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EXHIBIT 99.6
CARDINAL BANCSHARES, INC.
1993 Mutual Federal Savings Bank Restricted Stock Option Plan
1. Purpose. The purpose of the Cardinal Bancshares, Inc. 1993
Mutual 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 Mutual Federal Savings Bank
("Mutual Federal") to remain in the employ of Mutual Federal and to use their
best efforts in its behalf; and further to aid Mutual Federal in attracting,
maintaining, and developing capable personnel of a caliber required to insure
the success of Mutual 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
37,950 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.
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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.
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, after
consultation with the Board of Directors of Mutual 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 best 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 Mutual
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 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 a majority
of the members of the Board of Directors have voted in favor of such
resignation.
5. Eligibility. Key employees of Mutual Federal, including
officers and
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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 Mutual 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
Mutual Federal. Initially, after the effective date of the Conversion
Acquisition, options will be granted to the employees and in the amounts listed
on Exhibit 1 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 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 Mutual Federal to the stock form of
organization and concurrent acquisition by Cardinal (the "Conversion
Acquisition"), the price at which a share of Common Stock may 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 was 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 Mutual 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".
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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 Mutual 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 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 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 Mutual Federal is terminated for any reason whatsoever, including 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.
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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 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.
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;
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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 January 20, 1993
by and between Cardinal Bancshares, Inc. and Mutual Federal Savings Bank. If
required, 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,
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 7 of the Plan.
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
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Internal Revenue Code of 1986, 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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