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EXHIBIT 4.1
TEXAS CAPITAL BANCSHARES, INC.
1999 OMNIBUS STOCK PLAN
ARTICLE I
ESTABLISHMENT OF THE PLAN
Texas Capital Bancshares, Inc. ("the Company") hereby establishes the Texas
Capital Bancshares, Inc. 1999 Omnibus Stock Plan (the "Plan") upon the terms and
conditions hereinafter stated.
ARTICLE II
DEFINITIONS
2.01 "Award" means any stock option, stock appreciation right, restricted
stock award, or performance award granted to a Participant under the Plan.
2.02 "Board" means the Board of Directors of the Company.
2.03 "Code" means the Internal Revenue Code of 1986, as amended.
2.04 "Committee" means the Plan Committee appointed by the Board, and which
shall be comprised of at least three (3) members.
2.05 "Common Stock" means shares of the common stock, $.01 par value per
share, of the Company.
2.06 "Disability" means any physical or mental impairment which qualifies
an Employee for disability benefits under the applicable long-term disability
plan maintained by the Company or, if no such plan applies, which would qualify
such Employee for disability benefits under the Federal Social Security System.
2.07 "Effective Date" means the date upon which the Board approves this
Plan.
2.08 "Employee" means any person who is employed by the Company and whose
wages are reported on a Form W-2. The Company's classification as to who is an
Employee shall be determinative for purposes of an individual's eligibility
under the Plan. Solely for purposes of this Plan, the Company, in its sole
discretion, and from time to time, may deem an individual who provides services
to the Company pursuant to a personal service contract or agreement, but who
otherwise is not employed by the Company and whose compensation would not be
reported by the Company on a Form W-2, to be classified as an Employee. Any such
individual shall be eligible to receive only the following Awards pursuant to
this Plan: Non-Qualified Stock Options, stock appreciation rights, Restricted
Stock Awards or performance awards.
2.09 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
2.10 "Fair Market Value" of a share of the Company's Common Stock for any
purposes on a particular date shall be the most recent determination by an
independent valuation expert retained by the Company for the purpose of
determining the fair market value of each share of the Company's Common Stock;
provided that, in the event the Common Stock becomes registered under Section 12
of the Exchange Act, the Fair Market Value of the Company's Common Stock shall
mean the last reported sale price per share of Common Stock on such date, or in
case no such sale takes place on such date, the average of the closing and
asking prices, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on a national securities exchange or included for quotation on the
NASDAQ market, or if the Common Stock is not listed or
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admitted for trading or included for quotation, the last quote price, or if the
Common Stock is not so quoted, the average of the high bid and low asked prices,
in the over-the-counter market, as reported by the NASD Automatic Quotation
System or, if such system is no longer in use, the principal other automated
quotations system that may then be in use or, if the Common Stock is not quoted
by any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common Stock as
selected in good faith by the Committee.
If the relevant date is not a trading day, the determination shall be made
as of the next preceding trading day. As used herein, the term "trading day"
means a day on which public trading of securities occurs and as reported in the
principal consolidated reporting system referred to above, or if the Common
Stock is not listed or admitted to trading on a national market securities
exchange or included for quotation on the Nasdaq National Market, any business
day.
2.11 "Grantee" refers to any Participant in the Plan who receives an Award.
2.12 "Incentive Stock Option" means any Option granted under this Plan
which the Committee intends (at the time it is granted) to be an incentive stock
option within the meaning of Section 422 of the Code. All Incentive Stock
Options issued under this Plan are intended to comply with the requirements of
Section 422 of the Code, and the regulations thereunder, and all provisions
hereunder shall be read, interpreted and applied with that purpose in mind.
2.13 "Non-Qualified Stock Option" means any Option granted under this Plan
which is not an Incentive Stock Option.
2.14 "Officer" means any Employee of the Company who is determined by the
Board to be a corporate officer.
2.15 "Participant" means any Employee or Officer who is designated by the
Committee or the Board pursuant to Article VI to participate in the Plan.
2.16 "Restricted Stock Award" means an award of Company Common Stock that
is subject to certain terms, conditions, or restrictions as forth in the Stock
Award Agreement that may affect, among other things, transferability,
disposition, and/or forfeitability.
2.17 "Retirement" means a termination of employment which constitutes a
"retirement" under any applicable qualified pension benefit plan maintained by
the Company.
2.18 "Stock Award Agreement" means the written agreement pursuant to
Article VI hereof that sets forth the terms, conditions, restrictions and
privileges for an Award and that incorporates the terms of the Plan.
ARTICLE III
ADMINISTRATION OF THE PLAN
3.01 The Plan shall be administered by a Committee comprised of not fewer
than three persons as appointed by the Board. A simple majority of the members
of the Committee shall constitute a quorum for the transaction of business. The
Committee shall be responsible to the Board for the operation of the Plan, and
may make recommendations to the Board with respect to participation in the Plan
by Employees and Officers of the Company, and with respect to the extent of that
participation. The interpretation and construction of any provision of the Plan
by the Committee shall be final, unless otherwise determined by the Board. No
member of the Board shall be liable for any action or determination made by him
in good faith.
3.02 REVOCATION FOR MISCONDUCT. The Committee may by resolution immediately
revoke, rescind and terminate any Award, or portion thereof, to the extent not
yet vested, previously granted or
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awarded under this Plan to a Participant who is discharged from the employ of
the Company for cause, which, for purposes of this Plan, shall mean termination
because of the Participant's personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, or willful violation of any law, rule, or
regulation (other than traffic violations or similar offenses).
3.03 REPURCHASE RIGHTS. In the event the Company terminates either the
employment or personal services contract or agreement of a Participant for
cause, the Participant shall be required to sell all of his vested Awards under
this Plan back to the Company at par value upon receipt of written demand by the
Board or the Committee. Prior to the earlier to occur of (i) the Company
completing an Initial Public Offering of its Common Stock pursuant to the
Securities Act of 1933, as amended, or (ii) the Company's Common Stock being
listed on the New York Stock Exchange, American Stock Exchange or the NASDAQ
National Market System, each Participant whose employment with the Company
terminates either for any reason by action of the Company (except for cause) or
at the Participant's election, and such termination is for reasons other than
due to death, Retirement, or Disability, shall be required to offer for sale to
the Company on his final day of employment, or on the last day that he provides
services to the Company pursuant to a personal service contract or agreement,
all of his vested Awards under this Plan (whether or not received pursuant to
exercise of an option awarded under this Plan) at the lesser of: (i) the last
annual per share fair market valuation; or (ii) the then current Fair Market
Value.
3.04 LIMITATION ON LIABILITY. No member of the Committee shall be liable
for any action or determination made in good faith with respect to the Plan. To
the maximum extent allowed by law and the Company's bylaws, the members of the
Committee shall be indemnified by the Company in respect of all their activities
under the Plan.
3.05 COMPLIANCE WITH LAW AND REGULATIONS. All Awards granted hereunder
shall be subject to all applicable federal and state laws, rules and regulations
and to such approvals by any government or regulatory agency as may be required.
The Company shall not be required to issue or deliver any certificates for
shares of Common Stock prior to the completion of any registration or
qualification of or obtaining of consents or approvals with respect to such
shares under any Federal or state law or any rule or regulation of any
government body, which the Company shall, in its sole discretion, determine to
be necessary or advisable.
3.06 RESTRICTIONS ON TRANSFER. The Company may place a legend upon any
certificate representing shares acquired pursuant to an Award granted hereunder
noting that the transfer of such shares may be restricted by applicable laws and
regulations.
ARTICLE IV
ELIGIBILITY
Awards may be granted to such Employees and Officers of the Company as may
be designated from time to time by the Committee, pursuant to guidelines, if
any, which may be adopted by the Committee or the Board from time to time.
ARTICLE V
COMMON STOCK AVAILABLE FOR THE PLAN
The aggregate number of shares of Common Stock which may be issued pursuant
to this Plan, subject to adjustment as provided in Article VII, shall be ten
percent (10%) of the then outstanding shares of Common Stock; provided, however,
that the number of shares that may be issued hereunder shall not be reduced as a
result of any redemptions, repurchases or other reduction in the number of
outstanding shares of Common Stock. The Company shall reserve such number of
shares for Awards under the Plan. None of such shares shall be the subject of
more than one Award at any time, but if an Award as to
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any shares is surrendered before exercise, or expires or terminates for any
reason without having been exercised in full, or for any other reason ceases to
be exercisable, the number of shares covered thereby shall again become
available for grant under the Plan as if no Awards had been previously granted
with respect to such shares.
ARTICLE VI
PARTICIPATION; STOCK AWARD AGREEMENT
The Board or the Committee, if so designated by the Board, shall, in its
discretion, determine from time to time which Employees and Officers will
participate in the Plan and receive Awards under the Plan. In making all such
determinations there shall be taken into account the duties, responsibilities
and performance of each respective Employee or Officer, his present and
potential contributions to the growth and success of the Company, his cash
compensation and such other factors as the Committee shall deem relevant to
accomplishing the purposes of the Plan.
Awards may be granted individually or in tandem with other Awards. All
awards are subject to the terms, conditions, restrictions and privileges of the
Plan in addition to the terms, conditions, restrictions and privileges for an
Award contained in the Stock Award Agreement. No Award under this Plan shall be
effective unless memorialized in writing by the Committee in a Stock Award
Agreement delivered to and signed by the Participant.
ARTICLE VII
AWARDS
7.01 STOCK OPTIONS. The Committee may from time to time grant to eligible
participants Awards of Incentive Stock Options or Non-Qualified Stock Options,
provided however that Awards of Incentive Stock Options shall be limited to
Employees of Company. Options intended to qualify as Incentive Stock Options
must have an exercise price at least equal to the Fair Market Value of a share
of Common Stock at the time of grant, except as provided in Section 8.06.
Non-Qualified Stock Options must have an exercise price at least equal to the
Fair Market Value of a share of Common Stock at the time of grant.
7.02 STOCK APPRECIATION RIGHTS. The Committee may from time to time grant
to eligible participants Awards of Stock Appreciation Rights ("SARs"). A SAR
entitles the Grantee to receive, subject to the provisions of the Plan and the
Stock Award Agreement, a payment having an aggregate value equal to the product
of (i) the excess of (a) the Fair Market Value on the exercise date of one share
of Common Stock over (b) the base price per share specified in Stock Award
Agreement, multiplied by (ii) the number of shares specified in the Stock Award
Agreement which are exercised. Payment by the Company of the amount receivable
upon any exercise of a SAR may be made by the delivery of Common Stock or cash,
or any combination of Common stock and cash, as determined in the sole
discretion of the Committee. If upon settlement of the exercise of a SAR a
Grantee is to receive a portion of such payment in shares of Common stock, the
number of shares shall be determined by dividing such portion by the Fair Market
Value of a share of Common Stock on the exercise date. No fractional shares
shall be used for such payment and the Committee shall determine whether cash
shall be given in lieu of such fractional shares or whether such fractional
shares shall be eliminated.
7.03 RESTRICTED STOCK. The Committee may from time to time grant restricted
Stock awards to eligible participants in such amounts, on such terms and
conditions, and for such consideration, including no consideration or such
minimum consideration as may be required by law, as it shall determine.
7.04 PERFORMANCE AWARDS. The Committee may, in its discretion, grant
performance awards which become payable on account or attainment of one or more
performance goals established by the Committee. Performance awards may be paid
by the delivery of Common Stock or cash, or any combination thereof, as
determined in the sole discretion of the Committee.
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ARTICLE VIII
OPTION AWARDS
8.01 VESTING AND EXERCISE OF OPTIONS
(a) GENERAL RULES. Incentive Stock Options and Non-Qualified Stock Options
granted to Employees shall become vested and exercisable in equal increments
over a three (3) to five (5) year period, with such period determined by the
Board and incorporated into each individual Award. Each such Award shall become
100% vested and exercisable not more than five (5) years from the date of grant.
Notwithstanding the foregoing, no vesting shall occur on or after an Employee's
employment with the Company is terminated for any reason other than his Death,
Disability or Retirement. In determining the number of shares of Common Stock
with respect to which Options are vested and/or exercisable, fractional shares
will be rounded up to the nearest whole number if the fraction is 0.5 or higher,
and down if it is less.
(b) VESTING UPON DEATH, DISABILITY OR RETIREMENT. Unless the Committee
specifically states otherwise in the Stock Award Agreement, only those Options
granted to Participants under this Plan which are vested and exercisable on the
date of a Participant's death, Disability or Retirement shall be vested and
exercisable by the Participant or the Participant's representative subject to
Section 8.02.
(c) ACCELERATED VESTING FOR CHANGES IN CONTROL. Notwithstanding the general
rule described in Section 8.01(a), all outstanding Options shall become
immediately vested and exercisable in the event there is a change in control of
the Company. A "change in control of the Company" for this purpose shall mean:
(a) any person or group, other than a Subsidiary or any employee
benefit plan (or any related trust) of the Company, becomes the beneficial
owner of 40% or more of the Common Stock of the Company that are entitled
to vote generally in the election of directors of the Company representing
15% or more of the combined voting power of all voting stock of the
Company.
(b) approval by the stockholders of the Company of either of the
following:
(i) a merger, reorganization, consolidation or similar transaction
("Merger") as a result of which the Persons who were the respective
beneficial owners of the outstanding Common Stock of the Company
immediately before such Merger are not expected to beneficially own,
immediately after such Merger, directly or indirectly, more than 60% of the
Common Stock of the Company resulting from such Merger in substantially the
same proportions as immediately before such Merger, or
(ii) a plan of liquidation of the Company or a plan or agreement
for the sale or other disposition of all or substantially all of the assets
of the Company.
8.02 DURATION OF OPTIONS.
(a) GENERAL RULE. Except as provided in Section 8.01(b), each Option
granted to a Participant shall be exercisable at any time on or after it vests
and becomes exercisable until the earlier of (i) ten (10) years after its date
of grant or (ii) three (3) months after the date on which the Participant ceases
to be employed by the Company.
(b) EXCEPTION FOR TERMINATION DUE TO DEATH, DISABILITY OR RETIREMENT. If a
Participant dies while in the employ of the Company or terminates employment
with the Company as a result of Disability or Retirement without having fully
exercised his Options, the Participant or his legal representative or guardian,
or the executors, administrators, legatees or distributees of his estate shall
have the right, during the six (6) month period following the earlier of his
death, Disability or Retirement,
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to exercise such Options to the extent vested on the date of such death,
Disability or Retirement. In no event, however, shall any Option be exercisable
more than ten (10) years from the date it was granted.
(c) NOTICE OF DISPOSITION; WITHHOLDING; ESCROW. A Grantee shall immediately
notify the Company in writing of any sale, transfer, assignment or other
disposition (or action constituting a disqualifying disposition within the
meaning of Section 421 of the Code) of any shares of Common Stock acquired
through exercise of an Incentive Stock Option, within two (2) years after the
grant of such Incentive Stock Option or within one (1) year after the
acquisition of such shares, setting forth the date and manner of disposition,
the number of shares disposed of and the price at which such shares were
disposed. The Company shall be entitled to withhold from any compensation or
other payments then or thereafter due to the Grantee such amounts as may be
necessary to satisfy any withholding requirements of Federal or state law or
regulation and, further, to collect from the Grantee any additional amounts
which may be required for such purpose. The Committee may, in its discretion,
require shares of Common Stock acquired by a Grantee upon exercise of an
Incentive Stock Option to be held in an escrow arrangement for the purpose of
enabling compliance with the provisions of this Section 8.02(c).
8.03 NONASSIGNABILITY. Options shall not be transferable by a Grantee
except by will or the laws of descent or distribution, and during a Grantee's
lifetime shall be exercisable only by such Grantee or the Grantee's guardian or
legal representative. Notwithstanding the foregoing, or any other provision of
this Plan, a Grantee who holds Non-Qualified Stock Options may transfer such
Options to his or her spouse, lineal ascendants, lineal descendants, or to a
duly established trust for the benefit of one or more of these individuals.
Options so transferred may thereafter be transferred only to the Grantee who
originally received the grant or to an individual or trust to whom the Grantee
would have initially transferred the Option pursuant to this Section 8.01.
Options which are transferred pursuant to this Section 8.01 shall be exercisable
by the transferee according to the same terms and conditions as applied to the
Grantee.
8.04 MANNER OF EXERCISE. Options may be exercised in part or in whole from
time to time. The procedures for exercise shall be set forth in the written
Stock Award Agreement provided for in Section 7.01 above. The Committee, may in
its discretion, permit a Grantee to exercise vested and exercisable options
awarded under this Plan by surrendering an amount of Company stock already owned
by the Grantee equal to the options' exercise price (referred to as a "cashless
exercise").
8.05 $100,000 LIMITATION. Notwithstanding any contrary provisions contained
elsewhere in this Plan and as long as required by Section 422 of the Code, the
aggregate Fair Market Value, determined as of the time an Incentive Stock Option
is granted, of the Common Stock with respect to which Incentive Stock Options
are exercisable for the first time by the Grantee during any calendar year,
under this Plan and stock options that satisfy the requirements of Section 422
of the Code under any other stock option plan or plans maintained by the
Company, shall not exceed $100,000.
8.06 LIMITATION ON TEN PERCENT STOCKHOLDERS. The price at which shares of
Common Stock may be purchased upon exercise of an Incentive Stock Option granted
to an individual who, at the time such Incentive Stock Option is granted, owns,
directly or indirectly, more than ten percent (10%) of the total combined voting
power of all classes of stock issued to stockholders of the Company, shall be no
less than one hundred and ten percent (110%) of the Fair Market Value of a share
of the Common Stock of the Company at the time of grant, and such Incentive
Stock Option shall by its terms not be exercisable after the earlier of the date
determined under Section 8.01 or the expiration of five (5) years from the date
such Incentive Stock Option is granted.
ARTICLE X
AMENDMENT AND TERMINATION OF THE PLAN
The Board may, by resolution, at any time terminate or amend the Plan with
respect to any shares of Common Stock or options which have not been granted.
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ARTICLE XI
EMPLOYMENT RIGHTS
Neither the Plan nor any Award hereunder shall create any right on the part
of any Employee of the Company to continue in such capacity.
ARTICLE XII
WITHHOLDING
The Company may withhold from any cash payment made under this Plan
sufficient amounts to cover any applicable withholding and employment taxes, and
if the amount of such cash payment is insufficient, the Company may require the
Grantee to pay to the Company the amount required to be withheld as a condition
to delivering the shares acquired pursuant to an Option. The Company also may
withhold or collect amounts with respect to a disqualifying disposition of
shares of Common Stock acquired pursuant to exercise of an Incentive Stock
Option, as provided in Section 8.02(c).
The Committee is authorized to adopt rules, regulations or procedures which
provide for the satisfaction of a Participant's tax withholding obligation by
the retention of shares of Common Stock to which he otherwise would be entitled
pursuant to an Award or by the Participant's delivery of previously-owned shares
of Common Stock or other property.
ARTICLE XIII
EFFECTIVE DATE OF THE PLAN; TERM
12.01 EFFECTIVE DATE OF THE PLAN. This Plan shall become effective on the
Effective Date, and Awards may be granted hereunder as of or after the Effective
Date and prior to the termination of the Plan, provided that no Incentive Stock
Option issued pursuant to this Plan shall qualify as such unless this Plan is
approved by the requisite vote of the holders of the outstanding voting shares
of the Company at a meeting of stockholders of the Company held within twelve
(12) months before or after the Effective Date.
12.02 TERM OF PLAN. Unless sooner terminated, this Plan shall remain in
effect for a period of ten (10) years ending on the tenth anniversary of the
Effective Date. Termination of the Plan shall not affect any Awards previously
granted and such Awards shall remain valid and in effect until they have been
fully exercised or earned, are surrendered or by their terms expire or are
forfeited.
ARTICLE XIV
GOVERNING LAW
To the extent not governed by Federal law, this Plan shall be construed
under the laws of the State of Delaware.
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IN WITNESS WHEREOF, the Company has caused its duly authorized officers to
execute this 1999 Omnibus Stock Plan, and to apply the Corporate seal hereto as
of June 8, 1999.
TEXAS CAPITAL BANCSHARES, INC.
By: /s/ JOSEPH M. GRANT
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Joseph M. Grant
Chairman and Chief Executive Officer
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