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Registration No. 333-__________
Filed March 16, 1999
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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VERMILION BANCORP, INC.
- --------------------------------------------------------------------------
(Exact Name of Registrant as specified in its Articles of Incorporation)
Delaware 37-1363755
- ---------------------------- -----------------------------------
(State of incorporation) (IRS Employer Identification No.)
714 North Vermilion Street
Danville, Illinois 61834
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(Address of principal executive offices, including zip code)
1998 STOCK OPTION PLAN
----------------------
(Full Title of the Plan)
Copies to:
Merrill G. Norton Stephen M. Ege, Esq.
Chief Executive Officer Kenneth B. Tabach, Esq.
Vermilion Bancorp, Inc. Elias, Matz, Tiernan & Herrick L.L.P.
714 North Vermilion Street 734 15th Street, N.W.
Danville, Illinois 61834 Washington, D.C.
(217) 442-0270 (202) 347-0300
________________________________
(Name, address, and telephone number
of agent for service)
Page 1 of 26 pages
Index to Exhibits is located on page 4.
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CALCULATION OF REGISTRATION FEE
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
- -----------------------------------------------------------------------------
Common Stock,
par value $0.01 29,420 $16.875 (3) $496,462 (3) $138.02
Common Stock,
par value $0.01 10,255 $12.00 (4) $123,060 (4) $34.21
Total 39,675 (2) $619,522 $172.23
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------ ------- ------
- ---------------
(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
Vermilion Bancorp, Inc. ("Company" or "Registrant") 1998 Stock Option Plan
("1998 Plan") 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 shares currently reserved for issuance pursuant to the 1998 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 29,240 shares of Common Stock which are outstanding under the 1998 Plan
as of the date hereof.
(4) Estimated solely for the purpose of calculating the registration fee, which
has been calculated pursuant to Rule 457(c) promulgated under the Securities
Act. The Proposed Maximum Offering Price Per Share for the 10,225 shares for
which stock options have not been granted under the Plan is equal to the average
of the bid and asked price on March 11, 1999, on the Electronic Bulletin Board.
__________________________
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 Ex-
change Commission (the "Commission") are incorporated by reference in this
Registration Statement:
(a) The Company's Annual Report on Form 10-KSB for the year ended
September 30, 1998 filed with the Commission on January 12, 1999;
(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
Annual Report 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 on
March 18, 1997;
(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 super-
seded 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.
Section 145 of the Delaware General Corporation Law sets forth circumstances
under which directors, officers, employees and agents may be insured or in-
demnified against liability which they may incur in their capacity as such. The
Bylaws of the Company provide that the directors, officers, employees and agents
of the Company shall be indemnified to the full extent permitted by law. With
the prior written consent of the Company, such indemnity shall extend to
expenses, including attorney's fees, judgments, fines and amounts paid in the
settlement, prosecution or defense of the foregoing actions.
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 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 Olive LLP E-3
24 Power of attorney for any subsequent --
amendments is located in the signature pages
99 1998 Stock Option Plan E-4
- ----------
* Incorporated by reference from the Company's Registration Statement on Form
S-1 (Commission File No. 333-17227) filed with the Commission on December 3,
1996, as amended.
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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
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 ad-
judication 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 State-
ment to be signed on its behalf by the undersigned, thereunto duly authorized,
in the State of Illinois on March 15, 1999.
VERMILION BANCORP, INC.
By: /s/Merrill G. Norton
-------------------------------------
Merrill G. Norton
President 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 Merrill G. Norton 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
- ----------------- ------------------- --------------------
President, Chief Executive March 15, 1999
/s/Merrill G. Norton Officer and Director
- -------------------- (principal executive
Merrill G. Norton officer)
Chairman of the Board and March 15, 1999
/s/Thomas B. Meyer Director
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Thomas B. Meyer
Chief Financial Officer
/s/Terry Stal (principal financial and March 15, 1999
- -------------------- accounting officer)
Terry Stal
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Name Title Date
- ------------------- --------------------- ---------------------
/s/William T. Ingram Director and Secretary March 15, 1999
- --------------------
William T. Ingram
/s/Carl W. Busby
- -------------------- Director March 15, 1999
Carl W. Busby
/s/Robert W. Ewbank Director March 15, 1999
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Robert W. Ewbank
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Exhibit 5
Opinion of Elias, Matz, Tiernan & Herrick L.L.P.
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Exhibit 5
Law Offices
ELIAS, MATZ, TIERNAN & HERRICK L.L.P.
12th Floor
734 15th Street, N.W.
Washington, D.C. 20005
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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 FIORELLO J.VICENCIO*
NORMAN B. ANTIN DAVID TEEPLES*
JOHN P. SOUKENIK* CRISTIN ZEISLER
GERALD F. HEUPEL, JR. ANDREW B. ROSENSTEIN*
JEFFREY A. KOEPPEL ____________
DANIEL P. WEITZEL
PHILIP ROSS BEVAN
HUGH T. WILKINSON
March 15, 1999 OF COUNSEL
ALLIN P. BAXTER
JACK I. ELIAS
SHERYL JONES ALU
*NOT ADMITTED IN D.C.
VIA EDGAR
Board of Directors
Vermilion Bancorp, Inc.
714 North Vermilion
Danville, Illinois 61834
Re: Registration Statement on Form S-8
39,675 Shares of Common Stock
Gentlemen:
We are special counsel to Vermilion Bancorp, Inc., a Delaware 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 39,675 shares of common stock, par value
$0.01 per share ("Common Stock"), to be issued pursuant to the Corporation's
1998 Stock Option Plan (the "Plan") upon the exercise of stock options and/or
appreciation rights (referred to as "Option Rights"). The Registration State-
ment 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.
For this purpose, we have reviewed the Registration Statement and related
Prospectus, the Certificate 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
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Board of Directors
March 15, 1999
Page 2
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
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) the
Option Rights are exercised in accordance with their terms and the exercise
price therefor is paid in accordance with the terms thereof; (iv) no change
occurs in applicable law or the pertinent facts; and (v) 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 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/ Stephen M. Ege
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Stephen M. Ege, a Partner
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Exhibit 23.2
Consent of Olive LLP
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Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in Registration Statement on
Form S-8 to be filed on behalf of Vermilion Bancorp, Inc., of our report dated
October 20, 1998, on the consolidated financial statements of Vermilion Bancorp,
Inc. for the year ended September 30, 1998, which report is incorporated in the
Annual Report on Form 10-KSB of Vermilion Bancorp, Inc.
/s/ Olive LLP
Decatur, Illinois
March 8, 1999
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Exhibit 99
1998 Stock Option Plan
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Exhibit 99
VERMILION BANCORP, INC.
1998 STOCK OPTION PLAN
ARTICLE I
ESTABLISHMENT OF THE PLAN
Vermilion Bancorp, Inc., (the "Corporation") hereby establishes this 1998
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 American Savings Bank (the "Bank") 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 Employees for outstanding performance. All Incentive
Stock Options issued under this Plan are intended to comply with the require-
ments of Section 422 of the Code, and the regulations thereunder, and all pro-
visions hereunder shall be read, interpreted and applied with that purpose in
mind.
ARTICLE III
DEFINITIONS
3.01 "Bank" means American Savings Bank, 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 "Change in Control of the Corporation" 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, whether or
not the Corporation in fact is required to comply with Regulation 14A there-
under; provided that, without limitation, such a change in control 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, 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, or (ii)
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during any period of twenty-four consecutive months during the term of an Award,
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 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 Con-
trol 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 or any successor
thereto.
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 individual 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 individual for disability benefits under any
long-term disability plan maintained by the Corporation, if such individual were
covered by that plan.
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
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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.
3.14 "Non-Employee Director" means a member of the Board of the Corporation
or Board of Directors of the Bank or any Subsidiary Company, including a
Director Emeritus of the Board of Directors of the Corporation or the Board of
Directors of the Bank, who is not an Officer or Employee of the Corporation or
any Subsidiary Company.
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 conversion of the Bank to the stock form in March 1997.
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 which constitutes a
"retirement" under any applicable qualified pension benefit plan maintained by
the Corporation or a Subsidiary Corporation, or, if no such plan is applicable,
which would constitute "retirement" under the Corporation's pension benefit
plan, if such individual were a participant in that 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 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.
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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 pur-
suant 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) in-
clude 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.
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. 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 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 and Bylaws or the Bank's Charter and By-
laws shall terminate as of the effective date of such removal.
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4.04 Limitation on Liability. Neither the members of the Board 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
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 govern-
ment 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 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
Awards of Non-Qualified Options.
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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 39,675, 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. Not-
withstanding 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 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 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 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 deemed 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 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 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.
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8.02 Awards to Employee 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. However,
the aggregate amount of Awards made to all Non-Employee Directors may not exceed
11,902 shares (or 30% of the number of shares available under this Plan), no
individual Non-Employee Director may receive awards in excess of 11,902 shares
divided by the number of Non-Employee Directors serving at the time the Award is
made, and no individual Employee may receive Awards in excess of 9,918 shares(or
25% of the number of shares available under this Plan).
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
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 of 33 1/3 per
year over three years, commencing on the date of grant and an additional 33 1/3%
shall vest on each successive annual 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 or
service as a Non-Employee Director with the Corporation and all Subsidiary
Companies is terminated for any reason other than his death or Disability. 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 under this
Plan shall become vested and exercisable in full on the date an Optionee
terminates his employment with the Corporation or a Subsidiary Company or
service as a Non-Employee Director because of his death or Disability. All
Options hereunder shall become immediately vested and exercisable in full on the
date an Optionee terminates his employment with the Corporation or a Subsidiary
Company or service as a Non-Employee Director due to Retirement or there occurs
a Change in Control of the Corporation if, as of such date of such Retirement or
Change in Control of the Corporation, such treatment is either authorized or is
not prohibited by applicable laws and regulations.
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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 an Optionee 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 Corporation and all
Subsidiary Companies or serve as a Non-Employee Director, unless the Board 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 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 Dis-
ability, 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 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, to exercise such Options. In no event, however, shall any Option be
exercisable more than ten (10) years from the date it was granted. In the event
of Retirement, an Employee or Non-Employee Director shall be entitled to the
same time period set forth above in this Section 8.05(b) to exercise an Option
if, as of the date of such Retirement, such treatment is either authorized
or is not prohibited by applicable laws and regulations.
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 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
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may be made by the Optionee in cash or, at the discretion of the Board or 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.
8.09 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 dis-
posed 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
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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 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 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 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 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.
(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.
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(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 Award 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 sub-
sequent 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. Notwithstanding any provision to the contrary, the exercise
price of shares subject to outstanding Awards may be proportionately adjusted
upon the payment of a special large and nonrecurring dividend that has the
effect of a return of capital to the stockholders, provided that the adjust-
ments 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 adjust-
ments 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.
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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 any applicable regulatory requirements, 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 AND SERVICE 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 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 pur-
suant 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 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 no earlier than the date
that this Plan is approved by stockholders of the Corporation and prior to the
termination of the Plan, provided that this Plan is approved by stockholders of
the Corporation pursuant to Article XIV hereof.
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13.02 Term of the 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 pre-
viously 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
STOCKHOLDER APPROVAL
The Corporation shall submit this Plan to stockholders for approval at a
meeting of stockholders of the Corporation in order to meet the requirements of
Section 422 of the Code and regulations thereunder.
ARTICLE XV
MISCELLANEOUS
15.01 Governing Law. To the extent not governed by federal law, this
Plan shall be construed under the laws of the State of Delaware.
15.02 Pronouns. Wherever appropriate, the masculine pronoun shall
include the feminine pronoun, and the singular shall include the plural.
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