<PAGE> 1
As filed with the Securities and Exchange Commission on October 22, 1999
Registration No. 333-_____________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
AREA BANCSHARES CORPORATION
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
KENTUCKY 61-0902343
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
230 FREDERICA STREET, OWENSBORO, KENTUCKY 42301
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(Address of principal executive offices and zip code)
CARDINAL BANCSHARES, INC. 1994 RESTRICTED STOCK OPTION PLAN
CARDINAL BANCSHARES, INC. 1992 LIMITED STOCK OPTION PLAN
1992 FIRST FEDERAL SAVINGS BANK RESTRICTED STOCK OPTION PLAN
VST FINANCIAL SERVICES, INC. RESTRICTED STOCK PLAN AND ESCROW AGREEMENT
- --------------------------------------------------------------------------------
(Full Title of the Plan)
KATHRYN L. KNUDSON, ESQ.
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
191 PEACHTREE STREET, N.E., 16TH FLOOR
ATLANTA, GEORGIA 30303
- --------------------------------------------------------------------------------
(Name and address of agent for service)
(404) 572-6952
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(Telephone number, including area code, of agent for service)
Copy to:
TIMOTHY O. SHELBURNE, ESQ.
AREA BANCSHARES CORPORATION
230 FREDERICA STREET
OWENSBORO, KENTUCKY 42301
(502) 688-7750
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered Per Share Price Fee
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no 399,489 $25.78(2) $10,298,826(3) $2,864
par value shares(1)
- ------------------------------------------------------------------------------------------
</TABLE>
(1) The Registration Statement also covers such indeterminable number of
additional shares as may become issuable to prevent dilution in the
event of a stock split, stock dividend, reclassification or other
similar transaction pursuant to the terms of the Plan.
(2) The average of the high and low prices of the Registrant's Common Stock
as reported by the Nasdaq National Market for October 18, 1999.
(3) The aggregate offering price is calculated solely for the purpose of
determining the registration fee pursuant to Rule 457(h)(1) under the
Securities Act of 1933, as amended.
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I of the
Instructions to the Registration Statement on Form S-8 will be sent or given to
participants in the Plan as required by Rule 428(b)(1) promulgated under the
Securities Act of 1933, as amended (the "Securities Act").
<PAGE> 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange
Commission (the "Commission") are incorporated herein by reference:
(1) The Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1998 (File No. 0-26032);
(2) The Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1999 (File No. 026032);
(3) The Registrant's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1999 (File No. 0-26032);
(4) The Registrant's Current Report on Form 8-K dated January 5,
1999 (File No. 0-26032);
(5) The Registrant's Current Report on Form 8-K dated February 23,
1999 (File No. 0-26032);
(6) The Registrant's Current Report on Form 8-K dated August 30,
1999 (File No. 0-26032);
(7) The Registrant's Current Report on Form 8-K dated August 31,
1999 (File No. 0-26032);
(8) The Registrant's Current Report on Form 8-K dated October 7,
1999 (File No. 0-26032); and
(9) The description of the Registrant's Common Stock contained in
the Registrant's Registration Statement on Form 10-A1 as filed
with the Securities and Exchange Commission on June 30, 1995
pursuant to Section 12 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act") (File No. 0-26032).
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment that indicates that all securities offered hereby have
been sold or that deregisters all such 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.
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<PAGE> 4
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's Articles of Incorporation state that the Registrant
will indemnify its officers and directors as provided by Section 271B.8-510 of
the Kentucky Act. Section 271B.8-510, as is currently in effect, provides that a
corporation may indemnify its officers and directors against reasonable expenses
(including attorneys' fees) incurred by them in the defense of any action, suit
or proceeding to which they were made a party, or in defense of any claim, issue
or matter therein, by reason of the fact that they are or were officers or
directors of the corporation, to the extent that they have been successful, on
the merits or otherwise, in such defense. Section 271B.8-510 also permits
indemnification of a corporation's directors and officers against any liability
incurred in connection with any threatened, pending or completed action, suit or
proceeding by reason of the fact that they are or were directors or officers of
the corporation or who, while directors or officers of the corporation, are or
were serving at the corporation's request as directors, officers, partners,
trustees, employees or agents of another entity, if they acted in a manner they
believed in good faith to be in, or not opposed to, the best interests of the
corporation, or, with respect to any criminal proceeding, had no reasonable
cause to believe their conduct was unlawful, if a determination has been made
that they have met these standards of conduct. Such indemnification in
connection with a proceeding by or in the right of the corporation, however, is
limited to reasonable expenses, including attorney's fees, incurred in
connection with the proceeding. The corporation may also advance expenses
incurred by any director or officer in defending any such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such officer or
director to repay such advances unless it is ultimately determined that he or
she is not entitled to indemnification by the corporation.
Section 271B.8-520 of the Kentucky Act provides that a corporation
shall indemnify a director who was wholly successful, on the merits or
otherwise, in the defense of any proceeding to which he or she was a party
because such person is or was a director of the corporation against reasonable
expenses incurred in connection with such proceeding.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the
Registrant pursuant to the foregoing provisions, the Registrant has been
informed that in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is therefore unenforceable.
ITEM 8. EXHIBITS.
The following exhibits are filed with or incorporated by reference into
this Registration Statement pursuant to Item 601 of Regulation S-K:
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<PAGE> 5
<TABLE>
<CAPTION>
Exhibit
No. Description
- ------- -----------
<S> <C>
5.1 Opinion of Timothy O. Shelburne, Esq. with respect to the securities
being registered, including consent.
23.1 Consent of counsel (included in Exhibit 5.1).
23.2 Consent of KPMG LLP, independent auditors.
24.1 Power of Attorney (see signature pages to this Registration Statement).
99.1 Cardinal Bancshares, Inc. 1994 Restricted Stock Option Plan.
99.2 Cardinal Bancshares, Inc. 1992 Limited Stock Option Plan.
99.3 Amendment Number 1 to Cardinal Bancshares, Inc. 1992 Limited Stock
Option Plan.
99.4 Cardinal Bancshares, Inc. 1992 First Federal Savings Bank Restricted
Stock Option Plan.
99.5 Cardinal Bancshares, Inc. VST Financial Services, Inc. Restricted Stock
Plan and Escrow Agreement.
</TABLE>
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
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<PAGE> 6
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information
set forth in the Registration Statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or high
and of the estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8 and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d)
of the Exchange Act that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(h) Insofar as indemnification for liabilities arising under the
Securities Act 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 Commission such
indemnification is against public policy as expressed in the Securities 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,
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<PAGE> 7
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
Securities 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, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Owensboro, State of Kentucky, on this the 18th day of
October, 1999.
AREA BANCSHARES CORPORATION
By: /s/ Thomas R. Brumley
--------------------------------------
Thomas R. Brumley
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Thomas R. Brumley and Timothy O.
Shelburne as his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any 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 each of said attorneys-in-fact
and agents, full power and authority to do and perform each and every act and
thing required or necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that each of said attorneys-in-fact and agents, or their
substitutes, could lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities
indicated and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Anthony G. Bittel Director October 18, 1999
- ----------------------------------------
Anthony G. Bittel
/s/ Samuel A. B. Boone Director October 18, 1999
- ----------------------------------------
Samuel A. B. Boone
</TABLE>
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<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Thomas R. Brumley President, Chief Executive Officer and October 18, 1999
- ---------------------------------------- Director (principal executive Officer)
Thomas R. Brumley
/s/ Cecile W. Garmon Director October 18, 1999
- ----------------------------------------
Cecile W. Garmon
/s/ C. M. Gatton Chairman of the Board of Directors October 18, 1999
- ----------------------------------------
C. M. Gatton
Director
- ----------------------------------------
Gary H. Latham
/s/ Raymond McKinney Vice Chairman of the Board of October 18, 1999
- ---------------------------------------- Directors
Raymond McKinney
/s/ Ralph L. Oliver Director October 18, 1999
- ----------------------------------------
Ralph L. Oliver
/s/ Allan R. Rhodes Director October 18, 1999
- ----------------------------------------
Allan R. Rhodes
/s/ Jim R. Shelby Director October 18, 1999
- ----------------------------------------
Jim R. Shelby
/s/ David W. Smith, Jr. Director October 18, 1999
- ----------------------------------------
David W. Smith, Jr.
/s/ Thomas N. Thompson Director October 18, 1999
- ----------------------------------------
Thomas N. Thompson
</TABLE>
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<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Don Vitale Director October 18, 1999
- ----------------------------------------
Don Vitale
/s/ Pollard White Director October 18, 1999
- ----------------------------------------
Pollard White
/s/ John A. Ray Executive Vice President, Chief October 18, 1999
- ---------------------------------------- Financial Officer (principal financial officer)
John A. Ray
/s/ Gary White Vice President and Controller October 18, 1999
- ---------------------------------------- (principal accounting officer)
Gary White
</TABLE>
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<PAGE> 11
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description
- ------- -----------
<S> <C>
5.1 Opinion of Timothy O. Shelburne, Esq. with respect to the securities
being registered, including consent.
23.1 Consent of counsel (included in Exhibit 5.1).
23.2 Consent of KPMG LLP, independent auditors.
24.1 Power of Attorney (see signature pages to this Registration Statement).
99.1 Cardinal Bancshares, Inc. 1994 Restricted Stock Option Plan.
99.2 Cardinal Bancshares, Inc. 1992 Limited Stock Option Plan.
99.3 Amendment Number 1 to Cardinal Bancshares, Inc. 1992 Limited Stock
Option Plan.
99.4 Cardinal Bancshares, Inc. 1992 First Federal Savings Bank Restricted
Stock Option Plan.
99.5 Cardinal Bancshares, Inc. VST Financial Services, Inc. Restricted Stock
Plan and Escrow Agreement.
</TABLE>
<PAGE> 1
EXHIBIT 5.1
October 18, 1999
Area Bancshares Corporation
230 Frederica Street
Owensboro, Kentucky 42301
Re: Registration Statement on Form S-8
Area Bancshares Corporation
Ladies and Gentlemen:
This opinion is given in connection with the filing by Area Bancshares
Corporation, a Kentucky corporation (the "Company"), with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, pursuant to a
Registration Statement on Form S-8 (the "Registration Statement"), of an
aggregate of 399,489 shares (the "Shares") of common stock, no par value, of the
Company, to be offered and sold by the Company pursuant to the following plans:
- Cardinal Bancshares, Inc. 1994 Restricted Stock Option Plan
- Cardinal Bancshares, Inc. 1992 Limited Stock Option Plan
- 1992 First Federal Savings Bank Restricted Stock Option Plan
- VST Financial Services, Inc. Restricted Stock Plan and Escrow
Agreement
I have examined and am familiar with originals or copies (certified,
photostatic or otherwise identified to our satisfaction) of such documents,
corporate records and other instruments relating to the incorporation of the
Company and the authorization of the shares to be issued pursuant to the Plan as
I have deemed necessary and advisable. In such examinations, I have assumed the
genuineness of all signatures on all originals and copies of documents I have
examined, the authenticity of all documents submitted to me as originals and the
conformity to original documents of all certified, conformed or photostatic
copies. As to questions of fact material and relevant to this opinion, I have
relied upon certificates or representations of Company officials and of
appropriate governmental officials.
I express no opinion as to matters under or involving the laws of any
jurisdiction other than the corporate law of the State of Kentucky.
Based upon and subject to the foregoing and having regard for such
legal considerations as I have deemed relevant, it is my opinion that:
1. The Shares have been duly authorized; and
2. Upon the issuance and delivery of the Shares and payment
therefor as provided in the Plan and as contemplated by the
Registration Statement, such Shares will be legally and
validly issued, fully paid and non-assessable.
<PAGE> 2
Area Bancshares Corporation
October 18, 1999
Page 2
I hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement.
Very truly yours,
/s/ Timothy O. Shelburne
<PAGE> 1
EXHIBIT 23.2
CONSENT OF KPMG LLP
The Board of Directors
Area Bancshares Corporation
We consent to incorporation by reference in the registration statement on From
S-8 of Area Bancshares Corporation of our report dated March 2, 1999, relating
to the consolidated balance sheets of Area Bancshares Corporation and
subsidiaries as of December 31, 1998 and 1997, and the related consolidated
statements of income, comprehensive income, changes in stockholders' equity, and
cash flows for each of the years in the three-year period ended December 31,
1998, which report appears in the December 31, 1998 annual report on Form 10-K
of Area Bancshares Corporation.
/s/ KPMG LLP
Louisville, Kentucky
October 19, 1999
<PAGE> 1
EXHIBIT 99.1
CARDINAL BANCSHARES, INC.
1994 RESTRICTED STOCK OPTION PLAN
1. Purpose. The purpose of the Cardinal Bancshares, Inc. 1994
Restricted Stock Option Plan (hereinafter called the "Plan") is to promote the
interests of Cardinal Bancshares, Inc., a Kentucky corporation (hereinafter
called the "Corporation"), by affording an incentive to certain key employees to
remain in the employ of the Corporation and its subsidiaries and to use their
best efforts in its behalf; and further to aid the Corporation and its
subsidiaries in attracting, maintaining, and developing capable personnel of a
caliber required to ensure the continued success of the Corporation and its
subsidiaries by means of an offer to such persons of an opportunity to acquire
or increase their proprietary interest in the Corporation through the granting
of options to purchase the Corporation's stock pursuant to the terms of this
Plan.
2. Shares Subject to Plan.
A. Subject to the provisions of Section 11, the shares to be
delivered upon exercise of options granted under the Plan shall be made
available, at the discretion of the Board of Directors, from the authorized
unissued shares of the Corporation's no par value common stock. Unless the
context indicates otherwise, as used herein, Common Stock shall refer to shares
of the no par value common stock of the Corporation, or the common stock or
securities of a Successor of the Corporation that have been substituted therefor
under Section 11 of the Plan.
B. Subject to adjustments and substitutions made pursuant to
the provisions of Section 11, the aggregate number of shares that may be issued
upon exercise of all options that may be granted under the Plan shall not exceed
75,000 of the Corporation's authorized shares of Common Stock.
C. If any option granted under the Plan expires or terminates
for any reason whatsoever without having been exercised in full in accordance
with the terms of the Plan, the shares of Common Stock subject to, but not
delivered under, such option shall become available for any lawful corporate
purpose, including for issuance pursuant to other options granted to the same
employee or other employees without decreasing the aggregate number of shares of
Common Stock that may be granted under the Plan.
D. More than one option may be granted to an optionee pursuant
to this Plan.
3. Option Agreements.
A. Each option granted under the Plan shall be evidenced by an
option agreement signed by a member of the Plan Committee (as hereinafter
defined) on behalf of the Corporation and by the optionee.
<PAGE> 2
B. An option agreement shall constitute a binding contract
between the Corporation and the optionee, and every optionee, upon acceptance of
such option agreement, shall be bound by the terms and restrictions of this Plan
and of the option agreement.
C. The terms of the option agreement shall be in accordance
with this Plan, but may include additional provisions and restrictions, provided
that the same are not, as determined by the plan Committee, inconsistent with
the Plan.
4. Administration. The Plan shall be administered by a committee (the
"Plan Committee") whose membership shall be determined and reviewed from time to
time by the Corporation's Board of Directors. The Plan Committee shall consist
of not loss than three (3) members of the Board who are not eligible to receive
stock or options under this plan of the Corporation. Members of the Committee
shall be subject to any additional restrictions necessary to satisfy the
requirements for disinterested administration of the Plan as set forth in Rule
16b-3 under the Securities Exchange Act of 1934, as it may be amended from time
to time. James S. Mahan, III, John S. Penn and Ronald C. Switzer shall act as
the Plan Committee unless and until the Board of Directors votes to alter the
composition of the Plan Committee. The Plan Committee shall have full power and
authority to construe, interpret, and administer the Plan and nay from time to
time adopt such rules and regulations for carrying out the Plan as it may deem
proper and in the best interests of the Corporation. Subject to the terms,
provisions and conditions of the Plan, the Plan Committee shall have exclusive
jurisdiction: [i] to select the employees to whom options shall be granted; [ii]
to determine the number of shares of Common Stock subject to each option; [iii]
to determine the time or times when options will be granted; [iv] to fix such
other provisions of the option agreement as it may deem necessary or desirable
consistent with the terms of the Plan; and [v] to determine all other questions
relating to the administration of the Plan. The interpretation of any provisions
of the Plan by the Committee shall be final, conclusive, and binding upon all
persons and the officers of the corporation shall place into effect, and shall
cause the Corporation to perform its obligations under the Plan in accordance
with, the determinations of the Plan Committee in administering the Plan. Any
member of the Plan Committee shall resign his or her membership immediately upon
receiving notice that majority of the members of the Board of Directors have
voted in favor of such resignation.
5. Eligibility. Key employees of the Corporation, except the Chief
Executive Officer and President, shall be eligible to receive options under the
Plan. Directors of the Corporation shall not be eligible to receive Options
under the Plan. That an employee has been granted an option under this plan
shall not in any way affect or qualify the right of the Corporation to terminate
his employment at any time, subject to the terms and conditions of any
employment agreement that may then be in effect. Nothing contained in the Plan
shall be construed to limit the right of the Corporation to grant options
otherwise than under the Plan for any proper and lawful corporate purpose,
including but not limited to options granted to key employees. Key employees to
whom options may be granted under the Plan will be those elected by the Plan
Committee from time to time who, in the sole discretion of the Plan Committee,
have contributed in the past or who may be expected to contribute materially in
the future to the successful performance of the Corporation.
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<PAGE> 3
6. Option Price. The price at which a Share of Common Stock may be
purchased under an option granted pursuant to the Plan shall be set by the grant
but shall in no instance be less than fair market value on the date of grant,
determined by:
[i] if the Common Stock is traded on the over-the-counter
market, the average of the closing bid and asked quotations or the
closing high bid quotation, whichever is available, for the Common
Stock in the over-the-counter market, as reported by the National
Association of Securities Dealers Automated Quotation System, but not
exceeding the average of the final closing price of the Common Stock on
the twenty business days immediately preceding the date of grant;
[ii] if the Common Stock is listed on a national securities
exchange, the average of the closing prices of the Common Stock on the
Composite Tape for the ten (10) consecutive trading days immediately
preceding such given date; and
[iii] if the Common stock is neither traded on the
over-the-counter market nor listed on a national securities exchange,
such value as the Plan Committee, in good faith, shall determine.
The option price shall be subject to adjustments in accordance with the
provisions of Section 11 herein.
7. Exercise of Options.
A. Any option granted under the Plan shall not be exercisable
until the optionee has had continuous employment with the Corporation for a
period of five (5) years after the date such Option is granted and must be
exercised, if at all, within ten (10) years after the date such option is
granted. Notwithstanding the above, should an optionee's employment with the
Corporation terminate due to the death of the optionee, all options shall
immediately become fully vested provided the optionee has had continuous service
with the Corporation for two (2) years, and the optionee's successor in interest
shall have sixty (60) days after the optionee's date of death to exercise such
option (provided, however, that such option must be exercised within ten (10)
years after the date such option is granted) in accordance with the terms
hereof. Any such exercisable option is hereinafter referred to as a "Vested
Option".
B. Subject to the terms and conditions of any applicable
option agreement, any option granted under the Plan may be exercised in whole or
in part in installments at such time or times as the Plan committee may
prescribe in the applicable option agreement.
C. Except as otherwise provided herein, no option granted
under the Plan may be exercised unless the optionee is at the time of such
exercise an employee of the Corporation or its subsidiaries.
8. Issuance of Shares. No shares of Common Stock shall be issued
pursuant to the exercise of an option until:
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<PAGE> 4
A. The requirements of such laws and regulations as may be
deemed by the Plan Committee to be applicable are satisfied including
appropriate disclosure obligations;
B. Any documents counsel for the Corporation deems necessary
are delivered by the optionee, including a letter evidencing the optionee's
investment intent in acquiring such shares;
C. The optionee pays, or makes satisfactory arrangements to
pay, the option price for the shares to be issued; and
D. Provision has been made for the payment of any and all
federal, state, and local taxes that may be required to be paid as a result of
the exercise of such option or the issuance of such shares.
No optionee, or legal representative, legatee, or distributee
of an optionee, shall be deemed to be the holder of any shares of Common Stock
subject to any option unless and until the certificate or certificates for them
have been issued. Nothing contained in the Plan or any option agreement shall
obligate the Corporation to cause the Corporation's Common Stock to be listed
with any securities exchange or other regulatory agency. Any shares issued under
the Plan will be restricted stock and shall be appropriately legended to
restrict sale or transfer until the Corporation shall have received a
satisfactory opinion of legal counsel that such sale or transfer is in
accordance with all applicable securities laws. If the Corporation's Common
Stock becomes publicly traded on a national securities exchange, then any shares
issued under the Plan shall include any additional restrictions imposed on the
Corporation's Common Stock by such exchange.
9. Effect of Termination of Service. If an optionee's employment by the
Corporation is terminated for any reason whatsoever, including death, such
optionee or the optionee's successor in interest shall have sixty (60) days
after the date of termination to exercise any Vested Option held by such
optionee at the time of his termination, provided that such option is exercised
within (10) years from after the date such option is granted. All other options
held on the date of termination shall expire automatically as of the date of
termination.
10. Leaves of Absence and Disability. The Plan Committee shall be
entitled to make such rules, regulations and determinations as it deems
appropriate under the Plan in respect of any leave of absence taken by or
disability of any optionee. Without limiting the generality of the foregoing,
the Plan Committee shall be entitled to determine: [i] whether or not any such
leave of absence or disability shall constitute a termination of employment
within the meaning of the Plan, and [ii] the impact, if any, of any such leave
of absence or disability on awards under the Plan theretofore made to any
optionee who takes such leave of absence or becomes disabled.
11. Capital Adjustments Affecting Stock.
A. In the event of a capital adjustment in the Common Stock
resulting from a stock dividend, stock split, reorganization, merger,
consolidation, or a combination or exchange of shares, the number of shares of
Common Stock subject to this Plan and the number of shares under option
-4-
<PAGE> 5
shall be automatically adjusted to take into account such capital adjustment. By
virtue of such a capital adjustment, the price of any share under option shall
be adjusted so that there will be no change in the aggregate purchase price
payable upon exercise of any such option.
B. In the event the Corporation merges or consolidates with
another entity, or all or a substantial portion of the Corporation's assets or
outstanding capital stock are acquired (whether by merger, purchase or
otherwise) by another entity (such other entity being the "Successor"), the kind
of shares of Common Stock that shall be subject to the Plan and to each
outstanding option shall, automatically by virtue of such merger, consolidation
or acquisition, be converted into and replaced by shares of common stock, or
such other class of securities having rights and preferences no less favorable
than the Common Stock, of the Successor, and the number of shares subject to the
option and the purchase price per share upon exercise of the option shall be
correspondingly adjusted, so that, by virtue of such merger, consolidation or
acquisition, each optionee shall have the right to purchase [a] that number of
shares of common stock of the Successor that have a book value equal, as of the
date of such merger, conversion or acquisition, to the book value, as of the
date of such merger, conversion or acquisition, of the shares of Common Stock of
the Corporation theretofore subject to the optionee's option, [b] for a purchase
price per share that, when multiplied by the number of shares of common stock of
the Successor subject to the option, shall equal the aggregate exercise price at
which the optionee could have acquired all of the shares of Common Stock of the
Corporation theretofore optioned to the optionee.
C. The granting of an option pursuant to this Plan shall not
affect in any way the right and power of the Corporation to make adjustments,
reorganizations, reclassifications, or changes of its capital or business
structure or to merge, consolidate, dissolve, liquidate, sell or transfer all or
any part of its business or assets.
12. Amendment, Suspension or Termination. The Board shall have the
right, at any time, to amend, suspend or terminate the Plan in any respect that
it may deem to be in the best interests of the Corporation, provided, however,
no amendments shall be made in the Plan that would cause a modification,
extension or renewal to the terms of an option granted hereunder within the
meaning of Section 424 (h) of the Internal Revenue Code of 1986, as amended.
13. Effective Date, Term and Approval. This Plan shall become effective
upon its approval by the Board of Directors. This Plan shall terminate ten years
after the effective date of the Plan and no options may be granted under the
Plan after such time, but any option granted prior thereto may be exercised in
accordance with its terms. The Plan and all options granted pursuant to it are
subject to all laws, approvals, requirements and regulations of any governmental
authority that may be applicable thereto and, notwithstanding any provisions of
the Plan or option agreement, the holder of an option shall not be entitled to
exercise the option nor shall the Corporation be obligated to issue any shares
to the holder if such exercise or issuance would violate any of the provisions
of the Plan, including paragraph 8 of the Plan.
14. Transferability of Options. An option granted under the Plan may
not be transferred by the optionee otherwise than by will or the laws of descent
and distribution, and during the lifetime of the optionee to whom granted, may
be exercised only by such optionee.
-5-
<PAGE> 6
15. Governing Law; Severability. This Plan shall be governed by the
laws of the Commonwealth of Kentucky. The invalidity or unenforceability of any
provision of this Plan or any option granted pursuant to this Plan shall not
affect the validity and enforceability of the remaining provisions of this Plan
and the Options granted hereunder, and such invalid or unenforceable provision
shall be stricken to the extent necessary to preserve the validity and
enforceability of this Plan and the options granted hereunder.
16. Sale or Business Combination. In the event that an offer is made to
shareholders or to the Corporation whereby a change in control of the
Corporation may or will occur, the Corporation, upon receipt of notice of said
offer, shall promptly provide notice to all optionees. Notwithstanding anything
to the contrary herein, upon receipt of notice of an intended change in control
of the Corporation, the optionee shall have the right to exercise any options
granted hereunder and to the extent permitted by applicable state and federal
law, thereafter to fully exercise his or her rights as a shareholder of the
Corporation.
Dated this second day of March, 1994.
CARDINAL BANCSHARES, INC.
By: /s/ John S. Penn
-------------------------------------
John S. Penn, President
ATTEST:
/s/ Carolyn L. Gabriel
- ----------------------------------
Carolyn L. Gabriel, Secretary
-6-
<PAGE> 1
EXHIBIT 99.2
CARDINAL BANCSHARES, INC.
1992 LIMITED STOCK OPTION PLAN
1. Purpose. The purpose of this Stock Option Plan ("Plan") is to
strengthen Cardinal Bancshares, Inc. ("Corporation") by providing options to
acquire stock of the Corporation ("Options") an additional means of retaining
and attracting competent management personnel and by providing to participating
key employees of the Corporation added incentive for high levels of performance
and for unusual efforts to increase the earnings of the Corporation through the
opportunity for stock ownership hereunder.
It is intended that the Options granted under this Plan will
constitute nonqualified stock options.
2. Administration. The Plan shall be administered by those members of
the Compensation Committee of the Board of Directors of the Corporation who are
not and have not at any time for one year prior to the appointment to said
committee been eligible to receive stock or Options under any plan of the
Corporation or any of its subsidiaries ("Plan Committee"). The decision of a
majority of the members of the Plan Committee shall constitute the decision of
the Plan Committee and the Plan Committee may act either at a meeting at which a
majority of the members of the Plan Committee is present, or by a writing signed
by all of the members of the Plan Committee. The Plan Committee shall have full
power and authority to construe, interpret and administer the Plan and may from
time to time adopt such rules and regulations for carrying out this Plan as it
may deem proper and in the best interests of the Corporation. However, the Board
of Directors of the Corporation (the "Board"), upon the recommendation of the
Plan Committee, shall have the sole, final and conclusive authority to
determine:
<PAGE> 2
A. The individuals ("Optionees") to whom Options shall be granted
under the Plan;
B. The number of shares of the Corporation's common stock ("Common
Stock") to be granted under each Option;
C. The price to be paid for the Common Stock upon the exercise of
each Option ("Option Price"); and
D. The terms and conditions of each Option between the Corporation
and an Optionee.
3. Eligibility. The employees of the Corporation or any of its
subsidiaries who, in the opinion of the Board, are materially responsible for
the management of the business or have materially contributed to the successful
performance of the Corporation or any of its subsidiaries shall be eligible to
be granted Options under the Plan.
4. Stock Subject to Plan. The aggregate number of shares of Common
Stock which may be issued under the Plan shall not exceed One Hundred Thousand
(100,000) shares; subject, however, to adjustment as provided in Section 6
hereof. Either authorized and unissued shares or shares reacquired by the
Corporation, including shares purchased in the open market, may be delivered
under the Plan. If any Option shall expire or terminate for any reason as to any
shares, such shares shall again become available under the Plan.
5. Terms of Options. Each Option shall be evidenced by a written
agreement (a "1992 Limited Stock Option Agreement") between the Corporation and
the Optionee and shall be subject to the following terms and conditions and to
such other terms and conditions not inconsistent herewith as the Plan Committee
may deem appropriate in each case:
2
<PAGE> 3
A. Option Price. The Option Price per share of Common Stock shall be
set by the grant.
B. Payment at Exercise of Option. The Option shall be exercisable as
shall be determined by the Plan Committee upon payment in full in cash and/or
Common Stock of the Option Price. If payment of the Option Price is made in
Common Stock, the value of the Common Stock used for payment of the Option price
shall be based on the market value of the Common Stock as determined by the
average of the closing bid and asked quotations or the closing highest bid
quotation, whichever is available, for the Common Stock in the over-the-counter
market, as reported by the National Association of Securities Dealers Automated
Quotation System (if the Common Stock of the Company is not traded on such
market at the time of payment, then as reasonably determined by the Plan
Committee) on the business day immediately preceding the day the notice of
exercise is delivered to the Secretary of the Corporation.
C. Period of Exercise of Options. Options shall be exercisable only
during the period from the date of grant through December 31, 2006, only as and
at the times provided below, and all Options shall lapse and cease to be
exercisable upon the earliest of [x] the date of the termination of employment
of the Optionee (other than by reason of Disability or Death, as set out below);
[y] December 31, 2006; or [z] any earlier date expressly set forth in the grant.
No Option shall be exercisable before January 1, 1998 except in the event of an
Optionee's Disability or Death, as provided below.
[1] If prior to January 1, 1997 any Optionee ceases to be an
employee of the Corporation or any of its subsidiaries by reason of
permanent and total disability (within the meaning of Section
22(e)((3) of the Internal Revenue Code
3
<PAGE> 4
of 1986, as amended ("Disability"), or [y] death {"Death"), then, in
either event, for each of the complete fiscal years of the
Corporation beginning after December 31, 1991 and prior to the date
of cessation of employment that the Corporation achieved the Annual
Performance Goal (as defined below) 20% of the Options granted to
him or her shall be exercisable by the Optionee or, in the event of
Death, his or her personal representative ("Optionee
Representative"); provided, however, such Options must be exercised
within one year after the date of his or her cessation of
employment.
[2] If the Corporation fails to achieve the Cumulative
Performance Goal and subsequent to December 31, 1996 any Optionee
ceases to be an employee of the Corporation or any of its
subsidiaries by reason of Disability or Death, then for each of the
complete fiscal years of the Corporation beginning after December
31, 1996 and prior to the date of cessation of employment 10% of the
Options granted to him or her shall become exercisable by the
Optionee or, in the event of Death, his or her Optionee
Representative; provided, however, such Options must be exercised
within one year after the date of his or her cessation of
employment.
[3] If the Corporation achieves the Cumulative Performance Goal,
then as of January 1, 1997 1/3% of the Options held by an Optionee
as of December 31, 1996 shall become exercisable, and thereafter, on
and after January 1, 1998 an additional 33 1/3% of the Options held
by that Optionee on December 31, 1996 shall
4
<PAGE> 5
become exercisable, and thereafter, on and after January 1, 1999
the balance of the Options held by that Optionee on December 31,
1996 shall become exercisable; provided, however, that in the event
that the Corporation achieves the Cumulative Performance Goal and
subsequent to December 31, 1996 the Optionee shall cease to be an
employee of the Corporation or any of its subsidiaries by reason of
Disability or Death, then all such Options may and must be exercised
by Optionee or the Optionee's Representative within one year after
the date of his or her cessation of employment.
[4] If the Corporation fails to achieve the Cumulative
Performance Goal, then all Options held by an Optionee as of that
date shall become exercisable on and after January 1, 2006.
[5] Leave of absence approved by the Plan Committee or a transfer
of employment from the Corporation to any subsidiary or from a
subsidiary to the Corporation or any other subsidiary, shall not
constitute termination of employment.
[6] If the holder of an Option does not purchase all of the
Common Stock which he or she is entitled to purchase in any given
installment period, the right to purchase the Common Stock not
purchased in such installment period shall continue until the lapse
or termination of such period, subject in all events to the
Optionee's continued employment or other event causing an Option to
sooner lapse. No Option or installment thereof shall be exercisable
except with respect to whole shares, and fractional share interests
shall be disregarded.
D. Acceleration. Notwithstanding the other provisions of this Section 5
to the contrary, if there is a Change in Control of the Corporation (as defined
below), any Options then
5
<PAGE> 6
outstanding shall become immediately exercisable on and after the date of the
Change in Control of the Corporation.
E. Definitions. For the purposes of the Plan
"Annual Performance Goal" shall mean that for a fiscal year ending in
1992, 1993, 1994, 1995 or 1996, the Corporation and its subsidiaries on
a consolidated basis earned net income per common share on a fully
diluted basis ("EPS"), which when compared with the EPS for all the
prior fiscal years, if any, ending after December 31, 1991 would
reflect an average annual increase in EPS of 15%, compounded annually,
over the net income per common share (on an undiluted basis) of the
Corporation for the fiscal year ended December 31, 1991 which is hereby
fixed at $1.68 per common share. For all fiscal years ending after
December 31, 1991 there shall not be included in earnings of the
Corporation the accretion of any negative good-will produced by
acquisition of the Corporation or its subsidiaries and accounted for by
the purchasing method of accounting. Other than the foregoing
adjustment, all calculations shall be determined by the Corporation's
then current accounting firm in accordance with generally accepted
accounting principles consistently applied and shall be completed as
promptly as practicable after the close of the period in question.
"Cumulative Performance Goal" shall mean that for the fiscal year
ending in 1996 the Corporation achieves the Annual Performance Goal for
that year. "Change in Control of the Corporation" shall mean [a] any
share exchange or merger or consolidation of the Corporation or a
significant subsidiary of the Corporation if the Corporation will not
be the surviving or acquiring corporation or will not own 100% of the
outstanding capital stock of the surviving or acquiring corporation:
following the consummation of the transactions
6
<PAGE> 7
contemplated by the plan or agreement of exchange, merger or
consolidation; [b] any sale, lease, exchange, transfer or other
disposition of all or any substantial part of the assets of the
Corporation or a subsidiary of the Corporation followed by a
liquidation of the Corporation; or [c] the closing of any tender offer,
exchange offer or other purchase offer for as much as (or more than)
50% of the outstanding Common Stock of the Corporation or a subsidiary
of the Corporation.
6. Adjustment of Shares. In the event of capital adjustments to the
Common Stock of the Corporation after the effective date of the Plan by reason
of any reorganization, recapitalization, stock split, stock dividend,
combination of shares, merger or consolidation, or any other change in the
nature or number of shares of Common Stock of the Corporation, a proportionate
adjustment shall be made in the maximum number and kind of shares which may be
delivered under the Plan, and in the Option Price under, and the number and kind
of shares of Common Stock covered by, outstanding Options. By virtue of such a
capital adjustment, the price of any share under Option shall be adjusted so
that there will be no change in the aggregate purchase price payable upon
exercise of any such Option.
Without limiting the generality of the foregoing, if [a] there is a
Change in Control of the Corporation, as hereafter defined, and [b] as a result
of the transactions contemplated by the Change in Control, another person or
entity (a "Successor") will acquire all or a substantial portion of the assets
or outstanding capital stock of the Corporation, then the kind of shares of
common stock which shall be subject to the Plan and to each outstanding Option
shall automatically be converted into and replaced by shares of common stock, or
such other class of equity securities having rights and preferences no less
favorable than common stock of the Successor, and the number of shares subject
to the Options are the purchase price per share
7
<PAGE> 8
upon exercise of the Options shall be correspondingly adjusted, so that, by
virtue of such Change in Control of the Corporation, each Optionee shall have
the right to purchase [i] that number of shares of the Successor which, as of
the date of the change in Control, have a fair market value equal to the fair
market value of the shares of the Corporation theretofore subject to an Option,
[ii] for a purchase price per share which, when multiplied by the number of
shares of the Successor subject to the Option, shall equal the aggregate
exercise price at which the Optionee could have acquired shares of the
Corporation under such Option.
The granting of an Option shall not affect in any way the right of
power of the Corporation to make adjustments, reorganizations,
reclassifications, or changes of its capital or business structure or to merge,
consolidate, dissolve, liquidate, sell or transfer all of any part of its
business assets; provided, however, that the Corporation shall not, and shall
not permit its subsidiaries to, recommend or agree or consent to a transaction
or series of transactions which would result in a Change of Control of the
Corporation unless and until the person or persons acquiring or succeeding to
assets or capital stock of the Corporation or its subsidiaries as a result of
such transaction or transactions agrees to be bound by the terms of the Plan so
far as it pertains to Options theretofore granted and agrees to assume and
perform the obligations of the Corporation and its Successor hereunder.
7. Employees' and Optionees' Rights. No employee or other person shall
have any claim or right to be granted an Option except as the Board shall have
conferred in committing an Optionee to the Plan. Participation in the Plan shall
not confer upon any Optionee any right with respect to continuation of
employment by the Corporation or any of its subsidiaries, nor shall
participation interfere with the right of the Corporation or such subsidiary to
terminate at any time the employment of any Optionee. An Option shall not confer
any rights as a stockholder
8
<PAGE> 9
upon the holder thereof, except only as to shares of Common Stock actually
delivered pursuant to the Plan.
8. Privileges of Stock Ownership; Purchase for Investment. Neither the
Optionee nor any optioned Representative shall be entitled to the privilege of
stock ownership as to any shares of Common Stock not actually issued and
delivered to such Optionee or Optionee Representative. Upon the exercise of an
Option at a time when there is not in effect a registration statement under the
Securities Act of 1933 and any applicable state securities laws (the "Securities
Laws") relating to the shares of Common Stock issuable upon exercise thereof and
available for delivery a prospectus meeting the requirements of the Securities
Laws, the shares of Common Stock may be issued only if the Optionee or Optionee
Representative represents and warrants in writing to the Corporation that the
shares being purchased are being acquired for investment and not with a view to
the distribution thereof. The shares of the Common Stock shall contain such
legends or other restrictive endorsements as counsel for the Corporation shall
deem necessary or proper. No shares of Common Stock shall be purchased upon the
exercise of any Option unless and until there shall have been satisfied any
applicable requirements of the Securities and Exchange Commission or other
regulatory agencies having jurisdiction and applicable requirements of any
exchanges upon which stock of the Corporation may be listed. The Corporation
covenants that it will take all actions necessary to register under the
Securities Laws the Common Stock issuable upon exercise of Options granted
pursuant to this Plan.
9. Transferability. Options are not transferable except by will or the
laws of descent and distribution, and then only to the extent provided herein.
Options may be exercised during the lifetime of the Optionee only by the
Optionee and after the death of the Optionee, only as provided in Section 5
hereof.
9
<PAGE> 10
10. Termination. The Plan shall terminate on December 31, 2006. No
Option shall be granted hereunder after termination of the Plan. Termination of
the Plan, however, shall not affect the validity of any Option theretofore
granted under the Plan.
11. Amendment. The Plan Committee, subject to the approval of the Board
when required by the provisions of the other Sections of this Plan, may amend
the Plan from time to time, except that, without the approval of a majority of
the votes represented and entitled to be voted at a duly held meeting of the
stockholders of the Corporation:
A. The maximum number of shares of Common Stock which may be
delivered under the Plan may not be increased except as provided in Section 6.
hereof;
B. The Option Price under any option may not be reduced except as
provided in Section 6.5 hereof; and
C. The period during which an Option may be exercised may not be
extended beyond the period provided in Section 5. hereof.
No amendment of the Plan, however, may without the consent of the
Optionee or Optionee Representative, make any changes in any outstanding Option
theretofore granted under the Plan which would adversely affect the rights of
such Optionee or Optionee Representative.
12. Tax Withholding. The employer corporation of each Optionee shall
have the right to deduct any sums required by federal, state or local tax law to
be withheld due to the exercise of any Option but, in the alternative, the
Optionee or Optionee Representatives may elect to pay such sums to the employer
corporation by delivering written notice of that election to the Plan Committee
not less than thirty (30) nor more than sixty (60) days prior to exercise. There
is no
10
<PAGE> 11
obligation hereunder that an Optionee be advised of the existence of the tax or
the amount which the employer corporation may be so required to withhold.
13. Governing Law. This Plan and the 1992 Limited Stock Option
Agreements issued hereunder shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Kentucky.
14. Effective Date. This Plan has been approved by the Board of
Directors of the Corporation. The effective date of each Option shall be the day
on which it is granted to any Optionee.
Dated as of this 24th day of October, 1992
CARDINAL BANCSHARES, INC.
ATTEST:
By /s/ C. M. Gatton
---------------------------------------
Carol M. Gatton, Executive and
Compensation Committee
/s/ H. Jack Runion
- ------------------------------------
H. Jack Runion, Executive
and Compensation Committee
11
<PAGE> 1
EXHIBIT 99.3
AMENDMENT NO. 1
CARDINAL BANCSHARES, INC.
1992 LIMITED STOCK OPTION PLAN
CERTIFICATE OF ACTION OF THE
PLAN COMMITTEE OF THE BOARD OF
DIRECTORS OF CARDINAL BANCSHARES, INC.
WHEREAS, the Board of Directors of Cardinal Bancshares, Inc. (the
"Company") adopted the Cardinal Bancshares, Inc. 1992 Limited Stock Option Plan
(the "Plan"), effective October 24, 1992; and
WHEREAS, the Board of Directors of the Company at a meeting on March
22, 1993 has authorized the amendment of the Plan to provide for the reduction
of the exercise period for options granted under the Plan to a maximum of ten
(10) years; and
WHEREAS, the Plan authorizes the amendment of the Plan by the Plan
Committee subject to the approval of the Company's Board of Directors;
NOW, THEREFORE, BE IT RESOLVED that the Plan is hereby amended by the
Plan Committee of the Board of Directors of the Company, effective March 22,
1993, in the following manner:
1. Section 5C is hereby amended in its entirety to read as
follows:
Period for Exercise of Options. Options shall be exercisable
only during the period from the date of grant through December
31, 2001, only as and at the time provided below, and all
Options shall lapse and cease to be exercisable upon the
earliest of [x] the date of the termination of employment of
the Optionee (other than by reason of Disability or Death, as
set out below); [y] December 31, 2001;
<PAGE> 2
or [z] any earlier date expressly set forth in the grant. No
Option shall be exercisable before January 1, 1997 except in
the event of an Optionee's Disability or Death, as provided
below.
2. Section 5C[4] is hereby amended in its entirety to read as
follows:
[4] If the Corporation fails to achieve the
Cumulative Performance Goal, then all Options held by an
Optionee as of that date shall become exercisable on and after
January 1, 2001.
3. Section 10 is hereby amended in its entirety to read as
follows:
10. Termination. The Plan shall terminate on December
31, 2001. No Option shall be granted hereunder after
termination of the Plan. Termination of the Plan, however,
shall not affect the validity of any Option theretofore
granted under the Plan.
The undersigned certify that they constitute all the members of the
Plan Committee of the Board of Directors of the Company.
Effective this 22nd day of March, 1993.
/s/ Carol M. Gatton
- ----------------------------------
Carol M. Gatton
/s/ H. Jack Runnion
- ----------------------------------
H. Jack Runnion
Consent of Participants:
/s/ John S. Penn
- ----------------------------------
John S. Penn
/s/ James S. Mahan, III
- ----------------------------------
James S. Mahan, III
2
<PAGE> 1
EXHIBIT 99.4
CARDINAL BANCSHARES, INC.
1992 First Federal Savings Bank Restricted Stock Option Plan
1. Purpose. The purpose of the Cardinal Bancshares, Inc. 1992 First
Federal Savings Bank Restricted Stock Option Plan(hereinafter called the "Plan")
is to promote the interests of Cardinal Bancshares, Inc., a Kentucky corporation
(hereinafter called the "Corporation"), by affording an incentive to certain
key employees of its subsidiary corporation First Federal Savings Bank("First
Federal") to remain in the employ of First Federal and to use their best efforts
in its behalf; and further to aid First Federal in attracting, maintaining, and
developing capable personnel of a caliber required to insure the success of
First Federal by means of an offer to such persons of an opportunity to acquire
or increase their proprietary interest in the Corporation through the granting
of options to purchase the Corporation's stock pursuant to the terms of this
Plan.
2. Shares Subject to Plan.
A. Subject to the provisions of Section 10, the shares to be
delivered upon exercise of options granted under the Plan shall be made
available, at the discretion of the Board of Directors of Corporation, from the
authorized unissued shares or treasury shares of the Corporation's no par value
common stock. Unless the context indicates otherwise, as used herein, Common
Stock shall refer to shares of the no par value common stock of the Corporation,
or the common stock or securities of a successor of the Corporation that have
been substituted therefore under Section 10 of the Plan.
B. Subject to adjustments and substitutions made pursuant to the
provisions of Section 10, the aggregate number of shares that may be issued upon
exercise of all options that may be granted under the Plan shall not exceed
13,010 of the Corporation's authorized shares of Common Stock.
C. If any option granted under the Plan expires or terminates for
any reason whatsoever without having been exercised in full in accordance with
the terms of the Plan, the shares of Common Stock subject to, but not delivered
under, such option shall become available for any lawful corporate purpose,
including for issuance pursuant to other options granted to the same employee or
other employees without decreasing the aggregate number of shares of Common
Stock that may be granted under the Plan.
D. More than one option may be granted to an optionee pursuant to
this Plan.
3. Option Agreements.
A. Each option granted under the Plan shall be evidenced by an
option agreement signed by a member of the Plan Committee (as hereinafter
defined) on behalf of the Corporation and by the optionee.
<PAGE> 2
B. An option agreement shall constitute a binding contract between
the Corporation and the optionee, and every optionee, upon acceptance of such
option agreement, shall be bound by the terms and restrictions of this Plan and
of the option agreement.
C. The terms of the option agreement shall be in accordance with
this Plan, but nay include additional provisions and restrictions, provided that
the same are not, as determined by the Plan Committee, inconsistent with the
Plan.
4. Administration. The Plan shall be administered, after consultation
with the Board of Directors of First Federal, by a committee (the "Plan
Committee") whose membership shall be determined and reviewed from time to time
by the Corporation's Board of Directors. Ronald C. Switzer, James S. Mahan, III,
and John S. Penn shall act as the Plan committee unless and until the Board of
Directors votes to alter the composition of the Plan Committee. The Plan
Committee shall have the full power and authority to construe, interpret, and
administer the Plan and may from time to time adopt such rules and regulations
for carrying out the Plan as it may deem proper and in the beat interests of the
Corporation. Subject to the terms, provisions and conditions of the Plan, the
Plan Committee, after consultation with the Board of Directors of First Federal,
shall have exclusive jurisdiction: (a)to select the employees to whom options
shall be granted; [b] to determine the number of shares of Common Stock subject
to each option; [c] to determine the time or times when options will be granted;
(d] to fix such other provisions of the option agreement as it may deem
necessary or desirable consistent with the terms of the Plan; and [e] to
determine all other questions relating to the administration of the Plan. The
interpretation of any provisions of the Plan by the Committee shall be final,
conclusive, and binding upon all persons and the officers of the Corporation
shall place into affect, and shall cause the Corporation to perform its
obligations under the Plan in accordance with, the determinations of the Plan
Committee in administering the Plan. Any member of the Plan Committee shall
resign his or her membership immediately upon receiving notice that a majority
of the members of the Board of Directors have voted in favor of such
resignation.
5. Eligibility. Key employees of First Federal, including officers and
directors, shall be eligible to receive options under the Plan. That an employee
has been granted an option under this Plan shall not in any way affect or
qualify the right of First Federal to terminate his employment at any time,
subject to the terms and conditions of any employment agreement that may then be
in effect. Nothing contained in the Plan shall be construed to limit the right
of the Corporation to grant options otherwise than under the Plan for any proper
and lawful corporate purpose, including but not limited to options granted to
key employees. Key employees to whom options may be granted under the Plan will
be those selected by the Plan Committee from time to time who, in the sole
discretion of the Plan Committee, have contributed in the past or who may be
expected to contribute materially in the future to the successful performance of
First Federal. Initially, after the effective date of the Conversion
Acquisition, options will be granted to the employees and in the amounts listed
on Exhibit I attached hereto.
6. Option Price. The price at which a share of Common Stock may be
purchased under an option granted pursuant to the Plan shall be an amount equal
to one hundred percent (100%) of the (i) fair market value of the Common Stock
if quoted on NASDAQ NMS or, (ii) if
2
<PAGE> 3
not quoted on NASDAQ NMS, the most recent price of Common Stock listed in the
pink sheets or, (iii) if not quoted on NASDAQ NMS or listed in the pink sheets,
the book value of such share of Common Stock as of the last day of the month
immediately preceding the date the option is granted; provided, however, that as
to any options granted in connection with the conversion of First Federal to the
stock form of organization and concurrent acquisition by Cardinal (the
"Conversion Acquisition"), the price at which a share of Common Stock nay be
purchased under such option shall be the amount equal to the price per share at
which shares of Common Stock are sold in the Subscription offering which is part
of the Conversion Acquisition. The option price shall be subject to adjustments
in accordance with the provisions of Section 10 herein.
7. Exercise of Options.
A. Twenty percent (20%) of those shares subject to any option
granted under the Plan shall vest and become exercisable during each year of the
first five (5) years after the date such option is granted provided, however,
that no option shall be exercised until at least six (6) months following the
date it war. granted and must be exercised, if at all, within ten (10) years
after the date such option is granted. Notwithstanding the above, should an
optionee's employment with First Federal terminate, prior to exercising the
option or any portion thereof, due to the death of the optionee, the optionee's
successor in interest shall have one year after the optionee's date of death to
exercise such option in accordance with the terms hereof. Any such exercisable
option is hereinafter referred to as a "Vested option".
B. Subject to the terms and conditions of any applicable option
agreement, any option granted under the Plan may be exercised in whole or in
part in installments at such time or times as the Plan Committee may prescribe
in the applicable option agreement.
C. Except as otherwise provided herein, no option granted under the
Plan may be exercised unless the optionee is at the time of such exercise an
employee of First Federal.
8. Issuance of Shares. No shares of Common Stock shall be issued
pursuant to the exercise of an option until:
A. The optionee pays, or makes satisfactory arrangements to pay, the
option price for the shares to be issued; and until.
B. Provision has been made for the payment of any and all federal,
state, and local taxes that may be required to be paid as a result of the
exercise of such option or the issuance of such shares.
No optionee, or legal representative, legatee, or distributes of an
optionee, shall be deemed to be the holder of any shares of Common Stock subject
to any option unless and until the certificate or certificates for then have
been issued. Nothing contained in the Plan or any option agreement shall
obligate the Corporation to cause the Corporation's Common Stock to he listed
with any securities exchange or other regulatory agency. Any shares issued under
the Plan will be restricted stock and shall be appropriately legended to
restrict sale or transfer until
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the Corporation shall have received a satisfactory opinion of counsel that such
a sale or transfer is in accordance with all applicable securities laws. If the
Corporation's Common Stock becomes publicly traded on a securities exchange,
then any shares issued under the plan shall include any additional restrictions
imposed on the Corporation's Common Stock by such exchange.
9. Effect of Termination of Service. If an optionee's employment by
First Federal is terminated for any reason whatsoever, except death, such
optionee or the optionee's successor in interest shall have one year after the
date of termination to exercise any Vested Option held by such optionee at the
time of his termination. If an optionee's employment by the Corporation is
terminated by reason of his death, such optionee's successor in interest shall
have one year after the date of death to exercise any option or portion thereof
held by the optionee at the date of death provided the optionee has had at least
two years continuous service with the Corporation as of the date of death.
otherwise, all other options held on the date of termination shall expire
automatically as of the date of termination.
10. Capital Adjustments Affecting Stock.
A. In the event of a capital adjustment in the Common Stock
resulting from a stock dividend, stock split, reorganization, merger,
consolidation, or a combination or exchange of shares, the number of shares of
Common Stock subject to this Plan and the number of shares under option shall be
automatically adjusted to take into account such capital adjustment. By virtue
of such a capital adjustment, the price of any share under option shall be
adjusted so that there will be no change in the aggregate purchase price payable
upon exercise of any such option.
B. In the event the Corporation merges or consolidates with another
entity, or all or a substantial portion of the Corporation's assets or
outstanding capital stock are acquired (whether by merger, purchase or
otherwise) by another entity (such other entity being the "Successor"), the kind
of shares of Common Stock that shall be subject to the Plan and to each
outstanding option shall, automatically by virtue of such merger, consolidation
or acquisition, be converted into and replaced by shares of common stock, or
such other class of securities having rights and preferences no less favorable
then the Common Stock, of the Successor, and the number of shares subject to the
option and the purchase price per share upon exercise of the option shall be
correspondingly adjusted, so that, by virtue of such merger, consolidation or
acquisition, each optionee shall have the right to purchase [a] that number of
shares of common stock of the Successor that have a book value equal, as of the
date of such merger, conversion or acquisition, to the book value, as of the
date of such merger, conversion or acquisition, of the shares of common Stock of
the Corporation theretofore subject to the option's option, [b] for a purchase
price per share that, when multiplied by the number of shares of common stock of
the Successor subject to the option, shall equal the aggregate exercise price at
which the optionee could have acquired all of the shares of Common Stock of the
Corporation theretofore optioned to the optionee.
C. The granting of an option pursuant to this Plan shall not affect
in any way the right and power of the Corporation to make adjustments,
reorganizations, reclassifications,
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or changer of its capital or business structure or to merge, consolidate,
dissolve, liquidate, sell or transfer all or any part of its business or assets.
11. Amendment, Suspension, or Termination. The Board of Directors of
Corporation shall have the right, at any time, to amend, suspend or terminate
the Plan in any respect that it may deem to be in the best interests of the
corporation, provided, however, no amendments shall be made in the Plan that
would:
A. Increase the total number of shares for which options may be
granted under this Plan for all key employees or for any one of them except as
provided in Section 10;
B. Change the minimum purchase price for the optioned shares, except
as provided in Section 10;
C. Affect outstanding options or any unexercised rights thereunder
except as provided in and required by Section 10;
D. Extend the termination date of the Plan.
E. The Board of Directors may at any time, and from time to time,
modify or amend the Plan in any respect; provided, however, that if necessary to
continue to qualify the Plan under the Securities and Exchange Commission Rule
16b-3, Shareholder approval shall be required for any such modification or
amendment which:
[1] materially increases the benefits accruing to participants
under the Plan.
[2] materially increases the number of securities which may be
issued under the Plan; or
[3] materially modifies the requirements as to eligibility for
participation in the Plan.
12. Effective Date, Term and Approval. This Plan shall become effective
upon the effective date of the Conversion Acquisition as that term is defined in
the Agreement and Plan of Reorganization dated as of February 15, 1992 by and
between Cardinal Bancshares and First Federal Savings Bank. The Plan shall be
presented to shareholders for approval for purposes of obtaining favorable
treatment under Section 16(b) of the Securities Exchange Act of 1934. This Plan
shall terminate ten years after the effective date of the Plan and no options
may be granted under the Plan after such time, but any option granted prior
thereto may be exercised in accordance with its terms. The Plan and all options
granted pursuant to it are subject to all laws, approvals, requirement and
regulations of any governmental authority that may be applicable thereto and,
notwithstanding any provisions of the Plan or option agreement, the holder of an
option shall not be entitled to exercise the option nor shall the Corporation be
obligated to issue any shares to the holder if such exercise or issuance would
violate any of the provisions of the Plan, including paragraph 7 of the Plan.
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13. Transferability of Options. An option granted under the Plan may
not be transferred by the optionee otherwise than by will or the laws of descent
and distribution, or pursuant to a qualified domestic relations order as defined
in the Internal Revenue Code of 1906, as amended, 26 U.S.C. ss.1 et. seq. of
Title I of the Employee Retirement Income Security Act or the rules thereunder.
14. Governing Law; Severability. This Plan shall be governed by the
laws of the Commonwealth of Kentucky. The invalidity or unenforceability of any
provision of this Plan or any option granted pursuant to this Plan shall not
affect the validity and enforceability of the remaining provisions of this Plan
and the options granted hereunder, and such invalid or unenforceable provision
shall be stricken to the extent necessary to preserve the validity and
enforceability of this Plan and the options granted hereunder.
15. Sale or Business Combination. In the event that an offer is made to
shareholders or to the Corporation whereby a change in control of the
Corporation may or will occur, the Corporation, upon receipt of notice of said
offer, shall promptly provide notice to all Optionees. Notwithstanding anything
to the contrary herein, upon receipt of notice of an intended change in control
of the Corporation, the Optionee shall have the right to exercise any options
granted hereunder and to the extent permitted by applicable state and federal
law, thereafter to fully exercise his or her rights as a shareholder of the
Corporation.
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EXHIBIT 99.5
CARDINAL BANCSHARES, INC.
RESTRICTED STOCK PLAN
AND ESCROW AGREEMENT
PLAN AND AGREEMENT made this 11th day of May, 1992, by and between
Cardinal Bancshares, Inc., a Kentucky bank holding company ("Cardinal") and Vine
Street Trust Company, a Kentucky corporation (the "Escrow Agent");
WITNESSETH THAT:
WHEREAS, VST Financial Services, Inc., (the "Company") has entered into
employment agreements with certain employees; and
WHEREAS, such employment agreements provide for the award of common
stock of Cardinal Bancshares, Inc. under a plan of restricted stock awards; and
WHEREAS, Cardinal desires that such stock awards be placed in escrow
and further desires that Vine Street Trust Company serve as escrow agent; and
WHEREAS, Vine Street Trust Company desires to serve as escrow agent for
purposes of the Plan,
NOW, THEREFORE, Cardinal hereby adopts the Cardinal Bancshares, Inc.
Restricted Stock Plan and Escrow Agreement (the "Plan"), effective May 2, 1992,
as set forth below, and in consideration of the premises and the mutual
covenants herein contained, establishes with the Escrow Agent the following
agreement:
1. Purpose. Cardinal intends that the Plan provide incentives which
will attract and retain highly competent executive employees as officers and key
employees of Cardinal and its subsidiaries by providing them with opportunities
to acquire Common Stock of Cardinal pursuant to Awards, as described herein.
2. Definitions. For purposes of this Plan, the following terms will
have the meanings set forth below:
(a) Award. A transfer of Common Stock (rounded to the nearest whole
share) to the Executive as incentive payment for services rendered in
accordance with the Executive's employment agreement. The Executive
shall not be required to pay Cardinal for the Award.
(b) Board of Directors. The Board of Directors of Cardinal
Bancshares, Inc.
(c) Cardinal. Cardinal Bancshares, Inc. or its successor by merger
or otherwise.
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(d) Common Stock. The common stock of Cardinal.
(e) Escrow Agent. An agent appointed by Cardinal to retain custody
of Common Stock to which the restrictions set forth in Paragraph 4
apply. The initial Escrow Agent shall be Vine Street Trust Company.
(f) Executive. An employee of Cardinal or one of its subsidiaries
that enters into an employment agreement with Cardinal or one of its
subsidiaries that provides for participation in this Plan.
(g) Plan. The Cardinal Bancshares, Inc. Restricted Stock Plan and
Escrow Agreement, as set forth herein and as the same may be amended
from time to time.
(h) Restricted Period. A period starting on the date of issuance of
an Award to the Executive, and ending on the third (3rd) anniversary
thereof.
3. Issuance and Adjustment of Shares. Cardinal shall cause sufficient
shares to be authorized and issued to fulfill obligations under any employment
agreement in a timely manner. If Cardinal shall at any time change the number of
authorized shares of Common Stock due to a stock split or stock dividend or
combination of shares or any other change, or exchange for other securities, by
reclassification, reorganization, merger, consolidation, recapitalization or
otherwise, the total number of shares covered by each outstanding Award shall be
adjusted so that the value of each such Award shall not be changed.
4. Award Rights and Restrictions. Awards shall be made only pursuant to
an applicable employment agreement that exists between the Executive and
Cardinal or its subsidiaries. When an Award is made to the Executive, a
certificate or certificates for shares of Common Stock equal in value to the
Award shall be issued in the Executive's name. The Executive shall thereupon be
a shareholder of all the shares of Common Stock represented by the certificate
or certificates. As such, the Executive will have all the rights of a
shareholder with respect to such shares, including the right to vote them and to
receive all dividends and other distributions paid with respect to them,
provided, however, that the shares shall be subject to he restrictions set forth
in this Paragraph 4.
During a Restricted Period applicable to an Award, shares represented
by an Award may not be sold, exchanged, transferred, pledged, hypothecated, or
otherwise alienated. Stock certificates representing Awards shall be imprinted
with a legend stating such restrictions and each transfer agent for the Common
Stock shall be instructed to like effect in respect of such shares.
In aid of such restrictions, the Executive shall, immediately upon
receipt of the certificate or certificates therefore, deposit such certificate
or certificates together with a stock power or other instrument of transfer,
appropriately endorsed in blank, with the Escrow Agent.
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The Executive shall forfeit Common Stock subject to the Restricted
Period upon occurrence of the following events: [i] any attempt by the Executive
to exchange, transfer, pledge, hypothecate or otherwise alienate the Common
Stock during the Restricted Period; and [ii] the termination of an Executive's
employment for any reason at any time before the Restricted Period ends with
respect to an Award. Upon the occurrence of an event causing forfeiture,
Cardinal shall notify the Escrow Agent and all shares subject to a Restricted
Period shall be forfeited by the Executive and transferred back to Cardinal.
5. Lapse of Restricted Period. The restrictions set forth in Paragraph
4 above with respect to the Awards to which such Restricted Period was
applicable will lapse as to such shares of Common Stock in accordance with the
time and number of shares as to which the Restricted Period expires.
Notwithstanding the preceding sentence, restrictions set forth in Paragraph 4
above with respect to the Awards to which such Restricted Period is applicable
will lapse upon any event specified in the Executive's employment agreement.
Upon the lapse of the Restricted Period, the Escrow Agent shall cause the legend
on the restricted shares of Common Stock to be cancelled and shall distribute
the unrestricted shares of Common Stock to the Executive.
6. Administration. The Board of Directors shall supervise and
administer the Plan. Any questions of interpretation of the Plan or any Awards
issued under it shall be determined by the Board of Directors and such
determination shall be final and binding on all persons. Any or all powers and
discretion vested in the Board of Directors under the Plan, except the power to
amend or terminate the Plan, may be exercised by a committee of at least three
directors authorized by the Board of Directors to do so. If the Board of
Directors appoints a committee, a majority of members of the committee shall
constitute a quorum and all determinations of the committee shall be made by a
majority of its members. Any determination of the committee under the Plan may
be made without notice or meeting of the committee by a writing designated by a
majority of the committee members.
7. Tenure. An Executive's right, if any, to continue to serve Cardinal
and its subsidiaries as an officer, employee or otherwise shall not be enlarged
or otherwise affected by his designation as an Executive under the Plan.
8. Duration, Amendment and Termination. No Award shall be granted more
than four years after the effective date of this Plan; provided, however, that
the terms and conditions of the Plan applicable to any Award granted within such
four-year period will continue to apply to such Award unless amended or modified
by mutual agreement between Cardinal and the Executive. Also, by mutual
agreement between Cardinal and an Executive, or under any future plan of
Cardinal, Awards may be granted to the Executive in substitution and exchange
for, or in cancellation of any Awards previously granted such Executive under
this Plan or any benefit previously or thereafter granted to him under any
future plan of Cardinal. The Board of Directors may amend the Plan from time to
time or terminate the Plan at any time. However, no action authorized by this
Paragraph 8 shall reduce the amount of any existing Award or change the terms
and conditions thereof without the Executive's consent. No amendment of the Plan
shall, without the approval of stockholders of Cardinal, [i] increase the total
number of shares which may be issued under the Plan or increase the amount or
type of Awards that may be granted under the Plan; or [ii] modify the
requirements as to eligibility for Awards under the Plan.
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9. Governing Law. The Plan will be governed by the laws of the
Commonwealth of Kentucky.
10. Expense of Administration. All costs and expenses incurred in the
operation and administration of this Plan, including any fees owed to the Escrow
Agent, will be borne by Cardinal.
CARDINAL BANCSHARES, INC.
By: /s/ James S. Mahan III
--------------------------------------
Title: CEO
-----------------------------------
VINE STREET TRUST COMPANY
By: /s/
--------------------------------------
Title: President
-----------------------------------
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