
(d) Exercise Generally. Except as otherwise provided in Section 10
hereof, no Incentive Stock Option may be exercised unless the Optionee shall
have been in the employ of the Company or the Savings Bank at all times during
the period beginning with the date of grant of any such Incentive Stock Option
and ending on the date three (3) months prior to the date of exercise of any
such Incentive Stock Option. The Committee may impose additional conditions upon
the right of an Optionee to exercise any Incentive Stock Option granted
hereunder which are not inconsistent with the terms of the Plan or the
requirements for qualification as an Incentive Stock Option under Section 422 of
the Code.
(e) Cashless Exercise. An Optionee who has held an Incentive Stock Option
for at least six months may engage in the "cashless exercise" of the Option. In
a cashless exercise, an Optionee gives
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the Company written notice of the exercise of the Option together with an order
to a registered broker-dealer or equivalent third party, to sell part or all of
the Optioned Stock and to deliver enough of the proceeds to the Company to pay
the Option price and any applicable withholding taxes. If the Optionee does not
sell the Optioned Stock through a registered broker-dealer or equivalent third
party, he can give the Company written notice of the exercise of the Option and
the third party purchaser of the Optioned Stock shall pay the Option price plus
any applicable withholding taxes to the Company.
(f) Transferability. Any Incentive Stock Option granted pursuant to the
Plan shall be exercised during an Optionee's lifetime only by the Optionee to
whom it was granted and shall not be assignable or transferable otherwise than
by will or by the laws of descent and distribution.
9. Terms and Conditions of Non-Incentive Stock Options. Each Non-Incentive
Stock Option granted pursuant to the Plan shall be evidenced by an instrument in
such form as the Committee shall from time to time approve. Each and every
Non-Incentive Stock Option granted pursuant to the Plan shall comply with and be
subject to the following terms and conditions.
(a) Options Granted to Directors. Subject to the limitations of Section
6(iii), 1,120 Non-Incentive Stock Options will be granted to each Director as of
the Effective Date at an exercise price equal to the fair market value of the
Common Stock on such date of grant. The Option will be exercisable immediately
upon the date it is granted subject to stockholder ratification of the Plan and
will remain exercisable for up to ten years from such date of grant. The price
per Share at which such Options granted shall be equal to the fair market value
of the Common Stock at the time such Options are granted. For such purposes, if
the Common Stock is traded otherwise than on a national securities exchange at
the time of the granting of the Options, then the price per Share of the
Optioned Stock shall be not less than the mean between the bid and ask price on
the date the Options are granted or, if there is no bid and ask price on said
date, then on the next prior business day on which there was a bid and ask
price. If no such bid and ask price is available, then the price per Share shall
be determined by the Committee. If the Common Stock is listed on a national
securities exchange at the time of the granting of an Options, then the price
per Share shall be not less than the average of the highest and lowest selling
price on such exchange on the date such Options are granted or, if there were no
sales on said date, then the price shall be not less than the mean between the
bid and ask price on such date. Such Options may be exercised for a period of
ten years from the Effective Date of the Plan without regard to the continued
status of such Optionee as a Director of the Company, or in the event of such
person's death during the term of his directorship, by the personal
representation of his estate or person or persons to whom his rights under such
Option shall have passed by will or by laws of descent and distribution. Unless
otherwise inapplicable, or inconsistent with the provisions of this paragraph,
the Options to be granted to Directors hereunder shall be subject to all other
provisions of this Plan. Notwithstanding anything herein to the contrary,
Options granted pursuant to this Section 9(a) to Directors who are also
Employees at the time of such grant shall be deemed Incentive Stock Options;
provided that if such Options shall not be exercised within 3 months of the date
of termination of employment, such Options shall thereafter be deemed
Non-Incentive Stock Options and shall remain exercisable for the remaining term
of exercisability without regard to employment status. Notwithstanding the
provisions of Section 9(a), additional Awards may be made to Directors who are
serving as Employees within the sole discretion of the Committee.
(b) Option Price. The exercise price per Share of Common Stock for each
Non-Incentive Stock Option granted pursuant to the Plan, shall be at such price
as the Committee may determine in its sole discretion.
(c) Payment. Full payment for each Share of Common Stock purchased upon
the exercise of any Non-Incentive Stock Option granted under the Plan shall be
made at the time of exercise of each such Non-Incentive Stock Option and shall
be paid in cash (in United States Dollars), Common Stock or
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<PAGE>
a combination of cash and Common Stock. Common Stock utilized in full or partial
payment of the exercise price shall be valued at its fair market value at the
date of exercise. The Company shall accept full or partial payment in Common
Stock only to the extent permitted by applicable law. No Shares of Common Stock
shall be issued until full payment therefor has been received by the Company and
no Optionee shall have any of the rights of a stockholder of the Company until
the Shares of Common Stock are issued to him.
(d) Term. The term of each Non-Incentive Stock Option granted pursuant to
the Plan shall be not more than ten (10) years from the date each such
Non-Incentive Stock Option is granted.
(e) Exercise Generally. The Committee may impose additional conditions
upon the right of any Participant to exercise any Non-Incentive Stock Option
granted hereunder which is not inconsistent with the terms of the Plan.
(f) Cashless Exercise. An Optionee who has held a Non-Incentive Stock
Option for at least six months may engage in the "cashless exercise" of the
Option. In a cashless exercise, an Optionee gives the Company written notice of
the exercise of the Option together with an order to a registered broker-dealer
or equivalent third party, to sell part or all of the Optioned Stock and to
deliver enough of the proceeds to the Company to pay the Option price and any
applicable withholding taxes. If the Optionee does not sell the Optioned Stock
through a registered broker-dealer or equivalent third party, he can give the
Company written notice of the exercise of the Option and the third party
purchaser of the Optioned Stock shall pay the Option price plus any applicable
withholding taxes to the Company.
(g) Transferability. Any Non-Incentive Stock Option granted pursuant to
the Plan shall be exercised during an Optionee's lifetime only by the Optionee
to whom it was granted and shall not be assignable or transferable otherwise
than by will or by the laws of descent and distribution.
(h) Options Granted to Directors. Notwithstanding anything herein to the
contrary, as of December 12, 1995, ("Date of Grant") 841 Non-Incentive Stock
Options will be granted to each Director that is not then an Employee of the
Savings Bank at an exercise price equal to the fair market value of the Common
Stock on such date of grant. The Options will be exercisable immediately upon
the date it is granted and will remain exercisable for up to ten years from such
date of grant. The exercise price per Share at which such Options are granted
shall be equal to the fair market value of the Common Stock at the time such
Options are granted. For such purposes, the exercise price per Share of the
Optioned Stock shall be not less than the mean between the bid and ask price of
the Common Stock on the date the Options are granted or, if there is no bid and
ask price on said date, then on the next prior business day on which there was a
bid and ask price. If no such bid and ask price is available, then the price per
Share shall be determined by the Committee in good faith. Such Options may be
exercised for a period of ten years from the Date of Grant without regard to the
continued status of such Optionee as a Director or Director Emeritus of the
Company, or in the event of such person's death during the term of his
directorship, by the personal representation of his estate or person or persons
to whom his rights under such Option shall have passed by will or by laws of
descent and distribution. Unless otherwise inapplicable, or inconsistent with
the provisions of this paragraph, the Options to be granted to Directors
hereunder shall be subject to all other provisions of this Plan.
10. Effect of Termination of Employment, Disability or Death on Incentive
Stock Options.
(a) Termination of Employment. In the event that any Optionee's
employment with the Company or Savings Bank shall terminate for any reason,
other than Permanent and Total Disability (as such term is defined in Section
22(e)(3) of the Code) or death, all of any such Optionee's Incentive Stock
Options, and all of any such Optionee's rights to purchase or receive Shares of
Common Stock pursuant thereto, shall automatically terminate on the earlier of
(i) the respective expiration dates of any such
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<PAGE>
Incentive Stock Options or (ii) the expiration of not more than three (3) months
after the date of such termination of employment, but only if, and to the extent
that, the Optionee was entitled to exercise any such Incentive Stock Options at
the date of such termination of employment. In the event that a subsidiary
ceases to be a subsidiary of the Company, the employment of all of its employees
who are not immediately thereafter employees of the Company shall be deemed to
terminate upon the date such subsidiary so ceases to be a Subsidiary of the
Company.
(b) Disability. In the event that any Optionee's employment with the
Company shall terminate as the result of the Permanent and Total Disability of
such Optionee, such Optionee may exercise any Incentive Stock Options granted to
him pursuant to the Plan at any time prior to the earlier of (i) the respective
expiration dates of any such Incentive Stock Options or (ii) the date which is
one (1) year after the date of such termination of employment, but only if, and
to the extent that, the Optionee was entitled to exercise any such Incentive
Stock Options at the date of such termination of employment.
(c) Death. In the event of the death of an Optionee, any Incentive Stock
Options granted to such Optionee may be exercised by the person or persons to
whom the Optionee's rights under any such Incentive Stock Options pass by will
or by the laws of descent and distribution (including the Optionee's estate
during the period of administration) at any time prior to the earlier of (i) the
respective expiration dates of any such Incentive Stock Options or (ii) the date
which is two (2) years after the date of death of such Optionee but only if, and
to the extent that, the Optionee was entitled to exercise any such Incentive
Stock Options at the date of death. For purposes of this Section 10(c), any
Incentive Stock Option held by an Optionee shall be considered exercisable at
the date of his death if the only unsatisfied condition precedent to the
exercisability of such Incentive Stock Option at the date of death is the
passage of a specified period of time. At the discretion of the Committee, upon
exercise of such Options the Optionee may receive Shares or cash or combination
thereof. If cash shall be paid in lieu of Shares, such cash shall be equal to
the difference between the fair market value of such Shares and the exercise
price of such Options on the exercise date.
(d) Incentive Stock Options Deemed Exercisable. For purposes of Sections
10(a), 10(b) and 10(c) above, any Incentive Stock Option held by any Optionee
shall be considered exercisable at the date of termination of his employment if
any such Incentive Stock Option would have been exercisable at such date of
termination of employment.
(e) Termination of Incentive Stock Options. To the extent that any
Incentive Stock Option granted under the Plan to any Optionee whose employment
with the Company or the Savings Bank terminates shall not have been exercised
within the applicable period set forth in this Section 10, any such Incentive
Stock Option, and all rights to purchase or receive Shares of Common Stock
pursuant thereto, as the case may be, shall terminate on the last day of the
applicable period.
11. Effect of Termination of Employment, Disability or Death on Non-Incentive
Stock Options. The terms and conditions of Non-Incentive Stock Options relating
to the effect of the termination of an Optionee's employment, disability of an
Optionee or his death shall be such terms and conditions as the Committee shall,
in its sole discretion, determine at the time of termination, unless
specifically provided for by the terms of the Agreement at the time of grant of
the Award.
12. Right of Repurchase and Restrictions on Disposition. The Committee, in its
sole discretion, may include, as a term of any Incentive Stock Option or
Non-Incentive Stock Option, the right (the "Repurchase Right"), but not the
obligation, to repurchase all or any amount of the Shares acquired by an
Optionee pursuant to the exercise of any such Options. The intent of the
Repurchase Right is to encourage the continued employment of the Optionee. The
Repurchase Right shall provide for, among other things, a specified duration of
the Repurchase Right, a specified price per Share to be paid upon the exercise
of the Repurchase Right and a restriction on the disposition of the Shares by
the Optionee
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<PAGE>
during the period of the Repurchase Right. The Repurchase Right may permit the
Company to transfer or assign such right to another party. The Company may
exercise the Repurchase Right only to the extent permitted by applicable law.
13. Recapitalization, Merger, Consolidation, Change in Control and Similar
Transactions.
(a) Adjustment. Subject to any required action by the stockholders of the
Company, within the sole discretion of the Committee, the aggregate number of
Shares of Common Stock for which Options may be granted hereunder, the number of
Shares of Common Stock covered by each outstanding Option, and the exercise
price per Share of Common Stock of each such Option, shall all be
proportionately adjusted for any increase or decrease in the number of issued
and outstanding Shares of Common Stock resulting from a subdivision or
consolidation of Shares (whether by reason of merger, consolidation,
recapitalization, reclassification, split-up, combination of shares, or
otherwise) or the payment of a stock dividend (but only on the Common Stock) or
any other increase or decrease in the number of such Shares of Common Stock
effected without the receipt of consideration by the Company (other than Shares
held by dissenting stockholders).
(b) Change in Control. All outstanding Awards shall become immediately
exercisable in the event of a change in control or imminent change in control of
the Company, as determined by the Committee. In the event of such a change in
control or imminent change in control, the Optionee shall, at the discretion of
the Committee, be entitled to receive cash in an amount equal to the fair market
value of the Common Stock subject to any Incentive or Non-Incentive Stock Option
over the Option Price of such Shares, in exchange for the surrender of such
Options by the Optionee on that date in the event of a change in control or
imminent change in control of the Company. For purposes of this Section 13,
"change in control" shall mean: (i) the execution of an agreement for the sale
of all, or a material portion, of the assets of the Company; (ii) the execution
of an agreement for a merger or recapitalization of the Company or any merger or
recapitalization whereby the Company is not the surviving entity; (iii) a change
of control of the Company, as otherwise defined or determined by the New Jersey
Department of Banking or regulations promulgated by it; or (iv) the acquisition,
directly or indirectly, of the beneficial ownership (within the meaning of that
term as it is used in Section 13(d) of the Securities Exchange Act of 1934 and
the rules and regulations promulgated thereunder) of twenty-five percent (25%)
or more of the outstanding voting securities of the Company by any person,
trust, entity or group. The term "person" refers to an individual or a
corporation, partnership, trust, association, joint venture, pool, syndicate,
sole proprietorship, unincorporated organization or any other form of entity not
specifically listed herein. For purposes of this Section 13, "imminent change in
control" shall refer to any offer or announcement, oral or written, by any
person or persons acting as a group, to acquire control of the Company. The
decision of the Committee as to whether a change in control or imminent change
in control has occurred shall be conclusive and binding.
(c) Extraordinary Corporate Action. Subject to any required action by the
stockholders of the Company, in the event of any change in control,
recapitalization, merger, consolidation, exchange of Shares, spin-off,
reorganization, tender offer, liquidation or other extraordinary corporate
action or event, the Committee, in its sole discretion, shall have the power,
prior or subsequent to such action or event to:
(i) appropriately adjust the number of Shares of Common Stock
subject to each Option, the exercise price per Share of Common Stock, and the
consideration to be given or received by the Company upon the exercise of any
outstanding Option;
(ii) cancel any or all previously granted Options, provided that
appropriate consideration is paid to the Optionee in connection therewith;
and/or
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<PAGE>
(iii) make such other adjustments in connection with the Plan as the
Committee, in its sole discretion, deems necessary, desirable, appropriate or
advisable; provided, however, that no action shall be taken by the Committee
which would cause Incentive Stock Options granted pursuant to the Plan to fail
to meet the requirements of Section 422 of the Code.
Except as expressly provided in Sections 13(a) and 13(b) hereof, no
Optionee shall have any rights by reason of the occurrence of any of the events
described in this Section 13.
(d) Acceleration. The Committee shall at all times have the power to
accelerate the exercise date of Options previously granted under the Plan.
14. Time of Granting Options. The date of grant of an Option under the Plan
shall, for all purposes, be the date on which the Committee makes the
determination of granting such Option. Except, however, for purposes of
compliance with Section 16 of the Securities Exchange Act of 1934, the date of
grant of an Option shall be deemed the later of the date of grant or the date of
stockholder approval of the Plan. Notice of the determination of the grant of an
Option shall be given to each individual to whom an Option is so granted within
a reasonable time after the date of such grant in a form determined by the
Committee.
15. Effective Date. The Plan shall become effective upon the effective date of
the stock charter of the Savings Bank and simultaneous reorganization of the
Savings Bank under a State of New Jersey chartered mutual holding company.
Options may be granted prior to ratification of the Plan by the stockholders of
the Savings Bank if the exercise of such Options is subject to such stockholder
ratification.
16. Ratification by Stockholders. The Plan shall be ratified by stockholders
of the Savings Bank within twelve (12) months before or after the date the Plan
becomes effective.
17. Modification of Options. At any time and from time to time, the Board may
authorize the Committee to direct the execution of an instrument providing for
the modification of any outstanding Option, provided no such modification,
extension or renewal shall confer on the holder of said Option any right or
benefit which could not be conferred on him by the grant of a new Option at such
time, or shall not materially decrease the Optionee's benefits under the Option
without the consent of the holder of the Option, except as otherwise permitted
under Section 18 hereof. Notwithstanding anything herein to the contrary, the
Committee shall have the authority to cancel outstanding Options with the
consent of the Optionee and to reissue new Options at a lower exercise price
equal to the then fair market value per share of Common Stock in the event that
the fair market value per share of Common Stock at any time prior to the date of
exercise of outstanding Options falls below the exercise price of such Options.
18. Amendment and Termination of the Plan.
(a) Action by the Board. The Board may alter, suspend or discontinue the
Plan, except that no action of the Board may increase (other than as provided in
Section 13 hereof) the maximum number of Shares permitted to be optioned under
the Plan, materially increase the benefits accruing to Participants under the
Plan or materially modify the requirements for eligibility for participation in
the Plan unless such action of the Board shall be subject to approval or
ratification by the stockholders of the Savings Bank.
(b) Change in Applicable Law. Notwithstanding any other provision
contained in the Plan, in the event of a change in any federal or state law,
rule or regulation which would make the exercise of all or part of any
previously granted Incentive and/or Non-Incentive Stock Option unlawful or
subject the Company to any penalty, the Committee may restrict any such exercise
without the consent of the
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Optionee or other holder thereof in order to comply with any such law, rule or
regulation or to avoid any such penalty.
19. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to any Option granted under the Plan unless the issuance and delivery of
such Shares shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, the rules and regulations
promulgated thereunder, any applicable state securities law and the requirements
of any stock exchange upon which the Shares may then be listed.
The inability of the Company to obtain from any regulatory body or authority
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder shall relieve the Company of any liability in respect of
the non-issuance or sale of such Shares.
As a condition to the exercise of an Option, the Company may require the
person exercising the Option to make such representations and warranties as may
be necessary to assure the availability of an exemption from the registration
requirements of federal or state securities law.
20. Reservation of Shares. During the term of the Plan, the Company will
reserve and keep available a number of Shares sufficient to satisfy the
requirements of the Plan.
21. Unsecured Obligation. No Participant under the Plan shall have any
interest in any fund or special asset of the Company by reason of the Plan or
the grant of any Incentive or Non-Incentive Stock Option under the Plan. No
trust fund shall be created in connection with the Plan or any grant of any
Incentive or Non-Incentive Stock Option hereunder and there shall be no required
funding of amounts which may become payable to any Participant.
22. Withholding Tax. The Company shall have the right to deduct from all
amounts paid in cash with respect to the cashless exercise of Options under the
Plan any taxes required by law to be withheld with respect to such cash
payments. Where a Participant or other person is entitled to receive Shares
pursuant to the exercise of an Option pursuant to the Plan, the Company shall
have the right to require the Participant or such other person to pay the
Company the amount of any taxes which the Company is required to withhold with
respect to such Shares, or, in lieu thereof, to retain, or sell without notice,
a number of such Shares sufficient to cover the amount required to be withheld.
23. Governing Law. The Plan shall be governed by and construed in accordance
with the laws of the State of New Jersey, except to the extent that federal law
shall be deemed to apply.
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EXHIBIT 4.3
Form of Stock Option Agreement to be entered
into with Optionees with respect to Incentive Stock Options
<PAGE>
STOCK OPTION AGREEMENT
----------------------
FOR INCENTIVE STOCK OPTIONS UNDER SECTION 422
OF THE INTERNAL REVENUE CODE
PURSUANT TO THE
WESTWOOD FINANCIAL CORPORATION
1993 STOCK OPTION PLANS -- A and B
STOCK OPTIONS for a total of ___________ shares of Common Stock, par value
$0.10 per share, of Westwood Financial Corporation (the "Company"), which Option
is intended to qualify as an Incentive Stock Option under Section 422 of the
Internal Revenue Code of 1986, as amended, is hereby granted to ___________ (the
"Optionee") at the price determined as provided in, and in all respects subject
to the terms, definitions and provisions of the 1993 Stock Option Plans A and B
(the "Plan") adopted by the Company which is incorporated by reference herein,
receipt of which is hereby acknowledged.
1. Option Price. The Option price is $__________ for each Share, being 100% of
the fair market value, as determined by the Committee, of the Common Stock on
the date of grante of this Option.
2. Exercises of Option. This Option shall be exercisable in accordance with
provisions of the Plan and actions of the Plan Committee as follows:
(a) Schedule of Rights to Exercise.
Total of Shares Subject
Years of Continuous Employment After to Option Which May
Date of Grant of Option Be Exercised
- ------------------------------------ -------------------
Upon grant.......................... 0%
6 months............................ 50%
18 months or more................... 100%
Such Options shall become 100% exercisable upon the death or disability of
the Optionee or a Change in Control of the Company.
<PAGE>
(b) Method of Exercise. This Option shall be exercisable by a
written notice which shall:
(i) State the election to exercise the Option, the number of
Shares with respect to which it is being exercised, the person in whose
name the stock certificate or certificates for such Shares of Common Stock
is to be registered, his address and Social Security Number (or if more
than one, the names, addresses and Social Security Numbers of such
persons);
(ii) Contain such representations and agreements as to the
holder's investment intent with respect to such shares of Common Stock as
may be satisfactory to the Company's counsel;
(iii) Be signed by the person or persons entitled to exercise
the Option and, if the Option is being exercised by any person or persons
other than the Optionee, be accompanied by proof, satisfactory to counsel
for the Company, of the right of such person or persons to exercise the
Option; and
(iv) Be in writing and delivered in person or by certified
mail to the Treasurer of the Company.
Payment of the purchase price of any Shares with respect to which the
Option is being exercised shall be by certified or bank cashier's or teller's
check. The certificate or certificates for shares of Common Stock as to which
the Option shall be exercised shall be registered in the name of the person or
persons exercising the Option.
(c) Restrictions on Exercise. This Option may not be exercised if
the issuance of the Shares upon such exercise would constitute a violation of
any applicable federal or state securities or other law or valid regulation. As
a condition to the Optionee's exercise of this Option, the Company may require
the person exercising this Option to make any representation and warranty to the
Company as may be required by any applicable law or regulation.
3. Non-transferability of Option. This Option may not be transferred in
any manner otherwise than by will or the laws of descent or distribution and may
be exercised during the lifetime of the Optionee only by the Optionee. The terms
of this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.
4. Term of Option. This Option may not be exercised more than ten (10)
years from the date of grant of this Option, as set forth below, and may be
exercised during such term only in accordance with the Plan and the terms of
this Option.
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<PAGE>
5. Related Matters. Notwithstanding anything herein to the contrary,
additional conditions or restrictions related to such Options may be contained
in the Plan or the resolutions of the Plan Committee authorizing such grant of
Options.
WESTWOOD FINANCIAL CORPORATION
Date of Grant: __________________ By: _____________________________________
Attest:
_________________________________
[SEAL]
3
<PAGE>
INCENTIVE STOCK OPTION EXERCISE FORM
------------------------------------
PURSUANT TO THE
WESTWOOD FINANCIAL CORPORATION
1993 STOCK OPTION PLANS -- A and B
______________
(Date)
WESTWOOD FINANCIAL CORPORATION
Dear Sir:
The undersigned elects to exercise the Incentive Stock Option to purchase
shares, par value $0.10, of Common Stock of Westwood Financial Corporation under
and pursuant to a Stock Option Agreement dated ___________, 19____ .
Delivered herewith is a certified or bank cashier's or teller's check
and/or shares of Common Stock, valued at the fair market value of the stock on
the date of exercise, as set forth below.
$ _________ of cash or check
_________ of Common Stock
$ Total
=========
The name or names to be on the stock certificate or certificates and the
address and Social Security Number of such person(s) is as follows:
Name ________________________________________________________
Address _____________________________________________________
Social Security Number ______________________________________
Very truly yours,
_________________
EXHIBIT 4.4
Form of Stock Option Agreement to be entered into with
Optionees with respect to Non-Incentive Stock Options
<PAGE>
STOCK OPTION AGREEMENT
----------------------
FOR NON-INCENTIVE STOCK OPTIONS PURSUANT TO THE
WESTWOOD FINANCIAL CORPORATION
1993 STOCK OPTION PLANS -- A AND B
----------------------
NON-EMPLOYEE DIRECTORS
STOCK OPTIONS for a total of __________ shares of Common Stock, par value
$0.10 per share, of Westwood Financial Corporation (the "Company") is hereby
granted to __________ (the "Optionee") at the price determined as provided in,
and in all respects subject to the terms, definitions and provisions of the 1993
Stock Option Plans A and B (the "Plan") adopted by the Company which is
incorporated by reference herein, receipt of which is hereby acknowledged. Such
Stock Options do not comply with Options granted under Section 422 of the
Internal Revenue Code of 1986, as amended.
1. Option Price. The Option price is $__________ for each Share, being 100%
of the fair market value, as determined by the Committee, of the Common Stock on
the date ofof grant of this Option.
2. Exercise of Option. This Option shall be exercisable in accordance with
provisions of the Plan as follows:
(a) Schedule of Rights to Exercise.
Percentage of Total Shares
Years of Continuous Service After Subject to Option Which May
Date of Grant of Option Be Exercised
- --------------------------------- ---------------------------
Upon grant.......................... 100 %
Notwithstanding any provisions in this Section 2, in no event shall this
Option be exercisable prior to six months following the date of grant. Further,
such Options shall not be deemed exercisable if such grant or exercise is deemed
to be in violation of State law or regulation.
<PAGE>
(b) Method of Exercise. This Option shall be exercisable by a
written notice which shall:
(i) State the election to exercise the Option, the number of
Shares with respect to which it is being exercised, the person in whose
name the stock certificate or certificates for such Shares of Common Stock
is to be registered, his address and Social Security Number (or if more
than one, the names, addresses and Social Security Numbers of such
persons);
(ii) Contain such representations and agreements as to the
holder's investment intent with respect to such shares of Common Stock as
may be satisfactory to the Company's counsel;
(iii) Be signed by the person or persons entitled to exercise
the Option and, if the Option is being exercised by any person or persons
other than the Optionee, be accompanied by proof, satisfactory to counsel
for the Company, of the right of such person or persons to exercise the
Option; and
(iv) Be in writing and delivered in person or by certified
mail to the Treasurer of the Company.
Payment of the purchase price of any Shares with respect to which the
Option is being exercised shall be by certified or bank cashier's or teller's
check. The certificate or certificates for shares of Common Stock as to which
the Option shall be exercised shall be registered in the name of the person or
persons exercising the Option.
(c) Restrictions on Exercise. This Option may not be exercised if
the issuance of the Shares upon such exercise would constitute a violation of
any applicable federal or state securities or other law or valid regulation. As
a condition to the Optionee's exercise of this Option, the Company may require
the person exercising this Option to make any representation and warranty to the
Company as may be required by any applicable law or regulation.
3. Non-transferability of Option. This Option may not be transferred in
any manner otherwise than by will or the laws of descent or distribution and may
be exercised during the lifetime of the Optionee only by the Optionee. The terms
of this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.
2
<PAGE>
4. Term of Option. This Option may not be exercised more than ten (10)
years from the date of grant of this Option, as set forth below, and may be
exercised during such term only in accordance with the Plan and the terms of
this Option.
WESTWOOD FINANCIAL CORPORATION
Date of Grant: ___________ By: __________________________________
Attest:
__________________________
[SEAL]
3
<PAGE>
NON-INCENTIVE STOCK OPTION EXERCISE FORM
----------------------------------------
PURSUANT TO THE
WESTWOOD FINANCIAL CORPORATION
1993 STOCK OPTION PLANS -- A AND B
_____________
(Date)
WESTWOOD FINANCIAL CORPORATION
Dear Sir:
The undersigned elects to exercise the Non-Incentive Stock Option to
purchase shares, par value $0.10, of Common Stock of Westwood Financial
Corporation under and pursuant to a Stock Option Agreement dated __________,
19____ .
Delivered herewith is a certified or bank cashier's or teller's check
and/or shares of Common Stock, valued at the fair market value of the stock on
the date of exercise, as set forth below.
$_________ of cash or check
_________ of Common Stock
$ Total
=========
The name or names to be on the stock certificate or certificates and the
address and Social Security Number of such person(s) is as follows:
Name ____________________________________________________
Address _________________________________________________
Social Security Number __________________________________
Very truly yours,
_____________________
EXHIBIT 5.1
Opinion of Malizia, Spidi, Sloane & Fisch, P.C. as to
the validity of the Common Stock being registered
<PAGE>
MALIZIA, SPIDI, SLOANE & FISCH, P.C.
Attorneys at Law
One Franklin Square
1301 K Street, N.W.
Suite 700 East
Washington, D.C. 20005
Telephone: (202) 434-4660
Telecopier: (202) 434-4661
Board of Directors
Westwood Financial Corporation
700-88 Broadway
Westwood, New Jersey 07675
RE: Westwood Financial Corporation
Registration Statement on Form S-8:
----------------------------------
Gentlemen:
We have acted as special counsel to Westwood Financial Corporation, a New
Jersey corporation (the "Company"), in connection with the preparation of the
Registration Statement on Form S-8 filed with the Securities and Exchange
Commission (the "Registration Statement") under the Securities Act of 1933, as
amended, relating to 39,224 shares of common stock, par value $0.10 per share
(the "Common Stock") of the Company which may be issued upon the exercise of
options (the "Options") granted or which may be granted under the Westwood
Financial Corporation 1993 Stock Option Plan -- Plan A and -- Plan B
(collectively, the "Option Plans"), as more fully described in the Registration
Statement. You have requested the opinion of this firm with respect to certain
legal aspects of the issuance of Common Stock pursuant to the Option Plans.
We have examined such documents, records and matters of law as we have
deemed necessary for purposes of this opinion and based thereon, we are of the
opinion that the Common Stock when issued pursuant to the stock awards or
exercise of options granted under and in accordance with the terms of the Option
Plans will be duly and validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form S-8 and to references to our firm included under
the caption "Legal Opinion" in the Prospectus which is a part of the
Registration Statement.
Sincerely,
/s/Malizia, Spidi, Sloane & Fisch
Malizia, Spidi, Sloane & Fisch, P.C.
Washington, D.C.
October 11, 1996
EXHIBIT 23.2
Consent of Independent Accountants
<PAGE>
[RD Hunter & Company LLP Letterhead]
INDEPENDENT ACCOUNTANTS' CONSENT
Board of Directors
Westwood Financial Corporation
700-88 Broadway
Westwood, New Jersey 07675
We consent to incorporation by reference in this Registration Statement on
Form S-8 related to the Westwood Financial Corporation 1993 Stock Option Plan --
Plan A and -- Plan B of our report on the consolidated financial statements
included in the Company's Form 10-KSB as filed with the Securities and Exchange
Commission for the fiscal year ended March 31, 1996.
/s/RD Hunter & Company
RD Hunter & Company LLP
October 11, 1996
