<PAGE>
Registration No. 333-_____
Filed December 17, 1996
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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JACKSONVILLE BANCORP, INC.
(Exact Name of Registrant as specified in its Articles of Incorporation)
Delaware 75-2632718
(State of incorporation) (IRS Employer Identification No.)
Commerce and Neches Streets
Jacksonville, Texas 75766
(Address of principal executive offices, including zip code)
1994 STOCK INCENTIVE PLAN
1994 DIRECTORS' STOCK OPTION PLAN
1996 STOCK OPTION PLAN
(Full Titles of the Plans)
Copies to:
John P. Soukenik, Esq.
Jerry M. Chancellor Kenneth B. Tabach, Esq.
President Elias, Matz, Tiernan & Herrick L.L.P.
Jacksonville Bancorp, Inc. 734 15th Street, N.W.
Commerce and Neches Streets Washington, D.C.
Jacksonville, Texas 75766 (202) 347-0300
(903) 586-9861
(Name, address, and telephone number
of agent for service)
Page 1 of 41 pages
Index to Exhibits is located on page 6.
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Proposed Proposed
Securities Maximum Maximum Amount of
to be Amount to be Offering Price Aggregate Registration
Registered Registered(1) Per Share Offering Price Fee
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par
value $0.01 256,322(2) $7.05(3) $ 1,807,070(3) $547.60
- --------------------------------------------------------------------------------------
</TABLE>
(1) Together with an indeterminate number of additional shares which may be
necessary to adjust the number of shares reserved for issuance pursuant to the
Jacksonville Bancorp, Inc. ("Company" or "Registrant") 1994 Stock Incentive Plan
("1994 Incentive Plan"), 1994 Directors' Stock Option Plan ("1994 Directors
Plan") and 1996 Stock Option Plan ("1996 Option Plan") (together, the "Plans")
as a result of a stock split, stock dividend or similar adjustment of the
outstanding common stock, $0.01 par value per share ("Common Stock"), of the
Company.
(2) Represents 71,157 shares currently reserved for issuance pursuant to the
1994 Incentive Plan, 23,325 shares currently reserved for issuance pursuant to
the 1994 Directors Plan and 161,840 shares currently reserved for issuance
pursuant to the 1996 Option Plan.
(3) Estimated solely for the purpose of calculating the registration fee, which
has been calculated pursuant to Rule 457(h) promulgated under the Securities Act
of 1933, as amended ("Securities Act"). The Proposed Maximum Offering Price Per
Share is equal to the weighted average exercise price for the options to
purchase shares of Common Stock which are outstanding under the Plans as of the
date hereof.
----------
This Registration Statement shall become effective automatically upon the
date of filing in accordance with Section 8(a) of the Securities Act and 17
C.F.R. Section 230.462.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed or to be filed with the Securities
and Exchange Commission (the "Commission") are incorporated by reference in this
Registration Statement:
(a) The Company's Prospectus, dated February 22, 1996,
filed with the Commission pursuant to Rule 424(b) (Commission
File No. 33-81015) containing audited financial statements for
the year ended September 30, 1995;
(b) All reports filed by the Company pursuant to Sections
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), since the end of the fiscal year covered by
the financial statements in the Prospectus referred to in clause
(a) above;
(c) The description of the Common Stock of the Company
contained in the Company's Registration Statement on Form 8-A
filed with the Commission;
(d) All documents filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date
hereof and prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or
which deregisters all securities then remaining unsold.
Any statement contained in this Registration Statement, or in a
document incorporated or deemed to be incorporated by reference herein, shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein, or in any other subsequently
filed document which also is or is deemed to be incorporated by reference
herein, modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable since the Company's Common Stock is registered
under Section 12 of the Exchange Act.
ITEM. 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
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ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article VIII of the Company's proposed Articles of Incorporation
provides that:
A. LIMITATION OF LIABILITY. No director shall be personally
liable to the Corporation or its stockholders for monetary damages for any
act or omission by such director as a director; provided that a director's
liability shall not be eliminated to the extent provided by Section 7.06B. of
the Texas Miscellaneous Corporation Laws Act or any successor provision
thereto. No amendment to or repeal of this Subsection (A) to Article VIII
shall apply to or have any effect on the liability or alleged liability of
any director of the Corporation for or with respect to any acts or omissions
of such director occurring prior to such amendment.
B. INDEMNIFICATION. The Corporation shall indemnify any person
who was or is a party or is threatened to be a made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative, arbitrative or investigative, by reason of the fact
that such person is or was a director, officer, employee or agent of the
Corporation or any predecessor of the Corporation, or is or was serving at
the request of the Corporation or any predecessor of the Corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against liability and expenses
(including court costs and attorney's fees), judgments, fines, excise taxes
and amounts paid in satisfaction, settlement or compromise actually and
reasonably incurred by such person in connection with such action, suit or
proceeding to the full extent authorized by law.
C. ADVANCEMENT OF EXPENSES. Reasonable expenses incurred by a
director, officer, employee or agent of the Corporation in defending a civil
or criminal action, suit or proceeding described in Article VIII.B. shall be
paid by the Corporation in advance of the final disposition of such action,
suit or proceeding as authorized by the Board of Directors only upon receipt
of written affirmation by or on behalf of such person of his good faith
belief that he or she has met the standard of conduct necessary for
indemnification under relevant law and a written undertaking to repay such
amount if it shall ultimately be determined that the person has not met that
standard or if it is ultimately determined that indemnification of the person
against expenses incurred by him or her in connection with that proceeding is
prohibited by relevant law.
D. OTHER RIGHTS AND REMEDIES. The indemnification provided by this
Article VIII shall not be deemed to exclude any other rights to which those
seeking indemnification or advancement of expenses may be entitled under the
Corporation s Articles of Incorporation, any insurance or other agreement, vote
of stockholders or disinterested directors or otherwise, both as to actions in
their official capacity and as to actions in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such person; provided that no indemnification
shall be made to or on
4
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behalf of an individual if a judgment or other final
adjudication establishes that his actions, or omissions to act, were material to
the cause of action as adjudicated and (i) the person is found liable on the
basis that personal benefit was improperly received by him or her; (ii) the
person is found liable to the Corporation; or (iii) the person is found liable
for willful or intentional misconduct in the performance of his duty to the
Corporation; provided, however, that persons found liable under clauses (i) and
(ii) above, may still be indemnified solely as to reasonable expenses actually
incurred by such person in connection with the proceeding.
E. INSURANCE. Upon resolution passed by the Board, the
Corporation may purchase and maintain insurance on behalf of any person who
is or was a director, officer, employee or agent of the Corporation, or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or another
enterprise, against any liability asserted against him or her or incurred by
him or her in any such capacity, or arising out of his status, whether or not
the Corporation would have the power to indemnify him or her against such
liability under the provisions of this Article or the TBCA.
F. MODIFICATION. The duties of the Corporation to indemnify and to
advance expenses to a director or officer provided in this Article VIII shall be
in the nature of a contract between the Corporation and each such director or
officer, and no amendment or repeal of any provision of this Article VIII shall
alter, to the detriment of such director or officer, the right of such person to
the advance of expenses or indemnification related to a claim based on an act or
failure to act which took place prior to such amendment or repeal.
G. PROCEEDINGS INITIATED BY INDEMNIFIED PERSONS. Notwithstanding
any other provision of this Article VIII, the Corporation shall not indemnify
a director, officer, employee or agent for any liability incurred in an
action, suit or proceeding initiated by (which shall not be deemed to include
counter-claims or affirmative defenses), or participated in as an intervenor
or amicus curiae by, the person seeking indemnification unless such
initiation of or participation in the action, suit or proceeding is
authorized, either before or after its commencement, by the affirmative vote
of a majority of the directors then in office.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable since no restricted securities will be reoffered or
resold pursuant to this Registration Statement.
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ITEM 8. EXHIBITS
The following exhibits are filed with or incorporated by reference
into this Registration Statement on Form S-8 (numbering corresponds to
Exhibit Table in Item 601 of Regulation S-K):
No. Exhibit Page
--- ------- ----
4 Common Stock Certificate* --
5 Opinion of Elias, Matz, Tiernan & Herrick E-1
L.L.P. as to the legality of the securities
23.1 Consent of Elias, Matz, Tiernan & Herrick --
L.L.P. (contained in the opinion included
as Exhibit 5)
23.2 Consent of Henry & Peters, P.C. E-3
24 Power of attorney for any subsequent --
amendments is located in the signature pages
99.1 1994 Stock Incentive Plan E-4
99.2 1994 Directors' Stock Option Plan E-16
99.3 1996 Stock Option Plan E-21
- ----------
* Incorporated by reference from the Company's Registration Statement
on Form S-1 (Commission File No. 33-81015) filed with the Commission on
December 29, 1995.
ITEM 9. UNDERTAKINGS.
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,
(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, and (iii) to include any material information with
respect to the plan of distribution not previously
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<PAGE>
disclosed in the Registration Statement or any material change in such
information in the Registration Statement; provided, however, that clauses (i)
and (ii) do not apply if the information required to be included in a
post-effective amendment by those clauses is contained in periodic reports filed
by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference in the Registration Statement.
2. That, for the purpose of determining any liability under the
Securities Act, 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. That, for the purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act 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.
5. 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 Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against 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 questions whether such indemnification by it is against public
policy expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the State of Texas on December 16, 1996.
JACKSONVILLE BANCORP, INC.
By: /s/Jerry M. Chancellor
--------------------------------
Jerry M. Chancellor
Director and President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears
below hereby makes, constitutes and appoints Jerry M. Chancellor his or her true
and lawful attorney, with full power to sign for such person and in such
person's name and capacity indicated below, and with full power of substitution
any and all amendments to this Registration Statement, hereby ratifying and
confirming such person's signature as it may be signed by said attorney to any
and all amendments.
Name Title Date
- ------------------ --------------- --------------
/s/ Jerry M. Chancellor Director and President December 16, 1996
- ----------------------- (principal executive officer)
Jerry M. Chancellor
/s/ Bill W. Taylor Director and Executive December 16, 1996
- ---------------------- Vice President
Bill W. Taylor (principal financial and
accounting officer)
/s/ Ray W. Beall Director December 16, 1996
- --------------------
Ray W. Beall
<PAGE>
Name Title Date
- ------------------ --------------- --------------
/s/ Charles Broadway Director and Chief December 16, 1996
- -------------------- Executive Officer
Charles Broadway
/s/ W.G. Brown Chairman of the Board December 16, 1996
- --------------------
W. G. Brown
/s/ Joe Tollett Director December 16, 1996
- --------------------
Joe Tollett
/s/ Robert F. Brown Director December 16, 1996
- -------------------
Robert F. Brown
<PAGE>
Law Offices
ELIAS, MATZ, TIERNAN & HERRICK L.L.P.
12th Floor
734 15th Street, N.W.
Washington, D.C. 20005
----------
TIMOTHY B. MATZ Telephone: (202) 347-0300 JEFFREY D. HAAS
STEPHEN M. EGE Facsimile: (202) 347-2172 KEVIN M. HOULIHAN
RAYMOND A. TIERNAN KENNETH B. TABACH
W. MICHAEL HERRICK PATRICIA J. WOHL*
GERARD L. HAWKINS JEFFREY R. HOULE
NORMAN B. ANTIN JEFFREY R. JOHNSON
JOHN P. SOUKENIK* SCOTT H. RICHTER*
GERALD F. HEUPEL, JR.
JEFFREY A. KOEPPEL
DANIEL P. WEITZEL
PHILIP ROSS BEVAN
HUGH T. WILKINSON December 17, 1996 OF COUNSEL
ALLIN P. BAXTER
JACK I. ELIAS
SHERYL JONES ALU
*NOT ADMITTED IN D.C. VIA EDGAR JACQUELINE R. SCOTT
Board of Directors
Jacksonville Bancorp, Inc.
Commerce and Neches Streets
Jacksonville, Texas 75766
Re: Registration Statement on Form S-8
256,322 Shares of Common Stock
Gentlemen:
We are special counsel to Jacksonville Bancorp, Inc., a Texas corporation
(the "Corporation"), in connection with the preparation and filing with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, as
amended, of a Registration Statement on Form S-8 (the "Registration Statement"),
relating to the registration of up to 256,322 shares of common stock, par value
$0.01 per share ("Common Stock"), to be issued pursuant to the Corporation's
1994 Stock Incentive Plan, 1994 Directors' Stock Option Plan and 1996 Stock
Option Plan (together, the "Plans") upon the exercise of stock options and/or
appreciation rights (referred to as "Option Rights"). The Registration
Statement also registers an indeterminate number of additional shares which may
be necessary under the Plans to adjust the number of shares reserved thereby for
issuance as the result of a stock split, stock dividend or similar adjustment of
the outstanding Common Stock of the Corporation. We have been requested by the
Corporation to furnish an opinion to be included as an exhibit to the
Registration Statement.
<PAGE>
For this purpose, we have reviewed the Registration Statement and related
Prospectuses, the Articles of Incorporation and Bylaws of the Corporation, the
Plans, a specimen stock certificate evidencing the Common Stock of the
Corporation and such other corporate records and documents as we have deemed
appropriate. We are relying upon the originals, or copies certified or
otherwise identified to our satisfaction, of the corporate records of the
Corporation and such other instruments, certificates and representations of
public officials, officers and representatives of the Corporation as we have
deemed relevant as a basis for this opinion. In addition, we have assumed,
without independent verification, the genuineness of all signatures and the
authenticity of all documents furnished to us and the conformance in all
respects of copies to originals. Furthermore, we have made such factual
inquiries and reviewed such laws as we determined to be relevant for this
opinion.
For purposes of this opinion, we have also assumed that (i) the shares of
Common Stock issuable pursuant to Option Rights granted under the terms of the
Plans will continue to be validly authorized on the dates the Common Stock is
issued pursuant to the Option Rights; (ii) on the dates the Option Rights are
exercised, the Option Rights granted under the terms of the Plans will
constitute valid, legal and binding obligations of the Corporation and will
(subject to applicable bankruptcy, moratorium, insolvency, reorganization and
other laws and legal principles affecting the enforceability of creditors'
rights generally) be enforceable as to the Corporation in accordance with their
terms; (iii) no change occurs in applicable law or the pertinent facts; and (iv)
the provisions of "blue sky" and other securities laws as may be applicable will
have been complied with to the extent required.
Based on the foregoing, and subject to the assumptions set forth herein,
we are of the opinion as of the date hereof that the shares of Common Stock to
be issued pursuant to the Plans, when issued and sold pursuant to the Plans and
upon receipt of the consideration required thereby, will be legally issued,
fully paid and non-assessable shares of Common Stock of the Corporation.
We hereby consent to the reference to this firm under the caption "Legal
Opinion" in the Prospectuses of the Plans and to the filing of this opinion as
an exhibit to the Registration Statement.
Very truly yours,
ELIAS, MATZ, TIERNAN & HERRICK L.L.P.
By: /s/ Kenneth B. Tabach
Kenneth B. Tabach, a Partner
<PAGE>
[LETTERHEAD]
The Board of Directors
Jacksonville Bancorp, Inc,
We consent to the use of our report dated November 15, 1995 on the consolidated
financial statements of Jacksonville Savings and Loan Association and
Subsidiary, incorporated herein by reference in the registration statement on
Form S-8.
/S/ HENRY & PETERS, P.C.
Tyler, Texas
December 16, 1996
<PAGE>
JACKSONVILLE SAVINGS AND LOAN ASSOCIATION
1994 STOCK INCENTIVE PLAN
ARTICLE I
ESTABLISHMENT OF THE PLAN
Jacksonville Savings and Loan Association (the "Company") hereby
establishes this Stock Incentive Plan (the "Plan") upon the terms and conditions
hereinafter stated.
ARTICLE II
PURPOSE OF THE PLAN
The purpose of this Plan is to improve the growth and profitability of the
Company and its Subsidiary Companies by attracting and retaining qualified
personnel, providing such Employees with a proprietary interest in the Company
as an incentive to contribute to the success of the Company and its Subsidiary
Companies, and rewarding those Employees for outstanding performance and the
attainment of targeted goals. All Incentive Stock Options issued under this
Plan are intended to comply with the requirements of Section 422 of the Code,
and the regulations thereunder, and all provisions hereunder shall be read,
interpreted and applied with that purpose in mind.
ARTICLE III
DEFINITIONS
3.01 "Award" means an Option or Stock Appreciation Right granted pursuant
to the terms of this Plan.
3.02 "Board" means the Board of Directors of the Company.
3.03 "Code" means the Internal Revenue Code of 1986, as amended.
3.04 "Committee" means a committee of two or more directors appointed by
the Board pursuant to Article IV hereof, none of whom shall be an officer or
employee of the Company, and each of whom shall be a "disinterested person"
within the meaning of Rule 16b-3 under the Exchange Act, or any successor
thereto.
3.05 "Common Stock" means shares of the common stock, $.01 par value per
share, of the Company.
3.06 "Disability" means any physical or mental impairment which qualifies
an Employee for disability benefits under the applicable long-term disability
plan maintained by the Company or a Subsidiary Company, or, if no such plan
applies, which would qualify such Employee for disability benefits under any
long-term disability plan maintained by the Company, if such Employee were
covered by that plan.
<PAGE>
3.07 "Effective Date" means the hour and day upon which Common Stock is
initially sold by the Company in the Offering.
3.08 "Employee" means any person who is employed by the Company or a
Subsidiary Company, including Officers, but not including directors who are not
also officers of or otherwise employed by the Company or a Subsidiary Company.
3.09 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
3.10 "Fair Market Value" shall be equal to the fair market value per
share of the Company's Common Stock on the date an Award is granted. For
purposes hereof, the Fair Market Value of a share of Common Stock shall be the
closing sale price of a share of Common Stock on the date in question (or, if
such day is not a trading day in the U.S. markets, on the nearest preceding
trading day), as reported with respect to the principal market (or the composite
of the markets, if more than one) or national quotation system in which such
shares are then traded, or if no such closing prices are reported, the mean
between the high bid and low asked prices that day on the principal market or
national quotation system then in use, or if no such quotations are available,
the price furnished by a professional securities dealer making a market in such
shares selected by the Committee.
3.11 "Incentive Stock Option" means any Option granted under this Plan
which the Board intends (at the time it is granted) to be an incentive stock
option within the meaning of Section 422 of the Code or any successor thereto.
3.12 "Non-Qualified Option" means any Option granted under this Plan which
is not an Incentive Stock Option.
3.13 "Offering" means the offering of Common Stock to the public pursuant
to the Plan of Stock Issuance adopted by the Company following the
reorganization of Jacksonville Savings and Loan Association into the mutual
holding company form of organization.
3.14 "Officer" means an Employee whose position in the Company or
Subsidiary Company is that of a corporate officer, as determined by the Board.
3.15 "Option" means a right granted under this Plan to purchase Common
Stock.
3.16 "Optionee" means an Employee or former Employee to whom an Option is
granted under the Plan.
3.17 "Retirement" means a termination of employment which constitutes a
"retirement" under any applicable qualified pension benefit plan maintained by
the Company or a Subsidiary Company, or, if no such plan is applicable, which
would constitute "retirement" under any qualified pension benefit plan
maintained by the Company or a Subsidiary Company, if such individual were a
participant in such plan.
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<PAGE>
3.18 "Stock Appreciation Right" means a right to surrender an Option in
consideration for a payment by the Company in cash and/or Common Stock, as
provided in the discretion of the Committee in accordance with Section 8.10.
3.19 "Subsidiary Companies" means those subsidiaries of the Company which
meet the definition of "subsidiary corporations" set forth in Section 425(f) of
the Code, at the time of granting of the Option in question.
ARTICLE IV
ADMINISTRATION OF THE PLAN
4.01 DUTIES OF THE COMMITTEE. The Plan shall be administered and
interpreted by the Committee, as appointed from time to time by the Board
pursuant to Section 4.02. The Committee shall have the authority in its
absolute discretion to adopt, amend and rescind such rules, regulations and
procedures as, in its opinion, may be advisable in the administration of the
Plan, including, without limitation, rules, regulations and procedures which (i)
deal with satisfaction of an Employee's tax withholding obligation pursuant to
Section 12.02 hereof, (ii) include arrangements to facilitate the Employee's
ability to borrow funds for payment of the exercise or purchase price of an
Award, if applicable, from securities brokers and dealers, and (iii) include
arrangements which provide for the payment of some or all of such exercise or
purchase price by delivery of previously-owned shares of Common Stock or other
property and/or by withholding some of the shares of Common Stock which are
being acquired. The interpretation and construction by the Committee of any
provisions of the Plan, any rule, regulation or procedure adopted by it pursuant
thereto or of any Award shall be final and binding.
4.02 APPOINTMENT AND OPERATION OF THE COMMITTEE. The members of the
Committee shall be appointed by, and will serve at the pleasure of, the Board.
The Board from time to time may remove members from, or add members to, the
Committee, provided the Committee shall continue to consist of two or more
members of the Board, none of whom shall be an officer or employee of the
Company, and each of whom shall be a "disinterested person" within the meaning
of Rule 16b-3 under the Exchange Act. The Committee shall act by vote or
written consent of a majority of its members. Subject to the express provisions
and limitations of the Plan, the Committee may adopt such rules, regulations and
procedures as it deems appropriate for the conduct of its affairs. It may
appoint one of its members to be chairman and any person, whether or not a
member, to be its secretary or agent. The Committee shall report its actions
and decisions to the Board at appropriate times but in no event less than one
time per calendar year.
4.03 REVOCATION FOR MISCONDUCT. The Committee may by resolution
immediately revoke, rescind and terminate any Option, or portion thereof, to
the extent not yet vested, or any Stock Appreciation Right, to the extent not
yet exercised, previously granted or awarded under this Plan to an Employee
who is discharged from the employ of the
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Company or a Subsidiary Company for cause, which, for purposes hereof, shall
mean termination for: (1) conviction of a felony involving the
misappropriation of the Company's or any Subsidiary Company's assets or a
conviction of a felony which results in a substantial, demonstrable threat to
the Company's or any Subsidiary Company's reputation, or (ii) gross and
willful failure to perform a substantial portion of the Employee's duties and
responsibilities as an Employee, which failure continues for more than thirty
(30) days after written notice given to the Employee pursuant to a two-thirds
vote of all of the members of the Board of the Company or any Subsidiary
Company, as the case may be, then in office, such vote to set forth in
reasonable detail the nature of such failure.
4.04 LIMITATION ON LIABILITY. No member of the Committee shall be liable
for any action or determination made in good faith with respect to the Plan, any
rule, regulation or procedure adopted by it pursuant thereto or any Awards
granted under it. If a member of the Committee is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of anything done or not done by him in such capacity under or with respect to
the Plan, the Company shall, subject to the requirements of applicable laws and
regulations, indemnify such member against all liabilities and expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in the best interests of the Company and its Subsidiary Companies and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful.
4.05 COMPLIANCE WITH LAW AND REGULATIONS. All Awards granted hereunder
shall be subject to all applicable federal and state laws, rules and
regulations and to such approvals by any government or regulatory agency as
may be required. The Company shall not be required to issue or deliver any
certificates for shares of Common Stock prior to the completion of any
registration or qualification of or obtaining of consents or approvals with
respect to such shares under any Federal or state law or any rule or
regulation of any government body, which the Company shall, in its sole
discretion, determine to be necessary or advisable. Moreover, no Option or
Stock Appreciation Right may be exercised if such exercise would be contrary
to applicable laws and regulations.
4.06 RESTRICTIONS ON TRANSFER. The Company may place a legend upon any
certificate representing shares acquired pursuant to an Award granted hereunder
noting that the transfer of such shares may be restricted by applicable laws and
regulations.
ARTICLE V
ELIGIBILITY
Awards may be granted to such Employees of the Company and its Subsidiary
Companies as may be designated from time to time by the Committee. Awards may
not be
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granted to individuals who are not Employees of either the Company or its
Subsidiary Companies.
ARTICLE VI
COMMON STOCK COVERED BY THE PLAN
6.01 OPTION SHARES. The aggregate number of shares of Common Stock which
may be issued pursuant to this Plan, subject to adjustment as provided in
Article IX, shall be an amount equal to 7% of the shares of Common Stock issued
in the Offering. None of such shares shall be the subject of more than one
Award at any time, but if an Option as to any shares is surrendered before
exercise (except for the surrender in connection with exercise of a Stock
Appreciation Right), or expires or terminates for any reason without having been
exercised in full, or for any other reason ceases to be exercisable, the number
of shares covered thereby shall again become available for grant under the Plan
as if no Awards had been previously granted with respect to such shares. If an
option as to any shares is surrendered before exercise in connection with the
exercise of a Stock Appreciation Right, the number of shares covered thereby
shall no longer be available for grant under the Plan.
6.02 SOURCE OF SHARES. The shares of Common Stock issued under the Plan
may be authorized but unissued shares, treasury shares or shares purchased by
the Company on the open market or from private sources for use under the Plan.
ARTICLE VII
DETERMINATION OF
AWARDS, NUMBER OF SHARES, ETC.
The Committee shall, in its discretion, determine from time to time which
Employees will be granted Awards under the Plan, the number of shares of Common
Stock subject to each Award, whether each Option will be an Incentive Stock
Option or a Non-Qualified Stock Option and the exercise price of an Option. In
making all such determinations there shall be taken into account the duties,
responsibilities and performance of each respective Employee, his present and
potential contributions to the growth and success of the Company, his salary and
such other factors as the Committee shall deem relevant to accomplishing the
purposes of the Plan.
ARTICLE VIII
OPTIONS AND STOCK APPRECIATION RIGHTS
Each Option granted hereunder shall be on the following terms and
conditions:
8.01 STOCK OPTION AGREEMENT. The proper Officers of the Company and each
Optionee shall execute a Stock Option Agreement which shall set forth the total
number of shares of Common Stock to which it pertains, the exercise price,
whether it is a Non-Qualified Option or an Incentive Stock Option, and such
other terms, conditions,
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restrictions and privileges as the Committee in each instance shall deem
appropriate, provided they are not inconsistent with the terms, conditions
and provisions of this Plan. Each Optionee shall receive a copy of his
executed Stock Option Agreement.
8.02 OPTION EXERCISE PRICE.
(a) INCENTIVE STOCK OPTIONS. The per share price at which the subject
Common Stock may be purchased upon exercise of an Incentive Stock Option shall
be no less than one hundred percent (100%) of the Fair Market Value of a share
of Common Stock at the time such Incentive Stock Option is granted, except as
provided in Section 8.09(b).
(b) NON-QUALIFIED OPTIONS. The per share price at which the subject
Common Stock may be purchased upon exercise of a Non-Qualified Option shall be
established by the Committee at the time of grant, but in no event shall be less
than the greater of (i) the par value or (ii) eighty-five percent (85%) of the
Fair Market Value of a share of Common Stock at the time such Non-Qualified
Option is granted.
8.03 VESTING AND EXERCISE OF OPTIONS.
(a) GENERAL RULES. Incentive Stock Options and Non-Qualified Options
shall become vested and exercisable at the rate, to the extent and subject to
such limitations as may be specified by the Committee, provided, however, that
no Option may be exercisable for the first six months following the date the
Option is granted. Notwithstanding the foregoing, no vesting shall occur on or
after an Optionee's employment with the Company and all Subsidiary Companies is
terminated for any reason other than his death, Disability or Retirement. In
determining the number of shares of Common Stock with respect to which Options
are vested and/or exercisable, fractional shares will be rounded up to the
nearest whole number if the fraction is 0.5 or higher, and down if it is less.
(b) ACCELERATED VESTING UPON DEATH, DISABILITY OR RETIREMENT. Unless the
Committee shall specifically state otherwise at the time an Option is granted,
all Options granted under this Plan shall become vested and exercisable in full
on the date an Optionee terminates his employment with the Company or a
Subsidiary Company because of his death, Disability or Retirement.
(c) ACCELERATED VESTING FOR CHANGES IN CONTROL. Notwithstanding the
general rule described in Section 8.03(a), all outstanding Options shall become
immediately vested and exercisable in the event there is a change in control of
the Company. A "change in control of the Company" for this purpose shall mean a
change in control of a nature that would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange
Act, or any successor thereto, whether or not the Company in fact is required to
comply with Regulation 14A thereunder, except that a "change in control of the
Company" shall not include any corporate reorganization of the Company
undertaken in conjunction with the conversion of Jacksonville Federal Mutual
Holding
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Company, the parent mutual holding company of the Company, from the
mutual to the stock form.
8.04 DURATION OF OPTIONS.
(a) GENERAL RULE. Except as provided in Sections 8.04(b) and 8.09, each
Option or portion thereof shall be exercisable at any time on or after it vests
and becomes exercisable until the earlier of (i) ten (10) years after its date
of grant or (ii) three (3) months after the date on which the Optionee ceases to
be employed by the Company and all Subsidiary Companies, unless the Committee in
its discretion decides at the time of grant or thereafter to extend such period
of exercise upon termination of employment from three (3) months to a period not
exceeding five (5) years.
(b) EXCEPTION FOR TERMINATION DUE TO DEATH, DISABILITY OR RETIREMENT. If
an Optionee dies while in the employ of the Company or a Subsidiary Company or
terminates employment with the Company or a Subsidiary Company as a result of
Disability or Retirement without having fully exercised his Options, the
Optionee or the executors, administrators, legatees or distributees of his
estate shall have the right, during the twelve-month period following the
earlier of his death, Disability or Retirement, to exercise such Options to the
extent vested on the date of such death, Disability or Retirement. In no event,
however, shall any Option be exercisable more than ten (10) years from the date
it was granted.
8.05 NONASSIGNABILITY. Options shall not be transferable by an Optionee
except by will or the laws of descent or distribution, and during an Optionee's
lifetime shall be exercisable only by such Optionee or the Optionee's guardian
or legal representative.
8.06 MANNER OF EXERCISE. Options may be exercised in part or in whole and
at one time or from time to time. The procedures for exercise shall be set
forth in the written Stock Option Agreement provided for in Section 8.01 above.
8.07 PAYMENT FOR SHARES. Payment in full of the purchase price for shares
of Common Stock purchased pursuant to the exercise of any Option shall be made
to the Company upon exercise of the Option. All shares sold under the Plan
shall be fully paid and nonassessable. Payment for shares may be made by the
Optionee in cash or, at the discretion of the Committee, by delivering shares of
Common Stock (including shares acquired pursuant to the exercise of an Option)
or other property equal in Fair Market Value to the purchase price of the shares
to be acquired pursuant to the Option, by withholding some of the shares of
Common Stock which are being purchased upon exercise of an Option, or any
combination of the foregoing.
8.08 VOTING AND DIVIDEND RIGHTS. No Optionee shall have any voting or
dividend rights or other rights of a stockholder in respect of any shares of
Common Stock covered
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by an Option prior to the time that his name is recorded on the Company's
stockholder ledger as the holder of record of such shares acquired pursuant
to an exercise of an Option.
8.09 ADDITIONAL TERMS APPLICABLE TO INCENTIVE STOCK OPTIONS. All Options
issued under the Plan as Incentive Stock Options will be subject, in addition to
the terms detailed in Sections 8.01 to 8.08 above, to those contained in this
Section 8.09.
(a) Notwithstanding any contrary provisions contained elsewhere in this
Plan and as long as required by Section 422 of the Code, the aggregate Fair
Market Value, determined as of the time an Incentive Stock Option is granted, of
the Common Stock with respect to which Incentive Stock Options are exercisable
for the first time by the Optionee during any calendar year, under this Plan and
stock options that satisfy the requirements of Section 422 of the Code under any
other stock option plan or plans maintained by the Company (or any parent or
Subsidiary Company), shall not exceed $100,000.
(b) LIMITATION ON TEN PERCENT STOCKHOLDERS. The price at which shares of
Common Stock may be purchased upon exercise of an Incentive Stock Option granted
to an individual who, at the time such Incentive Stock Option is granted, owns,
directly or indirectly, more than ten percent (10%) of the total combined voting
power of all classes of stock issued to stockholders of the Company or any
Subsidiary Company, shall be no less than one hundred and ten percent (110%) of
the Fair Market Value of a share of the Common Stock of the Company at the time
of grant, and such Incentive Stock Option shall by its terms not be exercisable
after the earlier of the date determined under Section 8.03 or the expiration of
five (5) years from the date such Incentive Stock Option is granted.
(c) NOTICE OF DISPOSITION; WITHHOLDING; ESCROW. An Optionee shall
immediately notify the Company in writing of any sale, transfer, assignment or
other disposition (or action constituting a disqualifying disposition within the
meaning of Section 421 of the Code) of any shares of Common Stock acquired
through exercise of an Incentive Stock Option, within two (2) years after the
grant of such Incentive Stock Option or within one (1) year after the
acquisition of such shares, setting forth the date and manner of disposition,
the number of shares disposed of and the price at which such shares were
disposed of. The Company shall be entitled to withhold from any compensation or
other payments then or thereafter due to the Optionee such amounts as may be
necessary to satisfy any withholding requirements of Federal or state law or
regulation and, further, to collect from the Optionee any additional amounts
which may be required for such purpose. The Committee may, in its discretion,
require shares of Common Stock acquired by an Optionee upon exercise of an
Incentive Stock Option to be held in an escrow arrangement for the purpose of
enabling compliance with the provisions of this Section 8.09(c).
8.10 STOCK APPRECIATION RIGHTS.
(a) GENERAL TERMS AND CONDITIONS. The Committee may, but shall not be
obligated to, authorize the Company, on such terms and conditions as it deems
appropriate
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in each case, to grant rights to Optionees to surrender an exercisable
Option, or any portion thereof, in consideration for the payment by the
Company of an amount equal to the excess of the Fair Market Value of the
shares of Common Stock subject to the Option, or portion thereof, surrendered
over the exercise price of the Option with respect to such shares (any such
authorized surrender and payment being hereinafter referred to as a "Stock
Appreciation Right"). Such payment, at the discretion of the Committee, may
be made in shares of Common Stock valued at the then Fair Market Value
thereof, or in cash, or partly in cash and partly in shares of Common Stock.
The terms and conditions set with respect to a Stock Appreciation Right may
include (without limitation), subject to other provisions of this Section 8.10
and the Plan; the period during which, date by which or event upon which the
Stock Appreciation Right may be exercised; the method for valuing shares of
Common Stock for purposes of this Section 8.10; a ceiling on the amount of
consideration which the Company may pay in connection with exercise and
cancellation of the Stock Appreciation Right; and arrangements for income tax
withholding. The Committee shall have complete discretion to determine whether,
when and to whom Stock Appreciation Rights may be granted. Notwithstanding the
foregoing, the Company may not permit the exercise of a Stock Appreciation Right
issued pursuant to this Plan until the Company has been subject to the reporting
requirements of Section 13 of the Exchange Act for a period of at least one year
prior to the exercise of any such Stock Appreciation Right and until a Stock
Appreciation Right issued pursuant to this Plan has been outstanding for at
least six months from the date of grant.
(b) TIME LIMITATIONS. If a holder of a Stock Appreciation Right
terminates service with the Company as an Officer or Employee, the Stock
Appreciation Right may be exercised only within the period, if any, within which
the Option to which it relates may be exercised. Notwithstanding the foregoing,
any election by an Optionee to exercise the Stock Appreciation Rights provided
in this Plan shall be made during the period beginning on the third business day
following the release for publication of quarterly or annual financial
information required to be prepared and disseminated by the Company pursuant to
the requirements of the Exchange Act and ending on the twelfth business day
following such date. The required release of information shall be deemed to
have been satisfied when the specified financial data appears on or in a wire
service, financial news service or newspaper of general circulation or is
otherwise first made publicly available.
(c) EFFECTS OF EXERCISE OF STOCK APPRECIATION RIGHTS OR OPTIONS. Upon the
exercise of a Stock Appreciation Right, the number of shares of Common Stock
available under the Option to which it relates shall decrease by a number equal
to the number of shares for which the Stock Appreciation Right was exercised.
Upon the exercise of an Option, any related Stock Appreciation Right shall
terminate as to any number of shares of Common Stock subject to the Stock
Appreciation Right that exceeds the total number of shares for which the Option
remains unexercised.
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(d) TIME OF GRANT. A Stock Appreciation Right may be granted concurrently
with the Option which it relates or at any time thereafter prior to the exercise
or expiration of such Option.
(e) NON-TRANSFERABLE. The holder of a Stock Appreciation Right may not
transfer or assign the Stock Appreciation Right otherwise than by will or in
accordance with the laws of descent and distribution, and during a holder's
lifetime a Stock Appreciation Right may be exercisable only by the holder.
ARTICLE IX
ADJUSTMENTS FOR CAPITAL CHANGES
The aggregate number of shares of Common Stock available for issuance
under this Plan, the number of shares to which any Award relates and the
exercise price per share of Common Stock under any Option shall be
proportionately adjusted for any increase or decrease in the total number of
outstanding shares of Common Stock issued subsequent to the effective date of
this Plan resulting from a split, subdivision or consolidation of shares or
any other capital adjustment, the payment of a stock dividend, or other
increase or decrease in such shares effected without receipt or payment of
consideration by the Company. If, upon a merger, consolidation,
reorganization, liquidation, recapitalization or the like of the Company, the
shares of the Company's Common Stock shall be exchanged for other securities
of the Company or of another corporation, each recipient of an Award shall be
entitled, subject to the conditions herein stated, to purchase or acquire
such number of shares of Common Stock or amount of other securities of the
Company or such other corporation as were exchangeable for the number of
shares of Common Stock of the Company which such optionees would have been
entitled to purchase or acquire except for such action, and appropriate
adjustments shall be made to the per share exercise price of outstanding
Options.
ARTICLE X
AMENDMENT AND TERMINATION OF THE PLAN
The Board may, by resolution, at any time terminate, amend or revise the
Plan with respect to any shares of Common Stock as to which Awards have not been
granted, provided, however, that no amendment which (a) changes the maximum
number of shares that may be sold or issued under the Plan (other than in
accordance with the provisions of Article X) or (b) changes the class of
Employees that may be granted Options shall become effective until it receives
the approval of the stockholders of the Company, and further provided that the
Board may determine that stockholder approval for any other amendment to this
Plan may be advisable for any reason, such as for the purpose of obtaining or
retaining any statutory or regulatory benefits under tax, securities or other
laws or satisfying any applicable stock exchange listing requirements. The
Board may not, without the consent of the holder of an Award, alter or impair
any Award previously granted or awarded under this Plan as specifically
authorized herein.
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ARTICLE XI
EMPLOYMENT RIGHTS
Neither the Plan nor the grant of any Awards hereunder nor any action taken
by the Committee or the Board in connection with the Plan shall create any right
on the part of any Employee of the Company or a Subsidiary Company to continue
in the employ of the Company or a Subsidiary Company.
ARTICLE XII
WITHHOLDING
12.01 TAX WITHHOLDING. The Company may withhold from any cash payment made
under this Plan sufficient amounts to cover any applicable withholding and
employment taxes, and if the amount of such cash payment is insufficient, the
Company may require the Optionee to pay to the Company the amount required to be
withheld as a condition to delivering the shares acquired pursuant to an Award.
The Company also may withhold or collect amounts with respect to a disqualifying
disposition of shares of Common Stock acquired pursuant to exercise of an
Incentive Stock Option, as provided in Section 8.09(c).
12.02 METHODS OF TAX WITHHOLDING. The Committee is authorized to adopt
rules, regulations or procedures which provide for the satisfaction of an
Employee's tax withholding obligation by the retention of shares of Common Stock
to which the Employee would otherwise be entitled pursuant to an Award and/or by
the Employee's delivery of previously-owned shares of Common Stock or other
property.
ARTICLE XIII
EFFECTIVE DATE OF THE PLAN; TERM
13.01 EFFECTIVE DATE OF THE PLAN. This Plan shall become effective on
the Effective Date, and Awards may be granted hereunder as of or after the
Effective Date and prior to the termination of the Plan, provided that no shares
of Common Stock may be issued pursuant to this Plan unless this Plan is approved
by a vote of the holders of a majority of the outstanding voting shares of the
Company at a meeting of stockholders of the Company held within twelve (12)
months following the Effective Date.
13.02 TERM OF PLAN. Unless sooner terminated, this Plan shall remain
in effect for a period of ten (10) years ending on the tenth anniversary of the
Effective Date. Termination of the Plan shall not affect any Awards previously
granted and such Awards shall remain valid and in effect until they have been
fully exercised or earned, are surrendered or by their terms expire or are
forfeited.
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ARTICLE XIV
MISCELLANEOUS
14.01 GOVERNING LAW. To the extent not governed by Federal law, this
Plan shall be construed under the laws of the State of Texas.
14.02 PRONOUNS. Wherever appropriate, the masculine pronoun shall
include the feminine pronoun, and the singular shall include the plural.
<PAGE>
JACKSONVILLE SAVINGS AND LOAN ASSOCIATION
1994 DIRECTORS' STOCK OPTION PLAN
ARTICLE I
ESTABLISHMENT OF THE PLAN
Jacksonville Savings and Loan Association (the "Company") hereby
establishes this 1994 Directors' Stock Option Plan (the "Plan") upon the terms
and conditions hereinafter stated.
ARTICLE II
PURPOSE OF THE PLAN
The purpose of this Plan is to improve the growth and profitability of the
Company by providing non-employee directors with a proprietary interest in the
Company through non-discretionary grants of non-qualified stock options (an
"Option" or "Options").
ARTICLE III
ADMINISTRATION OF THE PLAN
3.01 ADMINISTRATION. This Plan shall be administered by the entire Board
of Directors of the Company (the "Board"). The Board shall have the power,
subject to and within the limits of the express provisions of this Plan, to
exercise such powers and to perform such acts as are deemed necessary or
expedient to promote the best interests of the Company with respect to this
Plan.
3.02 COMPLIANCE WITH LAW AND REGULATIONS. All Options granted hereunder
shall be subject to all applicable Federal and state laws, rules and
regulations and to such approvals by any government or regulatory agency as
may be required. The Company shall not be required to issue or deliver any
certificates for shares of Common Stock prior to the completion of any
registration or qualification of or obtaining of consents or approvals with
respect to such shares under any Federal or state law or any rule or
regulation of any government body, which the Company shall, in its sole
discretion, determine to be necessary or advisable. Moreover, no Option may
be exercised if such exercise or issuance would be contrary to applicable
laws and regulations.
3.03 RESTRICTIONS ON TRANSFER. The Company may place a legend upon any
certificate representing shares acquired pursuant to an Option granted hereunder
noting that the transfer of such shares may be restricted by applicable laws and
regulations.
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ARTICLE IV
ELIGIBILITY
Each of the four non-employee directors of the Company at the time of the
Company's initial offering of capital stock to the public pursuant to the Plan
of Stock Issuance adopted by the Company following the reorganization of
Jacksonville Savings and Loan Association into the mutual holding company form
of organization (the "Offering") shall receive options hereunder ("non-employee
director"). No honorary directors, advisory directors or directors emeritus
shall be entitled to receive Options hereunder.
ARTICLE V
COMMON STOCK COVERED BY THE PLAN
5.01 OPTION SHARES. The aggregate number of shares of common stock of the
Company, par value $.01 per share ("Common Stock"), which may be issued pursuant
to this Plan, subject to adjustment as provided in Article VIII, shall be an
amount equal to 3% of the shares of Common Stock issued in the Offering.
5.02 SOURCE OF SHARES. The shares of Common Stock issued under this Plan
may be authorized but unissued shares, treasury shares or shares purchased by
the Company on the open market or from private sources for use under the Plan.
ARTICLE VI
OPTION GRANTS
Each non-employee director of the Company as of the date of the closing of
the sale of Common Stock in connection with the Offering, shall be granted an
Option to purchase approximately 4,556 shares of Common Stock effective at such
time and with a per share exercise price equal to the actual purchase price of a
share of Common Stock in the Offering.
ARTICLE VII
OPTION TERMS
Each Option granted hereunder shall be on the following terms and
conditions:
7.01 OPTION AGREEMENT. The proper officers of the Company and each
optionee shall execute an Option Agreement which shall set forth the total
number of shares of Common Stock to which it pertains, the exercise price and
such other terms, conditions and provisions as are appropriate, provided that
they are not inconsistent with the terms, conditions and provisions of this
Plan. Each optionee shall receive a copy of his executed Option Agreement.
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7.02 OPTION EXERCISE PRICE. The per share exercise price at which shares
of Common Stock may be purchased upon exercise of an Option granted pursuant to
Section 6.01 shall be the uniform per share price at which Common Stock is sold
by the Company to participants in the Offering. The per share exercise price
which shares of Common Stock may be purchased upon exercise of an opinion
granted pursuant to Section 6.02 hereof shall be $10.00.
7.03 VESTING AND EXERCISE OF OPTIONS. Subject to the approval of
stockholders of the Company pursuant to the terms of Article XII hereof, Options
shall be vested and exercisable at any price six (6) months after the date of
grant.
7.04 DURATION OF OPTIONS.
(a) Each Option or portion thereof shall be exercisable at any time on or
after six (6) months after the date of grant until the earlier of (i) ten (10)
years after the date of grant or (ii) the third annual anniversary of the date
on which the optionee ceases to be a non-employee director.
(b) Exception for Termination Due to Death, Disability, Retirement or
Resignation. If an optionee dies while serving as a non-employee director or
within three (3) years following the termination of the optionee's service as a
non-employee director as a result of disability, retirement or resignation
without having fully exercised his Options, the Optionee's executors,
administrators, legatees or distributees of his estate shall have the right,
during the twelve-month period following such death, to exercise such Options,
provided that no Option shall be exercisable within six (6) months after the
date of grant or more than ten (10) years from the date it was granted.
(c) Options granted to a non-employee director who is removed for cause
pursuant to the Company's Charter shall terminate as of the effective date of
such removal.
7.05 NONASSIGNABILITY. Options shall not be transferable by an optionee
except by will or the laws of descent or distribution, and during an optionee's
lifetime shall be exercisable only by such optionee or the optionee's guardian
or legal representative.
7.06 MANNER OF EXERCISE. Options may be exercised in part or in whole and
at one time or from time to time. The procedures for exercise shall be set
forth in the written Option Agreement provided for in Section 7.01.
7.07 PAYMENT FOR SHARES. Payment in full of the purchase price for shares
of Common Stock purchased pursuant to the exercise of an Option shall be made to
the Company upon exercise of the Option. Payment for shares may be made by the
optionee in cash or by delivering shares of Common Stock (including shares
acquired pursuant to the exercise of an Option) equal in fair market value to
the purchase price of the shares to be acquired pursuant to the Option, or any
combination of the foregoing.
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7.08 VOTING AND DIVIDEND RIGHTS. No optionee shall have any voting or
dividend rights or other rights of a stockholder in respect of any shares of
Common Stock covered by an Option prior to the time that his name is recorded on
the Company's stockholder ledger as the holder of record of such shares acquired
pursuant to an exercise of an Option.
ARTICLE VIII
ADJUSTMENTS FOR CAPITAL CHANGES
The aggregate number of shares of Common Stock available for issuance
under this Plan, the number of shares to which any Option relates and the
exercise price per share of Common Stock under any Option shall be
proportionately adjusted for any increase or decrease in the total number of
outstanding shares of Common Stock issued subsequent to the effective date of
this Plan resulting from a split, subdivision or consolidation of shares or
any other capital adjustment, the payment of a stock dividend, or other
increase or decrease in such shares effected without receipt or payment of
consideration by the Company. If, upon a merger, consolidation,
reorganization, liquidation, recapitalization or the like of the Company, the
shares of the Company's Common Stock shall be exchanged for other securities
of the Company or of another corporation, each recipient of an Option shall
be entitled, subject to the conditions herein stated, to purchase or acquire
such number of shares of Common Stock or amount of other securities of the
Company or such other corporation as were exchangeable for the number of
shares of Common Stock of the Company which such optionees would have been
entitled to purchase or acquire except for such action, and appropriate
adjustments shall be made to the per share exercise price of outstanding
Options.
ARTICLE IX
AMENDMENT AND TERMINATION OF THE PLAN
The Board may, by resolution, at any time terminate, amend or revise this
Plan with respect to any shares of Common Stock as to which Options have not
been granted, provided, however, that no amendment which (a) changes the maximum
number of shares that may be sold or issued under the Plan (other than in
accordance with the provisions of Article VIII) or (b) changes the class of
persons that may be granted Options shall become effective until it receives the
approval of the stockholders of the Company, and further provided that the Board
may determine that stockholder approval for any other amendment to this Plan may
be advisable for any reason, such as for the purpose of obtaining or retaining
any statutory or regulatory benefits under tax, securities or other laws or
satisfying any applicable stock exchange listing requirements. The Board may
not, without the consent of the holder of an Option, alter or impair any Option
previously granted under this Plan as specifically authorized herein.
Notwithstanding anything contained in this Plan to the contrary, the provisions
of Articles IV, VI and VII of this Plan shall not be amended more than once
every six months, other than to comport with changes in the Internal Revenue
Code of 1986, as amended, the Employee Retirement Income Security Act of 1974,
as amended, or the rules and regulations promulgated under such statutes.
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ARTICLE X
RIGHTS TO CONTINUE AS A DIRECTOR
Neither the Plan nor the grant of any Options hereunder nor any action
taken by the Board in connection with the Plan shall create any right on the
part of any non-employee director of the Company to continue as such.
ARTICLE XI
WITHHOLDING
The Company may withhold from any cash payment made under this Plan
sufficient amounts to cover any applicable withholding and employment taxes, and
if the amount of such cash payment is insufficient, the Company may require the
optionee to pay to the Company the amount required to be withheld as a condition
to delivering the shares acquired pursuant to an Option.
ARTICLE XII
EFFECTIVE DATE OF THE PLAN; TERM
12.01 EFFECTIVE DATE OF THE PLAN. This Plan shall become effective at
the time that Common Stock is initially sold by the Company in the Offering (the
"Effective Date"), and Options may be granted hereunder as of or after the
Effective Date and prior to the termination of this Plan, provided that no
shares of Common Stock may be issued pursuant to this Plan until this Plan is
approved by a vote of the holders of a majority of the outstanding voting shares
of the Company at a meeting of stockholders of the Company held within twelve
(12) months following the Effective Date.
12.02 TERM OF PLAN. Unless sooner terminated, this Plan shall remain
in effect for a period of ten (10) years ending on the tenth anniversary of the
Effective Date. Termination of the Plan shall not affect any Options previously
granted and such Options shall remain valid and in effect until they have been
fully exercised or earned, are surrendered or by their terms expire or are
forfeited.
ARTICLE XIII
MISCELLANEOUS
13.01 GOVERNING LAW. To the extent not governed by Federal law, this
Plan shall be construed under the laws of the State of Texas.
13.02 PRONOUNS. Wherever appropriate, the masculine pronoun shall
include the feminine pronoun, and the singular shall include the plural.
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JACKSONVILLE BANCORP, INC.
1996 STOCK OPTION PLAN
ARTICLE I
ESTABLISHMENT OF THE PLAN
Jacksonville Bancorp, Inc. (the "Corporation") hereby establishes this 1996
Stock Option Plan (the "Plan") upon the terms and conditions hereinafter stated.
ARTICLE II
PURPOSE OF THE PLAN
The purpose of this Plan is to improve the growth and profitability of the
Corporation and its Subsidiary Companies by providing Employees and Non-Employee
Directors with a proprietary interest in the Corporation as an incentive to
contribute to the success of the Corporation and its Subsidiary Companies, and
rewarding those Employees for outstanding performance and the attainment of
targeted goals. All Incentive Stock Options issued under this Plan are intended
to comply with the requirements of Section 422 of the Code, and the regulations
thereunder, and all provisions hereunder shall be read, interpreted and applied
with that purpose in mind.
ARTICLE III
DEFINITIONS
3.01 "Association" means Jacksonville Savings and Loan Association, the
wholly owned subsidiary of the Corporation.
3.02 "Award" means an Option or Stock Appreciation Right granted pursuant
to the terms of this Plan.
3.03 "Board" means the Board of Directors of the Corporation.
3.04 "Code" means the Internal Revenue Code of 1986, as amended.
3.05 "Committee" means a committee of two or more directors appointed by
the Board pursuant to Article IV hereof, each of whom shall be a Non-Employee
Director.
3.06 "Common Stock" means shares of the common stock, $0.01 par value per
share, of the Corporation.
3.07 "Disability" means any physical or mental impairment which qualifies
an Employee for disability benefits under the applicable long-term disability
plan maintained by the Corporation or a Subsidiary Company, or, if no such plan
applies, which would qualify such Employee for disability benefits under the
Federal Social Security System.
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3.08 "Effective Date" means the day upon which the Board adopts this Plan.
3.09 "Employee" means any person who is employed by the Corporation or a
Subsidiary Company, or is an Officer of the Corporation or a Subsidiary Company,
but not including directors who are not also Officers of or otherwise employed
by the Corporation or a Subsidiary Company.
3.10 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
3.11 "Fair Market Value" shall be equal to the fair market value per
share of the Corporation's Common Stock on the date an Award is granted. For
purposes hereof, the Fair Market Value of a share of Common Stock shall be the
closing sale price of a share of Common Stock on the date in question (or, if
such day is not a trading day in the U.S. markets, on the nearest preceding
trading day), as reported with respect to the principal market (or the composite
of the markets, if more than one) or national quotation system in which such
shares are then traded, or if no such closing prices are reported, the mean
between the high bid and low asked prices that day on the principal market or
national quotation system then in use, or if no such quotations are available,
the price furnished by a professional securities dealer making a market in such
shares selected by the Committee.
3.12 "Incentive Stock Option" means any Option granted under this Plan
which the Board intends (at the time it is granted) to be an incentive stock
option within the meaning of Section 422 of the Code or any successor thereto.
3.13 "Non-Employee Director" means a member of the Board on the Effective
Date who is not an Officer or Employee of the Corporation or any Subsidiary
Company other than Robert F. Brown.
3.14 "Non-Qualified Option" means any Option granted under this Plan which
is not an Incentive Stock Option.
3.15 "Offering" means the offering of Common Stock to the public pursuant
to a Plan of Conversion and Agreement and Plan of Reorganization adopted by the
Bank and Jacksonville Federal Mutual Holding Company.
3.16 "Officer" means an Employee whose position in the Corporation or
Subsidiary Company is that of a corporate officer, as determined by the Board.
3.17 "OTS" means the Office of Thrift Supervision.
3.18 "Option" means a right granted under this Plan to purchase Common
Stock.
3.19 "Optionee" means an Employee or Non-Employee Director or former
Employee or Non-Employee Director to whom an Option is granted under the Plan.
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3.20 "Retirement" means a termination of employment which constitutes a
"retirement" under any applicable qualified pension benefit plan maintained by
the Company or a Subsidiary Company, or, if no such plan is applicable, which
would constitute "retirement" under any qualified pension benefit plan
maintained by the Company or a Subsidiary Company, if such individual were a
participant in such plan.
3.21 "Stock Appreciation Right" means a right to surrender an Option in
consideration for a payment by the Corporation in cash and/or Common Stock, as
provided in the discretion of the Committee in accordance with Section 8.11.
3.22 "Subsidiary Companies" means those subsidiaries of the Corporation,
including the Association, which meet the definition of "subsidiary
corporations" set forth in Section 425(f) of the Code, at the time of granting
of the Option in question.
ARTICLE IV
ADMINISTRATION OF THE PLAN
4.01 DUTIES OF THE COMMITTEE. The Plan shall be administered and
interpreted by the Committee, as appointed from time to time by the Board
pursuant to Section 4.02. The Committee shall have the authority to adopt,
amend and rescind such rules, regulations and procedures as, in its opinion, may
be advisable in the administration of the Plan, including, without limitation,
rules, regulations and procedures which (i) deal with satisfaction of an
Optionee's tax withholding obligation pursuant to Section 12.02 hereof, (ii)
include arrangements to facilitate the Optionee's ability to borrow funds for
payment of the exercise or purchase price of an Award, if applicable, from
securities brokers and dealers, and (iii) include arrangements which provide for
the payment of some or all of such exercise or purchase price by delivery of
previously owned shares of Common Stock or other property and/or by withholding
some of the shares of Common Stock which are being acquired. The interpretation
and construction by the Committee of any provisions of the Plan, any rule,
regulation or procedure adopted by it pursuant thereto or of any Award shall be
final and binding in the absence of action by the Board of Directors.
4.02 APPOINTMENT AND OPERATION OF THE COMMITTEE. The members of the
Committee shall be appointed by, and will serve at the pleasure of, the Board.
The Board from time to time may remove members from, or add members to, the
Committee, provided the Committee shall continue to consist of two or more
members of the Board, each of whom shall be a Non-Employee Director. The
Committee shall act by vote or written consent of a majority of its members.
Subject to the express provisions and limitations of the Plan, the Committee may
adopt such rules, regulations and procedures as it deems appropriate for the
conduct of its affairs. It may appoint one of its members to be chairman and
any person, whether or not a member, to be its secretary or agent. The
Committee shall report its actions and decisions to the Board at appropriate
times but in no event less than one time per calendar year.
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4.03 REVOCATION FOR MISCONDUCT. The Board of Directors or the Committee
may by resolution immediately revoke, rescind and terminate any Option, or
portion thereof, to the extent not yet vested, or any Stock Appreciation Right,
to the extent not yet exercised, previously granted or awarded under this Plan
to an Employee who is discharged from the employ of the Corporation or a
Subsidiary Company for cause, which, for purposes hereof, shall mean termination
because of the Employee's personal dishonesty, incompetence, willful misconduct,
breach of fiduciary duty involving personal profit, intentional failure to
perform stated duties, willful violation of any law, rule, or regulation (other
than traffic violations or similar offenses) or final cease-and-desist order.
Options granted to a Non-Employee Director who is removed for cause pursuant to
the Corporation's Certificate of Incorporation or Bylaws shall terminate as of
the effective date of such removal.
4.04 LIMITATION ON LIABILITY. Neither the members of the Board of
Directors nor any member of the Committee shall be liable for any action or
determination made in good faith with respect to the Plan, any rule, regulation
or procedure adopted by it pursuant thereto or any Awards granted under it. If
a member of the Board of Directors or the Committee is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of anything done or not done by him in such capacity under or with respect to
the Plan, the Corporation shall, subject to the requirements of applicable laws
and regulations, indemnify such member against all liabilities and expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in the best interests of the Corporation and its Subsidiary Companies and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful.
4.05 COMPLIANCE WITH LAW AND REGULATIONS. All Awards granted hereunder
shall be subject to all applicable federal and state laws, rules and
regulations and to such approvals by any government or regulatory agency as
may be required. The Corporation shall not be required to issue or deliver any
certificates for shares of Common Stock prior to the completion of any
registration or qualification of or obtaining of consents or approvals with
respect to such shares under any Federal or state law or any rule or
regulation of any government body, which the Corporation shall, in its sole
discretion, determine to be necessary or advisable. Moreover, no Option or
Stock Appreciation Right may be exercised if such exercise would be contrary
to applicable laws and regulations.
4.06 RESTRICTIONS ON TRANSFER. The Corporation may place a legend upon any
certificate representing shares acquired pursuant to an Award granted hereunder
noting that the transfer of such shares may be restricted by applicable laws and
regulations.
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ARTICLE V
ELIGIBILITY
Awards may be granted to such Employees or Non-Employee Directors of the
Corporation and its Subsidiary Companies as may be designated from time to time
by the Board of Directors or the Committee. Awards may not be granted to
individuals who are not Employees or Non-Employee Directors of either the
Corporation or its Subsidiary Companies. Non-Employee Directors shall be
eligible to receive only Non-Qualified Options.
ARTICLE VI
COMMON STOCK COVERED BY THE PLAN
6.01 OPTION SHARES. The aggregate number of shares of Common Stock which
may be issued pursuant to this Plan, subject to adjustment as provided in
Article IX, shall be 161,840 shares, which is equal to 10.0% of the shares of
Conversion Stock issued in the Offering. None of such shares shall be the
subject of more than one Award at any time, but if an Option as to any shares is
surrendered before exercise, or expires or terminates for any reason without
having been exercised in full, or for any other reason ceases to be exercisable,
the number of shares covered thereby shall again become available for grant
under the Plan as if no Awards had been previously granted with respect to such
shares. Notwithstanding the foregoing, if an Option is surrendered in
connection with the exercise of a Stock Appreciation Right, the number of shares
covered thereby shall not be available for grant under the Plan. During the
time this Plan remains in effect, grants to each Employee and each Non-Employee
Director shall not exceed 25% and 5% of the shares of Common Stock available
under the Plan, respectively.
6.02 SOURCE OF SHARES. The shares of Common Stock issued under the Plan
may be authorized but unissued shares, treasury shares or shares purchased by
the Corporation on the open market or from private sources for use under the
Plan.
ARTICLE VII
DETERMINATION OF
AWARDS, NUMBER OF SHARES, ETC.
The Board of Directors or the Committee shall, in its discretion, determine
from time to time which Employees will be granted Awards under the Plan, the
number of shares of Common Stock subject to each Award, and whether each Option
will be an Incentive Stock Option or a Non-Qualified Stock Option. In making
all such determinations there shall be taken into account the duties,
responsibilities and performance of each respective Employee, his present and
potential contributions to the growth and success of the Corporation, his salary
and such other factors as the Board of Directors or the Committee shall deem
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relevant to accomplishing the purposes of the Plan. Non-Employee Directors
shall be eligible to receive only Non-Qualified Options pursuant to Section 8.02
of the Plan.
ARTICLE VIII
OPTIONS AND STOCK APPRECIATION RIGHTS
Each Option granted hereunder shall be on the following terms and
conditions:
8.01 STOCK OPTION AGREEMENT. The proper Officers on behalf of the
Corporation and each Optionee shall execute a Stock Option Agreement which shall
set forth the total number of shares of Common Stock to which it pertains, the
exercise price, whether it is a Non-Qualified Option or an Incentive Stock
Option, and such other terms, conditions, restrictions and privileges as the
Board of Directors or the Committee in each instance shall deem appropriate,
provided they are not inconsistent with the terms, conditions and provisions of
this Plan. Each Optionee shall receive a copy of his executed Stock Option
Agreement.
8.02 (a) INITIAL GRANTS TO NON-EMPLOYEE DIRECTORS. Each Non-Employee
Director of the Corporation as of the day that the Plan is approved by
stockholders of the Corporation shall be granted an Option to purchase 8,902
shares of Common Stock effective at such time and with a per share exercise
price equal to the Fair Market Value of a share of Common Stock on such date.
8.03 OPTION EXERCISE PRICE.
(a) INCENTIVE STOCK OPTIONS. The per share price at which the
subject Common Stock may be purchased upon exercise of an Incentive Stock Option
shall be no less than one hundred percent (100%) of the Fair Market Value of a
share of Common Stock at the time such Incentive Stock Option is granted, except
as provided in Section 8.10(b).
(b) NON-QUALIFIED OPTIONS. The per share price at which the subject
Common Stock may be purchased upon exercise of a Non-Qualified Option shall be
no less than one hundred percent (100%) of the Fair Market Value of a share of
Common Stock at the time such Non-Qualified Option is granted.
8.04 VESTING AND EXERCISE OF OPTIONS.
(a) GENERAL RULES. Incentive Stock Options and Non-Qualified Options
granted hereunder shall become vested and exercisable at the rate of 20% per
year on each anniversary of the date the Option was granted, and the right to
exercise shall be cumulative. Notwithstanding the foregoing, no vesting shall
occur on or after an Employee's employment with the Corporation and all
Subsidiary Companies is terminated for any reason other than his death,
Retirement or Disability. In determining the number of shares
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of Common Stock with respect to which Options are vested and/or exercisable,
fractional shares will be rounded up to the nearest whole number if the
fraction is 0.5 or higher, and down if it is less.
(b) ACCELERATED VESTING UPON DEATH OR DISABILITY. Unless the
Committee shall specifically state otherwise at the time an Option is granted,
all Options granted hereunder shall become vested and exercisable in full on the
date an Optionee terminates his employment with or service to the Corporation or
a Subsidiary Company because of his death or Disability.
8.05 DURATION OF OPTIONS.
(a) GENERAL RULE. Except as provided in Sections 8.05(b) and 8.10,
each Option or portion thereof granted to Employees and Non-Employee Directors
shall be exercisable at any time on or after it vests and becomes exercisable
until the earlier of (i) ten (10) years after its date of grant or (ii) three
(3) months after the date on which the Optionee ceases to be employed (or in the
service of the Board of Directors) by the Corporation and all Subsidiary
Companies, unless the Board of Directors or the Committee in its discretion
decides at the time of grant or thereafter to extend such period of exercise to
a period not exceeding three (3) years.
(b) EXCEPTION FOR TERMINATION DUE TO DEATH OR DISABILITY. If an
Employee dies while in the employ of the Corporation or a Subsidiary Company or
terminates employment with the Corporation or a Subsidiary Company as a result
of Disability without having fully exercised his Options, the Optionee or the
executors, administrators, legatees or distributees of his estate shall have the
right, during the twelve-month period following the earlier of his death or
Disability, to exercise such Options to the extent vested on the date of such
death or Disability. If a Non-Employee Director dies while serving as a
Non-Employee Director without having fully exercised his Options, the
Non-Employee Director's executors, administrators, legatees or distributees of
his estate shall have the right, during the twelve-month period following such
death, to exercise such Options. In no event, however, shall any Option be
exercisable more than ten (10) years from the date it was granted.
8.06 NONASSIGNABILITY. Options shall not be transferable by an Optionee
except by will or the laws of descent or distribution, and during an Optionee's
lifetime shall be exercisable only by such Optionee or the Optionee's guardian
or legal representative.
8.07 MANNER OF EXERCISE. Options may be exercised in part or in whole and
at one time or from time to time. The procedures for exercise shall be set
forth in the written Stock Option Agreement provided for in Section 8.01 above.
8.08 PAYMENT FOR SHARES. Payment in full of the purchase price for shares
of Common Stock purchased pursuant to the exercise of any Option shall be made
to the Corporation upon exercise of the Option. All shares sold under the Plan
shall be fully paid and nonassessable. Payment for shares may be made by the
Optionee in cash or, at the
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discretion of the Board of Directors or the Committee in the case of Awards
to Employees, by delivering shares of Common Stock (including shares acquired
pursuant to the exercise of an Option) or other property equal in Fair Market
Value to the purchase price of the shares to be acquired pursuant to the
Option, by withholding some of the shares of Common Stock which are being
purchased upon exercise of an Option, or any combination of the foregoing.
8.09 VOTING AND DIVIDEND RIGHTS. No Optionee shall have any voting or
dividend rights or other rights of a stockholder in respect of any shares of
Common Stock covered by an Option prior to the time that his name is recorded on
the Corporation's stockholder ledger as the holder of record of such shares
acquired pursuant to an exercise of an Option.
8.10 ADDITIONAL TERMS APPLICABLE TO INCENTIVE STOCK OPTIONS. All Options
issued under the Plan as Incentive Stock Options will be subject, in addition to
the terms detailed in Sections 8.01 to 8.09 above, to those contained in this
Section 8.10.
(a) Notwithstanding any contrary provisions contained elsewhere in
this Plan and as long as required by Section 422 of the Code, the aggregate Fair
Market Value, determined as of the time an Incentive Stock Option is granted, of
the Common Stock with respect to which Incentive Stock Options are exercisable
for the first time by the Optionee during any calendar year, under this Plan and
stock options that satisfy the requirements of Section 422 of the Code under any
other stock option plan or plans maintained by the Corporation (or any parent or
Subsidiary Company), shall not exceed $100,000.
(b) LIMITATION ON TEN PERCENT STOCKHOLDERS. The price at which
shares of Common Stock may be purchased upon exercise of an Incentive Stock
Option granted to an individual who, at the time such Incentive Stock Option is
granted, owns, directly or indirectly, more than ten percent (10%) of the total
combined voting power of all classes of stock issued to stockholders of the
Corporation or any Subsidiary Company, shall be no less than one hundred and ten
percent (110%) of the Fair Market Value of a share of the Common Stock of the
Corporation at the time of grant, and such Incentive Stock Option shall by its
terms not be exercisable after the earlier of the date determined under Section
8.04 or the expiration of five (5) years from the date such Incentive Stock
Option is granted.
(c) NOTICE OF DISPOSITION; WITHHOLDING; ESCROW. An Optionee shall
immediately notify the Corporation in writing of any sale, transfer, assignment
or other disposition (or action constituting a disqualifying disposition within
the meaning of Section 421 of the Code) of any shares of Common Stock acquired
through exercise of an Incentive Stock Option, within two (2) years after the
grant of such Incentive Stock Option or within one (1) year after the
acquisition of such shares, setting forth the date and manner of disposition,
the number of shares disposed of and the price at which such shares were
disposed of. The Corporation shall be entitled to withhold from any
compensation or other payments then or thereafter due to the Optionee such
amounts as may be necessary to satisfy any withholding requirements of Federal
or state law or regulation and, further, to
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collect from the Optionee any additional amounts which may be required for
such purpose. The Committee may, in its discretion, require shares of Common
Stock acquired by an Optionee upon exercise of an Incentive Stock Option to
be held in an escrow arrangement for the purpose of enabling compliance with
the provisions of this Section 8.10(c).
8.11 STOCK APPRECIATION RIGHTS.
(a) GENERAL TERMS AND CONDITIONS. The Board of Directors or the
Committee may, but shall not be obligated to, authorize the Corporation, on such
terms and conditions as it deems appropriate in each case, to grant rights to
Optionees to surrender an exercisable Option, or any portion thereof, in
consideration for the payment by the Corporation of an amount equal to the
excess of the Fair Market Value of the shares of Common Stock subject to the
Option, or portion thereof, surrendered over the exercise price of the Option
with respect to such shares (any such authorized surrender and payment being
hereinafter referred to as a "Stock Appreciation Right"). Such payment, at the
discretion of the Board of Directors or the Committee, may be made in shares of
Common Stock valued at the then Fair Market Value thereof, or in cash, or partly
in cash and partly in shares of Common Stock.
The terms and conditions set with respect to a Stock Appreciation Right may
include (without limitation), subject to other provisions of this Section 8.11
and the Plan, the period during which, date by which or event upon which the
Stock Appreciation Right may be exercised (which shall be on the same terms as
the Option to which it relates pursuant to Section 8.04 hereunder); the method
for valuing shares of Common Stock for purposes of this Section 8.11; a ceiling
on the amount of consideration which the Corporation may pay in connection with
exercise and cancellation of the Stock Appreciation Right; and arrangements for
income tax withholding. The Board of Directors or the Committee shall have
complete discretion to determine whether, when and to whom Stock Appreciation
Rights may be granted. Notwithstanding the foregoing, the Corporation may not
permit the exercise of a Stock Appreciation Right issued pursuant to this Plan
until the Corporation has been subject to the reporting requirements of Section
13 of the Exchange Act for a period of at least one year prior to the exercise
of any such Stock Appreciation Right and until a Stock Appreciation Right issued
pursuant to this Plan has been outstanding for at least six months from the date
of grant.
(b) TIME LIMITATIONS. If a holder of a Stock Appreciation Right
terminates service with the Corporation as an Officer or Employee, the Stock
Appreciation Right may be exercised only within the period, if any, within which
the Option to which it relates may be exercised. Notwithstanding the foregoing,
any election by an Optionee to exercise the Stock Appreciation Rights provided
in this Plan shall be made during the period beginning on the third business day
following the release for publication of quarterly or annual financial
information required to be prepared and disseminated by the Corporation pursuant
to the requirements of the Exchange Act and ending on the twelfth business day
following such date. The required release of information shall be deemed to
have been satisfied when
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the specified financial data appears on or in a wire service, financial news
service or newspaper of general circulation or is otherwise first made
publicly available.
(c) EFFECTS OF EXERCISE OF STOCK APPRECIATION RIGHTS OR OPTIONS.
Upon the exercise of a Stock Appreciation Right, the number of shares of Common
Stock available under the Option to which it relates shall decrease by a number
equal to the number of shares for which the Stock Appreciation Right was
exercised. Upon the exercise of an Option, any related Stock Appreciation Right
shall terminate as to any number of shares of Common Stock subject to the Stock
Appreciation Right that exceeds the total number of shares for which the Option
remains unexercised.
(d) TIME OF GRANT. A Stock Appreciation Right may be granted
concurrently with the Option to which it relates or at any time thereafter prior
to the exercise or expiration of such Option.
(e) NON-TRANSFERABLE. The holder of a Stock Appreciation Right may
not transfer or assign the Stock Appreciation Right otherwise than by will or in
accordance with the laws of descent and distribution, and during a holder's
lifetime a Stock Appreciation Right may be exercisable only by the holder.
ARTICLE IX
ADJUSTMENTS FOR CAPITAL CHANGES
The aggregate number of shares of Common Stock available for issuance under
this Plan, the number of shares to which any Award relates and the exercise
price per share of Common Stock under any Option shall be proportionately
adjusted for any increase or decrease in the total number of outstanding shares
of Common Stock issued subsequent to the effective date of this Plan resulting
from a split, subdivision or consolidation of shares or any other capital
adjustment, the payment of a stock dividend, or other increase or decrease in
such shares effected without receipt or payment of consideration by the
Corporation. If, upon a merger, consolidation, reorganization, liquidation,
recapitalization or the like of the Corporation, the shares of the Corporation's
Common Stock shall be exchanged for other securities of the Corporation or of
another corporation, each recipient of an Award shall be entitled, subject to
the conditions herein stated, to purchase or acquire such number of shares of
Common Stock or amount of other securities of the Corporation or such other
corporation as were exchangeable for the number of shares of Common Stock of the
Corporation which such optionees would have been entitled to purchase or acquire
except for such action, and appropriate adjustments shall be made to the per
share exercise price of outstanding Options.
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ARTICLE X
AMENDMENT AND TERMINATION OF THE PLAN
The Board may, by resolution, at any time terminate or amend the Plan with
respect to any shares of Common Stock as to which Awards have not been granted,
subject to regulations of the OTS and any required stockholder approval or any
stockholder approval which the Board may deem to be advisable for any reason,
such as for the purpose of obtaining or retaining any statutory or regulatory
benefits under tax, securities or other laws or satisfying any applicable stock
exchange listing requirements. The Board may not, without the consent of the
holder of an Award, alter or impair any Award previously granted or awarded
under this Plan as specifically authorized herein.
ARTICLE XI
EMPLOYMENT RIGHTS
Neither the Plan nor the grant of any Awards hereunder nor any action taken
by the Committee or the Board in connection with the Plan shall create any right
on the part of any Employee or Non-Employee Director of the Corporation or a
Subsidiary Company to continue in such capacity.
ARTICLE XII
WITHHOLDING
12.01 TAX WITHHOLDING. The Corporation may withhold from any cash payment
made under this Plan sufficient amounts to cover any applicable withholding and
employment taxes, and if the amount of such cash payment is insufficient, the
Corporation may require the Optionee to pay to the Corporation the amount
required to be withheld as a condition to delivering the shares acquired
pursuant to an Award. The Corporation also may withhold or collect amounts with
respect to a disqualifying disposition of shares of Common Stock acquired
pursuant to exercise of an Incentive Stock Option, as provided in Section
8.10(c).
12.02 METHODS OF TAX WITHHOLDING. The Board of Directors or the Committee
is authorized to adopt rules, regulations or procedures which provide for the
satisfaction of an Optionee's tax withholding obligation by the retention of
shares of Common Stock to which the Employee would otherwise be entitled
pursuant to an Award and/or by the Optionee's delivery of previously owned
shares of Common Stock or other property.
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ARTICLE XIII
EFFECTIVE DATE OF THE PLAN; TERM
13.01 EFFECTIVE DATE OF THE PLAN. This Plan shall become effective on
the Effective Date, and Awards may be granted hereunder as of or after the
Effective Date and prior to the termination of the Plan, provided that no
Incentive Stock Option issued pursuant to this Plan shall qualify as such unless
this Plan is approved by the requisite vote of the holders of the outstanding
voting shares of the Corporation at a meeting of stockholders of the Corporation
held within twelve (12) months of the Effective Date. Notwithstanding the
foregoing or anything to the contrary in this Plan, the implementation of this
Plan and any Awards granted pursuant hereto are subject to the non-objection of
the OTS and approval of the Corporation's stockholders.
13.02 TERM OF PLAN. Unless sooner terminated, this Plan shall remain
in effect for a period of ten (10) years ending on the tenth anniversary of the
Effective Date. Termination of the Plan shall not affect any Awards previously
granted and such Awards shall remain valid and in effect until they have been
fully exercised or earned, are surrendered or by their terms expire or are
forfeited.
ARTICLE XIV
MISCELLANEOUS
14.01 GOVERNING LAW. To the extent not governed by Federal law, this
Plan shall be construed under the laws of the State of Texas.
14.02 PRONOUNS. Wherever appropriate, the masculine pronoun shall
include the feminine pronoun, and the singular shall include the plural.
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