<PAGE>
Registration No. 333-
Filed August 5, 1997
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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First Federal Bancshares of Arkansas, Inc.
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(Exact Name of Registrant as specified in its Articles of Incorporation)
Texas 71-0785261
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(State of incorporation) (IRS Employer Identification No.)
200 West Stephenson
Harrison, Arkansas 72601
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(Address of principal executive offices, including zip code)
First Federal Bancshares of Arkansas, Inc.
Stock Option Plan
------------------------------------------
(Full Title of the Plan)
Copies to:
Larry J. Brandt Kevin M. Houlihan, Esq.
President and Chief Operating Officer Elias, Matz, Tiernan & Herrick L.L.P.
First Federal Bancshares 734 15th Street, N.W.
of Arkansas, Inc. Washington, D.C. 20005
200 West Stephenson Street (202) 347-0300
Harrison, Arkansas 72601
- ---------------------------------------
(Name and Address of Agent For Service)
(501) 741-7641
- ---------------------------------------
(Telephone Number, Including Area Code,
of Agent for Service)
Page 1 of 25 pages
Index to Exhibits is located on page 5.
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Title of Maximum Maximum
Securities Offering Aggregate Amount of
to be Amount to be Price Offering Registration
Registered Registered(1) Per Share Price Fee
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par
value $.01 496,073 $ 19.27(3) $9,559,327(3) $2,896.48
Common Stock, par
value $.01 19,302 $21.375(4) $ 412,580(4) $ 125.01
------------- ----------- ----------
Total 515,375(2) $ 9,971,907 $3,021.49
---------- ----------- ----------
---------- ----------- ----------
- -----------------------------------------------------------------------------------
</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 First Federal Bancshares of Arkansas, Inc. ("Company"
or "Registrant") Stock Option Plan ("Option Plan") as a result of a
stock split, stock dividend or similar adjustment of the outstanding
common stock, $.01 par value per share ("Common Stock"), of the
Company.
(2) Represents shares currently reserved for issuance pursuant to the
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 options to purchase 496,073 shares of
Common Stock which have been granted under the Option Plan as of the
date hereof but not yet exercised.
(4) Estimated solely for the purposes of calculating the registration
fee in accordance with Rule 457(c) promulgated under the Securities
Act. The Proposed Maximum Offering Price Per Share for 19,302 shares
for which stock options have not been granted under the Option Plan is
equal to the average of the high and low prices of the Common Stock of
the Company on July 31, 1997 on the National Association of Securities
Dealers Automated Quotation ("NASDAQ") National Market.
__________________________
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.
2
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PART I*
Item 1. Plan Information.*
Item 2. Registrant Information and Employee Plan Annual Information.*
______________
* Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from the Registration Statement in accordance with
Rule 428 under the Securities Act of 1933, as amended ("Securities Act"),
and the Note to Part I on Form S-8.
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 Annual Report on Form 10-K of the Company for the year
ended December 31, 1996;
(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
Company's Annual Report on Form 10-K 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 (Commission File
No. 0-28312) filed with the Commission on April 12, 1996;
(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
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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.
Item 6. Indemnification of Directors and Officers.
Article VIII of the Company's Articles of Incorporation provide as follows:
INDEMNIFICATION, ETC. OF
OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS
A. Limitation of Liability. No director shall be personally liable
to the Company 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 Company for or with respect to any acts or omissions of
such director occurring prior to such amendment.
B. Indemnification. The Company 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 Company
or any predecessor of the Company, or is or was serving at the request of
the Company or any predecessor of the Company as a director, officer,
employee or agent of another company, 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 Company in defending a civil or
criminal action, suit or proceeding
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described in Article VIII.B. shall be paid by the Company 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 Company 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 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
Company; or (iii) the person is found liable for willful or intentional
misconduct in the performance of his duty to the Company; 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 Company may
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the Company, or was serving at the
request of the Company as a director, officer, employee or agent of another
company, 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 Company
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 Company 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 Company 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 Company shall not indemnify a
director, officer, employee or agent for any liability incurred in an
action, suit or proceeding initiated by (which shall
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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.
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
--- ------- ----
4.0 Specimen Common Stock Certificate of First Federal
Bancshares of Arkansas, Inc.* --
5.0 Opinion of Elias, Matz, Tiernan & Herrick E-1
L.L.P. as to the legality of the securities
10.1 First Federal Bancshares of Arkansas, Inc. E-3
Stock Option Plan
23.1 Consent of Elias, Matz, Tiernan & Herrick --
L.L.P. (contained in the opinion included
as Exhibit 5)
23.2 Consent of Deloitte & Touche LLP E-13
24.0 Power of attorney for any subsequent --
amendments is located in the signature pages
- --------------------------
* Incorporated by reference from the Company's Registration Statement on
Form S-1 (Commission File No. 333-612) filed with the Commission on January
25, 1995, as amended.
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-
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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 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 with or
furnished to the Commission by the Registrant pursuant to Section 13 or 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 15(d) of the Exchange Act and each filing of an employee
benefit plan's annual report pursuant to 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 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.
7
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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 Arkansas on July 31, 1997.
By: /s/ Frank L. Coffman, Jr.
-----------------------------
Frank L. Coffman, Jr.
Chairman of the Board and Chief
Executive Officer
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 Frank L. Coffman, Jr. 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
<TABLE>
<CAPTION>
Name Title Date
- ---- ----- ----
<S> <C> <C>
/s/ Frank L. Coffman, Jr.
- ------------------------------ Chairman of the Board and Chief July 31, 1997
Frank L. Coffman, Jr. Executive Officer
/s/ Larry J. Brandt
- ------------------------------ President, Chief Operating Officer July 31, 1997
Larry J. Brandt and Director
/s/ John P. Hammerschmidt
- ------------------------------ Director July 31, 1997
John P. Hammerschmidt
/s/ James D. Heuer
- ------------------------------ Director July 31, 1997
James D. Heuer
</TABLE>
8
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<TABLE>
<S> <C> <C>
/s/ William F. Smith
- ------------------------------ Director July 31, 1997
William F. Smith
/s/ Tommy W. Richards Senior Vice President and Chief July 31, 1997
- ------------------------------ Financial Officer
Tommy W. Richards (principal financial officer)
</TABLE>
9
<PAGE>
Exhibit 5.0
Opinion of Elias, Matz, Tiernan & Herrick L.L.P.
<PAGE>
Exhibit 5.0
August 5, 1997
Board of Directors
First Federal Bancshares of Arkansas, Inc.
200 West Stephenson
Harrison, Arkansas 72601
Re: Registration Statement on Form S-8
515,375 Shares of Common Stock
Gentlemen:
We are special counsel to First Federal Bancshares of Arkansas, 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 515,375
shares of common stock, par value $1.00 per share ("Common Stock"), to be
issued pursuant to the Corporation's Stock Option Plan (the "Plan") 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 Plan 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.
For this purpose, we have reviewed the Registration Statement and
related Prospectus, the Articles of Incorporation and Bylaws of the
Corporation, the Plan, 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
<PAGE>
Board of Directors
August 5, 1997
Page 2
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 Plan 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 Plan 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 Plan, when issued and sold pursuant to the
Prospectus and the Plan 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 Prospectus of the Plan 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/ Kevin M. Houlihan
-------------------------------
Kevin M. Houlihan, a Partner
<PAGE>
Exhibit 10.1
Stock Option Plan
<PAGE>
EXHIBIT 10.1
FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
1997 STOCK OPTION PLAN
ARTICLE I
ESTABLISHMENT OF THE PLAN
First Federal Bancshares of Arkansas, Inc. (the "Corporation") hereby
establishes this 1997 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. 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 "Bank" means First Federal Bank of Arkansas, FA, the wholly-owned
subsidiary of the Corporation.
3.03 "Board" means the Board of Directors of the Corporation or of the
Bank.
3.04 "Change in Control of the Corporation" shall be deemed to have
occurred if: (i) any "person" as such term is used in Sections 13(d) and 14(d)
of the Exchange Act (other than the Corporation and any trustee or other
fiduciary holding securities under any employee benefit plan of the
Corporation), is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the
Corporation representing 25% or more of the combined voting power of the
Corporation's then outstanding securities; (ii) during any period of two
consecutive years (not including any period prior to the adoption of the Plan),
individuals who at the beginning of such period constitute the Board of
Directors, and any new director whose election by the Board of Directors or
nomination for election by the Corporation's stockholders was approved by a vote
of at least two-thirds of the directors then still in office who either were
directors at the beginning of the two-year period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute at least a majority of the Board of Directors; (iii) the stockholders
of the Corporation approve a merger or consolidation of the
<PAGE>
Corporation with any other corporation, other than a merger or consolidation
that would result in the voting securities of the Corporation outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than 50% of the combined voting power of the voting securities
of the Corporation outstanding immediately after such merger or
consolidation; or (iv) the stockholders of the Corporation approve a plan of
complete liquidation of the Corporation or an agreement for the sale or
disposition by the Corporation of all or substantially all of the
Corporation's assets. If any of the events enumerated in clauses (i) through
(iv) occur, the Board shall determine the effective date of the Change in
Control resulting therefrom for purposes of the Plan.
3.05 "Code" means the Internal Revenue Code of 1986, as amended.
3.06 "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 as defined in Rule 16b-3(b)(3)(i) of the Exchange Act.
3.07 "Common Stock" means shares of the common stock, $.01 par value per
share, of the Corporation.
3.08 "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.
3.09 "Effective Date" means the day upon which the Board approves this
Plan.
3.10 "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.
3.11 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
3.12 "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.
3.13 "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.
A-2
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3.14 "Non-Employee Director" means a member of the Board who is not an
Officer or Employee of the Corporation or any Subsidiary Company and shall
include any individual who, at the date of adoption of the Plan or any time
thereafter, serves the Board in an advisory or emeritus capacity.
3.15 "Non-Qualified Option" means any Option granted under this Plan which
is not an Incentive Stock Option.
3.16 "Offering" means the offering of Common Stock to the public pursuant
to the Plan of Conversion adopted by the Bank.
3.17 "Officer" means an Employee whose position in the Corporation or
Subsidiary Company is that of a corporate officer, as determined by the Board.
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.
3.20 "Retirement" means a termination of employment upon or after
attainment of age sixty (60) or such earlier age as may be specified in any
applicable plans or policies maintained by the Corporation or a Subsidiary
Company.
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 Bank, 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
A-3
<PAGE>
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 as defined
in Rule 16b-3(b)(3)(i) of the Exchange Act or any successor thereto. In
addition, each member of the Committee shall be an "outside director" within the
meaning of Section 162(m) of the Code and regulations thereunder at such times
as is required under such regulations. 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 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 Articles of Incorporation 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 pursuant thereto or for any Awards granted hereunder. If
any members of the Board of Directors or 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 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
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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.
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 515,375 shares, which is equal to 10.0% 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, 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.
6.02 Source of Shares. The shares of Common Stock issued under the Plan
may be authorized but unissued shares, treasury shares, shares purchased by the
Corporation on the open market or from private sources for use under the Plan,
or, if applicable, shares held in a grantor trust created by the Corporation.
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ARTICLE VII
DETERMINATION OF
AWARDS, NUMBER OF SHARES, ETC.
7.01 Determination of Awards. The Board of Directors or the Committee
shall, in its discretion, determine from time to time which Employees and
Non-Employee Directors 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 determinations with respect to Employees 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 relevant to accomplishing the purposes of
the Plan.
7.02 Maximum Awards to Employees. Notwithstanding anything contained in
this Plan to the contrary, the maximum number of shares of Common Stock to which
Awards may be granted to any Employee in any calendar year shall be 128,844.
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 Awards to Employees and Non-Employee Directors. Specific Awards to
Employees and Non-Employee Directors shall be made to such persons and in such
amounts as are determined by the Board of Directors or the Committee.
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), and subject to any applicable adjustment
pursuant to Article IX hereof.
(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
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Common Stock at the time such Non-Qualified Option is granted, and subject to
any applicable adjustment pursuant to Article IX hereof.
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, to the extent
and subject to such limitation as may be specified by the Board or the
Committee. 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, 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. 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. In addition, all options hereunder shall
become immediately vested and exercisable in full on the date an Optionee
terminates his employment or service to the Corporation or a Subsidiary Company
due to Retirement. Further, all outstanding options shall become immediately
vested and exercisable in the event that there is a Change in Control of the
Corporation.
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 in the case of Non-Employee 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 upon termination of employment or service from three (3)
months to a period not exceeding five (5) years.
(b) Exceptions. 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 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 or termination
due to Disability or Retirement, to exercise such Options. If a Non-Employee
Director dies while serving as a Non-Employee Director or terminates his service
to the Corporation or a Subsidiary Company as a result of Disability or
Retirement without having fully exercised his Options, the Non-Employee Director
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 termination due to Disability or Retirement, to exercise such Options.
In no event, however, shall any Option be exercisable more than ten (10) years
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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. Notwithstanding the foregoing, or any other provision
of this Plan, an Optionee who holds Non-Qualified Options may transfer such
Options to his or her spouse, lineal ascendants, lineal descendants, or to a
duly established trust for the benefit of one or more of these individuals.
Options so transferred may thereafter be transferred only to the Optionee who
originally received the grant or to an individual or trust to whom the Optionee
could have initially transferred the Option pursuant to this Section 8.06.
Options which are transferred pursuant to this Section 8.06 shall be exercisable
by the transferee according to the same terms and conditions as applied to the
Optionee.
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 pursuant to Section 8.01.
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 such 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 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. Notwithstanding the foregoing, payment may also be made by
delivering a properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Corporation the amount of
sale or loan proceeds to pay the exercise price.
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 such 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.
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(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 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
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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.
(b) Time Limitations. If a holder of a Stock Appreciation Right
terminates service with the Corporation, 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
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 granted in connection
with an Incentive Stock Option must be granted concurrently with the Option to
which it relates, while a Stock Appreciation Right granted in connection with a
Non-Qualified Option 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 outstanding Award relates, the
maximum number of shares that can be covered by Awards to each Employee and each
Non-Employee Director and the exercise price per share of Common Stock under any
outstanding 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
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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. In the event the Corporation declares
a special cash dividend or return of capital in an amount per share which
exceeds 10% of the fair market value of a share of Common Stock as of the
date of declaration, the per share exercise price of all previously granted
Awards which remain unexercised as of the date of such declaration shall be
proportionately adjusted to give effect to such special cash dividend or
return of capital as of the date of payment of such special cash dividend or
return of capital; provided that the adjustments to the per shares exercise
price shall satisfy the criteria set forth in Emerging Issues Task Force 90-9
(or any successor thereto) so that the adjustments do not result in
compensation expense, and provided further that if such adjustment with
respect to incentive stock options would be treated as a modification of the
outstanding incentive stock options with the effect that, for purposes of
Section 422 and 425(h) of the Code, and the rules and regulations thereunder,
new incentive stock options would be deemed to be granted, then no adjustment
to the per share exercise price of outstanding incentive stock options shall
be made.
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 any applicable regulatory requirements 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.
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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 the 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.
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.
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 Arkansas.
14.02 Pronouns. Wherever appropriate, the masculine pronoun shall
include the feminine pronoun, and the singular shall include the plural.
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Exhibit 23.2
Consent of Deloitte & Touche LLP
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
- -------------------------------
The Board of Directors
First Federal Bancshares of Arkansas, Inc.:
We consent to incorporation by reference in the Registration Statement on
Form S-8 of First Federal Bancshares of Arkansas, Inc., of our report dated
February 15, 1997, relating to the consolidated statements of financial
condition of First Federal Bancshares of Arkansas, Inc. and subsidiaries as
of December 31, 1996 and 1995, and the related consolidated statements of
income, changes in stockholders' equity and cash flows for each of the three
years in the period ended December 31, 1996, which report is incorporated by
reference in the December 31, 1996 annual report on Form 10-K of First
Federal Bancshares of Arkansas, Inc.
/S/ DELOITTE & TOUCHE LLP
Little Rock, Arkansas
July 29, 1997
