<PAGE>
No. 33-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
----------------------
THE SUMMIT BANCORPORATION
(Exact name of registrant as specified in its charter)
New Jersey 22-2007124
_____________________________ ____________________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Main Street
Chatham, New Jersey 07928
----------------------------------------
(Address of principal executive offices)
----------------------
THE SUMMIT BANCORPORATION --
CRESTMONT FINANCIAL CORP.
INCENTIVE STOCK OPTION PLAN
and
THE SUMMIT BANCORPORATION --
CRESTMONT FINANCIAL CORP.
COMPENSATORY STOCK OPTION PLAN
----------------------
(Full title of the plans)
JOHN F. KUNTZ
General Counsel and Corporate Secretary
The Summit Bancorporation
One Main Street
Chatham, New Jersey 07928
---------------------------------------
(Name and address of agent for service)
(201) 701-2665
------------------------------------------
(Telephone number, including area code, of
agent for service)
----------------------
Copy of all communications to:
MARTIN RUBASHKIN, ESQ.
Bourne, Noll & Kenyon
382 Springfield Avenue
Summit, New Jersey 07901
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1
<PAGE>
(Cover Page Continued)
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Maximum Maximum
Title of Offering Aggregate Amount of
Securities to Amount to be Price Per Offering Registration
be Registered Registered (1) Share (1) Price (1) Fee (1)
------------- -------------- --------- -------- ------------
Common Stock 112,469 $ 2.96 $ 332,836 $ 114.77
No Par Value
(and
associated
stock purchase
rights) (2)
(1) Solely for the purpose of determining the registration fee, the
aggregate offering price is computed on the basis of the maximum amount which
may be paid upon exercise of the stock options for the 112,469 additional
shares registered hereby and the maximum price per share is stated as the
average price at which the stock options may be exercised. See SEC Rule
457(h) (1).
(2) Prior to the occurrence of certain events, the stock purchase rights
will not be evidenced separately from the common stock.
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2
PART II
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The registrant hereby incorporates by reference the following
documents:
(a) The registrant's Annual Report on Form 10-K for its fiscal year
ended December 31, 1994;
(b) The registrant's Quarterly Reports on Form 10-Q for the quarters
ended March 31 and June 30, 1995;
(c) The registrant's Current Reports on Form 8-K dated May 16, 1995,
July 7, 1995 and September 27, 1995;
(d) The registrant's Definitive Proxy Statement for its Annual
Meeting of Shareholders held on April 18, 1995.
(e) Description of the registrant's Junior Participating Preferred
stock, contained in the registrant's registration statement on
Form 8-A filed February 3, 1990 and amendment thereto on Form 8
filed January 31, 1992.
All documents subsequently filed by the registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
<PAGE>
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities remaining
unsold, shall be deemed to be incorporated by reference in this registration
statement and to be part hereof from the date of filing of such documents. Any
statement contained 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 on Form S-8 to the extent that a statement
contained in any other subsequently filed document which also is or is deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement on
Form S-8.
ITEM 4. DESCRIPTION OF SECURITIES
General
The registrant's authorized capital stock consists of 50,000,000
shares of common stock, no par value, and 12,000,000 shares of preferred stock,
no par value, issuable in one or more series and with such terms as the
registrant's board of directors determines. As of June 30, 1995, there were
3
issued 33,804,009 and outstanding 33,719,524 shares of common stock and 504,481
shares of Cumulative Adjustable Rate Preferred Stock issued and outstanding. As
of June 30, 1995, there were 1,777,404 shares of common stock reserved for
issuance under various stock incentive plans. As of June 30, 1995, 2,579,159
shares of common stock were reserved for issuance under the Dividend
Reinvestment and Stock Purchase Plan (described below) and 250,000 shares of
Series B Junior Participating Preferred Stock were reserved for issuance under
the Shareholder Rights Plan (described below).
The following summary does not purport to be complete and is subject
in all respects to the applicable provisions of the New Jersey Business
Corporation Act, the registrant's certificate of incorporation, including
certificates of designation pursuant to which the outstanding series of
preferred stock was issued, and the registrant's Shareholder Rights Plan and
Dividend Reinvestment and Stock Purchase Plan.
Common Stock
Holders of common stock are entitled to receive dividends when and as
declared by the registrant's board of directors out of funds legally available
therefor, provided that, so long as any shares of preferred stock are
outstanding, no dividends (other than dividends payable in common stock) or
other distributions (including redemptions and purchases) may be made with
respect to the common stock unless full dividends on the shares of preferred
stock, including accumulations, have been paid.
In the event of the liquidation of the registrant, holders of common
stock would be entitled to receive pro rata any assets legally available for
distribution to holders of common stock with respect to shares held by them,
subject to any prior rights of any preferred stock then outstanding.
The common stock does not have any preemptive rights, redemption
privileges, sinking fund privileges, or conversion rights. All the outstanding
shares of common stock are validly issued, fully paid and nonassessable.
<PAGE>
Subject to the rights of the preferred stock under certain
circumstances, the holders of outstanding common stock are entitled to one vote
per share with no cumulative voting.
The registrant's certificate of incorporation and bylaws provide for
a classified board of directors by dividing the board into three classes of
approximately equal size. Directors are generally elected for three-year terms
which have been established so that the terms of office of approximately one-
third of the members of the board expire each year.
The registrant's certificate of incorporation also provides that no
merger or consolidation or similar transaction involving the registrant may be
4
effected without the approval of voting securities representing at least two-
thirds of the votes entitled to be cast (excluding shares owned by 5%
shareholders and their affiliates) unless the board of directors has previously
approved the transaction or unless certain fair price tests, meant to ensure
equal price treatment for all shareholders, are met. The effect of this
provision, together with the provisions for the classified board and the
Shareholder Rights Plan (described below), may make it difficult for any person
to acquire control of the registrant and remove management by means of a
hostile takeover.
On May 9, 1995, the registrant announced that its board of directors had
authorized the repurchase of up to 2.3 million shares of its common stock and
that it expected to make such purchases from time to time in the open market or
in privately negotiated transactions, subject to market conditions.
Preferred Stock
The registrant's board of directors is authorized by the registrant's
certificate of incorporation to issue shares of preferred stock in series and
classes and to fix, from time to time, the number of shares to be included in
any class and series and the par value, dividend rights, voting rights,
redemption rights, designation, relative rights, preferences and limitations,
and all other characteristics and rights of the shares of each class and
series.
The registrant's only issued and outstanding series of preferred
stock is the Adjustable Rate Cumulative Preferred Stock, $25.00 stated value.
The holders of adjustable rate cumulative preferred shares are entitled to
receive, when and as declared by the registrant's board of directors,
cumulative preferred dividends payable quarterly in cash at the applicable rate
in effect at the time of declaration. The applicable rate for any dividend
period is 2.75% below the highest of the three-month "Treasury Bill Rate," the
"Ten-Year Constant Maturity Rate" and the "Twenty-Year Constant Maturity Rate"
determined in advance of the dividend period. However, the applicable rate for
any dividend period will not be less than 6% per annum nor greater than 12% per
annum. Shares of the Adjustable Rate Cumulative Preferred Stock are
redeemable, in whole or in part, at $25.00 per share.
No shares of the registrant's Series B Junior Participating Preferred
Stock (described below) are outstanding.
Shareholder Rights Plan
<PAGE>
The registrant's Shareholder Rights Plan is intended to protect
shareholders in the event of certain unsolicited offers or attempts to acquire
the registrant. The Plan provides that attached to each share of common stock
is one right which, when exercisable, entitles the holder of the right to
5
purchase one-hundredth of a share of Series B Junior Participating Preferred
Stock at a purchase price of $70, subject to adjustment. In certain events
(such as a person or group acquiring or announcing an intent to acquire 15% or
more of the common stock or the registrant's board of directors determining
that 10% or more of the common stock has been acquired by an adverse person, as
defined in the Shareholder Rights Plan), exercise of the rights would entitle
the holder to common stock of the registrant or a surviving corporation with a
market value of two times the exercise purchase price. Accordingly, exercise
of the rights may cause substantial dilution to a person that attempts to
acquire the registrant. The rights automatically attach to each outstanding
share of common stock. There is no monetary value presently assigned to the
rights, and they do not trade separately from the shares of common stock unless
and until they become exercisable. The rights expire on January 15, 2000. The
Plan may have certain antitakeover effects, although it is not intended to
preclude any prospective offer for all outstanding shares of common stock at a
fair price and otherwise in the best interests of the registrant and its
shareholders, as determined by the registrant's board of directors. However, a
shareholder could potentially disagree with the board's determination of what
constitutes a fair price or the best interests of the registrant and its
shareholders.
Dividend Reinvestment and Stock Purchase Plan
In September 1991, the registrant amended its Dividend Reinvestment
and Stock Purchase Plan to permit the registrant's shareholders to purchase
newly issued common stock at up to a 5% discount from the current market price
(as defined in the Plan). Effective November 13, 1992, the discount was
reduced to 3.5%. As long as the registrant continues to issue common stock
under the Plan, the registrant anticipates that the proceeds from sales under
the Plan will increase its equity capital and the number of shares of common
stock outstanding on a systematic and continuing basis.
Recent Developments
On September 10, 1995 the registrant entered into an Agreement and
Plan of Merger (the "Merger Agreement") with UJB Financial Corp. ("UJB")
pursuant to which the registrant will be merged with and into UJB in a stock-
for-stock merger. Pursuant to the Merger Agreement, each outstanding share of
the registrant's common stock (other than treasury shares or shares owned by
UJB or a subsidiary of UJB) will be exchanged for .9 shares of UJB common stock
and all shares of the registrant's $25.00 Stated Value Adjustable Rate
Cumulative Preferred Stock (other than treasury shares or shares held by UJB or
one of its subsidiaries) will be converted into one share of $25.00 Stated
Value Adjustable Rate Cumulative Preferred Stock of UJB. Consummation of the
merger is subject to the satisfaction of all terms and conditions set forth in
the Merger Agreement, including the receipt of required regulatory approvals,
approval of the shareholders of both the registrant and UJB and a letter from
KPMG Peat Marwick L.L.P. to the effect that the transaction will qualify for
pooling-of-interests accounting treatment.
6
<PAGE>
In connection with the Merger Agreement, the registrant has granted
to UJB an option to acquire 6,730,000 shares of the registrant's common stock
at $26.75 per share exercisable under certain circumstances and UJB has granted
to the registrant an option to acquire 11,450,000 shares of UJB Common Stock at
$36.625 per share, also exercisable under certain circumstances.
The registrant's Shareholder Rights Plan (the "Rights Plan") was
amended on September 10, 1995 to exclude UJB or any of its affiliates or
associates from the definition of "Acquiring Person". The effect of this
amendment is to not to treat the merger or stock option exercise as a
triggering event permitting the registrant's common stockholders to purchase
shares of Series B Junior Participating Preferred Stock under the Rights Plan.
See "Shareholder Rights Plan", below.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The validity of the Common Stock of the registrant (the "Common
Stock") offered pursuant to this Registration Statement on Form S-8 will be
passed upon for the Corporation by Bourne, Noll & Kenyon, P.A. and all
attorneys employed thereby own shares of Common Stock in an amount that does
not exceed .005% of the outstanding Common Stock of the registrant.
The consolidated financial statements of The Summit Bancorporation
and subsidiaries as of December 31, 1994 and 1993 and for each of the years in
the three-year period ended December 31, 1994, included in the registrant's
Annual Report on Form 10-K, have been incorporated by reference herein in
reliance on the report of KPMG Peat Marwick LLP, independent certified public
accountants, included in the registrant's 1994 Annual Report on Form 10-K and
incorporated by reference herein, and upon the authority of such firm as
experts in accounting and auditing.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As provided under New Jersey law, the registrant's certificate of
incorporation provides that a director or officer shall not be personally
liable to the corporation or its shareholders for breach of duty owed to the
corporation, except that such provision shall not relieve a director or officer
from liability for any breach of duty based upon an act or omission (a) in
breach of such person's duty of loyalty to the corporation or its shareholders,
(b) not in good faith or involving a knowing violation of law or (c) resulting
in receipt by such person or any improper personal benefit.
7
Under Article X of its bylaws, the registrant is required, to the
full extent permitted by law, to indemnify its directors, officers, employees
and agents. The New Jersey Business Corporation Act provides that a
corporation may indemnify its directors, officers, and agents against
judgments, fines, penalties, amounts paid in settlement and expenses, including
attorney's fees, resulting from various types of legal actions or proceedings
if the actions of the party being indemnified meet the standards of conduct
specified therein. Determinations concerning whether the applicable standard
of conduct has been met can be made by (a) a disinterested majority of the
board of directors, (b) independent legal counsel, or (c) an affirmative vote
of a majority of shares held by the shareholders. No indemnification shall be
made to or on behalf of a corporate director, officer, employee or agent if a
judgment or other final adjudication adverse to such person establishes that
his acts or omissions (a) were breaches of his duty of loyalty to the
corporation or its shareholders, (b) were not in good faith or involved a
<PAGE>
knowing violation of law or (c) resulted in receipt by such person or an
improper personal benefit.
The registrant's directors and officers are insured against losses
arising from any claim against them as such for wrongful acts or omissions,
subject to certain limitations.
ITEM 8. EXHIBITS
5 Opinion of Bourne, Noll & Kenyon
24(a) Consent of Counsel (included in Exhibit 5)
24(b) Consent of Independent Auditors
25 Power of Attorney
99(a) Copy of The Summit Bancorporation - Crestmont Financial Corp.
Incentive Stock Option Plan.
99(b) Copy of The Summit Bancorporation - Crestmont Financial Corp.
Compensatory Stock Option Plan
99(c) Copy of The Crestmont Financial Corp. Employee Stock Compensation
Program
ITEM 9. UNDERTAKINGS
The registrant hereby undertakes to file, during any period in which
offers or sales are being made, a post-effective amendment to this registration
statement (1) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933; (2) 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
8
aggregate, represent a fundamental change in the information set forth in the
registration statement; (3) 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 sections (1) and (2) above do not apply if the
registration statement is on Form S-3 or Form S-8 and information required to
be included in a post-effective amendment by those sections is contained in
periodic reports filed by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement.
The registrant hereby undertakes (1) that, for the purpose of
determining any liability under the Securities Act of 1933, each such post-
effective amendment to 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 and (2) 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.
The registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the registrant's
<PAGE>
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 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.
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.
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SIGNATURES
The Registrant
- --------------
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 Borough of Chatham, State of New Jersey, on October 18,
1995.
THE SUMMIT BANCORPORATION
By: /S/ John F. Kuntz
--------------------
John F. Kuntz,
Corporate Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the date indicated.
Signitures Capacity Date
---------- -------- ----
* Chairman of the October 18, 1995
--------------------- Board of Directors
Thomas D. Sayles, Jr.
<PAGE>
/S/ Robert G. Cox President, Chief October 18, 1995
-------------------- Executive Officer
Robert G. Cox and Director
(Principal
Executive
Officer)
/S/ John R.Feeney Senior Executive October 18, 1995
------------------ Vice President
John R. Feeney and Chief
Financial Officer
(Principal
Financial
Officer)
/S/ Alfred J. Soles Senior Vice October 18, 1995
-------------------- President and
Alfred J. Soles Controller
(Principal
Accounting
Officer)
10
Signitures Capacity Date
---------- -------- ----
*
---------------------- Director October 18, 1995
Allan G. Anderson
*
---------------------- Director October 18, 1995
S. Rodgers Benjamin
*
---------------------- Director October 18, 1995
James C. Brady, Jr.
*
---------------------- Director October 18, 1995
Samuel V. Gilman, Jr.
*
---------------------- Director October 18, 1995
S. Griffin McClellan
III
*
---------------------- Director October 18, 1995
William Boyce Lum
*
---------------------- Director October 18, 1995
Robert W. Parsons, Jr.
*
---------------------- Director October 18, 1995
Reeve Schley III
<PAGE>
*
---------------------- Director October 18, 1995
Orin R. Smith
*
---------------------- Director October 18, 1995
Douglas G. Watson
*
---------------------- Director October 18, 1995
Kate B. Wood
* John F. Kuntz, by signing his name hereto, does sign this document on
behalf of each of the persons indicated above pursuant to powers of
attorney duly executed by such persons and filed as exhibits herewith.
/S/ John F. Kuntz
-------------------------------
John F. Kuntz, Attorney-in-Fact
11
EXHIBITS
Exhibit Number
- --------------
5 Opinion of Bourne, Noll & Kenyon
24(a) Consent of Counsel (included in
Exhibit 5)
24(b) Consent of Independent Auditors
25 Power of Attorney
99(a) Copy of The Summit Bancorporation -
Crestmont Financial Corp. Incentive
Stock Option Plan
99(b) Copy of The Summit Bancorporation -
Crestmont Financial Corp. Compensatory
Stock Option Plan
99(c) Copy of The Crestmont Financial Corp.
Employee Stock Compensation Program
12
<PAGE>
EXHIBIT 5
<PAGE>
October 18, 1995
The Summit Bancorporation
One Main Street
Chatham, New Jersey 07928
Attn: John F. Kuntz, Esq.
Corporate Secretary and General Counsel
Re: Form S-8 Registration Statement - The Summit Bancorporation --
Crestmont Financial Corp. Incentive Stock Option Plan and
Compensatory Stock Option Plan
Dear Mr. Kuntz:
We are rendering this opinion as counsel for The Summit Bancorporation
(the "Company") in connection with the registration and issuance of 112,469
shares of Common Stock of the Company (the "Securities") pursuant to a
Registration Statement to be filed with the Securities and Exchange Commission
on Form S-8 (the "Registration Statement").
In connection with the foregoing, we have participated in the preparation
of, and have reviewed the Registration Statement. In addition, we have
examined originals or copies identified to our satisfaction as being the true
copies of such documents, corporate records and other instruments as we have
deemed necessary or appropriate for the purposes of this opinion.
Based upon the foregoing, we are of the opinion that:
1. The Company has been duly organized and is validly existing under the
laws of State of New Jersey;
2. The issuance and sale of the Securities have been validly authorized;
and
3. The Securities, when issued and sold, will be legally issued, fully
paid and non-assessable.
We hereby consent to all references to us in the Registration Statement,
including any prospectus relating thereto, and to the inclusion of a duplicate
original of this opinion as an exhibit to the Registration Statement.
Very truly yours,
/S/ Bourne, Noll & Kenyon P.A.
BOURNE, NOLL & KENYON
A Professional Corporation
14
<PAGE>
EXHIBIT 24(a)
15
<PAGE>
EXHIBIT 24(b)
16
<PAGE>
INDEPENDENT AUDITOR'S CONSENT
-----------------------------
The Board of Directors
The Summit Bancorporation:
We consent to the incorporation by reference in the registration statement on
Form S-8 relating to The Summit Bancorporation -Crestmont Financial Corp.
Incentive Stock Option Plan and The Summit Bancorporation - Crestmont Financial
Corp. Compensatory Stock Option Plan of our report dated January 17, 1995,
relating to the consolidated balance sheets of The Summit Bancorporation and
subsidiaries as of December 31, 1994, and 1993, and the related consolidated
statements of income, stockholders' equity, and cash flows for each of the
years in the three-year period ended December 31, 1994, which report is
included in the December 31, 1994 Annual Report on Form 10-K of The Summit
Bancorporation, and to the reference to our Firm under the heading "Interests
of Named Experts and Counsel" in the registration statement.
KPMG Peat Marwick LLP
Short Hills, New Jersey
October 18, 1995
<PAGE>
EXHIBIT 25
18
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below, in his or her capacity as a Director or Officer of The Summit
Bancorporation ("Summit"), hereby constitutes and appoints John F. Kuntz his or
her true and lawful attorney-in-fact and agent, with full power of
substitution, for him or her and in his or her name, place and stead, and in
any and all capacities, to execute a registration statement on Form S-8 under
the Securities Act of 1933 concerning the conversion to Summit options of
certain outstanding stock options issued under the former Crestmont Financial
Corp. ("Crestmont") Employee Stock Compensation Program, in connection with the
merger of Crestmont with and into Summit which was consummated on September 13,
1994, and file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, and to
execute and file any and all amendments thereto (including post-effective
amendments), granting unto said attorney-in-fact and agent full power and
authority to do each and every act requisite and necessary to be done, as fully
and to all intents and purposes as he or she might do in person, and hereby
ratifying and confirming all that said attorney-in-fact and agent may lawfully
do or cause to be done by virtue thereof.
Dated: October 18, 1995 /S/ Thomas D. Sayles, Jr.
-------------------------
Thomas D. Sayles, Jr.
/S/ Robert G. Cox
-------------------------
Robert G. Cox
/S/ John R. Feeney
-------------------------
John R. Feeney
/S/ Allan G. Anderson
-------------------------
Allan G. Anderson
/S/ S. Rodgers Benjamin
-------------------------
S. Rodgers Benjamin
/S/ James C. Brady, Jr.
-------------------------
James C. Brady, Jr.
/S/ Samuel V. Gilman, Jr.
-------------------------
Samuel V. Gilman, Jr.
19
<PAGE>
/S/ William Boyce Lum
----------------------------
William Boyce Lum
/S/ S. Griffin McClellan III
----------------------------
S. Griffin McClellan III
/S/ Robert W. Parsons, Jr.
----------------------------
Robert W. Parsons, Jr.
/S/ Reeve Schley III
----------------------------
Reeve Schley III
/S/ Orin R. Smith
----------------------------
Orin R. Smith
/S/ Douglas G. Watson
----------------------------
Douglas G. Watson
/S/ Kate B. Wood
----------------------------
Kate B. Wood
20
<PAGE>
EXHIBIT 99(a)
21
<PAGE>
PLAN I
CRESTMONT FEDERAL SAVINGS AND LOAN ASSOCIATION
INCENTIVE STOCK OPTION PLAN
Section 1. Purpose. The purpose of this Crestmont Federal
-------
Savings and Loan Association Incentive Stock Option Plan ("Incentive Plan") is
to promote the growth and general prosperity of the Association by permitting
the Association to grant options to purchase shares of its Common Stock. The
Incentive Plan is designed to help attract and retain superior personnel for
positions of responsibility with the Association, any parent and its
subsidiaries, and to provide key employees with an additional incentive to
contribute to the success of the Association. The Association intends that
options granted pursuant to the provisions of the Incentive Plan will qualify
and will be identified as "Incentive stock options" within the meaning of
Section 422A of the Internal Revenue Code of 1954, as amended ("Code"). This
Incentive Plan is Part I of the Association's Employee Stock Compensation
Program ("Program"). Unless any provision herein indicates to the contrary,
this Incentive Plan shall be subject to the General Provisions of the Program.
Section 2. Option Terms and Conditions. The terms and conditions
---------------------------
of options granted under the Incentive Plan may differ from one another as the
Program Administrators shall, in their discretion, determine, as long as all
options granted under the Incentive Plan satisfy the requirements of the
Incentive Plan.
Section 3. Duration of Options. Each option and all rights
-------------------
thereunder granted pursuant to the terms of the Incentive Plan shall expire on
the date determined by the Program Administrators, but in no event shall any
option granted under the Incentive Plan expire later than 10 years from the
date on which the option is granted, except that any employee who owns more
than 10% of the combined voting power of all classes of stock of the
Association, or of its parent or subsidiary, must exercise any options within
five years from the date of grant. In addition, each option shall be subject
to early termination as provided in the Incentive Plan.
Section 4. Purchase Price. The purchase price for shares
--------------
acquired pursuant to the exercise, in whole or in part, of any option shall not
be less than the fair market value of the shares at the time of the grant of
the option; except that for any employee who owns more than 10% of the combined
voting power of all classes of stock of the Association, or of its parent or
subsidiary, the purchase price shall not be less than 110% of fair market
value. Fair market value shall be determined by the Program Administrators on
the basis of such factors as they deem appropriate; provided, however, that
22
fair market value shall be determined without regard to any restriction other
than a restriction which, by its terms, will never lapse, and further provided,
however, that if at the time the determination of fair market value is made,
those shares are admitted to trading on a national securities exchange for
which sale prices are regularly reported, the fair market value of those shares
<PAGE>
shall not be less than the mean of the high and low asked or closing sales
prices reported for the Common Stock on that exchange on the day or most recent
trading day preceding the date on which the option is granted. For purposes of
this Section 4, the term "national securities exchange" shall include the
National Association of Securities Dealers Automated Quotation System and the
over-the-counter market.
Section 5. Maximum Amount of Options in Any Calendar Year. The
----------------------------------------------
maximum aggregate fair market value of Common Stock, determined as of the time
the option is granted, for which any employee may be granted incentive stock
options, as defined in Section 422A(b) of the Code, in any calendar year prior
to 1987 under all incentive stock option plans of the Association and any
parent, subsidiary, and predecessor corporations, shall not exceed $100,000
plus the amount of any "unused limit carryover" that may be taken into account
in that calendar year in accordance with the provisions of Section 422A(c)(4)
of the Code. With respect to options granted under the Incentive Plan after
December 31, 1986, including options granted concurrently with the
Association's conversion to stock form if such conversion is not completed
until after December 31, 1986, the aggregate fair market value (determined as
of the time the option is granted) of the Common Stock with respect to which
incentive stock options are first exercisable by any Optionee during any
calendar year under the terms of this Plan and all such plans of the
Association and its parent and subsidiary corporations, shall not exceed
$100,000 plus the amount of any "unused limit carryover" that may be taken into
account in that calendar year in accordance with the provisions of Section
422A(c)(4) of the Code. Any option in excess of the foregoing limitations
shall be granted pursuant to the Association's Compensatory Stock Option Plan
(Plan II), and shall be clearly and specifically designated as not being an
incentive stock option.
Section 6. Exercise of Options. Each option shall be exercisable
-------------------
in one or more installments during its term, and the right to exercise may be
cumulative as determined by the Program Administrators. No option may be
exercised for a fraction of a share of Common Stock. The purchase price of any
shares purchased shall be paid in full in cash or by certified or cashier's
check payable to the order of the Association or by shares of Common Stock, if
permitted by the Program Administrators, or by a combination of cash, check, or
shares of Common Stock, at the time of exercise of the option; provided that
the form(s) of payment allowed the employee shall be established when the
option is granted. If any portion of the purchase price is paid in shares of
23
Common Stock, those shares shall be tendered at their then fair market value as
determined by the Program Administrators in accordance with Section 4 of this
Incentive Plan.
Section 7. Acceleration of Right of Exercise of Installments.
-------------------------------------------------
Notwithstanding the first sentence of Section 6 of this Incentive Plan, in the
event the Association or its stockholders enter into an agreement to dispose of
all or substantially all of the assets or stock of the Association by means of
a sale, merger or other reorganization, liquidation, or otherwise, any option
granted pursuant to the terms of the Incentive Plan shall become immediately
exercisable with respect to the full number of shares subject to that option
during the period commencing as of the date of the agreement to dispose of all
or substantially all of the assets or stock of the Association and ending when
the disposition of assets or stock contemplated by that agreement is
<PAGE>
consummated or the option is otherwise terminated in accordance with its
provisions or the provisions of this Incentive Plan, whichever occurs first;
provided, however, that no option shall be immediately exercisable under this
Section 7 on account of any agreement to dispose of all or substantially all of
the assets or stock of the Association by means of a sale, merger or other
reorganization, liquidation, or otherwise where the stockholders of the
Association immediately before the consummation of the transaction will own at
least 50% of the total combined voting power of all classes of stock entitled
to vote of the surviving entity, whether the Association or some other entity,
immediately after the consummation of the transaction. In the event the
transaction contemplated by the agreement referred to in this Section 7 is not
consummated, but rather is terminated, cancelled, or expires, the options
granted pursuant to the Incentive Plan shall thereafter be treated as if that
agreement had never been entered into.
Notwithstanding the first sentence of Section 6 of this Incentive
Plan, in the event of a change in control of the Association or threatened
change in control of the Association as determined by a vote of not less than a
majority of the Board of Directors of the Association, all options granted
prior to such change in control or threatened change of control shall become
immediately exercisable. The term "control" for purposes of this Section shall
refer to the acquisition of 10% or more of the voting securities of the
Association by any person or by persons acting as a group within the meaning of
Section 13(d) of the Securities Exchange Act of 1934; provided, however, that
for purposes of this Incentive Plan, no change in control or threatened change
in control shall be deemed to have occurred if prior to the acquisition of, or
offer to acquire, 10% or more of the voting securities of the Association, the
full Board of Directors of the Association shall have adopted by not less than
two-thirds vote a resolution specifically approving such acquisition or offer.
24
The term "person" for purposes of this Section refers to an individual or a
corporation, partnership, trust, association, joint venture, pool, syndicate,
sole proprietorship, unincorporated organization or any other form of entity
not specifically listed herein.
Section 8. Written Notice Required. Any option granted pursuant
-----------------------
to the terms of the Incentive Plan shall be exercised when written notice of
that exercise has been given to the Association at its principal office by the
person entitled to exercise the option and full payment for the shares with
respect to which the option is exercised has been received by the Association.
Section 9. Limitation on Exercise. Notwithstanding Sections 6
----------------------
and 7 of this Incentive Plan, no option granted on or before December 31, 1986
to an employee pursuant to the Incentive Plan shall be exercisable while there
is outstanding any other incentive stock option previously granted to such
employee to purchase Common Stock of the Association or shares in a corporation
which, at the time of the granting of such option, is a parent subsidiary
corporation of the Association, or is a predecessor corporation, of any such
corporation. However, any incentive stock option granted after December 31,
1986, can be exercised notwithstanding the existence of an incentive stock
option granted before such option. For this purpose, an incentive stock option
shall be treated as outstanding until that option is exercised in full or
expires solely by reason of the lapse of time.
<PAGE>
Section 10. Compliance With Securities Laws. Shares of Common
-------------------------------
Stock shall not be issued with respect to any option granted under the
Incentive Plan unless the exercise of that option and the issuance and delivery
of those shares pursuant to that exercise shall comply with all relevant
provisions of state and federal law including, without limitation, the
Securities Act of 1933, as amended, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the shares
may then be listed, and shall be further subject to the approval of counsel for
the Association with respect to such compliance. The Program Administrators
may also require an employee to whom an option has been granted under the
Incentive Plan ("Optionee") to furnish evidence satisfactory to the
Association, including a written and signed representation letter and consent
to be bound by any transfer restriction imposed by law, legend, condition, or
otherwise, that the shares are being purchased only for investment and without
any present intention to sell or distribute the shares in violation of any
state or federal law, rule, or regulation. Further, each Optionee shall consent
to the imposition of a legend on the shares of Common Stock subject to his or
her option restricting their transferability as required by law or by this
Section 10.
Section 11. Employment of Optionee. Each Optionee, if requested
----------------------
by the Program Administrators when the option is granted, must agree in writing
as a condition of receiving his or her option, that he or she will remain in
25
the employ of the Association, or any parent or subsidiary corporation of the
Association (or a corporation or a parent or subsidiary of such corporation
issuing or assuming a stock option in a transaction to which Section 425 (a) of
the Code applies), as the case may be, following the date of the granting of
that option for a period specified by the Program Administrators, which period
shall in no event exceed three years.
Nothing in the Plan or in any option granted hereunder shall confer
upon any Optionee any right to continued employment by the Association, or its
subsidiary corporations, or limit in any way the right of the Association or
any of its subsidiary corporations at any time to terminate or alter the terms
of that employment.
Section 12. Option Rights Upon Termination of Employment. If an
--------------------------------------------
Optionee ceases to be employed by the Association, or any parent or subsidiary
corporation (or a corporation or a parent or subsidiary of such corporation
issuing or assuming a stock option in a transaction to which Section 425 (a) of
the Code applies), for any reason other than death or disability, his or her
option shall immediately terminate; provided, however, that the Program
Administrators may, at the time an option is granted, in their discretion,
allow such option to be exercised (to the extent exercisable on the date of
termination of employment) at any time within three months after the date of
termination of employment, unless either the option or the Incentive Plan
otherwise provides for earlier termination.
Section 13. Option Rights Upon Disability. If an Optionee becomes
-----------------------------
disabled within the meaning of Section 22(e)(3) of the Code while employed by
the Association, or any parent or subsidiary corporation (or a corporation or a
parent or subsidiary of such corporation issuing or assuming a stock option in
<PAGE>
a transaction to which Section 425 (a) of the Code applies), the option may be
exercised, to the extent exercisable on the date of termination of employment,
at any time within one year after the date of termination of employment due to
disability, unless either the option or the Incentive Plan otherwise provides
for earlier termination.
Section 14. Option Rights Upon Death of Optionee. Except as
------------------------------------
otherwise limited by the Program Administrators at the time of the grant of an
option, if an Optionee dies while employed by the Association, or any parent or
subsidiary corporation (or a corporation or a parent or subsidiary of such
corporation issuing or assuming a stock option in a transaction to which
Section 425(a) of the Code applies), or within three months after ceasing to be
an employee thereof, his or her option shall expire one year after the date of
death unless by its term it expires sooner. During this one year or shorter
period, the option may be exercised, to the extent that it remains unexercised
on the date of death, by the person or persons to whom the Optionee's rights
under the option shall pass by will or by the laws of descent and distribution,
26
but only to the extent that the Optionee is entitled to exercise the option at
the date of death.
Section 15. Options Not Transferable. Options granted pursuant to
------------------------
the terms of the Incentive Plan may not be sold, pledged, assigned, or
transferred in any manner otherwise than by will or the laws of descent or
distribution and may be exercised during the lifetime of an Optionee only by
that Optionee.
Section 16. Adjustments to Number and Purchase Price of Optioned
----------------------------------------------------
Shares. All options granted pursuant to the terms of this Incentive Plan
------
shall be adjusted in the manner prescribed by Article 6 of the General
Provisions of this Program.
27
<PAGE>
EXHIBIT 99(b)
28
<PAGE>
CRESTMONT FEDERAL SAVINGS AND LOAN ASSOCIATION
COMPENSATORY STOCK OPTION PLAN
Section 1. Purpose. The purpose of this Crestmont Federal Savings and
-------
Loan Association Compensatory Stock Option Plan ("Compensatory Plan") is to
permit the Association to grant options to purchase shares of its Common Stock
to directors, officers and full-time, key employees of the Association. The
Compensatory Plan is designed to help attract and retain superior personnel for
positions of substantial responsibility with the Association and its
subsidiaries, and to provide directors, officers and key employees with an
additional incentive to contribute to the success of the Association. Any
option granted pursuant to this Compensatory Plan shall be clearly and
specifically designated as not being an incentive stock option, as defined in
Section 422A(b) of the Internal Revenue Code of 1954, as amended ("Code").
This Compensatory Plan is Part II of the Association's Employee Stock
Compensation Program ("Program"). Unless any provision herein indicates to the
contrary, this Compensatory Plan shall be subject to the General Provisions of
the Program.
Section 2. Option Terms and Conditions. The terms and conditions of
---------------------------
options granted under this Compensatory Plan may differ from one another as the
Program Administrators shall, in their discretion, determine as long as all
options granted under the Compensatory Plan satisfy the requirements of the
Compensatory Plan.
The maximum number of shares of Common Stock for which options may be
granted under this Compensatory Plan to all directors who are not full-time
salaried employees of the Association or its subsidiaries shall not exceed 25%
of the shares of Common Stock covered by the Program.
Except as otherwise provided herein, the Program Administrators may grant
options under this Compensatory Plan only to officers and key employees of the
Corporation and its subsidiaries. Notwithstanding the foregoing, each person
who (i) becomes a member of the Board of Directors of Crestmont Financial Corp.
(the "Corporation") or a subsidiary after August 31, 1992 and who is not then
an employee of the Corporation or a subsidiary shall receive, date of becoming
a board member, options to purchase 7,500 shares of Common Stock. The purchase
price for shares acquired pursuant to the exercise, in whole or in part, of any
option granted under this paragraph shall be equal to the fair market value of
the shares at the time of grant of the option (as determined in accordance with
Section 4). For one year following the grant of options pursuant to this
paragraph, the Optionee shall be ineligible to serve as a member of the Program
Administrators. The provisions of this paragraph shall supersede any contrary
provision of the Program or of this Plan (other than the second paragraph of
this Section 2).
29
Section 3. Duration of Options. Each option and all rights thereunder
-------------------
granted pursuant to the terms of this Compensatory Plan shall expire on the
date determined by the Program Administrators (or the Board of Directors with
respect to the Program Administrators), but in no event shall any option
granted under the Compensatory Plan expire later than 10 years and one month
<PAGE>
from the date on which the option is granted. In addition, each option shall
be subject to early termination as provided in the Compensatory Plan.
Section 4. Purchase Price. The purchase price for shares acquired
--------------
pursuant to the exercise, in whole or in part, of any option shall be not less
than the fair market value of the shares at the time of the grant of the
option, as determined by the Program Administrators (or the Board of Directors
with respect to the Program Administrators) at the time of grant on the basis
of such factors as they deem appropriate; provided, however, that fair market
value shall be determined without regard to any restriction other than a
restriction which, by its terms, shall never lapse. If at the time of the
determination, the shares of the Association are admitted to trading on a
national securities exchange for which sales prices are regularly reported, the
fair market value of those shares shall not be less than the mean of the high
and low asked or closing sales prices reported for the Common Stock on that
exchange on the day or most recent trading day preceding the date on which the
option is granted. For purposes of this Section 4, the term "national
securities exchange" shall include the National Association of Securities
Dealers Automated Quotation System and the over-the-counter market.
Section 5. Exercise of Options. Each option shall be exercisable in one
-------------------
or more installments during its term and the right to exercise may be
cumulative as determined by the Program Administrators (or the Board of
Directors with respect to the Program Administrators). No options may be
exercised for a fraction of a share of Common Stock. The purchase price of any
shares purchased shall be paid in full in cash or by certified or cashier's
check payable to the order of the Association or by shares of Common Stock, if
permitted by the Program Administrators (or the Board of Directors with respect
to the Program Administrators), or by a combination of cash, check or shares of
common stock, at the time of exercise of the option. If any portion of the
purchase price is paid in shares of Common Stock, those shares shall be
tendered at their then fair market value as determined by the Program
Administrators (or the Board of Directors with respect to the Program
Administrators) in accordance with Section 4 of this Compensatory Plan.
Section 6. Acceleration of Right of Exercise of Installments.
-------------------------------------------------
Notwithstanding the first sentence of Section 5 of this Compensatory Plan, if
the Association or its stockholders enter into an agreement to dispose of all
or substantially all of the assets or stock of the Association by means of a
30
sale, merger or other reorganization, liquidation, or otherwise, any option
granted pursuant to the terms of this Compensatory Plan shall become
immediately exercisable with respect to the full number of shares subject to
that option during the period commencing as of the date of the agreement to
dispose of all or substantially all of the assets or stock of the Association
and ending when the disposition of assets or stock contemplated by that
agreement is consummated, or the option is otherwise terminated in accordance
with its provisions or the provisions of this Compensatory Plan, whichever
<PAGE>
occurs first; provided, however, that no option shall be immediately
exercisable under this Section 6 on account of any agreement to dispose of all
or substantially all of the assets or stock of the Association by means of a
sale, merger or other reorganization, liquidation, or otherwise where the
stockholders of the Association immediately before the consummation of the
<PAGE>
transaction will own at least 50% of the total combined voting power of all
classes of stock entitled to vote of the surviving entity, whether the
Association or some other entity, immediately after the consummation of the
transaction. In the event the transaction contemplated by the agreement
referred to in this Section 6 is not consummated, but rather is terminated,
cancelled or expires, the options granted pursuant to this Compensatory Plan
shall thereafter be treated as if that agreement had never been entered into.
Notwithstanding the first sentence of Section 5 of this Compensatory Plan,
in the event of a change in control of the Association, or threatened change in
control of the Association as determined by a vote of not less than a majority
of the Board of Directors of the Association, all options granted prior to such
change in control or threatened change in control shall become immediately
exercisable. The term "control" for purposes of this Section shall refer to
the acquisition of 10% or more of the voting securities of the Association by
any person or by persons acting as a group within the meaning of Section 13(d)
of the Securities Exchange Act of 1934; provided, however, that for purposes of
this Compensatory Plan, no change in control or threatened change in control
shall be deemed to have occurred if prior tot he acquisition of, or offer to
acquire, 10% or more of the voting securities of the Association, the full
Board of Directors of the Association shall have adopted by not less than two-
thirds vote a resolution specifically approving such acquisition or offer. The
term "person" for purposes of this section refers to an individual or a
corporation, partnership, trust, association, joint venture, pool, syndicate,
sole proprietorship, unincorporated organization or any other form of entity
not specifically listed herein.
Section 7. Written Notice Required. Any option granted pursuant to the
-----------------------
terms of this Compensatory Plan shall be exercised when written notice of that
exercise has been given to the Association at its principal office by the
person entitled to exercise the option and full payment for the shares with
respect to which the option is exercised has been received by the Association.
31
Section 8. Compliance With Securities Laws. Shares shall not be issued
-------------------------------
with respect to any option granted under the Compensatory Plan unless the
exercise of that option and the issuance and delivery of the shares pursuant
thereto shall comply with all relevant provisions of state and federal law,
including, without limitation, the Securities Act of 1933, as amended, the
rules and regulations promulgated thereunder and the requirements of any stock
exchange upon which the shares may then be listed, and shall be further subject
to the approval of counsel for the Association with respect to such compliance.
The Program Administrators may also require an employee to whom an option has
been granted ("Optionee") to furnish evidence satisfactory to the Association,
including a written and signed representation letter and consent to be bound by
any transfer restrictions imposed by law, legend, condition, or otherwise, that
the shares are being purchased only for investment purposes and without any
present intention to sell or distribute the shares in violation of any state or
federal law, rule, or regulation. Further, each Optionee shall consent to the
imposition of a legend on the shares of Common Stock subject to his or her
option restricting their transferability as required by law or by this Section
8.
Section 9. Employment of Optionee. Each Optionee, if requested by the
----------------------
Program Administrators, must agree in writing as a condition of the granting of
<PAGE>
his or her option, to remain in the employment of the Association or its parent
or any of its subsidiaries (or a corporation or a parent or subsidiary of such
corporation issuing or assuming a stock option in a transaction to which
Section 425(a) of the Code applies), following the date of the granting of that
option for a period specified by the Program Administrators, which period shall
in no event exceed three years. Nothing in this Compensatory Plan or in any
option granted hereunder shall confer upon any Optionee any right to continued
employment by the Association or any of its subsidiaries, or limit in any way
the right of the Association or any subsidiary at any time to terminate or
alter the terms of that employment.
Section 10. Option Rights Upon Termination of Service. If any Optionee
-----------------------------------------
under this Compensatory Plan ceases all service with the Association, its
parent, and its subsidiaries (or a corporation or a parent or subsidiary of
such corporation issuing or assuming a stock option in a transaction to which
Section 425(a) of the Code applies), for any reason other than disability or
death, his or her option shall immediately terminate; provided, however, that
the Program Administrators (or the Board of Directors with respect to the
Program Administrators) may, in their discretion, allow the option to be
exercised, to the extent exercisable on the date of termination of service, at
any time within three months after the date of termination of service, unless
either the option of this Compensatory Plan otherwise provides for earlier
termination. For purposes of this Section 10, the term "service" shall include
service as an employee and service as a director.
32
Section 11. Option Rights Upon Disability. If an Optionee becomes
-----------------------------
disabled within the meaning of Section 22(e)(3) of the Code while employed by
the Association, or any parent or subsidiary corporation (or a corporation or a
parent or subsidiary of such corporation issuing or assuming a stock option in
a transaction to which Section 425(a) of the Code applies), the Program
Administrators (or the Board of Directors with respect to the Program
Administrators), in their discretion, may allow the option to be exercised, to
the extent exercisable on the date of termination of employment, at any time
within one year after the date of termination of employment due to disability,
unless either the option or the Incentive Plan otherwise provides for earlier
termination.
Section 12. Option rights Upon Death of Optionee. Except as otherwise
------------------------------------
limited by the Program Administrators (or the Board of Directors with respect
to the Program Administrators) at the time of the grant of an option, if an
Optionee dies while employed by the Association (or while serving as a member
of the Association's Board of Directors), its parent, or any of its
subsidiaries (or a corporation or a parent or subsidiary of such corporation
issuing or assuming a stock option in a transaction to which Section 425(a) of
the Code applies), his or her option shall expire one year after the date of
death unless by its terms it expires sooner. During this one year or shorter
period, the option may be exercised, to the extent that it remains unexercised
on the date of death, by the person or persons to whom the Optionee's rights
under the option shall pass by will or by the laws of descent and distribution,
but only to the extent that the Optionee is entitled to exercise the option at
the date of death.
<PAGE>
Section 13. Options Not Transferable. Options granted pursuant to the
------------------------
terms of this Compensatory Plan may not be sold, pledged, assigned, or
transferred in any manner otherwise than by will or the laws of descent or
distribution and may be exercised during the lifetime of an Optionee only by
that Optionee.
Section 14. Adjustments to Number and Purchase Price of Optioned Shares.
-----------------------------------------------------------
All options granted pursuant to the terms of this Compensatory Plan shall be
adjusted in a manner prescribed by Article 6 of the General Provisions of the
Program.
Section 15. Certain Mandatory Abstentions. Notwithstanding anything
-----------------------------
herein to the contrary, no employee or director of the Corporation or its
subsidiaries shall, as a Program Administrator or otherwise, have any vote with
regard to any option granted to himself or herself, including, but not limited
to:
(i) The time at which any such option shall be granted;
(ii) The number of shares of Common Stock covered by any such option;
33
(iii) The time or times at which, or the period during which, any
such option may be exercised or whether it may be exercised in whole or in
installments;
(iv) The provisions of any stock option agreement relating to any
such option; and
(v) The option price of shares subject to an option granted to him or
her.
34
<PAGE>
EXHIBIT 99(c)
35
<PAGE>
CRESTMONT FEDERAL SAVINGS AND LOAN ASSOCIATION
EMPLOYEE STOCK COMPENSATION PROGRAM
1. Purpose. This Crestmont Federal Savings and Loan Association Employee
-------
Stock Compensation Program ("Program") is intended to secure for Crestmont
Federal Savings and Loan Association (the "Association") and its stockholders
<PAGE>
the benefits arising from ownership of the Association's common stock, par
value $1.00 per share ("Common Stock"), by those directors, officers and other
key employees of the Association who will be responsible for its future growth.
The Program is designed to help attract and retain superior personnel for
positions of substantial responsibility with the Association, and to provide
directors, officers and key employees with an additional incentive to
contribute to the success of the Association.
2. Elements of the Program. In order to maintain flexibility in the
-----------------------
award of stock benefits, the Program is comprised of four parts. The first
part is the Incentive Stock Option Plan ("Incentive Plan"). The second part is
the Compensatory Stock Option Plan ("Compensatory Plan"). The third part is
the Stock Appreciation Rights Plan ("S.A.R. Plan"). The fourth part is the
Performance Shares Plan ("Performance Plan"). Copies of the Incentive Plan,
Compensatory Plan, S.A.R. Plan, and Performance Plan are attached hereto as
Part I, Part II, Part III and Part IV, respectively, and are collectively
referred to herein as the "Plans." The grant of an option, appreciation right
or performance share under one of the Plans shall not be construed to prohibit
the grant of an option, appreciation right or performance share under any of
the other Plans.
3. Applicability of General Provisions. Unless any Plan specifically
-----------------------------------
indicates to the contrary, all Plans shall be subject to the General Provisions
of the Stock Compensation Program set forth below.
4. Administration of the Plans. The Plans shall be administered,
---------------------------
construed, governed and amended in accordance with their respective terms.
GENERAL PROVISIONS OF STOCK COMPENSATION PROGRAM
Article 1. Administration. The Program shall be administered by a
--------------
committee appointed by the Board of Directors of the Association and composed
of not less than three directors of the Association, none of whom is a full-
time officer or employee of the Association or its subsidiaries. The
committee, when acting to administer the Program, is referred to as the
"Program Administrators." Any action of the Program Administrators shall be
taken by majority vote or the unanimous written consent of the Program
36
Administrators. The Board of Directors with the Program Administrators not
acting shall administer the Program with respect to options granted to the
Program Administrators in accordance with the provisions of Plan II. No
<PAGE>
Program Administrator or member of the Board of Directors of the Association,
its parent or subsidiaries, shall be liable for any action or determination
made in good faith with respect to the Program or to any option, stock
appreciation right, or performance share granted thereunder.
Article 2. Authority of Program Administrators. Subject to the other
-----------------------------------
provisions of this Program, and with a view to effecting its purpose, the
Program Administrators shall have sole authority in their absolute discretion:
(a) to construe and interpret the Program; (b) to define the terms used herein;
(c) to prescribe, amend, and rescind rules and regulations relating to the
Program; (d) to determine the employees to whom options, appreciation rights
and performance shares shall be granted under the Program; (e) to determine the
time or times at which options, appreciation rights and performance shares
shall be granted under the Program; (f) to determine the number of shares
subject to any option or stock appreciation right under the Program and the
number of shares to be awarded as performance share under the Program as well
as the option price, and the duration of each option, appreciation right and
performance share, and any other terms and conditions of options, appreciation
rights and performance shares; (g) to terminate the Program; and (h) to make
any other determinations necessary or advisable for the administration of the
Program and to do everything necessary or appropriate to administer the
Program. All decisions, determinations, and interpretations made by the
Program Administrators shall be binding and conclusive on all participants in
the Program and on their legal representatives, heirs and beneficiaries.
Article 3. Maximum Number of Shares Subject to the Program. The maximum
-----------------------------------------------
aggregate number of shares of Common Stock available pursuant to the Plans,
subject to adjustment as provided in Article 6 hereof, shall be equal to the
number of shares that represent 10% of the Association's initial issuance of
Common Stock. If any of the options granted under this Program expire or
terminate for any reason before they have been exercised in full, the
unpurchased shares subject to those expired or terminated options shall again
be available for the purposes of the Program. If the performance objectives
associated with the grant of any performance share(s) are not achieved within
the specified performance period or if the performance share grant terminates
for any reason before the performance objective date arrives, the shares of
Common Stock associated with such performance shares shall again be available
for the purposes of the Program.
Article 4. Eligibility and Participation. Only regular full-time
-----------------------------
employees of the Association, including officers whether or not directors of
the Association, or of any parent or any subsidiary, shall be eligible for
selection by the Program Administrators to participate in the Program.
37
Directors who are not full-time salaried employees of the Association shall
only be eligible to participate in Plan II of the Program.
Article 5. Effective Date and Term of Program. The Program shall become
----------------------------------
effective upon its adoption by the Board of Directors of the Association and
subsequent approval of the Program by a majority of the total votes eligible to
be cast at a meeting of stockholders, which vote shall be taken within 12
months of adoption of the Program by the Association's Board of Directors;
provided, however, that options, appreciation rights, and performance shares
<PAGE>
may be granted under this Program prior to obtaining stockholder approval of
the Program, but after the Association's original issuance of Common Stock, and
further provided that any such options or appreciation rights or performance
shares shall be contingent upon such stockholder approval being obtained and
may not be exercised prior to such approval. The Program shall continue in
effect for a term of 10 years unless sooner terminated under Article 2 of the
General Provisions.
Article 6. Adjustments. If the shares of Common Stock of the Association
-----------
as a whole are increased, decreased, changed into, or exchanged for a different
number or kind of shares or securities through merger, consolidation,
combination, exchange of shares, other reorganization, recapitalization,
reclassification, stock dividend, stock split or reverse stock split, an
appropriate and proportionate adjustment shall be made in the maximum number
and kind of shares as to which options, appreciation rights and performance
shares may be granted under this Program. A corresponding adjustment changing
the number or kind of shares allocated to unexercised options, appreciation
rights, performance shares, or portions thereof, which shall have been granted
prior to any such change, shall likewise be made. Any such adjustment in
outstanding options and appreciation rights shall be made without change in the
aggregate purchase price applicable to the unexercised portion of the option or
appreciation right, but with a corresponding adjustment in the price for each
share or other unit of any security covered by the option or appreciation
right. In making any adjustment pursuant to this Article 6, any fractional
shares shall be disregarded.
Article 7. Termination and Amendment of Program. The Program shall
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terminate no later than 10 years from the date such Program is adopted by the
Board of Directors, or the date such Program is approved by the stockholders,
whichever is earlier. No options, appreciation rights, or performance shares
shall be granted under the Program after that date. Subject to the limitation
contained in Article 8 of the General Provisions, the Program Administrators
may at any time amend or revise the terms of the Program, including the form
and substance of the option, appreciation right, and performance shares
agreements to be used hereunder; provided that no amendment or revision shall
(a) increase the maximum aggregate number of shares that may be sold,
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appreciated, or distributed pursuant to options, appreciation rights, or
performance shares granted under this Program, except as permitted under
Article 6 of the General Provisions; (b) change the minimum purchase price for
shares under Section 4 of Plans I and II; (c) increase the maximum term
established under the Plans for any option, appreciation right, or performance
share; or (d) permit the granting of an option, appreciation right, or
performance share to anyone other than as provided in Article 4 of the General
Provisions.
However, nothing contained herein shall prohibit the Program Administrator from
cancelling outstanding options granted pursuant to Part I or II of the Plan,
with the consent of the Optionee, and reissuing new options at a lower exercise
price equal to the then fair market value per share of Common Stock in the
event that the fair market value per share of Common Stock at any time prior to
the date of the exercise of such options falls below the exercise price of the
options previously granted pursuant to the Plan. The number of new options to
be granted upon cancellation and surrender of previously granted options shall
be determined within the sole discretion of the Program Administrator.
<PAGE>
Article 8. Prior Rights and Obligations. No amendment, suspension, or
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termination of the Program shall, without the consent of the employee who has
received an option, appreciation right, or performance share, alter or impair
any of that employee's rights or obligations under any option, appreciation
right or performance share granted under the Program prior to such amendment,
suspension or termination.
Article 9. Privileges of Stock Ownership. Notwithstanding the exercise
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of any options granted pursuant to the terms of this Program or the achievement
of any performance objective specified in any performance share granted
pursuant to the terms of this Program, no employee shall have any of the rights
or privileges of a stockholder of the Association in respect of any shares of
stock issuable upon the exercise of his or her option or achievement of his or
her performance goal until certificates representing the shares have been
issued and delivered. No shares shall be required to be issued and delivered
upon exercise of any option or achievement of any performance goal as specified
in a performance share unless and until all of the requirements of law and of
all regulatory agencies having jurisdiction over the issuance and delivery of
the securities shall have been fully complied with. No adjustment shall be
made for dividends or any other distributions for which the record date is
prior to the date on which such stock certificate is issued.
Article 10. Reservation of Shares of Common Stock. The Association,
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during the term of this Program, will at all times reserve and keep available
such number of shares of its Common Stock as shall be sufficient to satisfy the
requirements of the Program. In addition, the Association will from time to
39
time, as is necessary to accomplish the purposes of this Program, seek to
obtain from any regulatory agency having jurisdiction any requisite authority
in order to issue and sell shares of Common Stock hereunder. The inability of
the Association to obtain from any regulatory agency having jurisdiction the
authority deemed by the Association's counsel to be necessary to the lawful
issuance and sale of any shares of its stock hereunder shall relive the
Association of any liability in respect of the non-issuance or sale of the
stock as to which the requisite authority shall not have been obtained.
Article 11. Tax Withholding. The exercise of any option, appreciation
---------------
right, or performance share granted under the Program is subject to the
condition that if at any time the Association shall determine, in its
discretion, that the satisfaction of withholding tax or other withholding
liabilities under any state or federal law is necessary or desirable as a
condition of, or in any connection with, such exercise or the delivery or
purchase or shares pursuant thereto, then in such event, the exercise of the
option, appreciation right or performance share shall not be effective unless
such withholding tax or other withholding liabilities shall have been satisfied
in a manner acceptable to the Association.
Article 12. Employment. Nothing in the Program or in any option, stock
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appreciation right, or performance share award, shall confer upon any eligible
employee any right to continued employment by the Association, or by its parent
or subsidiary corporations, or limit in any way the right of the Association or
<PAGE>
its parent or subsidiary corporation at any time to terminate or alter the
terms of that employment.
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