<PAGE> 1
As filed with the Securities and Exchange Commission on February 2, 2000
Registration No. 333-_____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
FIRST CAPITAL, INC.
(exact name of registrant as specified in its certificate of incorporation)
INDIANA 35-2056949
(state or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
220 FEDERAL DRIVE, N.W.
CORYDON, INDIANA 47112
(812) 738-2198
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
FIRST CAPITAL, INC.
1999 STOCK-BASED INCENTIVE PLAN
and
1998 OFFICERS' AND KEY EMPLOYEES'
STOCK OPTION PLAN OF HCB BANCORP1
(Full Title of the Plans)
----------------------------------
M. CHRIS FREDERICK COPIES TO:
CHIEF FINANCIAL OFFICER ERIC S. KRACOV, ESQUIRE
FIRST CAPITAL, INC. AARON M. KASLOW, ESQUIRE
220 FEDERAL DRIVE, N.W. MULDOON, MURPHY & FAUCETTE LLP
CORYDON, INDIANA 47112 5101 WISCONSIN AVENUE, N.W.
(812) 738-2198 WASHINGTON, D.C. 20016
(Name, address, including zip code, and (202) 362-0840
telephone number, including area code,
of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As
soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, check the following box. / X /
<TABLE>
<CAPTION>
=====================================================================================================
Title of each Class of Amount to be Proposed Purchase Estimated Aggregate Registration
Securities to be Registered Registered(2) Price Per Share Offering Price Fee
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 76,876
$.01 Par Value Shares (3) $11.00 (4) $845,636 $223
- -----------------------------------------------------------------------------------------------------
Common Stock 62,000
$.01 Par Value Shares (5) $11.00 (6) $682,000 $180
- -----------------------------------------------------------------------------------------------------
Common Stock 30,750
$.01 Par Value Shares (7) $11.00 (8) $338,250 $ 89
- -----------------------------------------------------------------------------------------------------
(1)First Capital, Inc. (the "Registrant" or "First Capital") is offering shares
of its common stock pursuant to this plan because in the merger of HCB
Bancorp into First Capital, the Registrant succeeded to HCB Bancorp's
obligations under this plan.
(2)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 Capital, Inc. 1999 Stock-Based Incentive Plan (the "Incentive
Plan") and the 1998 Officers' and Key Employees' Stock Option Plan of HCB
Bancorp (as assumed by First Capital) (the "Option Plan") as the result of a
stock split, stock dividend or similar adjustment of the outstanding common
stock of First Capital pursuant to 17 C.F.R. Section 230.416(a).
(3)This number represents the total number of shares of First Capital currently
reserved or available for issuance upon the exercise of stock options
pursuant to the Incentive Plan. This is pursuant to 17 C.F.R. Section 457.
(4)$11.00 represents the market value of First Capital Common Stock on January
27, 2000. No options have been granted under the Incentive Plan to date.
(5)Represents the total number of shares currently reserved or available for
issuance upon the exercise of stock options pursuant to the Option Plan, as
adjusted to reflect the exchange ratio of 15.5 shares of First Capital common
stock for each share of HCB Bancorp common stock ("Exchange Ratio"). This is
pursuant to 17 C.F.R. Section 457.
(6)Represents the market value of the Common Stock on January 27, 2000.
(7)Represents the total number of shares currently reserved or available for
issuance as stock awards under the Incentive Plan.
(8)The market value of the Common Stock on January 27, 2000. All 30,750 shares
have been awarded under the Incentive Plan.
</TABLE>
THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE IMMEDIATELY UPON FILING IN
ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES
ACT OF 1933, AS AMENDED, (THE "SECURITIES ACT") AND 17 C.F.R. SECTION 230.462.
Number of Pages
Exhibit Index begins on Page
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FIRST CAPITAL, INC.
PART I INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEMS 1 & 2. First Capital, Inc. (the "Registrant" or "First Capital") is
offering shares of its common stock pursuant to the First Capital, Inc. 1999
Stock-Based Incentive Plan (the "Incentive Plan") and the 1998 Officers' and Key
Employees' Stock Option Plan of HCB Bancorp (as assumed by First Capital) (the
"Option Plan") because in the merger of HCB Bancorp into First Capital, the
Registrant succeeded to HCB Bancorp's obligations under the Option Plan. The
documents containing the information for the Incentive Plan and the Option Plan
required by Part I of the Registration Statement will be sent or given to the
participants in the plans as specified by Rule 428(b)(1). Such documents are not
filed with the Securities and Exchange Commission (the "SEC") either as a part
of this Registration Statement or as a prospectus or prospectus supplement
pursuant to Rule 424 in reliance on Rule 428.
PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed or to be filed with the SEC are incorporated
by reference in this Registration Statement:
(a) The Form 10-KSB report filed by the Registrant for the year ended June
30, 1999 (File No. 333-76543), filed with the SEC on September 17, 1999 which
includes the consolidated balance sheets of First Capital, Inc. and Subsidiary
as of June 30, 1999 and 1998, and the related consolidated statements of income,
stockholders' equity and cash flows for the years then ended, together with the
related notes and the reports of Monroe Shine & Co., Inc. dated July 22, 1999.
(b) The Form 10-QSB report filed by the Registrant for the fiscal quarter
ended September 30, 1999 (File No. 000-25023), filed with the SEC on November
15, 1999.
(c) The 424(b) Joint Proxy Statement-Prospectus filed by the Registrant,
dated October 7, 1999, (File No. 333-87203), filed with the SEC on October 13,
1999, which includes the financial statements of First Capital, Inc. as of June
30, 1999 and 1998 and for the years then ended by reference to the First
Capital, Inc., Form 10-KSB filed with SEC on September 17, 1999 and also
includes the consolidated balance sheets of HCB Bancorp and Subsidiary as of
December 31, 1998 and 1997, and the related consolidated statements of income,
changes in stockholders' equity and cash flows for the years then ended,
together with the related notes and the reports of Monroe Shine & Co., Inc.
dated January 15, 1999.
(d) The description of Registrant's common stock contained in Registrant's
Form 8-A12G (File No. 000-25023), as filed with the SEC, pursuant to Section
12(g) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule
12b-15 promulgated thereunder, on November 4, 1998 and declared effective on
November 12, 1998, as incorporated by reference from the Registrant's
Registration Statement on Form SB-2 (SEC No. 333-63515) as amended and declared
effective on November 12, 1998.
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(e) All documents filed by the Registrant pursuant to Section 13(a) and
(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the
filing of a post-effective amendment 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 INCORPORATED OR 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
The common stock to be offered pursuant to the Plan has been registered
pursuant to Section 12 of the Exchange Act. Accordingly, a description of the
common stock is not required herein.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
None.
The validity of the Common Stock offered hereby has been passed upon by
Muldoon, Murphy & Faucette LLP, Washington, DC, for the Registrant.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Directors and officers of the Registrant are indemnified and held harmless
against liability to the fullest extent permissible by the Indiana Business
Corporation Law as it currently exists or as it may be amended provided any such
amendment provides broader indemnification provisions than currently exists.
In accordance with the Indiana Business Corporation Law (being Title 23,
Article 1 Chapter 37 of the Indiana Code), the Registrant's Articles of
Incorporation provide as follows:
ARTICLE VII
INDEMNIFICATION
SECTION 7.01. GENERAL PROVISIONS. The corporation shall, to the fullest
extent to which it is empowered to do so by the Indiana Business Corporation Law
or any other applicable laws, as from time to time in effect, indemnify any
person who was or 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 and whether formal or informal, by
reason of the fact that he is or was a director, officer or employee of the
corporation, or who, while serving as such director, officer or employee of the
corporation, is or was serving at the request of the corporation as a director,
officer, partner, trustee, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise,
whether for profit or not, against expenses (including attorneys' fees),
judgments, settlements, penalties and fines (including excise taxes assessed
with respect to employee benefit plans) actually or reasonably incurred by him
in accordance with such action, suit or proceeding, if he acted in good faith
and in a manner he
3
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reasonably believed, in the case of conduct in his official capacity, was in the
best interest of the corporation, and in all other cases, was not opposed to the
best interests of the corporation, and with respect to any criminal action or
proceeding, he either had reasonable cause to believe his conduct was lawful or
no reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement or conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not meet the prescribed standard of conduct.
SECTION 7.02. INDEMNIFICATION AUTHORIZED. To the extent that a director,
officer or employee of the corporation has been successful, on the merits or
otherwise, in the defense of any action, suit or proceeding referred to in
Section 7.01 of this Article, or in the defense of any claim, issue or matter
therein, the corporation shall indemnify such person against expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
therewith. Any other indemnification under Section 7.01 of this Article (unless
ordered by a court) shall be made by the corporation only as authorized in the
specific case, upon a determination that indemnification of the director,
officer or employee is permissible in the circumstances because he has met the
applicable standard of conduct. Such determination shall be made (a) by the
board of directors by a majority vote of a quorum consisting of directors who
were not at the time parties to such action, suit or proceeding; or (b) if a
quorum cannot be obtained under subdivision (a), by a majority vote of a
committee duly designated by the board of directors (in which designation
directors who are parties may participate), consisting solely of two or more
directors not at the time parties to such action, suit or proceeding; or (c) by
special legal counsel: (I) selected by the board of directors or its committee
in the manner prescribed in subdivision (a) or (b), or (ii) if a quorum of the
board of directors cannot be obtained under subdivision (a) and a committee
cannot be designated under subdivision (b), selected by a majority vote of the
full board of directors (in which selection directors who are parties may
participate); or (d) by stockholders, but shares owned by or voted under the
control of directors who are at the time parties to such action, suit or
proceeding may not be voted on the determination.
Authorization of indemnification and evaluation as to reasonableness of
expenses shall be made in the same manner as the determination that
indemnification is permissible, except that if the determination is made by
special legal counsel, authorization of indemnification and evaluation as to
reasonableness of expenses shall be made by those entitled under subsection (c)
to select counsel.
SECTION 7.03. DEFINITION OF GOOD FAITH. For purposes of any determination
under Section 7.01 of this Article, a person shall be deemed to have acted in
good faith and to have otherwise met the applicable standard of conduct set
forth in Section 7.01 if his action is based on information, opinions, reports,
or statements, including financial statements and other financial data, if
prepared or presented by (a) one or more officers or employees of the
corporation or other enterprise whom he reasonably believes to be reliable and
competent in the matters presented; (b) legal counsel, public accountants,
appraisers or other persons as to matters he reasonably believes are within the
person's professional or expert competence; or (c) a committee of the board of
directors of the corporation or another enterprise of which the person is not a
member if he reasonably believes the committee merits confidence. The term
"another enterprise" as used in this Section 7.03 shall mean any other
corporation or any partnership, joint venture, trust, employee benefit plan or
other enterprise of which such person is or was serving at the request of the
corporation as a director, officer, partner, trustee, employee or agent. The
provisions of this Section 7.03 shall not be deemed to be exclusive or to limit
in any way the circumstances in which a person may be deemed to have met the
applicable standards of conduct set forth in Section 7.01 of this Article.
4
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SECTION 7.04. ADVANCEMENT OF EXPENSES. Expenses incurred in connection
with any civil or criminal action, suit or proceeding may be paid for or
reimbursed by the corporation in advance of the final disposition of such
action, suit or proceeding, as authorized in the specific case in the same
manner described in Section 7.02 of this Article, upon receipt of a written
affirmation of the director, officer or employee's good faith belief that he has
met the standard of conduct described in Section 7.01 of this Article and upon
receipt of a written undertaking on behalf of the director, officer or employee
to repay such amount if it shall ultimately be determined that he did not meet
the standard of conduct set forth in this Article, and a determination is made
that the facts then known to those making the determination would not preclude
indemnification under this Article.
SECTION 7.05. NON-EXCLUSIVITY. The indemnification provided by this
Article shall not be deemed exclusive of any other rights to which a person
seeking indemnification may be entitled under these Articles of Incorporation,
the corporation's Bylaws, any resolution of the board of directors or
stockholders, any other authorization, whenever adopted, after notice, by a
majority vote of all voting stock then outstanding, or any contract, both as to
action in his official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has ceased to be a
director, officer or employee, and shall inure to the benefit of the heirs,
executors and administrators of such a person.
SECTION 7.06. VESTMENT OF RIGHTS. The right of any individual to
indemnification under this Article shall vest at the time of occurrence or
performance of any event, act or omission giving rise to any action, suit or
proceeding of the nature referred to in Section 7.01 of this Article and, once
vested, shall not later be impaired as a result of any amendment, repeal,
alteration or other modification of any or all of these provisions.
Notwithstanding the foregoing, the indemnification afforded under this Article
shall be applicable to all alleged prior acts or omissions of any individual
seeking indemnification hereunder, regardless of the fact that such alleged acts
or omissions may have occurred prior to the adoption of this Article. To the
extent such prior acts or omissions cannot be deemed to be covered by this
Article, the right of any individual to indemnification shall be governed by the
indemnification provisions in effect at the time of such prior acts or
omissions.
SECTION 7.07. INSURANCE. The corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or who is or was serving at the request of the
corporation as a director, officer, partner, trustee, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise, against any liability asserted against or incurred by the
individual in that capacity or arising from the individual's status as a
director, officer, employee or agent, whether or not the corporation would have
power to indemnify the individual against the same liability under this Article.
SECTION 7.08. OTHER DEFINITIONS.
For purposes of this Article, serving an employee benefit plan at the
request of the corporation shall include any service as a director, officer or
employee of the corporation which imposes duties on, or involves services by
such director, officer or employee with respect to an employee benefit plan, its
participants, or beneficiaries. A person who acted in good faith and in a manner
he reasonably believed to be in the best interests of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interest of the corporation" referred to in this
Article.
5
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For purposes of this Article, "party" includes any individual who is or
was a plaintiff, defendant or respondent in any action, suit or proceeding.
For purposes of this Article, "official capacity," when used with respect
to a director, shall mean the office of director of the corporation; and when
used with respect to an individual other than a director, shall mean the office
in the corporation held by the officer or the employment or agency relationship
undertaking by the employee or agent on behalf of the corporation. "Official
capacity" does not include service for any other foreign or domestic corporation
or any partnership, joint venture, trust, employee benefit plan, or other
enterprise, whether for profit or not, except as set forth in Section 7.01 of
this Article.
SECTION 7.09. BUSINESS EXPENSES. Any payments made to any indemnified
party under this Article under any other right of indemnification shall be
deemed to be an ordinary and necessary business expense of the corporation, and
payment thereof shall not subject any person responsible for the payment, or the
board of directors, to any action for corporate waste or to any similar action.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. LIST OF EXHIBITS
The following exhibits are filed with or incorporated by reference into
this Registration Statement on Form S-8 (numbering corresponds generally to
Exhibit Table in Item 601 of Regulation S-K):
4 Stock Certificate of First Capital, Inc.1
5 Opinion of Muldoon, Murphy & Faucette LLP, Washington, DC, as to
the legality of the Common Stock registered hereby.
10.1 Form of First Capital, Inc. Stock Option Assumption Agreement for
the 1998 Officers' and Key Employees' Stock Option Plan of HCB
Bancorp.
10.2 First Capital, Inc. 1999 Stock-Based Incentive Plan
10.3 1998 Officers' and Key Employees' Stock Option Plan for HCB
Bancorp.
23.1 Consent of Muldoon, Murphy & Faucette LLP (contained in the
opinion included as Exhibit 5).
23.2 Consent of Monroe Shine & Company, Inc.
24 Power of Attorney is located on the signature pages.
- --------------------------
1 Incorporated herein by reference from the Exhibit of the same number
contained in the Registration Statement on Form S-2 (SEC No. 333-63515),
as amended and declared effective on November 12, 1998.
6
<PAGE> 7
ITEM 9. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which it offers or sells
securities, a post-effective amendment to this Registration
Statement to:
(i) Include any Prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) 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 in the
Registration Statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would
not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum
offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
Registration Statement; and
(iii) Include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
by the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference into this
Registration Statement.
(2) That, for the purpose of determining 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 the 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 registered that remain unsold
at the termination of the Offering.
(b) The undersigned hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the
Registrant's or the Plan's annual report pursuant to Section 13(a)
or 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.
7
<PAGE> 8
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
8
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SIGNATURES
The Registrant.
Pursuant to the requirements of the Securities Act of 1933, as amended,
First Capital, Inc. 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 City of Corydon, State of Indiana, on February 2, 2000.
First Capital, Inc.
By: /s/ William W. Harrod
--------------------------------------
William W. Harrod
President, Chief Executive Officer
and Director
KNOW ALL MEN BY THESE PRESENT, that each person whose signature appears
below (other than Mr. Harrod's) constitutes and appoints William W. Harrod and
Mr. Harrod hereby constitutes and appoints Samuel E. Uhl, as the true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities to sign any
or all amendments to the Form S-8 registration statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
U.S. Securities and Exchange Commission, respectively, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and things requisite and necessary to be done as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that said attorney-in-fact and agent or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Name Title Date
---- ----- ----
/s/ William W. Harrod President, February 2, 2000
- ---------------------------- Chief Executive Officer and
William W. Harrod Director
(Principal Executive
Officer)
/s/ M. Chris Frederick Chief Financial Officer and February 2, 2000
- ---------------------------- Treasurer (Principal Financial
M. Chris Frederick and Accounting Officer)
/s/ Samuel E. Uhl Chief Operating February 2, 2000
- ---------------------------- Officer and Director
Samuel E. Uhl
9
<PAGE> 10
/s/ James G. Pendleton Chairman of the Board February 2, 2000
- -----------------------------
James G. Pendleton
/s/ Mark D. Shireman Director February 2, 2000
- -----------------------------
Mark D. Shireman
/s/ Dennis L. Huber Director February 2, 2000
- ------------------------------
Dennis L. Huber
/s/ Kenneth R. Saulman Director February 2, 2000
- ------------------------------
Kenneth R. Saulman
/s/ John W. Buschemeyer Director February 2, 2000
- ------------------------------
John W. Buschemeyer
/s/ Gerald L. Uhl Director February 2, 2000
- ------------------------------
Gerald L. Uhl
/s/ Earl H. Book Director February 2, 2000
- ------------------------------
Earl H. Book
/s/ James S. Burden Director February 2, 2000
- ------------------------------
James S. Burden
/s/ Marvin E. Kiesler Director February 2, 2000
- ------------------------------
Marvin E. Kiesler
/s/ James E. Nett Director February 2, 2000
- ------------------------------
James E. Nett
/s/ Michael L. Shireman Director February 2, 2000
- ------------------------------
Michael L. Shireman
/s/ Loren E. Voyles Director February 2, 2000
- ------------------------------
Loren E. Voyles
10
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<TABLE>
<CAPTION>
EXHIBIT INDEX
-------------
Sequentially
Numbered
Page
Exhibit No. Description Method of Filing Location
- ----------- -------------------------------------------- --------------------------------- ----------
<S> <C> <C> <C>
4 Stock Certificate of First Capital, Inc. Incorporated herein by --
reference from the Exhibits of
the Registrant's Registration
Statement on Form S-2
declared effective by SEC on
November 12, 1998.
5 Opinion of Muldoon, Murphy & Faucette LLP Filed herewith.
10.1 Form of First Capital, Inc. Stock Filed herewith.
Option Assumption Agreement for
the 1998 Officers' and Key Employees' Stock
Option Plan for HCB Bancorp
10.2 First Capital, Inc. 1999 Stock-Based Filed herewith.
Incentive Plan
10.3 1998 Officers' and Key Employees' Stock Filed herewith.
Option Plan for HCB Bancorp
23.1 Consent of Muldoon, Murphy & Faucette LLP Contained in Exhibit 5 hereof.
23.2 Consent of Monroe Shine & Company, Inc. Filed herewith.
24 Power of Attorney Located on the signature page.
</TABLE>
11
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EXHIBIT 5.0 OPINION OF MULDOON, MURPHY & FAUCETTE LLP RE: LEGALITY
<PAGE> 2
[MULDOON, MURPHY & FAUCETTE LLP LETTERHEAD]
February 2, 2000
Board of Directors
First Capital, Inc.
220 Federal Drive, N.W.
Corydon, Indiana 47112
Re: First Capital, Inc. 1999 Stock-Based Incentive Plan and the
1998 Officers' and Key Employees' Stock Option Plan for HCB
Bancorp (as assumed by First Capital, Inc.)
Gentlemen:
We have been requested by First Capital, Inc. (the "Company") to issue a
legal opinion in connection with the registration under the Securities Act of
1933 on Form S-8 of 107,626 shares of the Company's common stock, $.01 par
value, that may be issued under the First Capital, Inc. 1999 Stock-Based
Incentive Plan (the "Incentive Plan") and of 62,000 shares of the Company's
common stock, $.01 par value, that may be issued under the 1998 Officers' and
Key Employees' Stock Option Plan for HCB Bancorp (as assumed by First Capital,
Inc. effective January 12, 2000) (the "Option Plan") (collectively, the
"Shares").
We have made such legal and factual examinations and inquiries as we
deemed advisable for the purpose of rendering this opinion. In our examination,
we have assumed and have not verified (i) the genuineness of all signatures,
(ii) the authenticity of all documents submitted to us as originals, (iii) the
conformity with the originals of all documents supplied to us as copies, and
(iv) the accuracy and completeness of all corporate records and documents and of
all certificates and statements of fact, in each case given or made available to
us by the Company or its subsidiary, First Harrison Bank.
Based on the foregoing and limited in all respects to Indiana law, it is
our opinion that, upon the occurrence of the acquisition of HCB Bancorp by the
Company, the right to purchase shares of HCB Bancorp common stock reserved under
the Option Plan became the right to purchase shares of the Company, in an amount
adjusted to reflect the exchange ratio of 15.5 shares of Company Common Stock
for each share of HCB Bancorp common stock. It is our further opinion that the
Shares in the Incentive Plan and the Option Plan have been duly authorized and,
upon payment for
<PAGE> 3
Board of Directors
February 2, 2000
Page 2
and issuance of the Shares in the manner described in the Incentive Plan and the
Option Plan and the outstanding option assumption agreements, will, when
granted, be legally issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Company's Registration Statement on Form S-8, and we consent to the use of the
name of our firm under the heading "Interests of Named Experts and Counsel."
Sincerely,
/s/ Muldoon, Murphy & Faucette LLP
MULDOON, MURPHY & FAUCETTE LLP
<PAGE> 1
EXHIBIT 10.1 FORM OF FIRST CAPITAL, INC. STOCK OPTION ASSUMPTION AGREEMENT FOR
THE 1998 OFFICERS' AND KEY EMPLOYEES' STOCK OPTION PLAN FOR HCB
BANCORP
<PAGE> 2
FIRST CAPITAL, INC.
STOCK OPTION ASSUMPTION AGREEMENT
OPTIONEE: [Name]
STOCK OPTION ASSUMPTION AGREEMENT issued as of the ___ day of January,
2000, by First Capital, Inc., an Indiana corporation ("First Capital").
WHEREAS, the undersigned individual ("Optionee") holds one or more
outstanding options to purchase shares of the common stock of HCB Bancorp, an
Indiana corporation ("HCB"), which were granted to Optionee under the 1998
Officers' and Key Employees' Stock Option Plan of HCB Bancorp (the "HCB Plan")
and are evidenced by one or more Award Agreements or similar documentation (the
"Award Agreement(s)") between HCB and Optionee, which are incorporated by
reference herein.
WHEREAS, effective as of January __, 2000, HCB has merged with and into
First Capital (the "Merger") pursuant to the Agreement and Plan of Merger (the
"Merger Agreement"), dated as of July 19, 1999 by and between First Capital and
HCB;
WHEREAS, the Merger Agreement provides for the conversion of all
outstanding stock options under the HCB Plan into options to purchase First
Capital common stock ("First Capital Stock"), and to issue to the holder of each
outstanding option an agreement evidencing the conversion and assumption of such
option;
WHEREAS, pursuant to the provisions of the Merger Agreement, the exchange
ratio (the "Exchange Ratio") in effect for the Merger is 15.5 shares of First
Capital Stock for each outstanding share of HCB common stock ("HCB Stock");
WHEREAS, this Stock Option Assumption Agreement is to become effective
immediately in order to reflect certain adjustments to Optionee's outstanding
options under the HCB Plan, which have become necessary by reason of the
assumption of those options by First Capital in connection with the Merger.
NOW, THEREFORE, it is hereby agreed as follows:
1. The number of shares of First Capital Stock subject to the stock
options held by Optionee under the HCB Plan immediately prior to the Effective
Time (as defined in the Merger Agreement) of the Merger (the "HCB Options") and
the exercise price payable per share are set forth in Exhibit A hereto. First
Capital hereby assumes, as of the Effective Time, all the duties and obligations
of HCB under each of the HCB Options as set forth in the HCB Plan and the
Optionee's Award Agreement(s). In connection with such assumption, the number of
shares of First Capital Stock purchasable under each HCB Option hereby assumed
and the exercise price payable thereunder have been adjusted to reflect the
Exchange Ratio in a manner consistent with the Merger
<PAGE> 3
Agreement. Accordingly, the number of shares of First Capital Stock subject to
each HCB Option hereby assumed shall be as specified for that option in attached
Exhibit A, and the adjusted exercise price payable per share of First Capital
Stock under the assumed HCB Option shall be as indicated for that option in
attached Exhibit A.
2. The following provisions shall govern each HCB Option hereby assumed by
First Capital:
(a) Unless the context otherwise requires, all references in each
Award Agreement and in the HCB Plan (as incorporated into such Option
Agreement) (i) to the Company" shall mean First Capital, and (ii) to the
"Committee" shall mean the Benefits Committee of the First Capital Board
of Directors.
(b) The grant date and the expiration date of each assumed HCB
Option and all other provisions which govern either the exercisability or
the termination of the assumed HCB Option shall remain the same as set
forth in the Award Agreement applicable to that option and the provisions
of the HCB Plan, and shall accordingly govern and control Optionee's
rights under this Stock Option Assumption Agreement to purchase First
Capital Stock.
(c) The adjusted exercise price payable for the First Capital Stock
subject to each assumed HCB Option shall be payable in any of the forms
authorized under the HCB Plan and the Award Agreement applicable to that
option.
(d) In order to exercise each assumed HCB Option, Optionee must
deliver to First Capital a written notice of exercise in which the number
of shares of First Capital Stock to be purchased thereunder must be
indicated. The exercise notice must be accompanied by payment of the
adjusted exercise price payable for the purchased shares of First Capital
Stock and should be delivered to First Capital at the following address:
First Capital, Inc.
William W. Harrod
220 Federal Drive, N.W.
Corydon, Indiana 47112
3. Except to the extent specifically modified by this Stock Option
Assumption Agreement, all of the terms and conditions of each Award Agreement as
in effect immediately prior to the Merger shall continue in full force and
effect and shall not in any way be amended, revised or otherwise affected by
this Stock Option Assumption Agreement.
<PAGE> 4
IN WITNESS WHEREOF, First Capital has caused this Stock Option Assumption
Agreement to be executed on its behalf by its duly authorized officer as of the
___ day of January, 2000.
FIRST CAPITAL, INC.
By:
-------------------------------------
Title:
----------------------------------
ACKNOWLEDGMENT
The undersigned acknowledges receipt of this foregoing Stock Option
Assumption Agreement and understands and acknowledges that all rights and
liabilities with respect to each of his or her HCB Options hereby assumed by
First Capital are as set forth only in the Award Agreement, the HCB Plan and
this Stock Option Assumption Agreement and that no other agreements exist with
respect to his HCB Options. The undersigned also acknowledges that, except to
the extent specifically modified by this Stock Option Assumption Agreement, all
of the terms and conditions of the Award Agreement as in effect immediately
prior to the effective time shall continue in full force and effect and shall
not in any way be amended, revised or otherwise affected by this Stock Option
Assumption Agreement. The undersigned further acknowledges that the HCB Option
or Options described in Exhibit A hereto constitute all of the options or other
rights to purchase HCB Stock that he or she owned immediately prior to the
effective time of the Merger.
[Name], Optionee
DATED: __________________ , 2000
<PAGE> 5
EXHIBIT A
Optionee's Outstanding Options to Purchase Shares
of HCB Bancorp, Inc. Common Stock
(Pre-Merger)
DATE OF OPTION GRANT NUMBER OF OUTSTANDING OPTIONS EXERCISE PRICE
- -------------------- ----------------------------- --------------
Optionee's Outstanding Options to Purchase Shares
of First Capital, Inc. Common Stock
(Post-Merger)
<TABLE>
<CAPTION>
<S> <C> <C>
DATE OF OPTION GRANT ADJUSTED NUMBER OF OUTSTANDING OPTIONS ADJUSTED EXERCISE PRICE
- -------------------- -------------------------------------- -----------------------
</TABLE>
<PAGE> 1
EXHIBIT 10.2 FIRST CAPITAL, INC. 1999 STOCK-BASED INCENTIVE PLAN
<PAGE> 2
FIRST CAPITAL, INC.
1999 STOCK-BASED INCENTIVE PLAN
1. DEFINITIONS.
-----------
(a) "Affiliate" means any "parent corporation" or "subsidiary corporation"
of the Holding Company, as such terms are defined in Sections 424(e) and 424(f)
of the Code.
(b) "Award" means, individually or collectively, a grant under the Plan of
Non-Statutory Stock Options, Incentive Stock Options and Stock Awards.
(c) "Award Agreement" means an agreement evidencing and setting forth the
terms of an Award.
(d) "Bank" means First Federal Bank, A Federal Savings Bank.
(e) "Board of Directors" means the board of directors of the Holding
Company.
(f) "Change in Control" of the Holding Company or the Bank means: (i) an
event of a nature that would be required to be reported in response to Item 1(a)
of the current report on Form 8-K, as in effect on the date hereof, pursuant to
Section 13 or 15(d) of the Exchange Act; or (ii) an event that results in a
change in control of the Bank or the Holding Company within the meaning of the
Home Owners' Loan Act of 1933, as amended, the Federal Deposit Insurance Act,
and the rules and regulations promulgated by the Office of Thrift Supervision
(or its predecessor agency), as in effect on the date hereof (provided, that in
applying the definition of change in control as set forth under the rules and
regulations of the OTS, the Board of Directors shall substitute its judgment for
that of the OTS); or (iii) without limitation such a Change in Control shall be
deemed to have occurred at such time as (A) any "person" (as the term is used in
Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of voting securities of the Bank or the Holding Company representing
20% or more of the Bank's or the Holding Company's outstanding voting securities
or the right to acquire such securities except for any voting securities of the
Bank purchased by the Holding Company and any voting securities purchased by any
employee benefit plan of the Holding Company or its Subsidiaries, or (B)
individuals who constitute the Board of Directors on the date hereof (the
"Incumbent Board") cease for any reason to constitute at least a majority
thereof, provided that any person becoming a director subsequent to the date
hereof whose election was approved by a vote of at least three-quarters of the
directors comprising the Incumbent Board, or whose nomination for election by
the Holding Company's stockholders was approved by a Nominating Committee solely
composed of members which are Incumbent Board members, shall be, for purposes of
this clause (B), considered as though he or she were a member of the Incumbent
Board, or (C) a plan of reorganization, merger, consolidation, sale of all or
substantially all the assets of the Bank or the Holding Company or similar
transaction occurs or is effectuated in which the Bank or Holding Company is not
the resulting entity; provided, however, that such an event listed above will be
deemed to have occurred or to have been effectuated upon the receipt of all
required federal regulatory approvals not including the lapse of any statutory
waiting periods, or (D) a proxy statement has been distributed soliciting
proxies from stockholders of the Holding Company, by someone other than the
current management of the Holding Company, seeking stockholder approval of a
plan of reorganization, merger or consolidation of the Holding Company or Bank
with one or more corporations as a result of which the outstanding shares of the
class of securities then subject to such plan or transaction are exchanged for
or
<PAGE> 3
converted into cash or property or securities not issued by the Bank or the
Holding Company, or (E) a tender offer is made for 20% or more of the voting
securities of the Bank or Holding Company then outstanding by a person other
than the Bank or Holding Company.
(g) "Code" means the Internal Revenue Code of 1986, as amended.
(h) "Committee" means the committee designated by the Board of Directors,
pursuant to Section 2 of the Plan, to administer the Plan.
(i) "Common Stock" means the common stock of the Holding Company, par
value $.01 per share.
(j) "Date of Grant" means the effective date of an Award.
(k) "Disability" means any mental or physical condition with respect to
which the Participant qualifies for and receives benefits for under a long-term
disability plan of the Holding Company or an Affiliate, or in the absence of
such a long-term disability plan or coverage under such a plan, "Disability"
shall mean a physical or mental condition which, in the sole discretion of the
Committee, is reasonably expected to be of indefinite duration and to
substantially prevent the Participant from fulfilling his or her duties or
responsibilities to the Holding Company or an Affiliate.
(l) "Effective Date" means January 1, 2000, but only if, prior to such
date, the Plan is approved by the Holding Company's shareholders. The Plan will
be so approved if at an annual or special meeting of shareholders held prior to
such date a quorum is present and the majority of the votes cast at such meeting
by the holders of the Common Stock shall be cast in favor of its approval.
(m) "Employee" means any person employed by the Holding Company or an
Affiliate. Directors who are employed by the Holding Company or an Affiliate
shall be considered Employees under the Plan.
(n) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(o) "Exercise Price" means the price at which a Participant may purchase a
share of Common Stock pursuant to an Option.
(p) "Fair Market Value" means the market price of Common Stock, determined
by the Committee as follows:
(i) If the Common Stock was traded on the date in question on The
Nasdaq Stock Market then the Fair Market Value shall be equal
to the closing price reported for such date;
(ii) If the Common Stock was traded on a stock exchange on the date
in question, then the Fair Market Value shall be equal to the
closing price reported by the applicable composite
transactions report for such date; and
<PAGE> 4
(iii) If neither of the foregoing provisions is applicable, then the
Fair Market Value shall be determined by the Committee in good
faith on such basis as it deems appropriate.
Whenever possible, the determination of Fair Market Value by the Committee
shall be based on the prices reported in The Wall Street Journal. The
--------------------------
Committee's determination of Fair Market Value shall be conclusive and binding
on all persons.
(q) "Holding Company" means First Capital, Inc.
(r) "Incentive Stock Option" means a stock option granted to a
Participant, pursuant to Section 7 of the Plan, that is intended to meet the
requirements of Section 422 of the Code.
(s) "Non-Statutory Stock Option" means a stock option granted to a
Participant pursuant to the terms of the Plan but which is not intended to be
and is not identified as an Incentive Stock Option or a stock option granted
under the Plan which is intended to be and is identified as an Incentive Stock
Option but which does not meet the requirements of Section 422 of the Code.
(t) "Option" means an Incentive Stock Option or Non-Statutory Stock
Option.
(u) "Outside Director" means a member of the board(s) of directors of the
Holding Company or an Affiliate who is not also an Employee of the Holding
Company or an Affiliate.
(v) "Participant" means any person who holds an outstanding Award.
(w) "Plan" means this First Capital, Inc. 1999 Stock-Based Incentive Plan.
(x) "Retirement" means retirement from employment with the Holding Company
or an Affiliate in accordance with the then current retirement policies of the
Holding Company or Affiliate, as applicable. "Retirement" with respect to an
Outside Director means the termination of service from the board(s) of directors
of the Holding Company and any Affiliate following written notice to such
board(s) of directors of the Outside Director's intention to retire.
(y) "Stock Award" means an Award granted to a Participant pursuant to
Section 8 of the Plan.
(z) "Termination for Cause" means termination because of a Participant'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 material breach of any provision of any employment
agreement between the Holding Company and/or any subsidiary of the Holding
Company and a Participant.
(aa) "Trust" means a trust established by the Board of Directors in
connection with this Plan to hold Common Stock or other property for the
purposes set forth in the Plan.
(bb) "Trustee" means any person or entity approved by the Board of
Directors or its designee(s) to hold any of the Trust assets.
<PAGE> 5
2. ADMINISTRATION.
--------------
(a) The Committee shall administer the Plan. The Committee shall consist
of two or more disinterested directors of the Holding Company, who shall be
appointed by the Board of Directors. A member of the Board of Directors shall be
deemed to be "disinterested" only if he or she satisfies such requirements as
the Securities and Exchange Commission may establish for non-employee directors
administering plans intended to qualify for exemption under Rule 16b-3 (or its
successor) under the Exchange Act.
(b) The Committee shall (i) select the Employees and Outside Directors who
are to receive Awards under the Plan, (ii) determine the type, number, vesting
requirements and other features and conditions of such Awards, (iii) interpret
the Plan and Award Agreements in all respects and (iv) make all other decisions
relating to the operation of the Plan. The Committee may adopt such rules or
guidelines as it deems appropriate to implement the Plan. The Committee's
determinations under the Plan shall be final and binding on all persons.
(c) Each Award shall be evidenced by a written agreement ("Award
Agreement") containing such provisions as may be required by the Plan and
otherwise approved by the Committee. Each Award Agreement shall constitute a
binding contract between the Holding Company or an Affiliate and the
Participant, and every Participant, upon acceptance of an Award Agreement, shall
be bound by the terms and restrictions of the Plan and the Award Agreement. The
terms of each Award Agreement shall be in accordance with the Plan, but each
Award Agreement may include any additional provisions and restrictions
determined by the Committee, in its discretion, provided that such additional
provisions and restrictions are not inconsistent with the terms of the Plan. In
particular and at a minimum, the Committee shall set forth in each Award
Agreement: (i) the type of Award granted; (ii) the Exercise Price of any Option;
(iii) the number of shares subject to the Award; (iv) the expiration date of the
Award; (v) the manner, time, and rate (cumulative or otherwise) of exercise or
vesting of such Award; and (vi) the restrictions, if any, placed upon such
Award, or upon shares which may be issued upon exercise of such Award. The
Chairman of the Committee and such other directors and officers as shall be
designated by the Committee is hereby authorized to execute Award Agreements on
behalf of the Company or an Affiliate and to cause them to be delivered to the
recipients of Awards.
(d) The Committee may delegate all authority for: (i) the determination of
forms of payment to be made by or received by the Plan and (ii) the execution of
any Award Agreement.
3. TYPES OF AWARDS.
---------------
The following Awards may be granted under the Plan:
(a) Non-Statutory Stock Options.
(b) Incentive Stock Options.
(c) Stock Awards.
4. STOCK SUBJECT TO THE PLAN.
-------------------------
Subject to adjustment as provided in Section 13 of the Plan, the number of
shares reserved for Awards under the Plan is 107,626. Subject to adjustment as
provided in Section 13 of the Plan, the number
<PAGE> 6
of shares reserved hereby for purchase pursuant to the exercise of Options
granted under the Plan is 76,876. The number of the shares reserved for Stock
Awards is 30,750. The shares of Common Stock issued under the Plan may be either
authorized but unissued shares or authorized shares previously issued and
acquired or reacquired by the Trustee or the Holding Company, respectively. To
the extent that Options and Stock Awards are granted under the Plan, the shares
underlying such Awards will be unavailable for any other use including future
grants under the Plan except that, to the extent that Stock Awards or Options
terminate, expire or are forfeited without having vested or without having been
exercised, new Awards may be made with respect to these shares.
5. ELIGIBILITY.
-----------
Subject to the terms of the Plan, all Employees and Outside Directors
shall be eligible to receive Awards under the Plan. In addition, the Committee
may grant eligibility to consultants and advisors of the Holding Company or an
Affiliate, as it sees fit.
6. NON-STATUTORY STOCK OPTIONS.
---------------------------
The Committee may, subject to the limitations of the Plan and the
availability of shares of Common Stock reserved but not previously awarded under
the Plan, grant Non-Statutory Stock Options to eligible individuals upon such
terms and conditions as it may determine to the extent such terms and conditions
are consistent with the following provisions:
(a) Exercise Price. The Committee shall determine the Exercise Price of
---------------
each Non-Statutory Stock Option. However, the Exercise Price shall not be less
than 100% of the Fair Market Value of the Common Stock on the Date of Grant.
(b) Terms of Non-statutory Stock Options. The Committee shall determine
--------------------------------------
the term during which a Participant may exercise a Non-Statutory Stock Option,
but in no event may a Participant exercise a Non-Statutory Stock Option, in
whole or in part, more than ten (10) years from the Date of Grant. The Committee
shall also determine the date on which each Non-Statutory Stock Option, or any
part thereof, first becomes exercisable and any terms or conditions a
Participant must satisfy in order to exercise each Non-Statutory Stock Option.
The shares of Common Stock underlying each Non-Statutory Stock Option may be
purchased in whole or in part by the Participant at any time during the term of
such Non-Statutory Stock Option, or any portion thereof, once the Non-Statutory
Stock Option becomes exercisable.
(c) Non-Transferability. Unless otherwise determined by the Committee in
-------------------
accordance with this Section 6(c), a Participant may not transfer, assign,
hypothecate, or dispose of in any manner, other than by will or the laws of
intestate succession, a Non-Statutory Stock Option. The Committee may, however,
in its sole discretion, permit transferability or assignment of a Non-Statutory
Stock Option if such transfer or assignment is, in its sole determination, for
valid estate planning purposes and such transfer or assignment is permitted
under the Code and Rule 16b-3 under the Exchange Act. For purposes of this
Section 6(c), a transfer for valid estate planning purposes includes, but is not
limited to: (a) a transfer to a revocable intervivos trust as to which the
Participant is both the settlor and trustee, or (b) a transfer for no
consideration to: (i) any member of the Participant's Immediate Family, (ii) any
trust solely for the benefit of members of the Participant's Immediate Family,
(iii) any partnership whose only partners are members of the Participant's
Immediate Family, and (iv) any limited liability corporation or corporate entity
whose only members or equity owners are members of the Participant's Immediate
Family. For
<PAGE> 7
purposes of this Section 6(c), "Immediate Family" includes, but is not
necessarily limited to, a Participant's parents, grandparents, spouse, children,
grandchildren, siblings (including half bothers and sisters), and individuals
who are family members by adoption. Nothing contained in this Section 6(c) shall
be construed to require the Committee to give its approval to any transfer or
assignment of any Non-Statutory Stock Option or portion thereof, and approval to
transfer or assign any Non-Statutory Stock Option or portion thereof does not
mean that such approval will be given with respect to any other Non-Statutory
Stock Option or portion thereof. The transferee or assignee of any Non-Statutory
Stock Option shall be subject to all of the terms and conditions applicable to
such Non-Statutory Stock Option immediately prior to the transfer or assignment
and shall be subject to any other conditions proscribed by the Committee with
respect to such Non-Statutory Stock Option.
(d) Termination of Employment or Service (General). Unless otherwise
-------------------------------------------------
determined by the Committee, upon the termination of a Participant's employment
or other service for any reason other than Retirement, Disability or death, a
Change in Control, or Termination for Cause, the Participant may exercise only
those Non-Statutory Stock Options that were immediately exercisable by the
Participant at the date of such termination and only for a period of three (3)
months following the date of such termination, or, if sooner, until the
expiration of the term of the Option.
(e) Termination of Employment or Service (Retirement). Unless otherwise
--------------------------------------------------
determined by the Committee, in the event of a Participant's Retirement, the
Participant may exercise only those Non- Statutory Stock Options that were
immediately exercisable by the Participant at the date of Retirement and only
for a period of one (1) year from the date of Retirement or, if sooner, until
the expiration of the term of the Option.
(f) Termination of Employment or Service (Disability or Death). Unless
------------------------------------------------------------
otherwise determined by the Committee, in the event of the termination of a
Participant's employment or other service due to Disability or death, all
Non-Statutory Stock Options held by such Participant shall immediately become
exercisable and remain exercisable for a period one (1) year following the date
of such termination, or, if sooner, until the expiration of the term of the
Option.
(g) Termination of Employment or Service (Termination for Cause). Unless
-------------------------------------------------------------
otherwise determined by the Committee, in the event of a Participant's
Termination for Cause, all rights with respect to the Participant's
Non-Statutory Stock Options shall expire immediately upon the effective date of
such Termination for Cause.
(h) Acceleration Upon a Change in Control. In the event of a Change in
---------------------------------------
Control all Non- Statutory Stock Options held by a Participant as of the date of
the Change in Control shall immediately become exercisable and shall remain
exercisable until the expiration of the term of the Non-Statutory Stock Options.
(i) Payment. Payment due to a Participant upon the exercise of a
-------
Non-Statutory Stock Option shall be made in the form of shares of Common Stock.
<PAGE> 8
7. INCENTIVE STOCK OPTIONS.
-----------------------
The Committee may, subject to the limitations of the Plan and the
availability of shares of Common Stock reserved but unawarded under this Plan,
grant Incentive Stock Options to an Employee upon such terms and conditions as
it may determine to the extent such terms and conditions are consistent with the
following provisions:
(a) Exercise Price. The Committee shall determine the Exercise Price of
---------------
each Incentive Stock Option. However, the Exercise Price shall not be less than
100% of the Fair Market Value of the Common Stock on the Date of Grant;
PROVIDED, HOWEVER, that if at the time an Incentive Stock Option is granted, the
Employee owns or is treated as owning, for purposes of Section 422 of the Code,
Common Stock representing more than 10% of the total combined voting securities
of the Holding Company ("10% Owner"), the Exercise Price shall not be less than
110% of the Fair Market Value of the Common Stock on the Date of Grant.
(b) Amounts of Incentive Stock Options. To the extent the aggregate Fair
-----------------------------------
Market Value of shares of Common Stock with respect to which Incentive Stock
Options that are exercisable for the first time by an Employee during any
calendar year under the Plan and any other stock option plan of the Holding
Company or an Affiliate exceeds $100,000, or such higher value as may be
permitted under Section 422 of the Code, such Options in excess of such limit
shall be treated as Non-Statutory Stock Options. Fair Market Value shall be
determined as of the Date of Grant with respect to each such Incentive Stock
Option.
(c) Terms of Incentive Stock Options. The Committee shall determine the
---------------------------------
term during which a Participant may exercise an Incentive Stock Option, but in
no event may a Participant exercise an Incentive Stock Option, in whole or in
part, more than ten (10) years from the Date of Grant; PROVIDED, HOWEVER, that
if at the time an Incentive Stock Option is granted to an Employee who is a 10%
Owner, the Incentive Stock Option granted to such Employee shall not be
exercisable after the expiration of five (5) years from the Date of Grant. The
Committee shall also determine the date on which each Incentive Stock Option, or
any part thereof, first becomes exercisable and any terms or conditions a
Participant must satisfy in order to exercise each Incentive Stock Option. The
shares of Common Stock underlying each Incentive Stock Option may be purchased
in whole or in part at any time during the term of such Incentive Stock Option
after such Option becomes exercisable.
(d) Non-Transferability. No Incentive Stock Option shall be transferable
-------------------
except by will or the laws of descent and distribution and is exercisable,
during his or her lifetime, only by the Employee to whom the Committee grants
the Incentive Stock Option. The designation of a beneficiary does not constitute
a transfer of an Incentive Stock Option.
(e) Termination of Employment (General). Unless otherwise determined by
------------------------------------
the Committee, upon the termination of a Participant's employment or other
service for any reason other than Retirement, Disability or death, a Change in
Control, or Termination for Cause, the Participant may exercise only those
Incentive Stock Options that were immediately exercisable by the Participant at
the date of such termination and only for a period of three (3) months following
the date of such termination, or, if sooner, until the expiration of the term of
the Option.
<PAGE> 9
(f) Termination of Employment (Retirement). Unless otherwise determined by
--------------------------------------
the Committee, in the event of a Participant's Retirement, the Participant may
exercise only those Incentive Stock Options that were immediately exercisable by
the Participant at the date of Retirement and only for a period of one (1) year
from the date of Retirement, or, if sooner, until the expiration of the term of
the Option. Any Option originally designated as an Incentive Stock Option shall
be treated as a Non-Statutory Stock Option to the extent the Option does not
otherwise qualify as an Incentive Stock Option pursuant to Section 422 of the
Code.
(g) Termination of Employment (Disability or Death). Unless otherwise
-------------------------------------------------
determined by the Committee, in the event of the termination of a Participant's
employment or other service due to Disability or death, all Incentive Stock
Options held by such Participant shall immediately become exercisable and remain
exercisable for a period one (1) year following the date of such termination,
or, if sooner, until the expiration of the term of the Option.
(h) Termination of Employment (Termination for Cause). Unless otherwise
---------------------------------------------------
determined by the Committee, in the event of an Employee's Termination for
Cause, all rights under such Employee's Incentive Stock Options shall expire
immediately upon the effective date of such Termination for Cause.
(i) Acceleration Upon a Change in Control. In the event of a Change in
---------------------------------------
Control all Incentive Stock Options held by a Participant as of the date of the
Change in Control shall immediately become exercisable and shall remain
exercisable until the expiration of the term of the Incentive Stock Options. Any
Option originally designated as an Incentive Stock Option shall be treated as a
Non-Statutory Stock Option to the extent the Option does not otherwise qualify
as an Incentive Stock Option pursuant to Section 422 of the Code.
(j) Payment. Payment due to a Participant upon the exercise of an
-------
Incentive Stock Option shall be made in the form of shares of Common Stock.
(k) Disqualifying Dispositions. Each Award Agreement with respect to an
---------------------------
Incentive Stock Option shall require the Participant to notify the Committee of
any disposition of shares of Common Stock issued pursuant to the exercise of
such Option under the circumstances described in Section 421(b) of the Code
(relating to certain disqualifying dispositions) within 10 days of such
disposition.
8. STOCK AWARDS.
------------
The Committee may make grants of Stock Awards, which shall consist of the
grant of some number of shares of Common Stock, to a Participant upon such terms
and conditions as it may determine to the extent such terms and conditions are
consistent with the following provisions:
(a) Grants of the Stock Awards. Stock Awards may only be made in whole
---------------------------
shares of Common Stock. Stock Awards may only be granted from shares reserved
under the Plan and available for award at the time the Stock Award is made to
the Participant.
(b) Terms of the Stock Awards. The Committee shall determine the dates on
-------------------------
which Stock Awards granted to a Participant shall vest and any terms or
conditions which must be satisfied prior to the vesting of any Stock Award or
portion thereof. Any such terms or conditions shall be determined by the
Committee as of the Date of Grant.
<PAGE> 10
(c) Termination of Employment or Service (General). Unless otherwise
-------------------------------------------------
determined by the Committee, upon the termination of a Participant's employment
or service for any reason other than Retirement, Disability or death, a Change
in Control, or Termination for Cause, any Stock Awards in which the Participant
has not become vested as of the date of such termination shall be forfeited and
any rights the Participant had to such Stock Awards shall become null and void.
(d) Termination of Employment or Service (Retirement). Unless otherwise
--------------------------------------------------
determined by the Committee, in the event of a Participant's Retirement, any
Stock Awards in which the Participant has not become vested as of the date of
Retirement shall be forfeited and any rights the Participant had to such
unvested Stock Awards shall become null and void.
(e) Termination of Employment or Service (Disability or Death). Unless
------------------------------------------------------------
otherwise determined by the Committee, in the event of a termination of the
Participant's service due to Disability or death all unvested Stock Awards held
by such Participant shall immediately vest as of the date of such termination.
(f) Termination of Employment or Service (Termination for Cause). Unless
-------------------------------------------------------------
otherwise determined by the Committee, in the event of the Participant's
Termination for Cause, all Stock Awards in which the Participant had not become
vested as of the effective date of such Termination for Cause shall be forfeited
and any rights such Participant had to such unvested Stock Awards shall become
null and void.
(g) Acceleration Upon a Change in Control. In the event of a Change in
---------------------------------------
Control all unvested Stock Awards held by a Participant shall immediately vest.
(h) Issuance of Certificates. Unless otherwise held in Trust and
--------------------------
registered in the name of the Trustee, reasonably promptly after the Date of
Grant with respect to shares of Common Stock pursuant to a Stock Award, the
Holding Company shall cause to be issued a stock certificate, registered in the
name of the Participant to whom such Stock Award was granted, evidencing such
shares; provided, that the Holding Company shall not cause such a stock
certificate to be issued unless it has received a stock power duly endorsed in
blank with respect to such shares. Each such stock certificate shall bear the
following legend:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the restrictions, terms and
conditions (including forfeiture provisions and restrictions against
transfer) contained in the First Capital, Inc. 1999 Stock-Based
Incentive Plan and Award Agreement entered into between the
registered owner of such shares and First Capital, Inc. or its
Affiliates. A copy of the Plan and Award Agreement is on file in the
office of the Corporate Secretary of First Capital, Inc. located at
220 Federal Drive, N.W., Corydon, Indiana 47112.
Such legend shall not be removed until the Participant becomes vested in such
shares pursuant to the terms of the Plan and Award Agreement. Each certificate
issued pursuant to this Section 8(h), in connection with a Stock Award, shall be
held by the Holding Company or its Affiliates, unless the Committee determines
otherwise.
(i) Non-Transferability. Except to the extent permitted by the Code, the
-------------------
rules promulgated under Section 16(b) of the Exchange Act or any successor
statutes or rules:
<PAGE> 11
1. The recipient of a Stock Award shall not sell, transfer,
assign, pledge, or otherwise encumber shares subject to the
Stock Award until full vesting of such shares has occurred.
For purposes of this section, the separation of beneficial
ownership and legal title through the use of any "swap"
transaction is deemed to be a prohibited encumbrance.
2. Unless determined otherwise by the Committee and except in the
event of the Participant's death or pursuant to a domestic
relations order, a Stock Award is not transferable and may be
earned in his or her lifetime only by the Participant to whom
it is granted. Upon the death of a Participant, a Stock Award
is transferable by will or the laws of descent and
distribution. The designation of a beneficiary shall not
constitute a transfer.
3. If a recipient of a Stock Award is subject to the provisions
of Section 16 of the Exchange Act, shares of Common Stock
subject to such Stock Award may not, without the written
consent of the Committee (which consent may be given in the
Award Agreement), be sold or otherwise disposed of within six
(6) months following the date of grant of the Stock Award.
(j) Accrual of Dividends. To the extent Stock Awards are held in Trust and
--------------------
registered in the name of the Trustee, unless otherwise specified by the Trust
agreement, whenever shares of Common Stock underlying a Stock Award are
distributed to a Participant or beneficiary thereof under the Plan, such
Participant or beneficiary shall also be entitled to receive, with respect to
each such share distributed, a payment equal to any cash dividends and the
number of shares of Common Stock equal to any stock dividends, declared and paid
with respect to a share of the Common Stock if the record date for determining
shareholders entitled to receive such dividends falls between the date the
relevant Stock Award was granted and the date the relevant Stock Award or
installment thereof is issued. There shall also be distributed an appropriate
amount of net earnings, if any, of the Trust with respect to any dividends paid
out on the shares related to the Stock Award.
(k) Voting of Stock Awards. After a Stock Award has been granted but for
-----------------------
which the shares covered by such Stock Award have not yet been vested, earned
and distributed to the Participant pursuant to the Plan, the Participant shall
be entitled to vote or to direct the Trustee to vote, as the case may be, such
shares of Common Stock which the Stock Award covers subject to the rules and
procedures adopted by the Committee for this purpose and in a manner consistent
with the Trust agreement.
(l) Payment. Payment due to a Participant upon the redemption of a Stock
-------
Award shall be made in the form of shares of Common Stock.
9. DEFERRED PAYMENTS.
-----------------
The Committee, in its discretion, may permit a Participant to elect to
defer receipt of all or any part of any cash or stock payment under the Plan, or
the Committee may determine to defer receipt by some or all Participants, of all
or part of any such payment. The Committee shall determine the terms and
conditions of any such deferral, including the period of deferral, the manner of
deferral, and the method for measuring appreciation on deferred amounts until
their payout.
<PAGE> 12
10. METHOD OF EXERCISE OF OPTIONS.
-----------------------------
Subject to any applicable Award Agreement, any Option may be exercised by
the Participant in whole or in part at such time or times, and the Participant
may make payment of the Exercise Price in such form or forms permitted by the
Committee, including, without limitation, payment by delivery of cash, Common
Stock or other consideration (including, where permitted by law and the
Committee, Awards) having a Fair Market Value on the day immediately preceding
the exercise date equal to the total Exercise Price, or by any combination of
cash, shares of Common Stock and other consideration, including exercise by
means of a cashless exercise arrangement with a qualifying broker-dealer, as the
Committee may specify in the applicable Award Agreement.
11. RIGHTS OF PARTICIPANTS.
----------------------
No Participant shall have any rights as a shareholder with respect to any
shares of Common Stock covered by an Option until the date of issuance of a
stock certificate for such Common Stock. Nothing contained herein or in any
Award Agreement confers on any person any right to continue in the employ or
service of the Holding Company or an Affiliate or interferes in any way with the
right of the Holding Company or an Affiliate to terminate a Participant's
services.
12. DESIGNATION OF BENEFICIARY.
--------------------------
A Participant may, with the consent of the Committee, designate a person
or persons to receive, in the event of death, any Award to which the Participant
would then be entitled. Such designation will be made upon forms supplied by and
delivered to the Holding Company and may be revoked in writing. If a Participant
fails effectively to designate a beneficiary, then the Participant's estate will
be deemed to be the beneficiary.
13. DILUTION AND OTHER ADJUSTMENTS.
------------------------------
In the event of any change in the outstanding shares of Common Stock by
reason of any stock dividend or split, recapitalization, merger, consolidation,
spin-off, reorganization, combination or exchange of shares, or other similar
corporate change, or other increase or decrease in such shares without receipt
or payment of consideration by the Holding Company, or in the event an
extraordinary capital distribution is made, the Committee may make such
adjustments to previously granted Awards, to prevent dilution, diminution, or
enlargement of the rights of the Participant, including any or all of the
following:
(a) adjustments in the aggregate number or kind of shares of Common
Stock or other securities that may underlie future Awards under the
Plan;
(b) adjustments in the aggregate number or kind of shares of Common
Stock or other securities underlying Awards already made under the
Plan;
(c) adjustments in the Exercise Price of outstanding Incentive and/or
Non-Statutory Stock Options.
No such adjustments may, however, materially change the value of benefits
available to a Participant under a previously granted Award. All Awards under
this Plan shall be binding upon any successors or assigns
<PAGE> 13
of the Holding Company. Notwithstanding the above, in the event of an
extraordinary capital distribution, any adjustment under this Section 13 shall
be subject to required approval by the Office of Thrift Supervision.
14. TAXES.
-----
(a) Whenever under this Plan, cash or shares of Common Stock are to be
delivered upon exercise or payment of an Award or any other event with respect
to rights and benefits hereunder, the Committee shall be entitled to require as
a condition of delivery (i) that the Participant remit an amount sufficient to
satisfy all federal, state, and local withholding tax requirements related
thereto, (ii) that the withholding of such sums come from compensation otherwise
due to the Participant or from any shares of Common Stock due to the Participant
under this Plan or (iii) any combination of the foregoing; PROVIDED, HOWEVER,
that no amount shall be withheld from any cash payment or shares of Common Stock
relating to an Award which was transferred by the Participant in accordance with
this Plan. Furthermore, Participants may direct the Committee to instruct the
Trustee to sell shares of Common Stock to be delivered upon the payment of an
Award to satisfy tax obligations.
(b) If any disqualifying disposition described in Section 7(k) is made
with respect to shares of Common Stock acquired under an Incentive Stock Option
granted pursuant to this Plan, or any transfer described in Section 6(c) is
made, or any election described in Section 15 is made, then the person making
such disqualifying disposition, transfer, or election shall remit to the Holding
Company or its Affiliates an amount sufficient to satisfy all federal, state,
and local withholding taxes thereby incurred; provided that, in lieu of or in
addition to the foregoing, the Holding Company or its Affiliates shall have the
right to withhold such sums from compensation otherwise due to the Participant,
or, except in the case of any transfer pursuant to Section 6(c), from any shares
of Common Stock due to the Participant under this Plan.
15. NOTIFICATION UNDER SECTION 83(b).
--------------------------------
The Committee may, on the Date of Grant or any later date, prohibit a
Participant from making the election described below. If the Committee has not
prohibited such Participant from making such election, and the Participant
shall, in connection with the exercise of any Option, or the grant of any Stock
Award, make the election permitted under Section 83(b) of the Code, such
Participant shall notify the Committee of such election within 10 days of filing
notice of the election with the Internal Revenue Service, in addition to any
filing and notification required pursuant to regulations issued under the
authority of Section 83(b) of the Code.
16. AMENDMENT OF THE PLAN AND AWARDS.
--------------------------------
(a) Except as provided in paragraph (c) of this Section 16, the Board of
Directors may at any time, and from time to time, modify or amend the Plan in
any respect, prospectively or retroactively; PROVIDED, HOWEVER, that provisions
governing grants of Incentive Stock Options shall be submitted for shareholder
approval to the extent required by law, regulation or otherwise. Failure to
ratify or approve amendments or modifications by shareholders shall be effective
only as to the specific amendment or modification requiring such ratification or
approval. Other provisions of this Plan will remain in full force and effect. No
such termination, modification or amendment may adversely affect the rights of a
Participant under an outstanding Award without the written permission of such
Participant.
<PAGE> 14
(b) Except as provided in paragraph (c) of this Section 16, the Committee
may amend any Award Agreement, prospectively or retroactively; PROVIDED,
HOWEVER, that no such amendment shall adversely affect the rights of any
Participant under an outstanding Award without the written consent of such
Participant.
(c) In no event shall the Board of Directors amend the Plan or shall the
Committee amend an Award Agreement in any manner that has the effect of:
(i) Allowing any Option to be granted with an Exercise Price below
the Fair Market Value of the Common Stock on the Date of
Grant.
(ii) Allowing the Exercise Price of any Option previously granted
under the Plan to be reduced subsequent to the Date of Award.
(d) Notwithstanding anything in this Plan or any Award Agreement to the
contrary, if any Award or right under this Plan would, in the
opinion of the Holding Company's accountants, cause a transaction to
be ineligible for pooling of interest accounting that would, but for
such Award or right, be eligible for such accounting treatment, the
Committee, at its discretion, may modify, adjust, eliminate or
terminate the Award or right so that pooling of interest accounting
is available.
17. EFFECTIVE DATE OF PLAN.
----------------------
The Plan shall become effective on January 1, 2000, but only if, prior to
such date, the Plan is approved by the Holding Company's shareholders. The Plan
will be so approved if at an annual or special meeting of shareholders held
prior to such date a quorum is present and the majority of the votes cast at
such meeting by the holders of the Common Stock shall be cast in favor of its
approval. If the Plan is not approved by shareholders in accordance with the
regulations of the Internal Revenue Service, the Plan shall remain in full force
and effect, and any Incentive Stock Options granted under the Plan shall be
deemed to be Non-Statutory Stock Options.
18. TERMINATION OF THE PLAN.
-----------------------
The right to grant Awards under the Plan will terminate upon the earlier
of: (i) ten (10) years after the Effective Date; (ii) the issuance of a number
of shares of Common Stock pursuant to the exercise of Options or the
distribution of Stock Awards is equivalent to the maximum number of shares
reserved under the Plan as set forth in Section 4 hereof. The Board of Directors
has the right to suspend or terminate the Plan at any time, provided that no
such action will, without the consent of a Participant, adversely affect a
Participant's vested rights under a previously granted Award.
19. APPLICABLE LAW.
--------------
The Plan will be administered in accordance with the laws of the State of
Indiana to the extent not pre-empted by applicable federal law.
20. TREATMENT OF UNVESTED, UNEXERCISED, OR NON-EXERCISABLE AWARDS UPON A
--------------------------------------------------------------------------
CHANGE IN CONTROL.
------------------
<PAGE> 15
In the event of a Change in Control where the Holding Company or the Bank
is not the surviving entity, the Board of Directors of the Holding Company
and/or the Bank, as applicable, shall require that the successor entity take one
of the following actions with respect to all Awards held by Participants at the
date of the Change in Control:
(a) Assume the Awards with the same terms and conditions as granted to the
Participant under this Plan; or
(b) Replace the Awards with comparable Awards, subject to the same or more
favorable terms and conditions as the Award granted to the Participant under
this Plan, whereby the Participant will be granted common stock or the option to
purchase common stock of the successor entity; or
(c) Replace the Awards with an immediate cash payment of equivalent value.
<PAGE> 1
EXHIBIT 10.3 1998 OFFICERS' AND KEY EMPLOYEES' STOCK OPTION FOR HCB
BANCORP (AS ASSUMED BY FIRST CAPITAL, INC.)
<PAGE> 2
1998 OFFICERS' AND KEY EMPLOYEES' STOCK OPTION PLAN
OF
HCB BANCORP
ARTICLE
INTRODUCTION
1.1 PURPOSE. The 1998 Officers' and Key Employees' Stock Option Plan of
-------
HCB Bancorp (the "Plan") is designed to promote the interests of HCB Bancorp
(the "Company") and its Subsidiaries by encouraging their officers and key
employees, upon whose judgment, initiative and industry the Company and its
Subsidiaries are largely dependent for the successful conduct and growth of
their business, to continue their association with the Company and its
Subsidiaries by providing additional incentive and opportunity for unusual
industry and efficiency through stock ownership, and by increasing their
proprietary interest in the Company and their personal interest in its continued
success and progress. The Plan provides for the granting of incentive stock
options ("ISOs").
1.2 EFFECTIVE DATE AND DURATION. The Effective of the Plan is January 1,
---------------------------
1998. Options may be granted under the Plan for a period of ten (10) years
commencing January 1, 1998; however, no options may be exercised until the Plan
has been approved by a majority of the shares of the Company represented at the
shareholders' meeting at which approval of the Plan is considered. No options
shall be granted under the Plan after December 31, 2007. Upon that date, the
Plan shall expire except as to outstanding options which options shall remain in
effect until they have been exercised or terminated or have expired. Options
must be granted within ten (10) years of the date the Plan is adopted by the
Board of Directors or approved by the shareholders of the Company, whichever is
earlier.
1.3 ADMINISTRATION.
--------------
(a) The Plan shall be administered by the Committee. The Committee,
from time to time, may adopt any rule or procedure it deems necessary or
desirable for the proper and efficient administration of the Plan. No member of
the Committee shall be eligible, at any time when he is such a member, to
receive an option under the Plan. The decision of a majority of the members of
the Committee shall constitute the decision of the Committee. Subject to the
provisions of the Plan, the Committee is authorized (i) to determine the
employees to be granted ISO's and to make grants thereof; (ii) to determine the
option period, the option price and the number of shares subject to each option;
(iii) to determine the time or times at which options will be granted; (iv) to
determine the time or times when each option becomes exercisable and the
duration of the exercise period; (v) to determine other conditions and
limitations, if any, applicable to the exercise of each option; and (vi) to
determine the nature and duration of the restrictions, if any, to be imposed
upon the sale or other disposition of shares acquired by any optionee upon
exercise of an option, and the nature of the events, if any, and the duration of
the period, in which any optionee's rights in respect of shares
<PAGE> 3
acquired upon exercise of an option may be forfeited. Each option granted under
the Plan shall be evidenced by a written stock option agreement containing terms
and conditions established by the Committee consistent with the provisions of
the Plan, including such terms as the Committee shall deem advisable in order
the each ISO shall constitute an "incentive stock option" within the meaning of
Section 422 of the Code.
(b) Any notice or document required to be given to or filed with the
Committee will be properly given or filed if delivered or mailed by certified
mail, postage prepaid, to the Committee of 710 Main Street, NE, Palmyra, Indiana
47164.
1.4 DEFINITIONS. For purposes of this Plan, unless a different meaning is
-----------
clearly required by the context, the following terms shall have the following
meanings:
(a) "Board of Directors" means the Board of Directors of the
Company.
(b) "Change in control of the Company" means (i) any merger,
consolidation or similar transaction which involves the Company and in which
persons who are the shareholders of the Company immediately prior to such
transaction own, immediately after such transaction, shares of the surviving or
combined entity which possess voting rights equal to or less than fifty percent
(50%) of the voting rights of all shareholders of such entity, determined on a
fully diluted basis; (ii) any sale, lease, exchange, transfer or other
disposition of all or any substantial part of the consolidated assets of the
Company' (iii) any tender, exchange, sale or other disposition (other than
disposition of the stock of the Company or any Subsidiary in connection with
bankruptcy, insolvency, foreclosure, receivership or other similar transactions)
or purchases (other than purchases by the Company or any Company sponsored
employee benefit Plan, or purchases by members of the Board of Directors or any
Subsidiary) of shares which represent more than twenty-five percent (25%) of the
voting power of the Company or any Subsidiary; (iv) during any period of two (2)
consecutive years, individuals who at the date of the adoption of the Plan
constitute the Board of Directors cease for any reason to constitute at least a
majority thereof, unless the election of each director at the beginning of such
period has been approved by directors representing at least a majority of the
directors then in office who were directors on the date of the adoption of the
Plan; (v) a majority of the Board of Directors recommends the acceptance of or
accept any agreement, contract, offer or other arrangement which provides for,
or any series of transactions which results in, any of the transactions
described above. Notwithstanding the foregoing, a Change in Control of the
Company shall not be deemed to have occurred with respect to any transaction
unless such transaction has been approved or shares have been tendered by a
majority of the shareholders who are not Section 16 Grantees.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means the committee of the Board of Directors
appointed to administer the Plan.
<PAGE> 4
(e) "Company" means HCB Bancorp.
(f) "Effective Date" means January 1, 1998.
(g) "Exchange Act" means the Securities Exchange of 1934, as
amended.
(h) "Fair Market Value" means the per share market value of the
Company's common stock as determined by the Committee in good faith based upon
such factors as the Committee shall determine to be relevant.
(i) "For Cause" means (i) the willful and continued failure of an
optionee to perform his required duties as an officer or employee of the Company
or any Subsidiary, (ii) any action by an optionee which involves willful
misfeasance or gross negligence, (iii) the requirement of or direction by a
federal or state regulatory agency which has jurisdiction over the Company or
any Subsidiary to terminate the employment of an optionee, (iv) the conviction
of an optionee of the commission of any criminal offense which involves
dishonesty or breach of trust, or (v) any intentional breach by an optionee of a
material term, condition or covenant of any agreement between the optionee and
the Company or any Subsidiary.
(j) "Permanent and Total Disability" or "Permanently and Totally
Disabled" means any disability that would qualify as a disability under Section
22(e)(3) of the Code.
(k) "Plan" means the stock option plan embodied herein, as amended
from time to time, known as the 1998 Officers' and Key Employees' Stock Option
Plan of HCB Bancorp.
(l) "Section 16 Grantee" means a person subject to potential
liability under Section 16(b) of the Exchange Act with respect to transactions
involving equity securities of the Company.
(m) "Subsidiary" or "Subsidiaries" means a corporation, a majority
of the outstanding voting stock of which is owned or controlled, directly or
indirectly, by the Company or by one or more other Subsidiaries of the Company.
For the purposes of this definition, "voting stock" means stock having voting
power for the election of directors, whether at all times or only so long as no
senior class of stock has such voting power by reason of any contingency.
ARTICLE II
ELIGIBILITY AND PARTICIPATION
Officers and key employees of the Company or of any of its Subsidiaries
shall be eligible to receive grants of ISO's under the Plan. Members of the
Committee shall not be eligible to receive grants of options under the Plan
while serving as members of the Committee.
<PAGE> 5
ARTICLE III
BENEFITS
3.1 SHARES COVERED BY PLAN. The stock to be subject to options under the
----------------------
Plan shall be shares of authorized common stock of the Company and may be
unissued shares or reacquired shares (including shares purchased in the open
market), or a combination thereof, as the Committee may from time to time
determine. The maximum number of shares to be delivered upon exercise of all
options granted under the Plan shall not exceed four thousand (4,000) shares.
Shares covered by an option that remain unpurchased upon expiration or
termination of the option may be made subject to further options.
3.2 OPTION PRICE. The option price per share of stock under each ISO shall
------------
be not less than one hundred percent (100%) of the Fair Market Value of the
shares on the date on which the option is granted. Provided, however, as to
officers and key employees who, at the time an ISO is granted, own, within the
meaning of Section 425(d) of the Code, more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or its parent or
any Subsidiary ("Shareholder-Employees"), the purchase price per share of stock
under each ISO shall be not less than one hundred ten percent (110%) of the Fair
Market Value of the stock on the date on which the option is granted.
3.3 OPTION PERIOD. No option shall exceed ten (10) years; provided,
--------------
however, the option period with respect to ISO's granted to
Shareholder-Employees shall not exceed five (5) years.
3.4 SPECIAL CALENDAR YEAR LIMITATION ON SHARES SUBJECT TO ISO'S. The
----------------------------------------------------------------
aggregate Fair Market Value (determined at the time of the grant of the ISO's)
of the stock with respect to which ISO's are exercisable for the first time by
an eligible employee during any calendar year (under all plans providing for the
grant of incentive stock options of the Company or any of its Subsidiaries)
shall not exceed One Hundred Thousand Dollars ($100,000.00).
3.5 SEQUENCE OF EXERCISING INCENTIVE STOCK OPTIONS. Any option granted to
----------------------------------------------
an employee pursuant to the Plan shall be exercisable even if there are
outstanding previously granted but unexercised options with respect to such
employee.
3.6 VESTING OF OPTIONS. All options granted under the Plan shall vest, and
------------------
thereby become exercisable, at such time or times and subject to such
requirements as shall be determined by the Committee in its sole discretion. The
stock option agreement between the Company and the optionee shall include the
schedule under which the option shall vest and shall specify any requirements
which must be satisfied for the option to vest.
3.7 VESTING ON CHANGE IN CONTROL OR DEATH, RETIREMENT OR DISABILITY OF
---------------------------------------------------------------------
OPTIONEE. Notwithstanding the provisions of Section 3.6, in the event of a
- --------
Change in Control of the Company or upon the death, Permanent and Total
Disability or retirement of the optionee after attaining age
<PAGE> 6
sixty-five (65), any options granted under the Plan may be exercised in full
without regard to any restrictions on the vesting of the options contained in
the option agreement between the Company and the optionee.
3.8 EARLY TERMINATION OF OPTION.
---------------------------
(A) TERMINATION OF EMPLOYMENT. All rights to exercise an option
---------------------------
shall terminate ninety (90) days after the optionee's employment terminates
unless such termination is For Cause or on account of the Permanent and Total
Disability of the optionee (but not later than the date the option expires
pursuant to its terms). Transfer of employment from the Company to a corporation
which is a Subsidiary of the Company, or vice versa, or from one Subsidiary to
another, shall not be deemed termination of employment. The Committee shall have
the authority to determine in each case whether a leave of absence on military
or government service shall be deemed a termination of employment for purposes
of this subsection (a).
(B) FOR CAUSE TERMINATION. If an optionee's employment is terminated
---------------------
For Cause, no previously unexercised option granted hereunder may be exercised.
Rather, all unexercised options, including vested and non-vested options, shall
terminate effective on the date the optionee receives notice of his termination
For Cause.
(C) PERMANENT AND TOTAL DISABILITY. If an optionee's employment
--------------------------------
terminates due to Permanent and Total Disability, his option shall terminate one
(1) year after termination of his employment due to his Permanent and Total
Disability (but not later than the date the option expires pursuant to its
terms). During such period, subject to the limitations of the Plan and the
option agreement between the Company and the optionee, the optionee, his
guardian or attorney-in-fact, as the case may be, may exercise the option in
full.
3.9 PAYMENT FOR STOCK. Full payment for shares purchased hereunder shall
-----------------
be made at the time the option is exercised. Such payment may be made either (a)
in cash or (b) at the discretion of the Committee, by delivering shares of stock
of the Company (the "Delivered Stock") or a combination of cash and Delivered
Stock. Delivered Stock shall be valued by the Committee at its Fair Market Value
determined as of the date of the exercise of the option. No shares shall be
issued until full payment for them has been made, and an optionee shall have
none of the rights of a shareholder with respect to such shares until such
shares are issued to him. Upon payment of the full purchase price, the Company
shall issue a certificate or certificates to the optionee which evidences
ownership of the shares purchased pursuant to the exercise of the option which
contain(s) such terms, conditions and provisions as may be required and as are
consistent with the terms, conditions and provisions of the Plan and the stock
option agreement between the Company and the optionee.
<PAGE> 7
3.10 INCOME AND EMPLOYMENT TAX WITHHOLDING.
-------------------------------------
(A) PAYMENT BY OPTIONEE. The optionee shall be solely responsible
-------------------
for paying to the Company all required federal, state, city and local taxes
applicable to his disposition of shares acquired pursuant to the exercise of an
ISO in a disqualifying disposition of the shares under Section 422(a)(1) of the
Code.
(B) ISO DISQUALIFYING DISPOSITION TAX WITHHOLDING. Notwithstanding
----------------------------------------------
the provisions of subsection (a), with respect to shares of stock to be issued
pursuant to the exercise of any ISO, the Committee, in its discretion and
subject to such rules as it may adopt, may permit the optionee to satisfy, in
whole or in part, any withholding tax obligation which may arise in connection
with the disqualifying disposition of the shares under Section 422(a)(l) of the
Code by having the Company accept delivery from the optionee of shares of stock
having a Fair Market Value, determined as of the date of the delivery of such
shares, equal to the amount of the withholding tax to be satisfied by that
delivery.
3.11 NOTICE OF DISQUALIFYING DISPOSITION. Any ISO granted hereunder shall
-----------------------------------
require the optionee to notify the Committee of any disposition of any stock
issued pursuant to the exercise of the ISO under the circumstances described in
Section 421(b) of the Code (relating to certain disqualifying dispositions),
within ten (10) days of such disposition.
ARTICLE IV
PLAN ADMINISTRATION AND INTERPRETATION
4.1 AMENDMENT AND TERMINATION. The Board of Directors of the Committee
---------------------------
may, at any time, without the approval of the stockholders of the Company
(except as otherwise required by applicable law, rule or regulations), alter,
amend, modify, suspend or discontinue the Plan, but may not, without the consent
of the holder of an option, make any alteration which would adversely affect an
option previously granted under the Plan or, without the approval of the
stockholders of the Company, make any alteration which would: (a) increase the
aggregate numbers of shares subject to options under the Plan, except as
provided in Section 4.2; (b) decrease the minimum option price, except as
provided in Section 4.2; (c) permit any member of the Committee to become
eligible for grants of options under the Plan; (d) withdraw administration of
the Plan from the Committee or the Board of Directors; (e) extend the term of
the Plan or the maximum period during which any option may be exercised; (f)
change the manner of determining the option price; or (g) change the class of
individuals eligible for options under the Plan.
4.2 CHANGES IN STOCK.
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(A) SUBSTITUTION OF STOCK AND ASSUMPTION OF PLAN. In the event of
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any change in the common stock of the Company through stock dividends,
split-ups, recapitalizations, reclassifications, or otherwise, or in the event
that other stock shall be substituted for the present
<PAGE> 8
common stock of the Company as the result of any merger, consolidation, or
reorganization or similar transaction which constitutes a Change in Control of
the Company, then the Committee may make appropriate adjustment or substitution
in the aggregate number, price and kind of shares available under the Plan and
in the number, price and kind of shares covered under any options granted or to
be granted under the Plan. The Committee's determination in this respect shall
be final and conclusive. Provided, however, that the Company shall not, and
shall not permit its Subsidiaries to, recommend, facilitate or agree or consent
to a transaction or series of transactions which would result in a Change in
Control of the Company unless and until the person or persons or entity or
entities acquiring or succeeding to the assets or capital stock of the Company
or any of its Subsidiaries as a result of such transaction or transactions
agrees to be bound by the terms of the Plan so far as it pertains to options
theretofore granted but unexercised and agrees to assume and perform the
obligations of the Company hereunder. Notwithstanding the foregoing provision of
this subsection (a), no adjustment shall be made which would operate to reduce
the option price of any ISO below the Fair Market Value of the stock (determined
on the date the option was granted) which is subject to an ISO.
(B) CONVERSION OF STOCK. In the event of a Change in Control of the
-------------------
Company pursuant to which another person or entity acquires control of the
Company (such other person or entity being the "Successor"), the kind of shares
of common stock which shall be subject to the Plan and to each outstanding
option shall, automatically by virtue of such Change in Control of the Company,
be converted into and replaced by shares of common stock, or such other class of
securities having rights and preferences no less favorable than common stock of
the Successor, and the number of shares subject to the option and the purchase
price per share upon exercise of the option shall be correspondingly adjusted,
so that, by virtue of such Change in Control of the Company, each optionee shall
have the right to purchase (i) that number of shares of common stock of the
Successor which have a Fair Market Value equal, as of the date of such Change in
Control of the Company, to the Fair Market Value, as of the date of such Change
in Control of the Company, of the shares of common stock of the Company
theretofore subject to his option, and (ii) for a purchase price per share
which, when multiplied by the number of shares of common stock of the Successor
subject to the option, shall equal the aggregate exercise price at which the
optionee could have acquired all of the shares of common stock of the Company
previously optioned to the optionee.
4.3 INFORMATION TO BE FURNISHED BY OPTIONEES. Optionees, or any other
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persons entitled to benefits under this Plan, must furnish to the Committee such
documents, evidence, data or other information as the Committee considers
necessary or desirable for the purpose of administering the Plan. The benefits
under the Plan for each optionee, and each other person who is entitled to
benefits hereunder, are to be provided on the condition that he furnish full,
true and complete data, evidence or other information, and that he will promptly
sign any document reasonable related to the administration of the Plan requested
by the Committee.
4.4 EMPLOYMENT RIGHTS. Neither the plan nor any stock option agreement
------------------
executed under the Plan shall constitute a contract of employment and
participation in the Plan will not give
<PAGE> 9
an optionee the right to be rehired or retained in the employ of the Company,
nor will participation in the Plan give any optionee any right or claim to any
benefit under the Plan, unless such right or claim has specifically accrued
under the terms of the Plan.
4.5 EVIDENCE. Evidence required of anyone under the Plan may be by
--------
certificate, affidavit, document or other information which the person relying
thereon considers pertinent and reliable, and signed, made or presented by the
proper party or parties.
4.6 GENDER AND NUMBER. Where the context admits, words in the masculine
-----------------
gender shall include the feminine gender, the plural shall include the singular
and the singular shall include the plural.
4.7 ACTION BY COMPANY. Any action required of or permitted by the Company
-----------------
under the Plan shall be by resolution of the Board of Directors or by a person
or persons authorized by resolution of the Board of Directors.
4.8 CONTROLLING LAWS. Except to the extent superseded by laws of the
-----------------
United States, the laws of Indiana shall be controlling in all matters relating
to the Plan.
4.9 MISTAKE OF FACT. Any mistake of fact or misstatement of fact shall be
---------------
corrected when it becomes known and proper adjustment made by reason thereof.
4.10 SEVERABILITY. In the event any provisions of the Plan shall be held
------------
to be illegal or invalid for any reason, such illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
endorsed as if such illegal or invalid provisions had never been contained.
4.11 EFFECT OF HEADINGS. The descriptive headings of the sections of this
------------------
Plan are inserted for convenience of reference and identification only and do
not constitute a part of this Plan for purposes of interpretation.
4.12 NONTRANSFERABILITY. No option shall be transferable, except by the
------------------
optionee's will or the laws of descent and distribution. During the optionee's
lifetime, his option shall be exercisable (to the extent exercisable) only by
him. The option and any rights and privileges pertaining thereto shall not be
transferred, assigned, pledged or hypothecated by him in any way, whether by
operation of law or otherwise and shall not be subject to execution, attachment
or similar process.
4.13 LIABILITY. No member of the Board of Directors or the Committee or
---------
any officer or employee of the Company or its Subsidiaries shall be personally
liable for any action, omission or determination made in good faith in
connection with the Plan. Each optionee, in the stock option agreement between
him and the Company, shall agree to release and hold harmless the Company, the
Board of Directors, the Committee and all officers and employees of the Company
and its
<PAGE> 10
Subsidiaries from and against any tax liability, including without limitation
interest and penalties, incurred by the optionee in connection with his
participation in the Plan.
4.14 INVESTMENT REPRESENTATIONS. Unless the shares subject to an option
---------------------------
are registered under the Securities Act of 1933, each optionee, in the stock
option agreement between the Company and the optionee, shall agree for himself
and his legal representatives that any and all shares of common stock purchased
upon the exercise of the option shall be acquired for investment and not with a
view to, or for sale in connection with, any distribution of those shares. Any
share issued pursuant to the exercise of an option subject to this investment
representation shall bear a legend evidencing this restriction.
4.15 USE OF PROCEEDS. The proceeds received by the Company from the sale
---------------
of stock pursuant to the Plan will be used for general corporate purposes.
HCB BANCORP
Dated: _________________ By:_________________________
<PAGE> 1
EXHIBIT 23.2 CONSENT OF MONROE SHINE & COMPANY, INC.
<PAGE> 2
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement on
Form S-8 of First Capital, Inc. of our report, dated July 22, 1999, included and
incorporated by reference in the Annual Report on Form 10-KSB of First Capital,
Inc. for the year ended June 30, 1999.
/s/ Monroe Shine & Co., Inc.
Monroe Shine & Co., Inc.
New Albany, Indiana
February 1, 2000
