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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
JACKSONVILLE BANCORP, INC. /FL/
(Exact name of small business registrant as specified in its Charter)
Florida 59-3472981
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10325 San Jose Blvd.
Jacksonville, Florida 32257
(Address of Principal Executive Offices) (Zip Code)
JACKSONVILLE BANCORP, INC. STOCK OPTION PLAN
(Full title of the plan)
Price W. Schwenck
Chief Executive Officer
10325 San Jose Blvd.
Jacksonville, Florida 32257
(904) 288-8933
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
----------------------------------------------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
======================================================================================================
Title of securities Amount to be Proposed maximum Amount of
to be registered registered (1) aggregate offering registration fee
price (2)
======================================================================================================
<S> <C> <C> <C>
Common Stock, 152,599 $1,525,990 $424.22
$0.01 par value
======================================================================================================
</TABLE>
<PAGE>
(1) The number of shares of common stock, par value $0.01 per share
("Common Stock"), stated above consists of the aggregate number of
shares which may be sold upon the exercise of options which have been
granted and/or may hereafter be granted under the Jacksonville Bancorp,
Inc. Stock Option Plan (the "Plan"). The maximum number of shares which
may be sold upon the exercise of such options granted under the Plan
is subject to adjustment in accordance with certain anti-dilution and
other provisions of the Plan. Accordingly, pursuant to Rule 416 under
the Securities Act of 1933, as amended (the "Securities Act"), this
Registration Statement covers, in addition to the number of shares
stated above, an indeterminate number of shares which may be subject to
grant or otherwise issuable after the operation of any such
anti-dilution and other provisions.
(2) This calculation is made solely for the purpose of determining the
registration fee pursuant to the provisions of Rule 457(h) under the
Securities Act. All shares of Common Stock issuable under the Plan have
been granted under options with an exercise price of $10.00 per share.
EXPLANATORY NOTE
As permitted by the rules of the Securities and Exchange Commission
(the "Commission"), the information specified by Part I of Form S-8 has been
omitted from this Registration Statement on Form S-8 for offers of Common Stock
pursuant to the Plan.
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference.
The following documents filed by the Registrant with the Commission are
incorporated herein by reference:
(a) The Registrant's Annual Report on Form 10-KSB for the year ended
December 31, 1998, as filed with the Commission on August 27, 1999.
(b) (i) The Registrant's Quarterly Report on Form 10-QSB for the
quarter ended March 31, 1999, as filed with the Commission on September 1, 1999.
(ii) The Registrant's Quarterly Report on Form 10-QSB for the
quarter ended June 30, 1999, as filed with the Commission on August 13, 1999.
(c) The description of the Common Stock of the Registrant contained in
the Registrant's Registration Statement on Form 8-A, filed under the Securities
Exchange Act of 1934 (the "Exchange Act") on February 19, 1999, including any
amendment or report filed for the purpose of updating such description.
All reports and other documents filed by the Registrant after the date
hereof pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior
to the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated herein by reference and to be part
hereof from the date of filing of such reports and documents (such documents and
the documents enumerated above, being hereinafter referred to as "Incorporated
Documents"). Any statement contained herein or in an Incorporated Document
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes hereof to the extent that a statement contained herein
or in any other subsequently filed Incorporated Document 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 hereof.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
The Articles of Incorporation (the "Articles") and the Bylaws of the
Registrant require the indemnification of directors and officers to the fullest
extent permitted by Florida law. This right benefits any person who is made or
threatened to be made a party to any proceeding by reason of the fact of the
person's services as a director, officer, employee or agent of the Registrant or
service as a director, officer, employee or agent with another entity at
Registrant's request. A director's right to be indemnified also includes the
right to be paid by the Registrant for any expenses incurred in any proceeding
in advance of its final disposition if the Registrant receives an undertaking,
by or on behalf of such director or officer, to repay all amounts so advanced if
it should be determined ultimately that such director or officer is not entitled
to be indemnified.
The Articles further provide that if a claim for indemnification is not
paid in full by the Registrant within ninety (90) days after a written claim has
been received, the claimant may at any time thereafter bring suit against the
Registrant to recover the unpaid amount of the claim and, if successful in whole
or in part, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. The Articles provide that it shall be a defense to any
such action (other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final disposition where
the required undertaking, if any, has been tendered to the Registrant) that the
claimant has not met the applicable standards of conduct under Florida law
claimed, but the burden of proving such defense shall be on the Registrant.
Neither the failure of the Registrant (including its Board of Directors,
independent legal counsel, or its shareholders) to determine prior to the
commencement of such action that indemnification of the claimant is proper, nor
an actual determination by the Registrant that the claimant has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that claimant has not met the applicable standard of conduct.
The rights to indemnification conferred on any individual by the
Articles shall not be exclusive of any other right which such individual may
have to indemnification by statute, the Articles, bylaws, agreement, vote of
shareholders or disinterested directors or otherwise. The Bylaws contain
provisions substantially similar to those in the Articles.
Subsection (1) of Section 607.0850 of the Florida Business Corporation
Act (the "FBCA") empowers a corporation to indemnify any person who was or is a
party to any proceeding (other than an action by, or in the right of, the
corporation), by reason of the fact that he is or was a director, officer,
employee or agent of the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against liability
incurred in connection with such proceeding (including any appeal thereof) if he
acted in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful.
Subsection (2) of Section 607.0850 of the FBCA empowers a corporation
to indemnify any person who was or is a party to any proceeding by or in the
right of the corporation to procure a judgment in its favor by reason of the
fact that such person acted in any of the capacities set forth in the preceding
paragraph, against expenses and amounts paid in settlement not exceeding, in the
judgment of the board of directors, the estimated expenses of litigating the
proceeding to conclusion, actually and reasonably incurred in connection with
the defense or settlement of such proceeding, including appeals, provided that
the person acted under the standards set forth in the preceding paragraph.
However, no indemnification should be made for any claim, issue or matter as to
which such person is adjudged to be liable unless, and only to the extent that,
the court in which such proceeding was brought, or any other court of competent
jurisdiction, shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the court
deems proper.
Subsection (3) of Section 607.0850 of the FBCA provides that to the
extent a director or officer of a corporation has been successful on the merits
or otherwise in defense of any proceeding referred to in subsection (1) or (2)
of Section 607.0850 of the FBCA or in the defense of any claim, issue or matter
therein, he shall be indemnified against expenses actually and reasonably
incurred by him in connection therewith.
Subsection (4) of Section 607.0850 of the FBCA provides that any
indemnification under subsection (1) or (2) of Section 607.0850 of the FBCA,
unless determined by a court, shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification of the
director or officer is proper in the circumstances because he has met the
applicable standard of conduct set forth in subsection (1) or (2) of Section
607.0850 of the FBCA. Such determination shall be made:
(a) by the board of directors by a majority vote of a quorum
consisting of directors whom were not parties to such
proceeding;
(b) if such a quorum is not obtainable, or, even if obtainable, by
majority vote of a committee duly designated by the board of
directors (in which directors who are parties may participate)
consisting solely of two or more directors not at the time
parties to the proceeding;
(c) by independent legal counsel:
(1) selected by the board of directors as prescribed in
paragraph (a) or the committee selected as prescribed
in paragraph (b); or
(2) if no quorum of directors can be obtained under
paragraph (a) or no committee can be designated under
paragraph (b), by a majority vote of the full board
of directors (in which directors who are parties may
participate); or
(d) by the shareholders by a majority vote of a quorum of
shareholders who were not parties to such proceedings or, if
no quorum is obtainable, by a majority vote of shareholders
who were not parties to such proceeding.
Under subsection (6) of Section 607.0850 of the FBCA, expenses incurred
by a director or officer in defending a civil or criminal proceeding may be paid
by the corporation in advance of the final disposition thereof upon receipt of
an undertaking by or on behalf of such director or officer to repay such amount
if it is ultimately determined that such director or officer is not entitled to
indemnification under Section 607.0850 of the FBCA.
Subsection (7) of Section 607.0850 of the FBCA states that
indemnification and advancement of expenses provided under Section 607.0850 of
the FBCA are not exclusive and empowers the corporation to make any other or
further indemnification or advancement of expenses under any bylaw, agreement,
vote of shareholders or disinterested directors or otherwise, for actions in an
official capacity and in other capacities while holding an office. However, a
corporation cannot indemnify or advance expenses if a judgment or other final
adjudication establishes that the actions or omissions to act of the director or
officer were material to the adjudicated cause of action and the director or
officer (a) violated criminal law, unless the director or officer had reasonable
cause to believe his conduct was lawful or had no reasonable cause to believe
his conduct was unlawful, (b) derived an improper personal benefit from a
transaction, (c) was or is a director in a circumstance where the liability
under Section 607.0834 of the FBCA (relating to unlawful distributions) applies,
or (d) engaged in willful misconduct or conscious disregard for the best
interests of the corporation in a proceeding by or in right of the corporation
to procure a judgment in its favor or in a proceeding by or in right of a
shareholder.
Subsection (9) of Section 607.0850 of the FBCA permits any director or
officer who is or was a party to a proceeding to apply for indemnification or
advancement of expenses, or both, to any court of competent jurisdiction and
lists the determinations the court should make before ordering indemnification
or advancement of expenses.
Subsection (12) of Section 607.0850 of the FBCA permits a corporation
to purchase and maintain insurance for a director or officer against any
liability incurred in his official capacity or arising out of his status as such
regardless of the corporation's power to indemnify him against such liability
under Section 607.0850.
Section 607.0850(12) of the FBCA allows a corporation to maintain
liability insurance covering directors and officers.
The Registrant may obtain insurance policies insuring the directors and
officers of the Registrant against certain liabilities that they may incur in
their capacity as directors and officers. Under such policies, the insurers, on
behalf of the Registrant, may also pay amounts for which the Registrant has
granted indemnification to the directors or officers.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
(4.2) Articles of Incorporation (incorporated herein by reference to
Exhibit 3.1 to Registrant's Registration Statement on Form
SB-2, as amended).
(4.3) By-Laws (incorporated herein by reference to Exhibit 3.2 to
Registrant's Registration Statement on Form SB-2, as amended).
(5) Opinion of McGuire, Woods, Battle & Boothe LLP as to the
legality of shares being registered.
(23.1) Consent of McGuire, Woods, Battle & Boothe LLP (included in
opinion of counsel filed as Exhibit 5).
(23.2) Consent of Hacker, Johnson, Cohen & Grieb, P.A.
(24) Power of Attorney to file future amendments (set forth on the
signature page of this Registration Statement).
(99.1) Stock Option Plan.
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the Registration Statement.
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% change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective Registration Statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the Registration Statement or any material change to
such information in the Registration Statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the Registration Statement is on Form S-3, Form S-8 or Form F-3,
and the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) 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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Jacksonville, and the State of Florida, on November
2, 1999.
JACKSONVILLE BANCORP, INC.
By: /s/ Gilbert J. Pomar, III
-------------------------
Gilbert J. Pomar, III
President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
By: /s/ Price W. Schwenck
-------------------------
Price W. Schwenck
Chief Executive Officer
Date: November 2, 1999
By: /s/ Cheryl L. Whalen
------------------------
Cheryl L. Whalen
Chief Financial Officer
(also Principal Accounting
Officer)
Date: November 2, 1999
Each person whose signature appears below constitutes and appoints
Gilbert J. Pomar, III and Cheryl L. Whalen, and each of them, his or her true
and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution in each of them, for him and in his name, place and stead, and in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement on Form S-8 of Jacksonville Bancorp.,
Inc., and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent, full power and authority to do and perform each
and every act and thing requisite or necessary to be done in or about the
premises, as full 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 any
of 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.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ D. Michael Carter Director October 27, 1999
- -------------------------------------------
D. Michael Carter, CPA
/s/ Mel Gottlieb Director October 27, 1999
- -------------------------------------------
Mel Gottlieb
/s/ James M. Healy Director October 27, 1999
- ------------------------------------------
James M. Healy
/s/ John C. Kowkabany Director October 27, 1999
- --------------------------------------
John C. Kowkabany
/s/ Rudolph A. Kraft Director October 27, 1999
- -----------------------------------------
Rudolph A. Kraft
/s/ R.C. Mills Director October 27, 1999
- -------------------------------------------
R.C. Mills
/s/ Donald E. Roller Director October 27, 1999
- -----------------------------------------
Donald E. Roller
/s/ John W. Rose Director October 27, 1999
- ------------------------------------------
John W. Rose
/s/ John R. Schultz Director October 27, 1999
- ------------------------------------------
John R. Schultz
/s/ Price W. Schwenck Director October 27, 1999
- -------------------------------------
Price W. Schwenck
/s/ Charles F. Spencer Director October 27, 1999
- ---------------------------------------
Charles F. Spencer
/s/ Bennett A. Tavar Director October 27, 1999
- ----------------------------------------
Bennett A. Tavar
/s/ Gary L. Winfield, M.D. Director October 27, 1999
- ------------------------------------
Gary L. Winfield, M.D.
</TABLE>
<PAGE>
JACKSONVILLE BANCORP, INC.
INDEX TO EXHIBITS FILED WITH
FORM S-8 REGISTRATION STATEMENT
(4.2) Articles of Incorporation (incorporated herein by reference to
Exhibit 3.1 to Registrant's Registration Statement on Form
SB-2, as amended).
(4.3) By-Laws (incorporated herein by reference to Exhibit 3.2 to
Registrant's Registration Statement on Form SB-2, as amended).
(5) Opinion of McGuire, Woods, Battle & Boothe LLP as to the
legality of shares being registered.
(23.1) Consent of McGuire, Woods, Battle & Boothe LLP (included in
opinion of counsel filed as Exhibit 5).
(23.2) Consent of Hacker, Johnson, Cohen & Grieb, P.A.
(24) Power of Attorney to file future amendments (set forth on the
signature page of this Registration Statement).
(99.1) Stock Option Plan.
EXHIBIT 5
McGuire, Woods, Battle & Boothe, LLP
50 North Laura Street, Suite 3300
Jacksonville, Florida 32202
Telephone (904) 798-3200 Fax (904) 798-3207
November 9, 1999
Jacksonville Bancorp, Inc.
10325 San Jose Blvd.
Jacksonville, Florida 32257
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We refer to the Registration Statement on Form S-8 (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
filed by Jacksonville Bancorp, Inc., a Florida corporation (the "Company") with
the Securities and Exchange Commission (the "Commission") on November 9, 1999.
The Registration Statement covers an aggregate of 152,599 shares (the "Shares")
of common stock, par value $.01 per share ("Common Stock") of the Company,
together with such indeterminate number of additional shares of Common Stock as
may be issuable as a result of stock splits, stock dividends or similar
transactions, authorized for issuance pursuant to the exercise of options under
the Jacksonville Bancorp, Inc. Stock Option Plan (the "Plan") described in the
Registration Statement.
We have examined the originals, or photostatic or certified copies, of
such records of the Company, certificates of officers of the Company and of
public officials, and such other documents as we have deemed relevant and
necessary as the basis for the opinion set forth below. In such examination we
have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as photostatic or certified copies and the
authenticity of the originals of such copies.
Based upon the foregoing, we are of the opinion that the Shares, when
sold and delivered by the Company as contemplated by and in accordance with the
Plan, will be legally issued, fully paid and non-assessable.
We hereby consent to the use of our name in the Registration Statement
as counsel who will pass upon the legality of the Shares for the Company and as
having prepared this opinion, and to the use of this opinion as an exhibit to
the Registration Statement. We further consent to the use of our name as counsel
for the Company.
In giving this consent, we do not thereby admit that we come within the
category of persons whose consent is required under Section 7 of the Securities
Act, or the rules or regulations of the Commission promulgated thereunder.
Very truly yours,
/s/ McGuire, Woods, Battle & Boothe LLP
McGuire, Woods, Battle & Boothe LLP
Exhibit 23.2
Independent Auditor's Consent
The Board of Directors
Jacksonville Bancorp, Inc.
We consent to the use of our report dated August 23, 1999, with respect to the
balance sheets of Jacksonville Bancorp, Inc. as of December 31, 1998 and 1997
and the related statements of loss, changes in deficit and cash flows for the
year ended December 31, 1998 and for the period from October 24, 1997 (date of
incorporation) to December 31, 1997 which report appears in your Annual Report
on Form 10-KSB for the year ended December 31, 1998 which is incorporated by
reference in your Form S-8 filed with the Securities and Exchange Commission on
November 9, 1999.
/s/Hacker, Johnson, Cohen & Grieb
HACKER, JOHNSON, COHEN & GRIEB PA
Orlando, Florida
November 9, 1999
EXHIBIT 99.1
STOCK OPTION PLAN
OF
JACKSONVILLE BANCORP, INC,
I. GENERAL
1.1 Purpose of the Plan. The Stock Option Plan (the "Plan") of
Jacksonville Bancorp, Inc. (the "Company") is enacted to advance the best
interests of the Company by providing long-term incentive to officers, senior
management and key employees of the Company and its wholly owned subsidiary, The
Jacksonville Bank (the "Bank"), through the grant of options to acquire shares
of the Company's common stock (the "Common Stock"). The Plan further recognizes
the contributions of its Organizing Directors through the issuance of a one-time
stock option grant to the Organizing Directors.
1.2 Administration of the Plan. The Plan shall be administered by the
Compensation Committee or other designated committee (the "Committee") of the
Board of Directors of the Company.
The Committee shall have full and final authority in its discretion to
interpret conclusively the provisions of the Plan as it may deem advisable, to
adopt such rules and regulations for carrying out the Plan as it may deem
advisable; to decide all questions of fact arising in the application of the
Plan; and to make all other determinations necessary or advisable for the
administration of the Plan.
The Committee shall meet once each fiscal year, and at such additional
times as it may determine or at the request of the chief executive officer of
the Company, to designate the eligible participants, if any, to be granted
awards under the Plan and the type and amount of such awards and the time when
such awards will be granted. No such designation by the Committee shall be
effective as a grant of an award under the Plan until approved by the Board of
Directors of the Company; provided, however, that the Board of Directors may
empower the Committee to grant such awards without approval by the Board of
Directors. All awards granted under the Plan shall be on the terms and subject
to the conditions hereinafter provided.
1.3 Eligible Participants. Key employees, including officers and senior
management of the Company and the Bank, shall be eligible to participate in the
Plan. Any recipient of an award under this Plan is hereinafter referred to as a
"Participant". Directors of the Company are eligible to participate in the Plan
only to the extent and in the manner described in Section 4.5 below.
1.4 Awards. Awards under the Plan may be in the form of Incentive Stock
Options (as described in Article II) or Non-Qualified Stock Options (as
described in Article III), or any combination thereof. Awards to Directors may
only be in the form of Non-Qualified Stock Options.
<PAGE>
1.5 Limitation on Awards. The aggregate number of shares of Common Stock
reserved for issuance pursuant to the exercise of options, which may be granted
or issued under the terms of the Plan may not exceed 152,599 shares. The maximum
number of shares of Common Stock that may be the subject of awards to an
eligible participant may not exceed 40,000 shares (subject to adjustment under
Section 5.2) during any fiscal year. Whenever any outstanding grant or portion
thereof expires, is canceled or forfeited or is otherwise terminated for any
reason without having been exercised or vested, or without payment having been
made in respect of the entire grant, the Common Stock allocable to the expired,
forfeited, canceled or otherwise terminated portion of the grant may again be
the subject of further grants hereunder.
Notwithstanding the foregoing, the number of shares of Common Stock
available for grants at any time under the Plan shall be reduced to such lesser
amount as may be required pursuant to the methods of calculation necessary so
that the exemptions provided pursuant to Rule 16b-3 under the Securities
Exchange Act of 1934 (the "Exchange Act") will continue to be available for
transactions involving all current and future grants. In addition, during the
period that any grants remain outstanding under the Plan, the Committee may make
good faith adjustments with respect to the number of shares of Common Stock
attributable to such grants for purposes of calculating the maximum number of
shares of Common Stock available for the granting of future grants under the
Plan, provided that following such adjustments the exemptions provided pursuant
to Rule 16b-3 under the Exchange Act will continue to be available for
transactions involving all current and future grants.
1.6 Other Compensation Programs. The adoption of the Plan contemplates
the continuation of all existing incentive compensation plans of the Company and
in no way limits or is limited by the operation, administration or amendment of
any such plans. The existence and terms of the Plan shall not limit the
authority of the Board of Directors in compensating employees of the Company in
such other forms and amounts as it may determine from time to time.
II. INCENTIVE STOCK OPTIONS
2.1 Terms and Conditions. Subject to the following provisions in this
Article II, all Incentive Stock Options shall be in such form and upon such
terms and conditions as the Committee, in its discretion, may from time to time
determine.
2.2 Qualified Stock Options. Incentive Stock Options shall, at the time
of grant, be in such form and upon such terms and conditions as may be required
in order that such options will constitute Incentive Stock Options within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
2.3 Option Price. The option price per share shall be at least the Fair
Market Value (as defined in section 5.13 of this Plan) of the Common Stock on
the date the Incentive Stock Option is granted.
2.4 Term of Option. The term of an Incentive Stock Option shall not
exceed ten (10) years from the date of grant.
<PAGE>
2.5 Payment. Payment for shares for which an Incentive Stock Option is
exercised shall be made in such manner and at such time or times as shall be
provided by the Committee at the time of grant, in cash, in Common Stock,
through the surrender of stock options, or any combination thereof.
2.6 Exercise of Option. Incentive Stock Options shall be exercisable in
whole or in part after completion of such periods of service as the Committee
shall specify when granting the options; provided, however, that in the absence
of any Committee specification to the contrary, and subject to Sections 2.7 and
2.8, (1) twenty percent (20%) of the shares subject to the Incentive Stock
Option shall become exercisable with respect to such shares on the first
anniversary of the date of grant of the Incentive Stock Option and (2) on each
of the next four (4) anniversaries of the date of the grant, an additional
twenty percent (20%) of the shares subject to the Incentive Stock Option shall
become exercisable with respect to such shares. In no event, however, and
notwithstanding Sections 2.7 and 2.8, shall an Incentive Stock Option be
exercised after the expiration of ten (10) years from the date of grant.
2.7 Termination of Employment. A Participant's Incentive Stock Options
shall expire ninety (90) days after the termination of the Participant's
employment for any reason other than death, disability (as determined by the
Committee) or retirement (under the applicable retirement program of the Company
or one of its subsidiaries or as otherwise determined by the Committee), and
shall be limited to the shares of Common Stock which could have been purchased
by the Participant at the date of termination of employment. If a Participant's
employment is terminated by the Company for cause, the ninety (90) day period in
the first sentence shall be reduced to thirty (30) days.
2.8 Termination of Employment by Reason of Death, Disability or
Retirement. Upon the termination of a Participant's employment by reason of
death, disability (as determined by the Committee), or normal retirement (under
the applicable retirement program of the Company or one of its subsidiaries or
as otherwise determined by the Committee), Incentive Stock Options held at the
termination date by such Participant which may be exercised shall be limited to
the shares which could have been purchased by the Participant at the date of
such termination, except that the Committee, in its discretion, may waive the
vesting requirements of Section 2.6. Participant's Incentive Stock Options shall
expire unless exercised within one year from the date of such termination unless
otherwise established by the Committee.
Notwithstanding the foregoing, the tax treatment available pursuant to
Section 422 of the Code upon the exercise of an Incentive Stock Option will not
be available to a Participant who exercises any Incentive Stock Option more than
three months after termination of employment due to retirement, or who, in the
event of waiver of the vesting requirements of Section 2.6, obtains the right to
exercise for the first time Incentive Stock Options having an aggregate fair
market value, determined at the date of issue, exceeding $100,000.
<PAGE>
The Committee may, at any time on or before the termination of the
exercise period of the Participant's Incentive Stock Options, extend the
exercise period if the Participant's employment is terminated for a reason
specified in this section. If so extended, the term of the exercise period shall
expire on the date specified by the Committee, which date shall be no later than
the date which is sixty (60) months following the date of the Participant's
termination of employment. If such extension could adversely affect the
Participant's federal income tax treatment of the Incentive Stock Option at the
time of extension or exercise, the extension shall only be made with the consent
of the Participant. In no event may the term of an Incentive Stock Option,
including extensions, exceed the term set forth in Section 2.4.
2.9 Special Rule for 10 Percent Shareholders. If, at the time an
Incentive Stock Option is granted, a Participant owns stock representing more
than 10 percent of the total combined voting power of all classes of stock of
the Company or any of its subsidiaries, then the terms of the Incentive Stock
Option shall specify that the option price shall at the time of grant be at
least 110 percent of the Fair Market Value of the stock subject to the option
and such option shall not be exercisable after the expiration of five (5) years
from the date such option is granted.
2.10 Notice of Disposition. If a Participant makes a disposition, within
the meaning of Section 424(c) of the Code and regulations promulgated
thereunder, of a share or shares of Common Stock issued to such Participant
pursuant to the exercise of an Incentive Stock Option within the two year period
commencing on the day after the date of the grant or within the one year period
commencing on the day after the date of transfer of such share or shares to the
Participant pursuant to such exercise, the Participant shall, within ten (10)
days of such disposition, notify the Company thereof by delivery of written
notice to the Company at its principal executive office.
2.11 Acceleration Event. Notwithstanding anything herein to the
contrary, if an Acceleration Event (as defined in Section 5.14) has occurred,
then all of the shares subject to the Incentive Stock Option shall immediately
become exercisable with respect to such shares on the date such Acceleration
Event occurred.
III. NON-QUALIFIED STOCK OPTIONS
3.1 Terms and Conditions of Options. Subject to the following
provisions, all Non-Qualified Stock Options shall be in such form and upon such
terms and conditions as the Committee, in its discretion, may from time to time
determine.
3.2 Non-Qualified Stock Options. The terms of a Non-Qualified Stock
Option shall, at the time of grant, provide that it will not be treated as an
incentive stock option within the meaning of Section 422 of the Code.
3.3 Option Price. The option price per share shall be at least the Fair
Market Value of the Common Stock on the date the Non-Qualified Stock Option is
granted.
3.4 Term of Option. The term of a Non-Qualified Stock Option shall not
exceed ten (10) years from the date of grant.
3.5 Payment. Payment for shares for which a Non-Qualified Stock Option
is exercised shall be made in such manner and at such time or times as shall be
provided by the Committee at the time of grant, in cash, in Common Stock,
through the surrender of stock options, or any combination thereof.
<PAGE>
3.6 Exercise of Option. Non-Qualified Stock Options shall be exercisable
in whole or in part after completion of such periods of service as the Committee
shall specify when granting the options; provided, however, that in the absence
of any Committee specification to the contrary, and subject to Sections 3.7 and
3.8, (1) twenty percent (20%) of the shares subject to the Non-Qualified Stock
Option shall become exercisable with respect to such shares on the first
anniversary of the date of grant of the Non-Qualified Stock Option and (2) on
each of the next four (4) anniversaries of the date of the grant, an additional
twenty percent (20%) of the shares subject to the Non-Qualified Stock Option
shall become exercisable with respect to such shares. In no event, however, and
notwithstanding Sections 3.7 and 3.8, shall a Non-Qualified Stock Option be
exercised after the expiration of ten (10) years from the date of grant.
3.7 Termination of Employment. A Participant's Non-Qualified Stock
Options shall expire ninety (90) days after the termination of the Participant's
employment for any reason other than death, disability (as determined by the
Committee) or retirement (under the applicable retirement program of the Company
or one of its subsidiaries or as otherwise determined by the Committee), and
shall be limited to the shares which could have been purchased by the
Participant at the date of termination of employment. If a Participant's
employment is terminated by the Company for cause, the ninety (90) day period in
the first sentence shall be reduced to thirty (30) days.
3.8 Termination of Employment by Reason of Death, Disability or
Retirement. Upon the termination of a Participant's employment by reason of
death, disability (as determined by the Committee) or retirement (under the
applicable retirement program of the Company or one of its subsidiaries or as
otherwise determined by the Committee), Non-Qualified Stock Options held at the
termination date by such Participant which may be exercised shall be limited to
the shares which could have been purchased by the Participant at the date of
such termination, except that the Committee, in its discretion, may waive the
vesting requirements of Section 3.6. The Participant's Non-Qualified Stock
Options shall expire unless exercised within one year from the date of such
termination unless otherwise established by the Committee.
The Committee may, at any time on or before the termination of the
exercise period of the Participant's Non-Qualified Stock Options, extend the
exercise period if the Participant's employment is terminated for a reason
specified in this section. If so extended, the term of the exercise period shall
expire on the date specified by the Committee, which date shall be no later than
the date which is sixty (60) months following the date of the Participant's
termination of employment. In no event may the term of a Non-Qualified Stock
Option, including extensions, exceed the term set forth in Section 3.4.
3.9 Acceleration Event. Notwithstanding anything herein to the contrary,
if an Acceleration Event has occurred, then all of the shares subject to the
Non-Qualified Stock Option shall immediately become earned and the Non-Qualified
Stock Option shall become exercisable with respect to such shares on the date
such Acceleration Event occurred.
<PAGE>
IV. STOCK OPTION AWARDS TO ORGANIZING DIRECTORS
4.1 Terms and Conditions of Options. Subject to the following
provisions, all stock option awards granted to Directors ("Director Awards")
under this Article IV shall be in such form and upon such terms and conditions
described herein.
4.2 Non-Qualified Stock Options. The terms of a Director Award shall, at
the time of grant, provide that it will not be treated as an incentive stock
option within the meaning of Section 422 of the Code.
4.3 Option Price. The option price per share shall be at least the Fair
Market Value of the Common Stock on the date the Director Award is granted.
4.4 Term of Option. The term of a Director Award shall not exceed ten
(10) years from the date of grant.
4.5 Awards to Directors. Each Organizing Director shall receive an
option to purchase the number of shares of Common Stock shown on Exhibit A
hereto.
4.6 Payment. Payment for shares upon exercise of a Director Award shall
be in such manner and at such time or times as shall be determined by the
Committee at the time of grant, in cash, in Common Stock, through the surrender
of Stock Options, or any combination thereof.
4.7 Exercise of Option. Director Awards shall be immediately exercisable
in whole or in part. In no event, however, and notwithstanding anything in this
section or Section 7.8 to the contrary, shall a Director Award be exercised
after the expiration of ten (10) years from the date of grant.
4.8 Termination of Service as Director. Director Awards shall not expire
as a result of the termination of the Director's service as a member of the
Board of Directors of the Company regardless of the reason for termination.
V. ADDITIONAL PROVISIONS
5.1 General Restrictions. Each grant under the Plan shall be subject to
the requirement that if the Committee shall determine, at any time, that: (a)
the listing, registration or qualification of the shares of Common Stock subject
or related thereto upon any securities exchange or under any state or federal
law; or (b) the consent or approval of any government regulatory body, or (c) an
agreement by the Participant with respect to the disposition of shares of Common
Stock, is necessary or desirable as a condition of, or in connection with, the
granting or the issuance or purchase of shares of Common Stock thereunder, such
grant may not be consummated in whole or in part unless such listing,
registration, qualification, consent, approval or agreement shall have been
effected or obtained free of any conditions not acceptable to the Committee.
<PAGE>
5.2 Adjustments for Changes in Capitalization. In the event of a
reorganization, recapitalization, stock split, stock dividend, combination of
shares, rights offer, liquidation, dissolution, merger, consolidation, spin-off
or sale of assets, or any other change in or affecting the corporate structure
or capitalization of the Company, the Board of Directors shall make such
adjustments as the Committee may recommend, and as the Board of Directors in its
discretion may deem appropriate, in the number and kind of shares authorized
under the Plan, in the number, option price or kind of shares covered by the
grants and in any outstanding grants under the Plan in order to prevent
substantial dilution or enlargement thereof.
5.3 Amendments. The Board of Directors may discontinue the Plan at any
time, and may amend it from time to time, but no amendment, without approval by
shareholders, may (a) increase the total number of shares which may be issued
under the Plan, except as provided in Section 5.2 hereof, (b) change the class
of employees of the Company to whom awards may be made, or (c) cause awards
under the Plan to no longer comply with Rule 16b-3 of the Exchange Act or any
other federal or state statutory or regulatory requirements.
5.4 Modification or Substitution. Subject to the terms of the Plan, the
Committee may modify outstanding awards or accept the surrender of outstanding
awards and make new awards in substitution for them under the long-term
incentive component of the Plan, provided that the modification does not
adversely alter or impair any rights or obligations of the Participant without
the Participant's consent and does not constitute "repricing" as such term is
defined in 17 CFR 229.402(i)(1).
5.5 Cancellation of Awards. Any grant under the long-term incentive
component of the Plan may be canceled at any time with the consent of the
Participant, and a new grant may be provided to such Participant in lieu
thereof, provided the cancellation and reissuance does not constitute
"repricing" as such term is defined in 17 CFR 229.402(i)(1).
5.6 Shares Subject to the Plan. Shares distributed pursuant to the Plan
shall be made available from authorized but unissued shares or from shares
purchased or otherwise acquired by the Company for use in the Plan, as shall be
determined from time to time by the Committee.
5.7 Rights of a Shareholder. Participants under the Plan, unless
otherwise provided by the Plan, shall have no rights as shareholders by reason
thereof unless and until certificates for shares of Common Stock are issued to
them.
5.8 Withholding.
(a) The Company shall have the right to deduct from any distribution
of Common Stock to any Participant an amount equal to the federal, state and
local income taxes and other amounts as may be withheld (the "Withholding
Taxes") with respect to any grant under the Plan. If a Participant is to
experience a taxable event in connection with the receipt of cash or shares of
Common Stock pursuant to an Option exercise (a "Taxable Event"), the Participant
shall pay the Withholding Taxes to the Company prior to the issuance of such
shares of Common Stock. In satisfaction of the obligation to pay Withholding
Taxes to the Company, the Participant may make a written election (the "Tax
Election"), which may be accepted or rejected in the discretion of the
Committee, to have withheld a portion of the shares of Common Stock then
issuable to the Participant having an aggregate Fair Market Value on the day
immediately preceding the date of such issuance equal to the Withholding Taxes,
provided that in respect of a Participant who may be subject to liability under
section 16(b) of the Exchange Act either: (i) in the case of a Taxable Event
involving an Option (A) the Tax Election is made at least six (6) months prior
to the date of the Taxable Event, and (B) the Tax Election is irrevocable with
respect to all Taxable Events of a similar nature occurring prior to the
expiration of six (6) months following a revocation of the Tax Election; or (ii)
in the case of the exercise of an Option (A) the Participant makes the Tax
Election at least six (6) months after the date the Option was granted, (B) the
Option is exercised during the ten (10) day period beginning on the third
business day and ending on the twelfth business day following the release for
publication of the Company's quarterly or annual statement of sales and earnings
(the "Window Period"), and (C) the Tax Election is made during the Window Period
in which the related Option is exercised or prior to such Window Period and
subsequent to the immediately preceding Window Period
(b) Except in the case of Non-Qualified Stock Option grants to
Directors, the Committee shall have the authority, at the time of grant of a
Non-Qualified Stock Option under the Plan or at any time thereafter, including
upon any event constituting an Acceleration Event (as hereinafter defined), to
grant tax bonuses to designated Participants to be paid upon their exercise of
Non-Qualified Stock Options granted hereunder. The amount of any such payments
shall be determined by the Committe shall not be greater than the difference
between the option price (as established pursuant to Section 3.3, subject to
adjustment, if any, pursuant to Section 5.2) and the Fair Market Value, at the
time of exercise of the option, of the shares of Common Stock acquired (the
"Spread") multiplied times the maximum federal individual income tax rate
payable by a Participant optionee on such Spread (at the date of exercise). The
Committee shall have full authority in its absolute discretion to determine the
amount of any such tax bonus (subject to the limits of this section) and the
terms and conditions affecting the vesting and payment thereof. Such
supplemental payment shall be made in cash.
5.9 Nonassignability. Except as expressly provided in the Plan, no grant
shall be transferable except: (i) by gift to the grantee's spouse or natural,
adopted or step-children or grandchildren ("Immediate Family Members") or to a
trust for the benefit of one or more of the grantee's Immediate Family Members
or to a family charitable trust established by the grantee or the grantee's
family, but only with the approval of the Committee; (ii) by will; (iii) by the
laws of descent and distribution; or (iv) by a qualified domestic relations
order ("QDRO") as defined by the Code or Title I of the Employee Retirement
Income Security Act of 1974, as amended, or the rules thereunder. Any Stock
Option award transferred by the grantee under Section (i) above may not be
subsequently transferred by the transferee.
5.10 Nonuniform Determinations. Except as otherwise set forth in the
Plan, determinations by the Committee under the Plan (including, without
limitation, determinations of the persons to receive awards under either the
annual or long-term incentive components of the Plan, the form, amount and
timing of such awards, and the terms and provisions of such awards and the
agreements evidencing the same) need not be uniform and may be made by it
selectively among persons who receive, or are eligible to receive, awards under
the Plan, whether or not such persons are similarly situated.
<PAGE>
5.11 No Guarantee of Employment. Awards under the Plan shall not
constitute an assurance of continued employment for any period.
5.12 Effective Date; Duration. The Plan shall become effective as of
September 22, 1999, and will be submitted for approval by shareholders at the
Company's next Annual Meeting of Shareholders so that Incentive Stock Options
will be qualified under the Code. No awards may be made under the Plan after
September 21, 2009, but awards theretofore made may extend beyond such date.
5.13 Fair Market Value. The phrase Fair Market Value on any date means
the average of the high and low sales prices of the shares of Common Stock on
such date on the principal national securities exchange on which such shares of
Common Stock are listed or admitted to trading. If the shares of Common Stock on
such date are not listed or admitted to trading, the Fair Market Value shall be
the value established by the Board in good faith and, in the case of an
Incentive Stock Option, in accordance with Section 422 of the Code.
5.14 Acceleration Event. Notwithstanding anything herein to the
contrary, if a Change in Control of the Company occurs, or if the Committee
determines in its sole discretion that an Acceleration Event has occurred, then
all Incentive Stock Options and Non-Qualified Stock Options shall become fully
exercisable as of the date such Change in Control occurred or the Committee
determines that an Acceleration Event has occurred.
For purposes of the Plan, an Acceleration Event includes, but is not
limited to, any Change in Control of the Company, which shall be deemed to have
occurred if the conditions set forth in any one of the following paragraphs
shall have been satisfied:
(i) any person, as defined in Section 3(a)(9) of the Exchange
Act, as such term is modified in Sections 13(d) and 14(d) of the
Exchange Act (other than (A) any employee plan established by the
Company, which for these purposes shall be deemed to be the Company and
any corporation, association, joint venture, proprietorship or
partnership which is connected with the Company either through stock
ownership or through common control, within the meaning of Sections
414(b) and (c) and 1563 of Internal Revenue Code of 1986 as amended, (B)
the Company or any of its affiliates (as defined in Rule 12b-2
promulgated under the Exchange Act), (C) an underwriter temporarily
holding securities pursuant to an offering of such securities, or (D) a
corporation owned, directly or indirectly, by stockholders of the
Company in substantially the same proportions as their ownership of the
Company) (a "Person"), is or becomes the beneficial owner (as defined in
Rule 13d-3 promulgated under the Exchange Act), directly or indirectly,
of securities of the Company (not including in the securities
beneficially owned by such Person any securities acquired directly from
the Company) representing fifty percent (50%) or more of the combined
voting power of the Company's then outstanding voting securities;
<PAGE>
(ii) during any period of up to two consecutive years (not
including any period prior to the effective date of this Plan)
individuals who, at the beginning of such period, constitute the Board
cease for any reason to constitute at least a majority thereof, provided
that any person who becomes a director subsequent to the beginning of
such period and whose nomination for election is approved by at least
two-thirds (2/3) of the directors then still in office who either were
directors at th beginning of such period or whose election or nomination
for election was previously so approved (other than a director (A) whose
initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the directors of
the Company, as such terms are used in Rule 14a-11 of Regulation 14A
under the Exchange Act, or (B) who was designated by a Person who has
entered into an agreement with the Company to effect a transaction
described in clause (i), (iii) or (iv) hereof) shall be deemed a
director as of the beginning of such period;
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation (other than (A)
a merger or consolidation that would result in the voting securities of
the Company outstanding immediately prior thereto continuing to
represent, either by remaining outstanding or by being converted into
voting securities of the surviving entity or any parent thereof, in
combination with the ownership of any trustee or other fiduciary holding
securities under an employee benefit plan of any corporation, at least
fifty-one percent (51%) of the combined voting power of the voting
securities of the Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, or (B) a
merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person is or becomes the
beneficial owner (as defined in clause (i) above), directly or
indirectly, of securities of the Company (not including in the
securities beneficially owned by such Person any securities acquired
directly from the Company representing twenty-five percent (25%) or more
of the combined voting power of the Company's then outstanding voting
securities); or
(iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets,
other than a sale or disposition by the Company of all or substantially
all of the Company's assets to an entity, at least fifty percent (50%)
of the combined voting power of the voting securities of which are owned
by persons in substantially the same proportions as their ownership of
th Company immediately prior to such sale.
5.15 Securities Laws. All references to provisions of the federal
securities laws are to such provisions as in effect on September 1, 1999,
without regard to any subsequent amendments of, changes to or revocation of such
provisions.
