<PAGE> 1
Registration No. 333-____________
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
------------------
Form S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
------------------
SEARCH FINANCIAL SERVICES INC.
(Exact name of registrant as specified in its charter)
Delaware 41-1356819
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
600 North Pearl Street
Suite 2500
Dallas, TX 75201
(Address of principal executive
offices, including zip code)
1997 STOCK OPTION PLAN
(Full title of the plan)
Ellis A. Regenbogen, Esq.
Executive Vice President and General Counsel
Search Financial Services Inc.
600 North Pearl Street
Suite 2500
Dallas, TX 75201
(Name and address of agent for service)
(214) 965-6000
(Telephone number, including area code, of agent for service)
------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================
Proposed maximum Amount of
Title of securities to be Amount to be offering price per Proposed maximum registration
registered registered unit aggregate offering price fee
- --------------------------- ---------------------- ----------------------- ------------------------- ---------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par
value 1,250,000 shares $3.3125 (1) $4,140,625 (1) $1,254.73
====================================================================================================================
</TABLE>
(1) Determined pursuant to Rule 457(c) under the Securities Act of 1933,
based on the average of the high and low sale prices for the Common
Stock on August 19, 1997.
===============================================================================
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents constituting Part I of this Registration Statement with
respect to registrant's 1997 Stock Option Plan will be sent or given to
employees of registrant and its subsidiaries as specified by Rule 428(b)(1)
promulgated under the Securities Act of 1933.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The following documents filed by registrant with the Securities and
Exchange Commission are incorporated herein by reference:
(a) registrant's Annual Report on Form 10-K for the fiscal
year ended March 31, 1997;
(b) registrant's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1997;
(c) registrant's Current Reports on Form 8-K dated April 14,
May 1, May 16, June 25 and July 31, 1997; and
(d) the description of registrant's Common Stock contained in
registrant's registration statement on Form 8-A, including any
amendments or reports filed for the purpose of updating such
information.
All documents subsequently filed by registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the
filing of a post-effective amendment which indicates that all securities
offered hereby have been sold, or which de-registers all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
registration statement and to be a part hereof from the date of filing of such
documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
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<PAGE> 3
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Delaware General Corporation Law, Section 102(b)(7) of the Delaware
General Corporation Law provides that a certificate of incorporation may
contain a provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director, provided that such provision shall not
eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, (iii) under Section 174 (relating to liability for
unauthorized acquisitions or redemptions of, or dividends on, capital stock) of
the Delaware General Corporation Law, or (iv) of any transaction from which the
director derived an improper personal benefit.
Section 145 of the Delaware General Corporation Law provides as
follows:
"(a) A corporation may indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor
by reason of the fact that he is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
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<PAGE> 4
(c) To the extent that a director, officer, employee or agent of the
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met
the applicable standard of conduct set forth in subsections (a) and (b) of this
section. Such determination shall be made (1) by a majority vote of the
directors who are not parties to such action, suit or proceeding, even though
less than a quorum, or (2) if there are no such directors, by independent legal
counsel in a written opinion, or (3) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that he is not entitled to be indemnified by
the corporation as authorized in this section. Such expenses (including
attorneys' fees) incurred by other employees and agents may be so paid upon
such terms and conditions, if any, as the board of directors deems appropriate.
(f) The indemnification and advancement of expenses provided by or
granted pursuant to, the other subsections of this section shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office.
(g) A corporation shall have the power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out
of his status as such, whether or not the corporation would have the power to
indemnify him against such liability under this section.
(h) For purposes of this section, references to "the corporation"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, and
employees or agents, so that any person who is or was a director, officer,
employee or agent of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under this section with respect to
the resulting or surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued.
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<PAGE> 5
(i) For purposes of this section, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on a person with respect to any employee benefit plan;
and references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee or
agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in this
section.
(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive jurisdiction
to hear and determine all actions for advancement of expenses or
indemnification brought under this section or under any bylaw, agreement, vote
of stockholders or disinterested directors, or otherwise. The Court of Chancery
may summarily determine a corporation's obligations to advance expenses
(including attorneys' fees)."
Restated Certificate of Incorporation. Paragraph ELEVENTH of the
Restated Certificate of Incorporation states that registrant shall, to the
fullest extent permitted by the Delaware General Corporation Law, indemnify any
and all persons who it would have the power to indemnify under such law from
and against any and all of the expenses, liabilities or other matters referred
to in or covered by such law and, to the extent permitted under any bylaw,
agreement, vote of stockholders or disinterested directors or otherwise, both
as to action in his director or officer capacity and as to action in another
capacity while holding such office. Such indemnification obligation will
continue as to a person who has ceased to be a director, officer, employee or
agent and inure to the benefit of his heirs, executors and administrators.
Paragraph TWELFTH of the Restated Certificate of Incorporation states
that, to the fullest extent permitted by the Delaware General Corporation Law,
a director of registrant will not be liable to registrant or its shareholders
for monetary damages for breach of fiduciary duty as a director.
Bylaws. Article IX of registrant's Bylaws requires registrant to
indemnify any person who was or is a party, or threatened to be made a party,
to any suit or proceeding, by reason of the fact that he is or was an
authorized representative of registrant for specified liabilities and expenses
if he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of registrant and, with respect to any
criminal action or proceeding, he had no reasonable cause to believe his
conduct was unlawful. The Board of Directors, by vote of a majority of those
present at any meeting, may elect to exclude such person from such
indemnification. The indemnified liabilities and expenses include, but are not
limited to, legal fees and disbursements and amounts of judgments, fines or
penalties against, and amounts paid in settlement by, the indemnified party.
Registrant may advance any reasonable expense incurred by the indemnified party
prior to the final disposition of any claim, action, suit or proceeding if it
receives an undertaking by or on behalf of the recipient to repay such amount
if it is ultimately determined that he is not entitled to indemnification.
These indemnification rights are in addition to any other indemnification
rights to which the person may be entitled under any
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<PAGE> 6
agreement, vote of stockholders, the Restated Certificate of Incorporation, or
as a matter of law or otherwise.
The directors and officers of registrant are insured (subject to
certain exceptions and deductions) against liabilities which they may incur in
their capacity as such, including liabilities under the Securities Act of 1933,
under a liability insurance policy carried by registrant.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
Exhibit No. Description
----------- -----------
4 1997 Stock Option Plan
5 Opinion regarding legality of the securities
being registered
23.1 Consent of BDO Seidman, LLP
23.2 Consent of counsel (included in Exhibit No. 5)
ITEM 9. UNDERTAKINGS.
The undersigned registrant hereby undertakes
(1) to file, during any period in which offers or sales are
being made of the securities registered hereby, a post-effective
amendment to this registration statement:
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or
events arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement; and
(iii) to include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement;
provided, however, that the undertakings set forth in paragraphs
(1)(i) and (1)(ii) above do not apply if the information required to
be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by registrant pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this registration statement.
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<PAGE> 7
(2) that, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and each filing of the annual report of the Plan pursuant
to 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,
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, 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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<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dallas, State of Texas, on the 22nd day of August,
1997.
SEARCH FINANCIAL SERVICES INC.
By: /s/ George C. Evans
---------------------------------
George C. Evans, Chairman and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints, jointly and severally, George C. Evans,
Robert D. Idzi and Ellis A. Regenbogen, or any of them, with full power to act
alone, his true and lawful attorneys-in-fact, with full power of substitution
and resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact full
power and authority to do and perform each and every act and thing requisite
and necessary to be done as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact or any of them may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1993, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ George C. Evans Chairman of the Board, Chief Executive August 22, 1997
- --------------------------------------- Officer and Director
George C. Evans
/s/ Glen Adams Director August 22, 1997
- ---------------------------------------
Glen Adams
/s/ Richard F. Bonini Director August 22, 1997
- ---------------------------------------
Richard F. Bonini
/s/ William H. T. Bush Director August 22, 1997
- ---------------------------------------
William H. T. Bush
/s/ Anthony J. Dellavechia Director August 22, 1997
- ---------------------------------------
Anthony J. Dellavechia
/s/ Frederick S. Hammer Director August 22, 1997
- ---------------------------------------
Frederick S. Hammer
</TABLE>
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<PAGE> 9
<TABLE>
<S> <C> <C>
/s/ Luther H. Hodges, Jr. Director August 22, 1997
- ---------------------------------------
Luther H. Hodges, Jr.
/s/ James F. Leary Director August 22, 1997
- ---------------------------------------
James F. Leary
/s/ A. Brean Murray Director August 22, 1997
- ---------------------------------------
A. Brean Murray
/s/ Douglas W. Powell Director August 22, 1997
- ---------------------------------------
Douglas W. Powell
/s/ Barry W. Ridings Director August 22, 1997
- ---------------------------------------
Barry W. Ridings
/s/ James B. Stuart, Jr. Director August 22, 1997
- ---------------------------------------
James B. Stuart, Jr.
/s/ Robert D. Idzi Senior Executive Vice President, Chief August 22, 1997
- --------------------------------------- Financial Officer and Treasurer
Robert D. Idzi
/s/ Andrew D. Plagens Senior Vice President, Controller and August 22, 1997
- --------------------------------------- Chief Accounting Officer
Andrew D. Plagens
</TABLE>
-8-
<PAGE> 10
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------ -----------------------
<S> <C>
4 1997 Stock Option Plan
5 Opinion regarding legality of the securities being registered
23.1 Consent of BDO Seidman, LLP
23.2 Consent of counsel (included in Exhibit No. 5)
</TABLE>
<PAGE> 1
EXHIBIT 4
SEARCH FINANCIAL SERVICES INC.
1997 STOCK OPTION PLAN
I. PURPOSE. The purpose of the 1997 Stock Option Plan is to
attract and retain directors, officers and other key employees for Search
Financial Services Inc., a Delaware corporation, and its Subsidiaries and to
provide to such persons incentives and rewards for superior performance.
II. DEFINITIONS. As used in this Plan,
A. "Appreciation Right" means a right granted pursuant
to Section 5 of this Plan, including a Free-standing Appreciation
Right and a Tandem Appreciation Right.
B. "Base Price" means the price to be used as the basis
for determining the Spread upon the exercise of a Free-standing
Appreciation Right.
C. "Board" means the Board of Directors of the
Company and, to the extent of any delegation by the Board to a
committee (or subcommittee thereof) pursuant to Section 12 of this
Plan, such committee (or subcommittee).
D. "Change in Control" shall have the meaning set forth
in Section 9 of this Plan.
E. "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
F. "Common Shares" means the shares of common stock, par
value $0.01 per share, of the Company or any security into which such
Common Shares may be changed by reason of any transaction or event of
the type referred to in Section 8 of this Plan.
G. "Company" means Search Financial Services Inc., a Delaware
corporation.
H. "Date of Grant" means the date specified by the Board on
which a grant of Option Rights or Appreciation Rights shall become
effective (which date shall not be earlier than the date on which the
Board takes action with respect thereto).
I. "Director" means a member of the Board of Directors of the
Company.
J. "Exchange Act" means the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder, as such law,
rules and regulations may be amended from time to time.
K. "Free-standing Appreciation Right" means an Appreciation
Right granted pursuant to Section 5 of this Plan that is not granted
in tandem with an Option Right.
L. "Incentive Stock Options" means Option Rights that are
intended to qualify as "incentive stock options" under Section 422 of
the Code or any successor provision.
<PAGE> 2
M. "Market Value per Share" means, as of any particular date,
(i) the closing sale price per Common Share as reported on the
principal exchange on which Common Shares are then trading, if any,
or, if applicable, the NASDAQ National Market System, on the trading
day immediately preceding such date, or if there are no sales on such
immediately preceding trading day, on the next preceding trading day
during which a sale occurred, or (ii) if clause (i) does not apply,
the fair market value of the Common Shares as determined by the Board.
N. "Non-Employee Director" means a Director who is not an
employee of the Company or any Subsidiary.
O. "Optionee" means the optionee named in an agreement
evidencing an outstanding Option Right.
P. "Option Price" means the purchase price payable on
exercise of an Option Right.
Q. "Option Right" means the right to purchase Common Shares
upon exercise of an option granted pursuant to Section 4 or Section 6
of this Plan.
R. "Participant" means a person who is selected by the Board
to receive benefits under this Plan and who is at the time an officer,
or other key employee of the Company or any one or more of its
Subsidiaries, or who has agreed to commence serving in any of such
capacities within 90 days of the Date of Grant, and shall also include
each Non-Employee Director who receives an award of Option Rights.
S. "Plan" means this Search Financial Services Inc. 1997
Stock Option Plan.
T. "Reload Option Rights" means additional Option Rights
granted automatically to an Optionee upon the exercise of Option
Rights pursuant to Section 4(f) of this Plan.
U. "Spread" means, in the case of a Free-standing Appreciation
Right, the excess of the Market Value per Share on the date when the
Appreciation Right is exercised over the Base Price specified
therein, or, in the case of a Tandem Appreciation Right, the excess
of the Market Value per Share on the date when the Appreciation Right
is exercised over the Option Price provided for in the related Option
Right.
V. "Subsidiary" means a corporation, company or other entity
(i) more than 50 percent of whose outstanding shares or securities
(representing the right to vote for the election of directors or other
managing authority) are, or (ii) which does not have outstanding
shares or securities (as may be the case in a partnership, joint
venture or unincorporated association), but more than 50 percent of
whose ownership interest representing the right generally to make
decisions for such other entity is, now or hereafter, owned or
controlled, directly or indirectly, by the Company except that for
purposes of determining whether any person may be a Participant for
purposes of any grant of Incentive Stock Options, "Subsidiary" means
any corporation in which at the time the Company owns or controls,
directly or indirectly, more than 50 percent of the
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<PAGE> 3
total combined voting power represented by all classes of stock
issued by such corporation.
W. "Tandem Appreciation Right" means an Appreciation Right
granted pursuant to Section 5 of this Plan that is granted in tandem
with an Option Right.
X. "Voting Power" means at any time, the total votes relating
to the then-outstanding securities entitled to vote generally in the
election of Directors.
III. SHARES AVAILABLE UNDER THE PLAN.
A. Subject to adjustment as provided in Section 8 of this
Plan, the number of Common Shares that may be issued or transferred
upon the exercise of Option Rights or Appreciation Rights shall not
exceed in the aggregate 1,000,000 Common Shares, plus any shares
described in Section 3(b) below. Such shares may be shares of original
issuance or treasury shares or a combination of the foregoing.
B. The number of shares available in Section 3(a) above shall
be adjusted to account for shares relating to awards that expire or
are forfeited, or are transferred, surrendered, or relinquished upon
the payment of any Option Price by the transfer to the Company of
Common Shares or upon satisfaction of any withholding amount.
C. Notwithstanding anything in this Section 3, or elsewhere
in this Plan, to the contrary, (i) the aggregate number of Common
Shares actually issued or transferred by the Company upon the exercise
of Incentive Stock Options shall not exceed 1,250,000 shares; (ii) no
Participant shall be granted Option Rights and Appreciation Rights, in
the aggregate, for more than 250,000 Common Shares during any fiscal
year of the Company, subject to adjustments as provided in Section 8
of this Plan; and (iii) no Non-Employee Director shall be granted
Option Rights and Appreciation Rights, in the aggregate, for more than
10,000 Common Shares during any fiscal year of the Company, subject to
adjustments as provided in Section 8 of this Plan.
D. Upon payment in cash of the benefit provided by any award
granted under this Plan, any shares that were covered by that award
shall again be available for issue or transfer hereunder.
IV. OPTION RIGHTS. The Board may, from time to time and upon
such terms and conditions as it may determine, authorize the granting to
Participants of options to purchase Common Shares. Each such grant may utilize
any or all of the authorizations, and shall be subject to all of the
requirements, contained in the following provisions:
A. Each grant shall specify the number of Common Shares to
which it pertains subject to the limitations set forth in Section 3
of this Plan.
B. Each grant shall specify an Option Price per share, which
shall not be less than the Market Value per Share on the Date of
Grant.
C. Each grant shall specify whether the Option Price shall be
payable (i) in cash or by check acceptable to the Company, (ii) by the
actual or constructive transfer to the Company of Common Shares owned
by the Optionee for at least six months having a value at the time of
exercise equal to the total Option Price, or (iii) by a combination of
such methods of payment.
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<PAGE> 4
D. Any grant may provide for deferred payment of the Option
Price from the proceeds of sale through a broker on a date
satisfactory to the Company of some or all of the shares to which such
exercise relates.
E. Any grant may provide for payment of the Option Price, at
the election of the Optionee, in installments upon terms determined by
the Board. In any case, unless the Board otherwise determines, the
Option Price shall bear interest at the Company's then average cost of
borrowing as determined by Board at the date of exercise, and adjusted
quarterly thereafter.
F. Any grant may, at or after the Date of Grant, provide for
the automatic grant of Reload Option Rights to an Optionee upon the
exercise of Option Rights (including Reload Option Rights) using
Common Shares. Reload Option Rights shall cover up to the number of
Common Shares or Option Rights surrendered to the Company upon any
such exercise in payment of the Option Price or to meet any
withholding obligations. Reload Option Rights shall have an Option
Price that is no less than the applicable Market Value per Share at
the time of exercise and shall be on such other terms as may be
specified by the Board, which may be the same as or different from
those of the original Option Rights.
G. Successive grants may be made to the same Participant
whether or not any Option Rights previously granted to such
Participant remain unexercised.
H. Each grant shall specify the period or periods of
continuous service by the Optionee with the Company or any Subsidiary
that is necessary before the Option Rights or installments thereof
will become exercisable and may provide for the earlier exercise of
such Option Rights in the event of a Change in Control or other
similar transaction or event.
I. Option Rights granted under this Plan may be (i) options,
including, without limitation, Incentive Stock Options, that are
intended to qualify under particular provisions of the Code, (ii)
options that are not intended so to qualify, or (iii) combinations of
the foregoing.
J. The exercise of an Option Right shall result in the
cancellation on a share-for-share basis of any related Appreciation
Right authorized under Section 5 of this Plan.
K. No Option Right shall be exercisable more than 10 years
from the Date of Grant.
L. Each grant of Option Rights shall be evidenced by an
agreement executed on behalf of the Company by an officer and
delivered to the Optionee and containing such terms and provisions,
consistent with this Plan, as the Board may approve.
V. APPRECIATION RIGHTS. The Board may also authorize the granting
to any Optionee of Appreciation Rights; provided, however, that an Appreciation
Right awarded in relation to an Incentive Stock
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Option must be granted concurrently with such Incentive Stock Option. An
Appreciation Right shall be a right of the Optionee to receive from the Company
an amount determined by the Board, which shall be expressed as a percentage of
the Spread (not exceeding 100 percent) at the time of exercise of the
Appreciation Right. Each such grant may utilize any or all of the
authorizations, and shall be subject to all of the requirements, contained in
the following provisions:
A. Any grant may specify that the amount payable on exercise
of an Appreciation Right may be paid by the Company in cash, in Common
Shares owned by the Optionee for at least six months or in any
combination thereof and may either grant to the Optionee or retain in
the Board the right to elect among those alternatives.
B. Any grant may specify that the amount payable on exercise
of an Appreciation Right may not exceed a maximum specified by the
Board at the Date of Grant.
C. Any grant may specify waiting periods before exercise and
permissible exercise dates or periods.
D. Any grant may specify that such Appreciation Right may be
exercised earlier or only in the event of a Change in Control or
other similar transaction or event.
E. Each grant of Appreciation Rights shall be evidenced by a
notification executed on behalf of the Company by an officer and
delivered to and accepted by the Optionee, which notification shall
describe such Appreciation Rights, identify the related Option Rights,
if any, state that such Appreciation Rights are subject to all the
terms and conditions of this Plan, and contain such other terms and
provisions, consistent with this Plan, as the Board may approve.
F. Regarding Tandem Appreciation Rights only: Each grant
shall provide that a Tandem Appreciation Right may be exercised only
at a time when the related Option Right is also exercisable and the
Spread is positive and by surrender of the related Option Right for
cancellation.
G. Regarding Free-standing Appreciation Rights only:
1. Each grant shall specify in respect of each
Free-standing Appreciation Right a Base Price per Common
Share, which shall be equal to or greater or less than the
Market Value per Share on the Date of Grant;
2. Successive grants may be made to the same
Participant regardless of whether any Free-standing
Appreciation Rights previously granted to the Participant
remain unexercised;
3. Each grant shall specify the period or periods of
continuous employment of the Participant by the Company or
any Subsidiary that are necessary before the Free-standing
Appreciation Rights or installments thereof shall become
exercisable, and any grant may provide for the earlier
exercise of the Free-standing Appreciation Rights in the
event of a Change in Control or other similar transaction or
event; and
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4. No Free-standing Appreciation Right granted under
this Plan may be exercised more than 10 years from the Date
of Grant.
VI. AWARDS TO NON-EMPLOYEE DIRECTORS. The Board may, from time to time
and upon such terms and conditions as it may determine, authorize the granting
to Non-Employee Directors of Option Rights. Each grant of Option Rights awarded
pursuant to this Section 6 shall be upon terms and conditions consistent with
Section 4 of this Plan and shall be evidenced by an agreement in such form as
shall be approved by the Board. Each grant shall specify an Option Price per
share, which shall not be less than the Market Value per Share on the Date of
Grant. Each such Option Right granted under the Plan shall expire not more than
10 years from the Date of Grant and shall be subject to earlier termination as
hereinafter provided. Unless otherwise determined by the Board, such Option
Rights shall be subject to the following additional terms and conditions:
A. Each grant shall specify the number of Common Shares to
which it pertains subject to the limitations set forth in Section 3
of this plan.
B. Each such Option Right shall become exercisable to the
extent of one-third of the number of shares covered thereby one year
after the Date of Grant and to the extent of an additional one-third
of such shares after each of the next two successive years
thereafter. Such Option Rights shall become exercisable in full
immediately in the event of a Change in Control.
C. In the event of the termination of service on the Board by
the holder of any such Option Rights, other than by reason of
disability or death, the then outstanding Option Rights of such holder
may be exercised only to the extent that they were exercisable on the
date of such termination and shall expire 90 days after such
termination, or on their stated expiration date, whichever occurs
first.
D. In the event of the death or disability of the holder of
any such Option Rights, each of the then outstanding Option Rights of
such holder may be exercised at any time within one year after such
death or disability, but in no event after the expiration date of the
term of such Option Rights.
E. If a Non-Employee Director subsequently becomes an
employee of the Company or a Subsidiary while remaining a member of
the Board, any Option Rights held under the Plan by such individual at
the time of such commencement of employment shall not be affected
thereby.
F. Option Rights may be exercised by a Non-Employee Director
only upon payment to the Company in full of the Option Price of the
Common Shares to be delivered. Such payment shall be made in cash or
in Common Shares previously owned by the optionee for at least six
months, or in a combination of cash and such Common Shares.
VII. TRANSFERABILITY.
A. Except as otherwise determined by the Board, no Option
Right or Appreciation Right granted under the Plan shall be
transferable by an Optionee other than by will or the laws of descent
and distribution. Except as otherwise determined by the
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<PAGE> 7
Board, Option Rights and Appreciation Rights shall be exercisable
during the Optionee's lifetime only by him or her or by his or her
guardian or legal representative.
B. The Board may specify at the Date of Grant that part or
all of the Common Shares that are to be issued or transferred by the
Company upon the exercise of Option Rights or Appreciation Rights
shall be subject to further restrictions on transfer.
VIII. ADJUSTMENTS. The Board may make or provide for such
adjustments in the numbers of Common Shares covered by outstanding Option
Rights or Appreciation Rights granted hereunder, in the prices per share
applicable to such Option Rights and Appreciation Rights and in the kind of
shares covered thereby, as the Board, in its sole discretion, exercised in good
faith, may determine is equitably required to prevent dilution or enlargement
of the rights of Participants or Optionees that otherwise would result from (a)
any stock dividend, stock split, combination of shares, recapitalization or
other change in the capital structure of the Company, or (b) any merger,
consolidation, spin-off, split-off, spin-out, split-up, reorganization, partial
or complete liquidation or other distribution of assets, issuance of rights or
warrants to purchase securities, or (c) any other corporate transaction or
event having an effect similar to any of the foregoing. Moreover, in the event
of any such transaction or event, the Board, in its discretion, may provide in
substitution for any or all outstanding awards under this Plan such alternative
consideration as it, in good faith, may determine to be equitable in the
circumstances and may require in connection therewith the surrender of all
awards so replaced. The Board may also make or provide for such adjustments in
the numbers of shares specified in Section 3 of this Plan as the Board in its
sole discretion, exercised in good faith, may determine is appropriate to
reflect any transaction or event described in this Section 8.
IX. CHANGE IN CONTROL. For purposes of this Plan, a "Change in
Control" shall mean if at any time any of the following events shall have
occurred:
A. The Company is merged or consolidated or reorganized into
or with another corporation or other legal person, and as a result of
such merger, consolidation or reorganization less than a majority of
the combined voting power of the then-outstanding securities of such
corporation or person immediately after such transaction are held in
the aggregate by the holders of securities entitled to vote generally
in the election of Directors immediately prior to such transaction;
B. The Company sells or otherwise transfers all or
substantially all of its assets to any other corporation or other
legal person, less than a majority of the combined voting power of the
then-outstanding securities of such corporation or person immediately
after such sale or transfer is held in the aggregate by the holders of
Common Shares immediately prior to such sale or transfer;
C. There is a report filed on Schedule 13D or Schedule 14D-1
(or any successor schedule, form or report), each as promulgated
pursuant to the Exchange Act, disclosing that any person (as the term
"person" is used in Section 13(d)(3) or Section 14(d)(2) of the
Exchange Act) has become the beneficial owner (as the term "beneficial
owner" is defined under Rule 13d-3 or any successor rule or regulation
promulgated under the Exchange Act) of securities representing 20% or
more of the Voting Power;
D. The Company files a report or proxy statement with the
Securities and Exchange Commission pursuant to the Exchange Act
disclosing in response to Form 8-K
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<PAGE> 8
or Schedule 14A (or any successor schedule, form or report or item
therein) that a change in control of the Company has or may have
occurred or will or may occur in the future pursuant to any
then-existing contract or transaction; or
E. If during any period of two consecutive years, individuals
who at the beginning of any such period constitute the Directors cease
for any reason to constitute at least a majority thereof, unless the
election, or the nomination for election by the Company's
stockholders, of each Director first elected during such period was
approved by a vote of at least two-thirds of the Directors then still
in office who were Directors at the beginning of any such period.
F. Notwithstanding the foregoing provisions of Sections 9(c)
and (d) above, a "Change in Control" shall not be deemed to have
occurred for purposes of this Plan (i) solely because (A) the Company;
(B) a Subsidiary; or (C) any Company-sponsored employee stock
ownership plan or other employee benefit plan of the Company either
files or becomes obligated to file a report or proxy statement under
or in response to Schedule 13D, Schedule 14D-1, Form 8-K or Schedule
14A (or any successor schedule, form or report or item therein) under
the Exchange Act, disclosing beneficial ownership by it of shares,
whether in excess of 20% of the Voting Power or otherwise, or because
the Company reports that a change of control of the Company has or may
have occurred or will or may occur in the future by reason of such
beneficial ownership or (ii) solely because of a change in control of
any Subsidiary.
X. FRACTIONAL SHARES. The Company shall not be required to
issue any fractional Common Shares pursuant to this Plan. The Board may provide
for the elimination of fractions or for the settlement of fractions in cash.
XI. WITHHOLDING TAXES. To the extent that the Company is required
to withhold federal, state, local or foreign taxes in connection with any
payment made or benefit realized by a Participant or other person under this
Plan, and the amounts available to the Company for such withholding are
insufficient, it shall be a condition to the receipt of such payment or the
realization of such benefit that the Participant or such other person make
arrangements satisfactory to the Company for payment of the balance of such
taxes required to be withheld, which arrangements (in the discretion of the
Board) may include relinquishment of a portion of such benefit. The Company and
a Participant or such other person may also make similar arrangements with
respect to the payment of any taxes with respect to which withholding is not
required.
XII. ADMINISTRATION OF THE PLAN.
A. This Plan shall be administered by the Board, which may
from time to time delegate all or any part of its authority under this
Plan to a committee of the Board (or subcommittee thereof) consisting
of not less than two Non-Employee Directors appointed by the Board. A
majority of the committee (or subcommittee) shall constitute a quorum,
and the action of the members of the committee (or subcommittee)
present at any meeting at which a quorum is present, or acts
unanimously approved in writing, shall be the acts of the committee
(or subcommittee). To the extent of any such delegation, references in
this Plan to the Board shall be deemed to be references to any such
committee or subcommittee.
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<PAGE> 9
B. The interpretation and construction by the Board of any
provision of this Plan or of any agreement, notification or document
evidencing the grant of Option Rights or Appreciation Rights and any
determination by the Board pursuant to any provision of this Plan or
of any such agreement, notification or document shall be final and
conclusive. No member of the Board shall be liable for any such action
or determination made in good faith.
XIII. AMENDMENTS, ETC.
A. The Board may at any time and from time to time amend the
Plan in whole or in part; provided, however, that any amendment that
must be approved by the stockholders of the Company in order to comply
with applicable law or the rules of the principal national securities
exchange upon which the Common Shares are traded or quoted or, if
applicable, the NASDAQ National Market System, shall not be effective
unless and until such approval has been obtained. Presentation of this
Plan or any amendment hereof for stockholder approval shall not be
construed to limit the Company's authority to offer similar or
dissimilar benefits under other plans without stockholder approval.
B. The Board also may permit Participants to elect to defer
the issuance of Common Shares or the settlement of awards in cash
under the Plan pursuant to such rules, procedures or programs as it
may establish for purposes of this Plan.
C. The Board may condition the grant of any award or
combination of awards authorized under this Plan on the surrender or
deferral by the Participant of his or her right to receive a cash
bonus or other compensation otherwise payable by the Company or a
Subsidiary to the Participant.
D. In case of termination of employment by reason of death,
disability or normal or early retirement, or in the case of hardship
or other special circumstances, of a Participant who holds an Option
Right or Appreciation Right not immediately exercisable in full, or
who holds Common Shares subject to any transfer restriction imposed
pursuant to Section 7(b) of this Plan, the Board may, in its sole
discretion, accelerate the time at which such Option Right or
Appreciation Right may be exercised or the time when such transfer
restriction will terminate or may waive any other limitation or
requirement under any such award.
E. This Plan shall not confer upon any Participant any right
with respect to continuance of employment or other service with the
Company or any Subsidiary, nor shall it interfere in any way with any
right the Company or any Subsidiary would otherwise have to terminate
such Participant's employment or other service at any time.
F. To the extent that any provision of this Plan would
prevent any Option Right that was intended to qualify as an Incentive
Stock Option from qualifying as such, that provision shall be null and
void with respect to such Option Right. Such provision, however, shall
remain in effect for other Option Rights and there shall be no further
effect on any provision of this Plan.
XIV. TERMINATION. No grant shall be made under this Plan more than
10 years after the date on which this Plan is first approved by the
stockholders of the Company, but all grants made on or prior to such date shall
continue in effect thereafter subject to the terms thereof and of this Plan.
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EXHIBIT 5
SEARCH FINANCIAL SERVICES INC.
600 N. Pearl Street, Suite 2500
Dallas, TX 75201
214-965-6000 Fax 214-965-6130
August 22, 1997
Search Financial Services Inc.
600 N. Pearl Street, Suite 2500
Dallas, TX 75201
Re: Form S-8 Registration Statement of Search Financial Services Inc.;
Registration of 1,250,000 Shares of Common Stock, $.01 par value,
under the Search Financial Services Inc. 1997 Stock Option Plan
Ladies and Gentlemen:
I am the Executive Vice President and General Counsel of Search
Financial Services Inc., a Delaware corporation (the "Company"), and have acted
as counsel to the Company in connection with the execution and filing of the
Company's Registration Statement on Form S-8, filed with the Securities and
Exchange Commission on the date hereof (the "Registration Statement"),
providing for the registration of 1,250,000 shares of Common Stock, $.01 par
value per share, of the Company (the "Shares"), issuable by the Company in
connection with the Company's 1997 Stock Option Plan (the "Plan"). I am
rendering this opinion to you pursuant to Item 601(b) (5) of Regulation S-K
promulgated by the Securities and Exchange Commission.
As counsel for the Company, I am generally familiar with the corporate
affairs of the Company and its subsidiaries and the terms of the Plan. In
furnishing this opinion, I have examined such corporate and other records as I
have deemed necessary or appropriate to provide a basis for the opinion set
forth below.
Based thereon, I am of the opinion that the Shares that may be issued
pursuant to the Plan have been duly authorized and, when issued in accordance
with the Plan and the authorized forms of Stock Option Agreements applicable
thereto, will be validly issued, fully paid and non-assessable so long as the
consideration received by the Company for the Shares is at least equal to their
par value.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ ELLIS A. REGENBOGEN
Ellis A. Regenbogen
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
Search Financial Services Inc.
Dallas, Texas
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement (Form S-8) pertaining to the
Search Financial Services Inc. 1997 Stock Option Plan of our report dated May
23, 1997, relating to the consolidated financial statements of Search Financial
Services Inc. appearing in the Company's Annual Report on Form 10-K for the
fiscal year ended March 31, 1997.
/s/ BDO Seidman, LLP
BDO SEIDMAN, LLP
Dallas, Texas
August 22, 1997
