AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 1, 1998
Registration No. 333-44557-01
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1
ON
FORM S-8
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933*
MAGNA GROUP, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 37-0996453
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
One Magna Place
1401 South Brentwood Boulevard
St. Louis, Missouri 63144-1401
(Address of Principal Executive Offices) (Zip Code)
Charter Financial, Inc. 1997 Stock Option Plan
Charter Bank, S.B. 1993 Incentive Stock Option Plan
(Full Title of the Plans)
G. Thomas Andes
Chairman, and Chief Executive Officer
Magna Group, Inc.
One Magna Place
1401 South Brentwood Boulevard
St. Louis, Missouri 63144-1401
(Name and Address of Agent For Service)
(314) 963-2500
(Telephone Number, Including Area Code,
of Agent For Service)
Copies of all correspondence to:
Robert H. Wexler, Esq.
Gallop, Johnson & Neuman, L.C.
Interco Corporate Tower
101 South Hanley Road
St. Louis, Missouri 63105
* Filed as a Post-Effective Amendment on Form S-8 to Form S-4 Registration
Statement pursuant to the procedure described in Part II under "Introductory
Statement."
This Post-Effective Amendment No. 1 covers shares of the Registrant's Common
Stock originally registered on the Registration Statement on Form S-4
(333-44557) to which this is an amendment. The registration fees in respect of
such shares of Common Stock were paid in connection with the original filing of
the Registrant's Registration Statement on Form S-4 on January 20, 1998.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
INTRODUCTORY STATEMENT
The Registrant hereby amends its Registration Statement on Form S-4
(333-44557) (the "Form S-4") by filing this Post-Effective Amendment on Form S-8
("Amendment No. 1") with respect to up to 124,428 shares of the Registrant's
common stock, $2.00 par value per share, together with an attached, non
separable Preferred Share Purchase Right per share (collectively, the "Shares"),
issuable in connection with the following plans of Charter Financial, Inc.
("Charter"): the Charter Bank, S.B. 1993 Incentive Stock Option Plan and the
Charter Financial Inc. 1997 Stock Option Plan (collectively, the "Plans"). All
such Shares were previously included in the Form S-4.
As of May 1, 1998, Charter Acquisition Sub, Inc., a Delaware
corporation, and a wholly owned subsidiary of the Registrant ("Merger Sub"), was
merged with and into Charter (the "Merger") pursuant to an Agreement and Plan of
Merger by and between the Registrant and Charter, dated as of November 19, 1997,
as amended (the "Merger Agreement"). As a result of the Merger, each outstanding
share of Charter common stock (with certain specified exceptions) was converted
into Common Stock of the Registrant pursuant to the exchange ratio (the
"Exchange Ratio") set forth in the Merger Agreement. Also as a result of the
Merger, shares of Charter common stock are no longer issuable upon the exercise
of options to purchase Charter common stock ("Charter Options") pursuant to the
Plans. Instead, pursuant to the Merger Agreement, each outstanding Charter
Option not otherwise cashed out (as permitted under certain circumstances
pursuant to the Merger Agreement) was converted into an option to acquire, on
the same terms and conditions as were applicable under such Charter Option, the
number of shares of the Registrant's Common Stock equal to the number of shares
of Charter common stock subject to the Charter Option multiplied by the Exchange
Ratio, with an exercise price of such option equal to the exercise price which
existed under the corresponding Charter Option divided by the Exchange Ratio.
The designation of Amendment No. 1 as Registration No. 333-44557-01
denotes that Amendment No. 1 relates only to the Shares and that this is the
first Post-Effective Amendment to the Form S-4 filed with respect to such
Shares.
Item 3. Incorporation of Documents by Reference
The following documents filed by the Registrant with the Securities and
Exchange Commission are incorporated herein by reference:
(a) The Registrant's latest annual report on Form 10-K filed pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act");
(b) The Registrant's Current Report on Form 8-K, dated February 27,
1998.
(c) All other reports filed by the Registrant pursuant to Section 13 or
15(d) of the Exchange Act since the end of the fiscal year covered by the annual
report referred to in (a) above; and
(d) The description of the Registrant's common stock set forth in the
Registrant's Registration Statement on Form 8-A, dated November 4, 1996,
including any amendment or report filed for the purpose of updating such
description; and
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(e) The description of the Registrant's Preferred Stock Purchase Rights
set forth in Item 1 of the Registrant's Registration Statement on Form 8-A,
dated November 11, 1988, including any amendment or report filed for the purpose
of updating such description.
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 which indicates that all securities offered hereby have
been sold or which 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. Any statement
contained in a document incorporated by reference herein and filed prior to the
filing hereof shall be deemed to be modified or superseded for purposes of this
registration statement to the extent that a statement contained herein modifies
or supersedes such statement, and any statement contained herein or in any other
document incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this registration statement to the extent that a
statement contained in any other subsequently filed document which also is
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this registration statement.
Item 4. Description of Securities
Not Applicable.
Item 5. Interests of Named Experts and Counsel
The legality of the Common Stock offered hereby has been passed upon
for the Registrant by Gallop, Johnson & Neuman, L.C., of which firm Donald P.
Gallop, a director of the Registrant, is a member. As of April 30, 1998, Mr.
Gallop beneficially owned 35,389 shares of the Registrant's Common Stock.
Item 6. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law (the "DGCL")
provides generally and in pertinent part that a Delaware corporation may
indemnify its directors and officers against expenses, judgments, finances and
settlements actually and reasonably incurred by them in connection with any
civil suit or action, except actions by or in the right of the corporation, or
any administrative or investigative proceeding if, in connection with the
matters in issue, they acted in good faith and in a manner they reasonably
believed to be in, or not opposed to, the best interest of the corporation, and
in connection with any criminal suit or proceeding, if in connection with the
matters in issue, they had no reasonable cause to believe their conduct was
unlawful. Section 145 of the DGCL further permits a Delaware corporation to
grant its directors and officers additional rights of indemnification through
bylaw provisions and otherwise and to purchase indemnity insurance on behalf of
its directors and officers.
Article 12 of the Registrant's Certificate of Incorporation provides
for the elimination of personal liability of directors of the Registrant to the
Registrant and its stockholders for monetary damages arising from certain
breaches of directors' duty of care. In addition, Article 12 provides for the
indemnification of persons who are or were directors, officers, employees and
agents of the Registrant or who are or were serving at the request of the
Registrant in a similar capacity with another enterprise or entity to the
fullest extent authorized by the DGCL. Article 12 also authorizes the Registrant
to purchase insurance for itself and indemnifiable persons against any expense,
liability or loss whether or not the Registrant would have the power to
indemnify such expense, liability or loss under the DGCL. The Registrant
maintains a liability insurance policy which indemnifies its directors,
officers, employees and agents.
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Item 7. Exemption From Registration Claimed
Not Applicable.
Item 8. Exhibits
See Exhibit Index.
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 of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this 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 this registration statement.
Notwithstanding the foregoing, any increase or decrease in the
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 end 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 a 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 this 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, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
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(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c)-(g) Not Applicable.
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(i) Not Applicable.
(j) Not Applicable.
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<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the city of Brentwood, state of Missouri, on April 30, 1998.
MAGNA GROUP, INC.
By: /s/ Gary D. Hemmer
Gary D. Hemmer,
Executive Vice President
POWER OF ATTORNEY
We, the undersigned officers and directors of Magna Group, Inc., hereby
severally and individually constitute and appoint G. Thomas Andes, Robert S.
Kahler and Gary D. Hemmer and each of them, the true and lawful attorneys and
agents of each of us to execute in the name, place and stead of each of us
(individually and in any capacity stated below) any and all amendments to this
Registration Statement on Form S-8 and all instruments necessary or advisable in
connection therewith and to file the same with the Securities and Exchange
Commission, each of said attorneys and agents to have the power to act with or
without the other and to have full power and authority to do and perform in the
name and on behalf of each of the undersigned every act whatsoever necessary or
advisable to be done in the premises as fully and to all intents and purposes as
any of the undersigned might or could do in person, and we hereby ratify and
confirm our signatures as they may be signed by our said attorneys and agents
and each of them to any and all such amendments and instruments.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Name Title Date
/s/ G. Thomas Andes Chairman of the Board, April 30, 1998
- -------------------------- Chief Executive
G. Thomas Andes* Officer and Director
(Principal Executive Officer)
/s/ Robert S. Kahler Executive Vice President and April 30, 1998
- -------------------------- Chief Financial Officer
Robert S. Kahler* (Principal Financial and
Accounting Officer)
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/s/ James A. Auffenberg, Jr. Director April 30, 1998
- ----------------------------
James A. Auffenberg, Jr.*
/s/ Wayne T. Ewing Director April 30, 1998
- ----------------------------
Wayne T. Ewing*
/s/ Donald P. Gallop Director April 30, 1998
- ----------------------------
Donald P. Gallop*
/s/ Randall E. Ganim Director April 30, 1998
- ----------------------------
Randall E. Ganim*
/s/ C.E. Heiligenstein Director April 30, 1998
- ----------------------------
C.E. Heiligenstein*
/s/ John G. Helmkamp, Jr. Director April 30, 1998
- ----------------------------
John G. Helmkamp, Jr.*
/s/ Carl G. Hogan, Sr. Director April 30, 1998
- ----------------------------
Carl G. Hogan, Sr.*
/s/ Franklin A. Jacobs Director April 30, 1998
- ----------------------------
Franklin A. Jacobs*
/s/ S. Lee Kling Director April 30, 1998
- ----------------------------
S. Lee Kling*
/s/ Ralph F. Korte Director April 30, 1998
- ----------------------------
Ralph F. Korte*
/s/ Roger J. Lowery Director April 30, 1998
- ----------------------------
Roger J. Lowery*
/s/ William A. Peck Director April 30, 1998
- ----------------------------
William A. Peck*
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/s/ Erl A. Schmiesing Director April 30, 1998
- ----------------------------
Erl A. Schmiesing *
/s/ Douglas K. Shull Director April 30, 1998
- ----------------------------
Douglas K. Shull*
/s/ Frank R. Trulaske Director April 30, 1998
- ----------------------------
Frank R. Trulaske*
/s/ George T. Wilkins, Jr. Director April 30, 1998
- ----------------------------
George T. Wilkins, Jr.*
*/s/ Gary D. Hemmer
- ----------------------------
Gary D. Hemmer
Attorney-in-Fact
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<PAGE>
FORM S-8
Magna Group, Inc.
EXHIBIT INDEX
Exhibit
Number Description Page
- ------- ----------- ----
4.1 Charter Financial, Inc. 1997 Stock Option Plan.
4.2 Charter Bank, S.B. 1993 Incentive Stock Option Plan.
5.1 Opinion of Gallop, Johnson & Neuman, L.C.
23.1 Consent of Ernst & Young LLP, St. Louis, Missouri.
23.2 Consent of Gallop, Johnson & Neuman, L.C.
(included in Exhibit 5.1).
24.1 Power of Attorney (included on signature
page of the registration statement).
Exhibit 4.1
CHARTER FINANCIAL, INC.
1997 STOCK OPTION PLAN
1. Purpose
The purpose of the Charter Financial, Inc. 1997 Stock Option Plan (the
"Plan") is to advance the interests of the Company and its stockholders by
providing Key Employees and Outside Directors of the Company and its Affiliates,
including Charter Bank, S.B., upon whose judgment, initiative and efforts the
successful conduct of the business of the Company and its Affiliates largely
depends, with an additional incentive to perform in a superior manner as well as
to attract people of experience and ability.
2. Definitions
"Affiliate" means any "parent corporation" or "subsidiary corporation"
of the Company or the Bank, as such terms are defined in Section 424(e) or
424(f), respectively, of the Code, or a successor to a parent corporation or
subsidiary corporation.
"Award" means an Award of Non-Statutory Stock Options, Incentive Stock
Options, Limited Rights, and/or Dividend Equivalent Rights granted under the
provisions of the Plan.
"Bank" means Charter Bank, S.B., or a successor corporation.
"Beneficiary" means the person or persons designated by a Participant
to receive any benefits payable under the Plan in the event of such
Participant's death. Such person or persons shall be designated in writing on
forms provided for this purpose by the Committee and may be changed from time to
time by similar written notice to the Committee. In the absence of a written
designation, the Beneficiary shall be the Participant's surviving spouse, if
any, or if none, his estate.
"Board" or "Board of Directors" means the board of directors of the
Company or its Affiliate, as applicable.
"Cause" means personal dishonesty, willful misconduct, any breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties, or the willful violation of any law, rule or regulation (other than
traffic violations or similar offenses) or a final cease-and- desist order, any
of which results in a material loss to the Company or an Affiliate.
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"Change in Control" of the Bank or the Company means a change in
control of a nature that: (i) would be required to be reported in response to
Item 1(a) of the current report on Form 8-K, as in effect on the date hereof,
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act"); or (ii) results in a Change in Control of the Bank or the
Company within the meaning of the Home Owners' Loan Act ("HOLA"), and applicable
rules and regulations promulgated thereunder, as in effect at the time of the
Change in Control; or (iii) without limitation such a Change in Control shall be
deemed to have occurred at such time as (a) any "person" (as the term is used in
Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 25% or more of the
combined voting power of Company's outstanding securities except for any
securities purchased by the Bank's employee stock ownership plan or trust; or
(b) individuals who constitute the Board on the date hereof (the "Incumbent
Board") cease for any reason to constitute at least a majority thereof, provided
that any person becoming a director subsequent to the date hereof whose election
was approved by a vote of at least three-quarters of the directors comprising
the Incumbent Board, or whose nomination for election by the Company's
stockholders was approved by the same Nominating Committee serving under an
Incumbent Board, shall be, for purposes of this clause (b), considered as though
he were a member of the Incumbent Board; or (c) a plan of reorganization,
merger, consolidation, sale of all or substantially all the assets of the Bank
or the Company or similar transaction in which the Bank or Company is not the
surviving institution occurs; or (d) a proxy statement soliciting proxies from
stockholders of the Company, by someone other than the current management of the
Company, seeking stockholder approval of a plan of reorganization, merger or
consolidation of the Company or similar transaction with one or more
corporations as a result of which the outstanding shares of the class of
securities then subject to the Plan are to be exchanged for or converted into
cash or property or securities not issued by the Company; or (e) a tender offer
is made for 25% or more of the voting securities of the Company and the
shareholders owning beneficially or of record 25% or more of the outstanding
securities of the Company have tendered or offered to sell their shares pursuant
to such tender offer and such tendered shares have been accepted by the tender
offeror.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means a Committee of the Board consisting of either (i) at
least two Non- Employee Directors of the Company, or (ii) the entire Board of
the Company.
"Common Stock" means shares of the common stock of the Company, par
value $.10 per share.
"Company" means Charter Financial, Inc., or a successor corporation.
2
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"Continuous Service" means employment as a Key Employee and/or service
as an Outside Director without any interruption or termination of such
employment and/or service. Continuous Service shall also mean a continuation as
a member of the Board of Directors following a cessation of employment as a Key
Employee. In the case of a Key Employee, employment shall not be considered
interrupted in the case of sick leave, military leave or any other leave of
absence approved by the Bank or in the case of transfers between payroll
locations of the Bank or between the Bank, its parent, its subsidiaries or its
successor.
"Conversion" means the December 28, 1995, conversion of Charter
Bancorp, M.H.C. from the mutual to stock form of organization.
"Date of Grant" means the actual date on which an Award is granted by
the Committee.
"Director" means a member of the Board.
"Disability" means the permanent and total inability by reason of
mental or physical infirmative, or both, of an employee to perform the work
customarily assigned to him, or of a Director to serve as such. Additionally, in
the case of an employee, a medical doctor selected or approved by the Board must
advise the Committee that it is either not possible to determine when such
Disability will terminate or that it appears probable that such Disability will
be permanent during the remainder of said employee's lifetime.
"Dividend Equivalent Rights" means the right to receive an amount of
cash based upon the terms set forth in Section 10 hereof.
"Effective Date" means the date of, or a date determined by the Board
of Directors following, approval of the Plan by the Company's stockholders.
"Fair Market Value" means, when used in connection with the Common
Stock on a certain date, the reported closing price of the Common Stock as
reported by the Nasdaq stock market (as published by the Wall Street Journal, if
published) on such date, or if the Common Stock was not traded on the day prior
to such date, on the next preceding day on which the Common Stock was traded;
provided, however, that if the Common Stock is not reported on the Nasdaq stock
market, Fair Market Value shall mean the average sale price of all shares of
Common Stock sold during the 30-day period immediately preceding the date on
which such stock option was granted, and if no shares of stock have been sold
within such 30-day period, the average sale price of the last three sales of
Common Stock sold during the 90-day period immediately preceding the date on
which such stock option was granted. In the event Fair Market Value cannot be
determined in the manner described above, then Fair Market Value shall be
determined by the Committee. The Committee is authorized, but is not required,
to obtain an independent appraisal to determine the Fair Market Value of the
Common Stock.
"Incentive Stock Option" means an Option granted by the Committee to a
Participant, which Option is designated as an Incentive Stock Option pursuant to
Section 8.
"Key Employee" means any person who is currently employed by the
Company or an Affiliate who is chosen by the Committee to participate in the
Plan.
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"Limited Right" means the right to receive an amount of cash based upon
the terms set forth in Section 9.
"Non-Statutory Stock Option" means an Option granted by the Committee
to (i) an Outside Director or (ii) to any other Participant and such Option is
either (A) not designated by the Committee as an Incentive Stock Option, or (B)
fails to satisfy the requirements of an Incentive Stock Option as set forth in
Section 422 of the Code and the regulations thereunder.
"Non-Employee Director" means, for purposes of the Plan, a Director who
(a) is not employed by the Company or an Affiliate; (b) does not receive
compensation directly or indirectly as a consultant (or in any other capacity
than as a Director) greater than $60,000; (c) does not have an interest in a
transaction requiring disclosure under Item 404(a) of Regulation S-K; or (d) is
not engaged in a business relationship for which disclosure would be required
pursuant to Item 404(b) of Regulation S-K.
"Normal Retirement" means for a Key Employee, retirement at the normal
or early retirement date set forth in the Bank's Employee Stock Ownership Plan,
or any successor plan. Normal Retirement for an Outside Director means a
cessation of service on the Board of Directors for any reason other than removal
for Cause, after reaching 60 years of age and maintaining at least 10 years of
Continuous Service.
"Offering" means the December 28, 1995 subscription offering of the
Common Stock of the Company.
"Outside Director" means a Director of the Company or an Affiliate who
is not an employee of the Company or an Affiliate.
"Option" means an Award granted under Section 7 or Section 8.
"Participant" means a Key Employee or Outside Director of the Company
or its Affiliates who receives or has received an award under the Plan.
"Termination for Cause" means the termination of employment or
termination of service on the Board caused by the individual's personal
dishonesty, willful misconduct, any breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, or the willful violation
of any law, rule or regulation (other than traffic violations or similar
offenses), or a final cease-and-desist order, any of which results in material
loss to the Company or one of its Affiliates.
3. Plan Administration Restrictions
The Plan shall be administered by the Committee. The Committee is
authorized, subject to the provisions of the Plan, to establish such rules and
regulations as it deems necessary for the proper administration of the Plan and
to make whatever determinations and interpretations in connection with the Plan
it deems necessary or advisable. All determinations and interpretations made by
the Committee shall be binding and conclusive on all Participants in the Plan
and on their legal representatives and beneficiaries.
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All transactions involving a grant, award or other acquisition from the
Company shall:
(a) be approved by the Company's full Board or by the Committee;
(b) be approved, or ratified, in compliance with Section 14 of the
Exchange Act, by either: the affirmative vote of the holders of a majority of
the securities present, or represented and entitled to vote at a meeting duly
held in accordance with the laws of the state in which the Company is
incorporated; or the written consent of the holders of a majority of the
securities of the issuer entitled to vote provided that such ratification occurs
no later than the date of the next annual meeting of shareholders; or
(c) result in the acquisition of an Option or Limited Right that is
held by the Participant for a period of six months following the date of such
acquisition.
4. Types of Awards
Awards under the Plan may be granted in any one or a combination of:
(a) Incentive Stock Options; (b) Non-Statutory Stock Options; (c) Limited
Rights; and (d) Dividend Equivalent Rights.
5. Stock Subject to the Plan
Subject to adjustment as provided in Section 14, the maximum number of
shares reserved for issuance under the Plan is 340,276 shares. To the extent
that Options or rights granted under the Plan are exercised, the shares covered
will be unavailable for future grants under the Plan; to the extent that Options
together with any related rights granted under the Plan terminate, expire or are
canceled without having been exercised or, in the case of Limited Rights
exercised for cash, new Awards may be made with respect to these shares.
6. Eligibility
Key Employees of the Company and its Affiliates shall be eligible to
receive Incentive Stock Options, Non-Statutory Stock Options, Limited Rights
and/or Dividend Equivalent Rights under the Plan. Outside Directors shall be
eligible to receive Non-Statutory Stock Options and Dividend Equivalent Rights
under the Plan.
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7. Non-Statutory Stock Options
7.1 Grant of Non-Statutory Stock Options
(a) Grants to Outside Directors and Key Employees. The Committee may,
from time to time, grant Non-Statutory Stock Options to eligible Key Employees
and Outside Directors, and, upon such terms and conditions as the Committee may
determine, grant Non-Statutory Stock Options in exchange for and upon surrender
of previously granted Awards under the Plan. Non-Statutory Stock Options granted
under the Plan, including Non-Statutory Stock Options granted in exchange for
and upon surrender of previously granted Awards, are subject to the terms and
conditions set forth in this Section 7. The maximum number of shares subject to
a Non-Statutory Option that may be awarded under the Plan to any Key Employee
shall be ______.
(b) Option Agreement. Each Option shall be evidenced by a written
option agreement between the Company and the Participant specifying the number
of shares of Common Stock that may be acquired through its exercise and
containing such other terms and conditions that are not inconsistent with the
terms of the Plan.
(c) Price. The purchase price per share of Common Stock deliverable
upon the exercise of each Non-Statutory Stock Option shall be the Fair Market
Value of the Common Stock of the Company on the date the Option is granted.
Shares may be purchased only upon full payment of the purchase price in one or
more of the manners set forth in Section 12 hereof, as determined by the
Committee.
(d) Manner of Exercise and Vesting. A Non-Statutory Stock Option
granted under the Plan shall vest in a Participant at the rate or rates
determined by the Committee. A vested Option may be exercised from time to time,
in whole or in part, by delivering a written notice of exercise to the President
or Chief Executive Officer of the Company, or his designee. Such notice shall be
irrevocable and must be accompanied by full payment of the purchase price in
cash or shares of Common Stock at the Fair Market Value of such shares,
determined on the exercise date in the manner described in Section 2 hereof. If
previously acquired shares of Common Stock are tendered in payment of all or
part of the exercise price, the value of such shares shall be determined as of
the date of such exercise.
(e) Terms of Options. The term during which each Non-Statutory Stock
Option may be exercised shall be determined by the Committee, but in no event
shall a Non-Statutory Stock Option be exercisable in whole or in part more than
10 years and one day from the Date of Grant. No Options shall be earned by a
Participant unless the Participant maintains Continuous Service until the
vesting date of such Option, except as set forth herein. The shares comprising
each installment may be purchased in whole or in part at any time after such
installment becomes purchasable. The Committee may, in its sole discretion,
accelerate the time at which any Non-Statutory Stock Option may be exercised in
whole or in part by Key Employees and/or Outside Directors. Notwithstanding any
other provision of this Plan, in the event of a Change in Control of the Company
or the Bank, all Non-Statutory Stock Options that have been awarded shall become
immediately exercisable for three years following such Change in Control.
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(f) Termination of Employment or Service. Upon the termination of a Key
Employee's employment or upon termination of an Outside Director's service for
any reason other than, Normal Retirement, death, Disability, Change in Control
or Termination for Cause, the Participant's Non-Statutory Stock Options shall be
exercisable only as to those shares that were immediately purchasable on the
date of termination and only for one year following termination. In the event of
Termination for Cause, all rights under a Participant's Non-Statutory Stock
Options shall expire upon termination. In the event of the Normal Retirement,
death or Disability of any Participant, all Non-Statutory Stock Options held by
the Participant, whether or not exercisable at such time, shall be exercisable
by the Participant or his legal representative or beneficiaries for five years
following the date of his Normal Retirement, death or cessation of employment
due to Disability, provided that in no event shall the period extend beyond the
expiration of the Non-Statutory Stock Option term.
(g) Transferability. In the discretion of the Board, all or any
Non-Statutory Stock Option granted hereunder may be transferable by the
Participant once the Option has vested in the Participant, provided, however,
that the Board may limit the transferability of such Option or Options to a
designated class or classes of persons.
8. Incentive Stock Options
8.1 Grant of Incentive Stock Options
The Committee may, from time to time, grant Incentive Stock Options to
Key Employees. Incentive Stock Options granted pursuant to the Plan shall be
subject to the following terms and conditions:
(a) Option Agreement. Each Option shall be evidenced by a written
option agreement between the Company and the Key Employee specifying the number
of shares of Common Stock that may be acquired through its exercise and
containing such other terms and conditions that are not inconsistent with the
terms of the Plan.
(b) Price. Subject to Section 14 of the Plan and Section 422 of the
Code, the purchase price per share of Common Stock deliverable upon the exercise
of each Incentive Stock Option shall be not less than 100% of the Fair Market
Value of the Company's Common Stock on the date the Incentive Stock Option is
granted. However, if a Key Employee owns stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company or its
Affiliates (or under Section 424(d) of the Code is deemed to own stock
representing more than 10% of the total combined voting power of all classes of
stock of the Company or its Affiliates by reason of the ownership of such
classes of stock, directly or indirectly, by or for any brother, sister, spouse,
ancestor or lineal descendent of such Key Employee, or by or for any
corporation, partnership, estate or trust of which such Key Employee is a
shareholder, partner or Beneficiary), the purchase price per share of Common
Stock deliverable upon the exercise of each Incentive Stock Option shall not be
less than 110% of the Fair Market Value of the Company's Common Stock on the
date the Incentive Stock Option is granted. Shares may be purchased only upon
payment of the full purchase price in one or more of the mariners set forth in
Section 12 hereof, as determined by the Committee.
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(c) Manner of Exercise. Incentive Stock Options granted under the Plan
shall vest in a Participant at the rate or rates determined by the Committee.
The vested Options may be exercised from time to time, in whole or in part, by
delivering a written notice of exercise to the President or Chief Executive
Officer of the Company or his designee. Such notice is irrevocable and must be
accompanied by full payment of the purchase price in cash or shares of Common
Stock at the Fair Market Value of such shares determined on the exercise date by
the manner described in Section 2.
(d) Amounts of Options. Incentive Stock Options may be granted to any
eligible Key Employee in such amounts as determined by the Committee; provided
that the amount granted is consistent with the terms of Section 422 of the Code.
Notwithstanding the above, the maximum number of shares that may be subject to
an Incentive Stock Option awarded under the Plan to any Key Employee shall be .
In granting Incentive Stock Options, the Committee shall consider such factors
as it deems relevant, which factors may include, among others, the position and
responsibilities of the Key Employee, the length and value of his or her service
to the Bank, the Company, or the Affiliate, the compensation paid to the Key
Employee and the Committee's evaluation of the performance of the Bank, the
Company, or the Affiliate, according to measurements that may include, among
others, key financial ratios, levels of classified assets, and independent audit
findings. In the case of an Option intended to qualify as an Incentive Stock
Option, the aggregate Fair Market Value (determined as of the time the Option is
granted) of the Common Stock with respect to which Incentive Stock Options
granted are exercisable for the first time by the Participant during any
calendar year (under all plans of the Company and its Affiliates) shall not
exceed $100,000. The provisions of this Section 8.1(d) shall be construed and
applied in accordance with Section 422(d) of the Code and the regulations, if
any, promulgated thereunder.
(e) Terms of Options. The term during which each Incentive Stock Option
may be exercised shall be determined by the Committee, but in no event shall an
Incentive Stock Option be exercisable in whole or in part more than 10 years
from the Date of Grant. If any Key Employee, at the time an Incentive Stock
Option is granted to him, owns stock representing more than 10% of the total
combined voting power of all classes of stock of the Company or its Affiliate
(or, under Section 424(d) of the Code, is deemed to own stock representing more
than 10% of the total combined voting power of all classes of stock, by reason
of the ownership of such classes of stock, directly or indirectly, by or for any
brother, sister, spouse, ancestor or lineal descendent of such Key Employee, or
by or for any corporation, partnership, estate or trust of which such Key
Employee is a shareholder, partner or Beneficiary), the Incentive Stock Option
granted to him shall not be exercisable after the expiration of five years from
the Date of Grant.
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The Committee shall determine the date on which each Incentive Stock
Option shall become exercisable and may provide that an Incentive Stock Option
shall become exercisable in installments. The Committee may also determine as of
the Date of Grant any other specific conditions or specific performance goals
which must be satisfied prior to the Incentive Stock Option becoming
exercisable. The shares comprising each installment may be purchased in whole or
in part at any time after such installment becomes purchasable, provided that
the amount able to be first exercised in a given year is consistent with the
terms of Section 422 of the Code. To the extent required by Section 422 of the
Code, the aggregate Fair Market Value (determined at the time the option is
granted) of the Common Stock for which Incentive Stock Options are exercisable
for the first time by a Participant during any calendar year (under all plans of
the Company and its Affiliates) shall not exceed $100,000.
The Committee may, in its sole discretion, accelerate the time at which
any Incentive Stock Option may be exercised in whole or in part, provided that
it is consistent with the terms of Section 422 of the Code. Notwithstanding the
above, in the event of a Change in Control of the Company, all Incentive Stock
Options that have been awarded shall become immediately exercisable, unless the
Fair Market Value of the amount exercisable as a result of a Change in Control
shall exceed $100,000 (determined as of the Date of Grant). In such event, the
first $100,000 of Incentive Stock Options (determined as of the Date of Grant)
shall be exercisable as Incentive Stock Options and any excess shall be
exercisable as Non-Statutory Stock Options.
(f) Termination of Employment. Upon the termination of a Key Employee's
service for any reason other than Disability, Normal Retirement, Change in
Control, death or Termination for Cause, the Key Employee's Incentive Stock
Options shall be exercisable only as to those shares that were immediately
purchasable by such Key Employee at the date of termination and only for a
period of three months following termination. In the event of Termination for
Cause all rights under the Incentive Stock Options shall expire upon
termination.
Upon termination of a Key Employee's employment due to Normal
Retirement, death, Disability, or following a Change in Control, all Incentive
Stock Options held by such Key Employee, whether or not exercisable at such
time, shall be exercisable for a period of five years following the date of his
cessation of employment, provided however, that any such Option shall nor be
eligible for treatment as an Incentive Stock Option in the event such Option is
exercised more than three months following the date of his Normal Retirement or
termination of employment following a Change in Control; and provided further,
that no Option shall be eligible for treatment as an Incentive Stock Option in
the event such Option is exercised more than one year following termination of
employment due to Disability and provided further, in order to obtain Incentive
Stock Option treatment for Options exercised by heirs or devisees of an
Optionee, the Optionee's death must have occurred while employed or within three
(3) months of termination of employment. In no event shall the exercise period
extend beyond the expiration of the Incentive Stock Option term.
(g) Transferability. No Incentive Stock Option granted under the Plan
is transferable except by will or the laws of descent and distribution and is
exercisable during his lifetime only by the Key Employee to which it is granted.
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(h) Compliance with Code. The options granted under this Section 8 are
intended to qualify as Incentive Stock Options within the meaning of Section 422
of the Code, but the Company makes no warranty as to the qualification of any
Option as an Incentive Stock Option within the meaning of Section 422 of the
Code. If an Option granted hereunder fails for whatever reason to comply with
the provisions of Section 422 of the Code, and such failure is not or cannot be
cured, such Option shall be a Non-Statutory Stock Option.
9. Limited Rights
9.1 Grant of Limited Rights
The Committee may grant a Limited Right simultaneously with the grant
of any Option to any Key Employee of the Bank, with respect to all or some of
the shares covered by such Option. Limited Rights granted under the Plan are
subject to the following terms and conditions:
(a) Terms of Rights. In no event shall a Limited Right be exercisable
in whole or in part before the expiration of six months from the date of grant
of the Limited Right. A Limited Right may be exercised only in the event of a
Change in Control of the Company.
The Limited Right may be exercised only when the underlying Option is
eligible to be exercised, provided that the Fair Market Value of the underlying
shares on the day of exercise is greater than the exercise price of the related
Option.
Upon exercise of a Limited Right, the related Option shall cease to be
exercisable. Upon exercise or termination of an Option, any related Limited
Rights shall terminate. The Limited Rights may be for no more than 100% of the
difference between the exercise price and the Fair Market Value of the Common
Stock subject to the underlying Option. The Limited Right is transferable only
when the underlying Option is transferable and under the same conditions.
(b) Payment. Upon exercise of a Limited Right, the holder shall
promptly receive from the Company an amount of cash equal to the difference
between the Fair Market Value on the Date of Grant of the related Option and the
Fair Market Value of the underlying shares on the date the Limited Right is
exercised, multiplied by the number of shares with respect to which such Limited
Right is being exercised. In the event of a Change in Control in which pooling
accounting treatment is a condition to the transaction, the Limited Right shall
be exercisable solely for shares of stock of the Company, or in the event of a
merger transaction, for shares of the acquiring corporation or its parent, as
applicable. The number of shares to be received on the exercise of such Limited
Right shall be determined by dividing the amount of cash that would have been
available under the first sentence above by the Fair Market Value at the time of
exercise of the shares underlying the Option subject to the Limited Right.
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10. Dividend Equivalent Rights
Simultaneously with the grant of any Option to a Participant, the
Committee may grant a Dividend Equivalent Right with respect to all or some of
the shares covered by such Option. Dividend Equivalent Rights granted under this
Plan are subject to the following terms and conditions:
(a) Terms of Rights. The Dividend Equivalent Right provides the
Participant with a cash benefit per share for each share underlying the
unexercised portion of the related Option equal to the amount of any
extraordinary dividend (as defined in Section 10(c)) per share of Common Stock
declared by the Company. The terms and conditions of any Dividend Equivalent
Right shall be evidenced in the Option agreement entered into with the
Participant and shall be subject to the terms and conditions of the Plan. The
Dividend Equivalent Right is transferable only when the related Option is
transferable and under the same conditions.
(b) Payment. Upon the payment of an extraordinary dividend, the
Participant holding a Dividend Equivalent Right with respect to Options or
portions thereof which have vested shall promptly receive from the Company the
amount of cash equal to the amount of the extraordinary dividend per share of
Common Stock, multiplied by the number of shares of Common Stock underlying the
unexercised portion of the related Option. With respect to options or portions
thereof which have not vested, the amount that would have been received pursuant
to the Dividend Equivalent Right with respect to the shares underlying such
unvested Option or portion thereof shall be paid to the Participant holding such
Dividend Equivalent Right together with earnings thereon, on such date as the
Option or portion thereof becomes vested. Payments shall be decreased by the
amount of any applicable tax withholding prior to distribution to the
Participant as set forth in Section 18.
(c) Extraordinary Dividend. For purposes of this Section 10, an
extraordinary dividend is any dividend paid on shares of Common Stock where the
rate of the dividend exceeds the Bank's weighted average cost of funds on
interest-bearing liabilities for the current and preceding three quarters.
11. Surrender of Option
In the event of a Participant's termination of employment or
termination of service as a result of death, Disability or Normal Retirement,
the Participant (or his or her personal representatives, heir(s), or devisee(s))
may, in a form acceptable to the Committee make application to surrender all or
part of the Options held by such Participant in exchange for a cash payment from
the Company of an amount equal to the difference between the Fair Market Value
of the Common Stock on the date of termination of employment or the date of
termination of service on the Board and the exercise price per share of the
Option. Whether the Company accepts such application or determines to make
payment, in whole or part, is within its absolute and sole discretion, it being
expressly understood that the Company is under no obligation to any Participant
whatsoever to make such payments. In the event that the Company accepts such
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<PAGE>
application and determines to make payment, such payment shall be in lieu of the
exercise of the underlying Option and such Option shall cease to be exercisable.
No award under the Plan shall be transferable by the optionee other
than by will or the laws of descent and distribution and may only be exercised
during his or her lifetime by the Participant, or by a guardian or legal
representative of the Participant.
12. Alternate Option Payment Mechanism
The Committee has sole discretion to determine what form of payment it
will accept for the exercise of an Option. The Committee may indicate acceptable
forms in the agreement with the Participant covering such Options or may reserve
its decision to the time of exercise. No Option is to be considered exercised
until payment in full is accepted by the Committee or its agent.
(a) Cash Payment. The exercise price may be paid in cash or by
certified check. To the extent permitted by law, the Committee may permit all or
a portion of the exercise price of an Option to be paid through borrowed funds.
(b) Cashless Exercise. Subject to vesting requirements, if applicable,
a Participant may engage in a "cashless exercise" of the Option. Upon a cashless
exercise, the Participant shall give the Company written notice of the exercise
of the Option together with an order to a registered broker-dealer or equivalent
third party, to sell part or all of the Common Stock subject to the Option and
to deliver enough of the proceeds to the Company to pay the Option exercise
price and any applicable withholding taxes. If the Participant does not sell the
Common Stock subject to the Option through a registered broker-dealer or
equivalent third party, the Optionee can give the Company written notice of the
exercise of the Option and the third party, purchaser of the Common Stock
subject to the Option shall pay the Option exercise price plus applicable
withholding taxes to the Company.
(c) Exchange of Common Stock. The Committee may permit payment of the
Option exercise price by the tendering of previously acquired shares of Common
Stock. All shares of Common Stock tendered in payment of the exercise price of
an Option shall be valued at the Fair Market Value of the Common Stock on the
date prior to the date of exercise.
13. Rights of a Stockholder
A Participant shall have no rights as a stockholder with respect to any
shares covered by a Non-Statutory and/or Incentive Stock Option until the date
of issuance of a stock certificate for such shares. Nothing in the Plan or in
any Award granted confers on any person any right to continue in the employ of
the Company or its Affiliates or to continue to perform services for the Company
or its Affiliates or interferes in any way with the right of the Company or its
Affiliates to terminate his services as an officer, director or employee at any
time.
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14. Agreement with Participants
Each Award of Options, and/or Limited Rights will be evidenced by a
written agreement, executed by the Participant and the Company or its Affiliates
that describes the conditions for receiving the Awards including the date of
Award, the purchase price, applicable periods, and any other terms and
conditions as may be required by the Board or applicable securities law.
15. Designation of Beneficiary
A Participant may, with the consent of the Committee, designate a
person or persons to receive, in the event of death, any stock option or Limited
Rights Award to which he would then be entitled. Such designation will be made
upon forms supplied by and delivered to the Company and may be revoked in
writing. If a Participant fails effectively to designate a Beneficiary, then his
estate will be deemed to be the Beneficiary.
16. Dilution and Other Adjustments
In the event of any change in the outstanding shares of Common Stock of
the Company by reason of any stock dividend or split, pro rata return of capital
to all shareholders, recapitalization, merger, consolidation, spin-off,
reorganization, combination or exchange of shares, or other similar corporate
change, or other increase or decrease in such shares without receipt or payment
of consideration by the Company, the Committee will make such adjustments to
previously granted Awards, to prevent dilution or enlargement of the rights of
the Participant, including any or all of the following:
(a) adjustments in the aggregate number or kind of shares of Common
Stock that may be awarded under the Plan;
(b) adjustments in the aggregate number or kind of shares of Common
Stock covered by Awards already made under the Plan; or
(c) adjustments in the purchase price of outstanding Incentive and/or
Non-Statutory Stock Options, or any Limited Rights attached to
such Options.
No such adjustments may, however, materially change the value of
benefits available to a Participant under a previously granted Award. With
respect to Incentive Stock Options, no such adjustment shall be made if it would
be deemed a "modification" of the Award under Section 424 of the Code.
17. Effect of a Change in Control on Option Awards
In the event of a Change in Control, the Committee and the Board of
Directors will take one or more of the following actions to be effective as of
the date of such Change in Control:
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(a) provide that such Options shall be assumed, or equivalent options
shall be substituted, ("Substitute Options") by the acquiring or succeeding
corporation (or an affiliate thereof, provided that: (A) any such Substitute
Options exchanged for Incentive Stock Options shall meet the requirements of
Section 424(a) of the Code, and (B) the shares of stock issuable upon the
exercise of such Substitute Options shall constitute securities registered in
accordance with the Securities Act of 1933, as amended ("1933 Act") or such
securities shall be exempt from such registration in accordance with Sections
3(a)(2) or 3(a)(5) of the 1933 Act, (collectively, "Registered Securities"), or
in the alternative, if the securities issuable upon the exercise of such
Substitute Options shall not constitute Registered Securities, then the
Participant will receive upon consummation of the Change in Control a cash
payment for each Option surrendered equal to the difference between the (1) Fair
Market Value of the consideration to be received for each share of Common Stock
in the Change in Control times the number of shares of Common Stock subject to
such surrendered Options, and (2) the aggregate exercise price of all such
surrendered Options, or
(b) in the event of a transaction under the terms of which the holders
of Common Stock of the Company will receive upon consummation thereof a cash
payment (the "Merger Price") for each share of Common Stock exchanged in the
Change in Control transaction, to make or to provide for a cash payment to the
Participants equal to the difference between (A) the Merger Price times the
number of shares of Common Stock subject to such Options held by each Optionee
(to the extent then exercisable at prices nor in excess of the Merger Price) and
(B) the aggregate exercise price of all such surrendered Options in exchange for
such surrendered Options.
18. Withholding
There my be deducted from each distribution of cash and/or Common Stock
under the Plan the amount of tax required by any governmental authority to be
withheld.
19. Amendment of the Plan
The Board may at any time, and from time to time, modify or amend the
Plan in any respect, or modify or amend an Award received by Key Employees
and/or Outside Directors; provided, however, that no such termination,
modification or amendment may affect the rights of a Participant, without his
consent, under an outstanding Award. Any amendment or modification of the Plan
or an outstanding Award under the Plan, including but not limited to the
acceleration of vesting of an outstanding Award for reasons other than the
death, Disability, Normal Retirement, or a Change in Control, shall be approved
by the Committee or the full Board of the Company.
20. Effective Date of Plan
The Plan shall become effective upon the date of, or a date determined
by the Board of Directors following, approval of the Plan by the Company's
stockholders.
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21. Termination of the Plan
The right to grant Awards under the Plan will terminate upon the
earlier of (i) 10 years after the Effective Date, or (ii) the date on which the
exercise of Options or related rights equaling the maximum number of shares
reserved under the Plan occurs, as set forth in Section 5. The Board may suspend
or terminate the Plan at any time, provided that no such action will, without
the consent of a Participant, adversely affect his rights under a previously
granted Award.
22. Applicable Law
The Plan will be administered in accordance with the laws of the State
of Illinois.
IN WITNESS WHEREOF, the Company has caused the Plan to be executed by
its duly authorized officers and the corporate seal to be affixed and duly
attested, as of the ______ day of _________________ 1997.
Date Approved by Stockholders:
Effective Date:
ATTEST: CHARTER FINANCIAL, INC.
By: By:
Secretary President and Chief Executive Officer
15
<PAGE>
CHARTER FINANCIAL, INC.
1997 STOCK OPTION PLAN
STOCK OPTION AGREEMENT
A. A STOCK OPTION for a total of ____ shares of Common Stock, par value
$0.10, of Charter Financial, Inc. (the "Company") is hereby granted to ___ (the
"Participant"), subject in all respects to the terms and provisions of the
Charter Financial, Inc. 1997 Stock Option Plan (the "Plan"), dated January 16,
1997, which has been adopted by the Company and which is incorporated herein by
reference. The terms of this Agreement are subject to the terms and conditions
of the Plan.
B. The option price as determined by the Stock Option Committee for the
Plan is $12.84 per share, the fair market value of the Common Stock on the date
of the grant of this Option.
C. Twenty percent (20%) of the Options granted hereunder shall be
exercisable each year beginning one year from the date of grant unless the time
at which any Stock Option may be exercisable is accelerated as provided under
the Plan.
D. The right to exercise any Stock Option granted hereunder shall
expire upon the date which is 10 years after the date of such Stock Option's
grant. In the event of a Change in Control of the Company, the Stock Options
that have been awarded shall become immediately exercisable for three years
following such Change in Control.
E. This Option may not be exercised if the issuance of shares of Common
Stock of the Company upon such exercise would constitute a violation of any
applicable Federal or State securities or other law or valid regulation. The
Participant, as a condition to his/her exercise of this Option, shall represent
to the Company that the shares of Common Stock of the Company that he/she
acquires under this Option are being acquired by him/her for investment and not
with a present view to distribution or resale, unless counsel of the Company is
then of the opinion that such a representation is not required under the
Securities Act of 1933 or any other applicable law, regulation, or rule of any
governmental agency.
F. This Option may not be transferred in any manner otherwise than by
will or the laws of descent and distribution, and may be exercised during the
lifetime of the Participant only by his/her. The terms of this Option shall be
binding upon the executors, administrators, heirs, successors, and assigns of
the Participant.
G. In addition to the Stock Option award above, you are hereby
simultaneously granted Dividend Equivalent Rights with respect to all the shares
covered by such Stock Options. Dividend Equivalent Rights granted herein are
subject to the terms and conditions of the Charter Financial, Inc. 1997 Stock
Option Plan.
<PAGE>
H. A copy of the Charter Financial, Inc. 1997 Stock Option Plan
governing this Option granted to you is enclosed, and your attention is invited
to all the provisions of the Plan. You will observe that the Plan does not
require that you exercise this Option as to any particular number of shares at
one time, but this Option must be exercised, if it all and to the extent
exercised, by you no later than ten years and one day from the date of this
Agreement. This Option may be exercised during such term only in accordance with
the terms of the Plan.
Dated: January 16, 1997
CHARTER FINANCIAL, INC,
By:
President and Chief Executive Officer
ATTEST:
By:
Secretary
The Participant acknowledges receipt of a copy of the Plan, a copy of
which is annexed hereto, and represents that he/she is familiar with the terms
and provisions thereof The Participant hereby accepts this Option subject to all
the terms and provisions of the Plan. The Participant hereby agrees to accept as
binding, conclusive, and final all decisions and interpretations of the Stock
Option Committee upon any questions arising under the Plan. As a condition to
the issuance of shares of Common Stock of the Company under this Option, the
Participant authorizes the Company to withhold in accordance with applicable law
from any regular cash compensation payable to him/her any taxes required to be
withheld by the Company under Federal, State, or Local law as a result of
his/her exercise of this Option.
Dated: January 16, 1997
By:
Participant
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<PAGE>
NOTICE OF EXERCISE OF STOCK OPTIONS
I hereby exercise the stock option (the "Option") granted to me by the
Charter Financial, Inc. (the "Company") subject to all the terms and provisions
set forth in the Charter Financial, Inc. 1997 Stock Option Plan - Stock Option
Agreement (the "Agreement"), and the Charter Financial, Inc. 1997 Stock Option
Plan (the "Plan"), referred to therein, and notify you of my desire to purchase
shares of common stock of the Company ("Common Stock") for a purchase price of $
per share. Enclosed is my check in the sum of , in full payment for such shares.
I understand that after this exercise, shares of Common Stock remain subject to
the Option, subject to all terms and provisions set forth in the Agreement and
the Plans.
Unless counsel is of the opinion that the following representation is
not required under the Securities Act of 1933 or any other applicable law, I
hereby represent that the shares of Common Stock to be delivered to me pursuant
to this exercise are being acquired by me as an investment and not with a view
to distribution or resale.
Dated: _________________, 19___.
By________________________________
Signature
___________________________________
Address
___________________________________
Social Security Number
EXHIBIT A
<PAGE>
ACKNOWLEDGMENT OF RECEIPT OF STOCK OPTION SHARES
I hereby acknowledge the delivery to me by Charter Financial, Inc. (the
"Company") on ___________________________, 19____, of stock certificates for
_____________________ shares of common stock of the Company purchased by me
pursuant to the terms and conditions of the Charter Financial, Inc. Stock Option
Plan - Stock Option Agreement, and the Charter Financial, Inc. 1997 Stock Option
Plan, which shares were transferred to me on the Company's stock record books on
_______________, 19__.
Dated:
________________________________
Signature
EXHIBIT B
<PAGE>
CHARTER FINANCIAL, INC.
1997 STOCK OPTION PLAN
STOCK OPTION AGREEMENT
A. A STOCK OPTION for a total of _____ shares of Common Stock, par
value $0.10, of Charter Financial, Inc. (the "Company") is hereby granted to
__________________ (the "Participant"), subject in all respects to the terms and
provisions of the Charter Financial, Inc. 1997 Stock Option Plan (the "Plan"),
dated January 16, 1997, which has been adopted by the Company and which is
incorporated herein by reference. The terms of this Agreement are subject to the
terms and conditions of the Plan.
B. The option price as determined by the Stock Option Committee for the
Plan is $12.84 per share, the fair market value of the Common Stock on the date
of the grant of this Option; provided however, that if the Participant owns
stock representing more than 10% of the total combined voting power of all
classes of stock of the Company or an Affiliate (or under Section 424(d) of the
Code, is deemed to own stock, as of the date of the grant, representing more
than 10% of the total combined voting power of all such classes of stock, by
reason of the ownership of such classes of stock, directly or indirectly, by or
for any brother, sister, spouse, ancestor or lineal descendent of such employee,
or by or for any corporation, partnership, estate or trust of which such
employee is a shareholder, partner or Beneficiary), the option price shall be
$14.12, which is 110% of the fair market value of the Company's Common Stock on
the date of the grant of this Option.
C. Twenty percent (20%) of the Options granted hereunder shall be
exercisable each year beginning one year from the date of grant unless the time
at which any Stock Option may be exercisable is accelerated as provided under
the Plan.
D. The right to exercise any Stock Option granted hereunder shall
expire upon the date which is 10 years after the date of such Stock Option's
grant, provided that if the Participant to whom such Stock Option is granted
owns stock, as of the date of the grant, representing more than 10% of the total
combined voting power of all classes of stock of the Company or an Affiliate (or
under Section 424(d) of the Code, is deemed to own stock representing more than
10% of the total combined voting power of all such classes of stock, by reason
of the ownership of such classes of stock, directly or indirectly, by or for any
brother, sister, spouse, ancestor or lineal descendent of such employee, or by
or for any corporation, partnership, estate or trust of which such employee is a
shareholder, partner or Beneficiary), then the Stock Option shall not be
exercisable after the expiration of 5 years from the date such Option is
granted.
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E. This Option may not be exercised if the issuance of shares of Common
Stock of the Company upon such exercise would constitute a violation of any
applicable Federal or State securities or other law or valid regulation. The
Participant, as a condition to his/her exercise of this Option, shall represent
to the Company that the shares of Common Stock of the Company that he/she
acquires under this Option are being acquired by him/her for investment and not
with a present view to distribution or resale, unless counsel of the Company is
then of the opinion that such a representation is not required under the
Securities Act of 1933 or any other applicable law, regulation, or rule of any
governmental agency.
F. This Option may not be transferred in any manner otherwise than by
will or the laws of descent and distribution, and may be exercised during the
lifetime of the Participant only by him/her. The terms of this Option shall be
binding upon the executors, administrators, heirs, successors, and assigns of
the Participant.
G. In addition to the Stock Option award above, you are hereby
simultaneously granted Limited Rights and Dividend Equivalent Rights with
respect to all the shares covered by such Stock Options. Limited Rights and
Dividend Equivalent Rights granted herein are subject to the terms and
conditions of the Charter Financial, Inc. 1997 Stock Option Plan.
H. A copy of the Charter Financial, Inc. 1997 Stock Option Plan
governing this Option granted to you is enclosed, and your attention is invited
to all the provisions of the Plan. You will observe that the Plan does not
require that you exercise this Option as to any particular number of shares at
one time, but this Option must be exercised, if at all and to the extent
exercised, by you no later than ten years and one day from the date of this
Agreement. This Option may be exercised during such term only in accordance with
the terms of the Plan.
Dated: January 16, 1997
CHARTER FINANCIAL, INC,
By:
President and Chief Executive Officer
ATTEST:
By:
Secretary
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The Participant acknowledges receipt of a copy of the Plan, a copy of
which is annexed hereto, and represents that he/she is familiar with the terms
and provisions thereof. The Participant hereby accepts this Option subject to
all the terms and provisions of the Plan. The Participant hereby agrees to
accept as binding, conclusive, and final all decisions and interpretations of
the Stock Option Committee upon any questions arising under the Plan. As a
condition to the issuance of shares of Common Stock of the Company under this
Option, the Participant authorizes the Company to withhold in accordance with
applicable law from any regular cash compensation payable to him/her any taxes
required to be withheld by the Company under Federal, State, or Local law as a
result of his/her exercise of this Option.
Dated: January 16, 1997
By:
Participant
3
Exhibit 4.2
CHARTER BANK, S.B.
1993 INCENTIVE STOCK OPTION PLAN
1. Purpose
The purpose of the Charter Bank, S.B. 1993 Incentive Stock Option Plan
(the "Plan") is to advance the interests of Charter Bank, S.B. (the "Bank") and
its shareholders by providing officers and key employees of the Bank and its
affiliates, including Charter Bancorp, MHC, the mutual holding company of the
Bank (the Company"), upon whose judgment, initiative and efforts the successful
conduct of the business of the Bank and its affiliates largely depends, with an
additional incentive to perform in a superior manner as well as to attract
people of experience and ability.
2. Definitions
(a) "Affiliate" means (i) a member of a controlled group of
corporations of which the Bank is a member or (ii) an unincorporated trade or
business that is under common control with the Bank as determined in accordance
with Section 414(c) of the Internal Revenue Code of 1986, as amended (the
"Code"), and the regulations issued thereunder. For purposes hereof, a
"controlled group of corporations" shall mean a controlled group of corporations
as defined in Section 1563(a) of the Code determined without regard to Section
1563(a)(4) and (e)(3)(C) thereof.
(b) "Award" means an Award of Non-statutory Stock Options, Incentive
Stock Options, and/or Limited Rights granted under the provisions of the Plan.
(c) "Board of Directors" means the Board of Directors of the Bank.
(d) "Change in Control" of the Bank or the Company shall mean:
(1) A reorganization, merger, merger conversion,
consolidation or sale of all or substantially all of the assets of the Bank or
the Company or a similar transaction in which the Bank or Company is not the
resulting entity; (ii) individuals who constitute the board of directors of the
Bank or the board of directors of the Company as of the date hereof (the
"Incumbent Board"), cease for any reason to constitute at least a majority
thereof, provided that any person becoming a director subsequent to the date
hereof whose election was approved by a vote of at least three-fourths of the
directors composing the Incumbent Board or whose nomination for election by the
Bank's or Company's stockholders or members was approved by the same Nominating
Committee serving under an Incumbent Board shall be for purposes of this section
2(d) considered as though he were a member of the Incumbent Board; or (iii) an
acquisition of "control" as defined by the Bank Holding Company Act, as
determined by the board of directors of the Bank or the Company; or (iv) an
acquisition of the Bank's stock requiring submission of notice under the Change
in Bank Control Act, provided, however, that a change in control shall not be
deemed under 2(d)(1)(i), 2(d)(1)(iii), or 2(d)(1)(iv) of this section if the
transaction(s) constituting a change in control is approved by a majority of the
Board of Directors of the Bank or the Company, as the case may be.
<PAGE>
(2) In the event the Company converts from the mutual form of
organization to the stock form of organization (the "Stock Holding Company") at
any time subsequent to the effective date of this Agreement, a "Change in
Control" shall mean, a change in control of the Bank or the Stock Holding
Company of a nature that: (i) would be required to be reported in response to
Item 1 of the current report on Form 8-K, as in effect on the date hereof,
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act"); or (ii) results in a change in control of the Bank or the Stock
Holding Company within the meaning of the Home Owners' Loan Act of 1933 and
applicable rules and regulations promulgated thereunder, as in effect on the
date hereof; or (iii) without limitation such a change in control shall be
deemed to have occurred at such time as (a) any "person" (as such term is used
in Section 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Bank or the Stock Holding Company representing
20% or more of the Bank's or Stock Holding Company's outstanding securities
ordinarily having the right to vote at the election of directors except for any
securities of the Bank issued to the Stock Holding Company in connection with
the reorganization and stock offering pursuant to the Bank's Plan of
Reorganization and Stock Issuance and securities purchased by the Bank's or the
Stock Holding Company's employee stock benefit plans; or (b) the Incumbent Board
ceases for any reason to constitute at least a majority of the board of
directors of the Bank or Stock Holding Company; or (c) a reorganization, merger,
consolidation, sale of all or substantially all of the assets of the Bank or the
Stock Holding Company or similar transaction which the Incumbent Board does not
approve of or consent to; (d) a proxy statement is distributed that solicits
proxies from stockholders of the Stock Holding Company, by someone other than
the current management of the Stock Holding Company, seeking stockholder
approval of a plan of reorganization, merger or consolidation of the Bank or the
Stock Holding Company or similar transaction with one or more corporations as a
result of which the outstanding shares of the class of securities then subject
to such Plan are exchanged for or converted into cash or property or securities
not issued by the Bank or the Stock Holding Company; or (e) a tender offer is
made for 20% or more of the outstanding securities of the Bank of the Stock
Holding Company.
(e) "Committee" means a Committee of the Board of Directors consisting
of all non- employee (i.e., "outside") directors.
(f) "Common Stock" means the Common Stock of the Bank.
(g) "Conversion Transaction" means the conversion of the Company from
the mutual to stock form of organization either on a stand-alone basis or in the
context of a merger conversion, as contemplated by regulations of the OTS or any
successor thereof.
(h) "Date of Grant" means the actual date on which an Award is granted
by the Committee.
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(i) "Disability" means the permanent and total inability by reason of
mental or physical infirmity, or both, of an employee to perform the work
customarily assigned to him. Additionally, a medical doctor selected or approved
by the Board of Directors must advise the Committee that it is either not
possible to determine when such Disability will terminate or that it appears
probable that such Disability will be permanent during the remainder of such
employee's lifetime.
(j) "Fair Market Value" means, when used in connection with the Common
Stock on a certain date, the reported closing price of the Common Stock as
reported by the National Association of Securities Dealers Automated Quotation
("NASDAQ") System (as published by the Wall Street Journal, if published) on the
day prior to such date, or if the Common Stock was not traded on such date, on
the next preceding day on which the Common Stock was traded thereon; provided,
however, that if the Common Stock is not reported on the NASDAQ System, Fair
Market Value shall mean the average sale price of all shares of Common Stock
sold during the 30-day period immediately preceding the date on which such stock
option was granted, and if no shares of stock have been sold within such 30-day
period, the average sale price of the last three sales of Common Stock sold
during the 90-day period immediately preceding the date on which such stock
option was granted. In the event Fair Market Value cannot be determined in the
manner described above, then Fair Market Value shall be determined by the
Committee. The Committee shall be authorized to obtain an independent appraisal
to determine the Fair Market Value of the Common Stock. For purposes of the
grant of options in the Reorganization, Fair Market Value shall mean the initial
public offering price of the Common Stock.
(k) "Incentive Stock Option" means an Option granted by the Committee
to a Participant, which Option is designated as an Incentive Stock Option
pursuant to Section 8.
(l) "Limited Right" means the right to receive an amount of cash based
upon the terms set forth in Section 9.
(m) "Non-Statutory Stock Option" means an Option granted by the
Committee to a participant and which is not designated by the Committee as an
Incentive Stock Option.
(n) "Normal Retirement" means retirement at the normal or early
retirement date as set forth in Charter Bank Employee Stock Ownership Plan, or
any, successor plan.
(o) "Option" means Award granted under Section 7 or Section 8.
(p) "Participant" means an employee of the Bank or its affiliates
chosen by the Committee to participate in the Plan.
(q) "Plan Year or Years" means a calendar year or years commencing on
or after January 1, 1993.
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(r) "Reorganization" means the reorganization of Charter Bank, S.B. as
a mutual holding company and the establishment of the Bank as its majority-owned
subsidiary.
(s) "Termination for Cause" means the termination upon an intentional
failure to perform stated duties, or breach of a fiduciary duty involving
personal dishonesty, or willful violation of any law, rule or regulation (other
than traffic violations or similar offenses) or final cease-and-desist order,
any of which results in material loss to the Bank, the Company, or one of its
affiliates.
3. Administration
The Plan shall be administered by the Committee. The Committee is
authorized, subject to the provisions of the Plan, to establish such rules and
regulations as it deems necessary for the proper administration of the Plan and
to make whatever determinations and interpretations in connection with the Plan
it deems necessary or advisable. All determinations and interpretations made by
the Committee shall be binding and conclusive on all Participants in the Plan
and on their legal representatives and beneficiaries.
4. Types of Awards
Awards under the Plan may be granted in any one or a combination of:
(a) Incentive Stock Options; (b) Non-Statutory Stock Options; and (c) Limited
Rights as defined herein in Sections 7-9.
5. Stock Subject of the Plan
Subject to adjustment as provided in Section 14, the maximum number of
shares reserved for issuance under the Plan is ___% of the shares of Common
Stock of the Bank, issued in connection with the Reorganization. These shares of
Common Stock may be either authorized but unissued shares or shares previously
issued and reacquired by the Bank. To the extent that options or rights granted
under the Plan are exercised, the shares covered will be unavailable for future
grants under the Plan; to the extent that options together with any related
rights granted under the Plan terminate, expire or are cancelled without having
been exercised or, in the case of Limited Rights exercised for cash, new Awards
may be made with respect to these shares.
6. Eligibility
Officers and other employees of the Bank or its affiliates shall be
eligible to receive Incentive Stock Options, Non-Statutory Stock Options and/or
Limited Rights under the Plan. Directors who are not employees or officers of
the Bank or its affiliates shall not be eligible to receive Awards under the
Plan.
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7. Non-Statutory Stock Options
7.1 Grant of Non-Statutory Stock Options
The Committee may, from time to time, grant Non-Statutory Stock Options
to eligible employees and, upon such terms and conditions as the Committee may
determine, grant Non- Statutory Stock Options in exchange for and upon surrender
of previously granted Awards under this Plan. Non-Statutory Stock Options
granted under this Plan are subject to the following terms and conditions:
(a) Price. The purchase price per share of Common Stock deliverable
upon the exercise of each Non-Statutory Stock Option shall be determined by the
Committee on the date the option is granted. Except as provided below, such
purchase price shall not be less than 100% of the Fair Market Value of the
Bank's Common Stock on the date the option is granted. The purchase price per
share of Common Stock deliverable upon the exercise of each Non- Statutory Stock
Option granted in exchange for and upon surrender of previously granted awards
shall be not less than 85% of the Fair Market Value of the Bank's Common Stock
on the date the option is granted, but in no event may the purchase price of any
Non-Statutory Stock Option be less than the par value of the Common Stock.
Shares may be purchased only upon full payment of the purchase price. Payment of
the purchase price may be made, in whole or in part, through the surrender of
shares of the Common Stock of the Bank at the Fair Market Value of such shares
determined in the manner described in Section 2(j).
(b) Terms of Options. The term during which each Non-Statutory Stock
Option may be exercised shall be determined by the Committee, but in no event
shall a Non-Statutory Stock Option be exercisable in whole or in part more than
10 years from the Date of Grant. The Committee shall determine the date on which
each Non-Statutory Stock Option shall become exercisable in installments. The
shares of which each installment is composed may be purchased in whole or in
part at any time after such installment becomes purchasable. The Committee, in
its sole discretion, may accelerate the time at which any Non-statutory Stock
Option may be exercised in whole or in part. Notwithstanding the above, in the
event of a Change in Control of the Bank, all Non-Statutory Stock Options that
have been awarded shall become immediately exercisable.
(c) Termination Employment. Upon the termination of an employee's
service for any reason other than Disability, Normal Retirement, death or
Termination for Cause, the employee's Non-Statutory Stock Options shall be
exercisable only as to those shares that were immediately purchasable by the
employee at the date of termination and only for a period of one year following
termination. In the event of Termination for Cause, all rights under his Non-
Statutory Stock Options shall expire upon termination. In the event of the
death, Disability or Normal Retirement of any employee, all Non-Statutory Stock
Options held by such employee, whether or not exercisable at such time, shall be
exercisable by such employee or his legal representatives or beneficiaries for
one year following the date of his death, Normal Retirement or cessation of
employment due to Disability, provided that in no event shall the period extend
beyond the expiration of the Non-Statutory Stock Option term.
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8. Incentive Stock Options
8.1 Grant of Incentive Stock Options
The Committee, from time to time, may grant Incentive Stock Options to
eligible employees. Incentive Stock Options granted pursuant to the Plan shall
be subject to the following terms and conditions:
(a) Price. The purchase price per share of Common Stock deliverable
upon the exercise of each Incentive Stock Option shall be not less than 100% of
the Fair Market Value of the Bank's Common Stock on the date the Incentive Stock
Option is granted. However, if an employee owns stock possessing more than 10%
of the total combined voting power of all classes of Common Stock of the Bank,
the purchase price per share of Common Stock deliverable upon the exercise of
each Incentive Stock Option shall not be less than 110% of the Fair Market Value
of the Bank's Common Stock on the date the Incentive Stock Option is granted.
Shares may be purchased only upon payment of the full purchase price. Payment of
the purchase price may be made, in whole or in part, through the surrender of
shares of the Common Stock of the Bank at the Fair Market Value of such shares
determined in the manner described in Section 2(j).
(b) Amount of Options. Incentive Stock Options may be granted to any
eligible employee in such amounts as determined by the Committee; provided that
the amount granted is consistent with the terms of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"). In the case of an option intended
to qualify as an Incentive Stock Option, the aggregate Fair Market Value
(determined as of the time the option is granted) of the Common Stock with
respect to which Incentive Stock Options granted are exercisable for the first
time by the Participant during any calendar year (under all plans of the
Participant's employer corporation and its parent and subsidiary corporations)
shall not exceed $100,000. The provisions of this Section 8.1(b) shall be
construed and applied in accordance with Section 422(d) of the Code and the
regulations, if any, promulgated thereunder.
(c) Term of Options. The term during which each Incentive Stock Option
may be exercised shall be determined by the Committee, but in no event shall an
Incentive Stock Option be exercisable in whole or in part more than 10 years
from the Date of Grant. If any employee, at the time an Incentive Stock Option
is granted to him, owns Common Stock representing more than 10% of the total
combined voting power of the Bank (or, under Section 425(d) of the Code, is
deemed to own Common Stock representing more than 10% of the total combined
voting power of all such classes of Common Stock, by reason of the ownership of
such classes of Common Stock, directly or indirectly, by or for any brother,
sister, spouse, ancestor or lineal descendent of such employee, or by or for any
corporation, partnership, estate or trust of which such employee is a
shareholder, partner or beneficiary), the Incentive Stock Option granted to him
shall not be exercisable after the expiration of five years from the Date of
Grant. No Incentive Stock Option granted under this Plan is transferable except
by will or the laws of descent and distribution and is exercisable only by the
employee to which it is granted.
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The Committee shall determine the date on which each Incentive Stock
Option shall become exercisable and may provide that an Incentive Stock Option
shall become exercisable in installments. The shares comprising each installment
may be purchased in whole or in part at any time after such installment becomes
purchasable, provided that the amount able to be first exercised in a given year
is consistent with the terms of Section 422 of the Code. The Committee, in its
sole discretion, may accelerate the time at which any Incentive Stock Option may
be exercised in whole or in part; provided that it is consistent with the terms
of Section 422 of the Code. Notwithstanding the above, in the event of a Change
in Control of the Bank, all Incentive Stock Options that have been awarded shall
become immediately exercisable.
(d) Termination of Employment. Upon the termination of an employee's
service for any reason other than Disability, Normal Retirement, Change in
Control, death or Termination for Cause, his Incentive Stock Options shall be
exercisable only as to those shares which were immediately purchasable by him at
the date of termination and only for a period of three months following
termination. In the event of Termination for Cause all rights under his
Incentive Stock Options shall expire upon termination.
In the event of death or Disability of any employee, all Incentive
Stock Options held by such employee, whether or not exercisable at such time,
shall be exercisable by such employee or his legal representatives or
beneficiaries for one year following the date of his death or cessation of
employment due to Disability. Upon termination of an employee's service due to
Normal Retirement, or a Change in Control, all Incentive Stock Options held by
such employee, whether or not exercisable at such time, shall be exercisable for
a period of one year following the date of his cessation of employment;
provided, however, that such option shall not be eligible for treatment as an
Incentive Stock Option in the event such option is exercised more than three
months following the date of his Normal Retirement or the Change in Control. In
no event shall the exercise period extend beyond the expiration of the Incentive
Stock Option term.
(e) Compliance with Code. The options granted under this Section 8 of
the Plan are intended to qualify as incentive stock options within the meaning
of Section 422 of the Code, but the Bank makes no warranty as to the
qualification of any option as an incentive stock option within the meaning of
Section 422 of the Code.
9. Limited Rights
9.1 Grant of Limited Rights
The Committee may grant a Limited Right simultaneously with the grant
of any option, with respect to all or some of the shares covered by such option.
Limited Rights granted under this Plan are subject to the following terms and
conditions:
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(a) Terms of Rights. In no event shall a Limited Right be exercisable
in whole or in part before the expiration of six months from the date of grant
of the Limited Right. A Limited Right may be exercised only in the event of a
Change in Control of the Bank.
The Limited Right may be exercised only when the underlying option is
eligible to be exercised, provided that the Fair Market Value of the underlying
shares on the day of exercise is greater than the exercise price of the related
option.
Upon exercise of a Limited Right, the related option shall cease to be
exercisable. Upon exercise or termination of an option, any related Limited
Rights shall terminate. The Limited Rights may be for no more than 100% of the
difference between the exercise price and the Fair Market Value of the Common
Stock subject to the underlying option. The Limited Right is transferable only
when the underlying option is transferable and under the same conditions.
(b) Payment. Upon exercise of a Limited Right, the holder shall
promptly receive from the Bank an amount of cash equal to the difference between
the Fair Market Value on the Date of Grant of the related option and the Fair
Market Value of the underlying shares on the date the Limited Right is
exercised, multiplied by the number of shares with respect to which such Limited
Right is being exercised.
(c) Stock to be Optioned. The maximum number of shares of Common Stock
that may be optioned or sold under the Plan is shares. Such shares may be
treasury, or authorized but unissued, shares of Common Stock of the Bank. Any
shares subject to an Option under the Plan which Option for any reason expires
or is terminated unexercised as to such shares, may again be subject to an
Option under the Plan.
10. Surrender of Option
In the event of a Participant's termination of employment as a result
of death, Disability or Retirement, the Participant (or his personal
representatives, heir(s), or devisee(s)) may, in a form acceptable to the
Committee, make application to surrender all or part of options held by such
Participant in exchange for a cash payment from the Bank of an amount equal to
the difference between the Fair Market Value of the Common Stock on the date of
termination of employment and the exercise price per share of the option on the
Date of Grant. Whether the Bank accepts such application or determines to make
payment, in whole or part, is within its absolute and sole discretion, it being
expressly understood that the Bank is under no obligation to any Participant
whatsoever to make such payments. In the event that the Bank accepts such
application and determines to make payment, such payment shall be in lieu of the
exercise of the underlying option and such option shall cease to be exercisable.
11. Rights of a Shareholder; Nontransferability
An optionee shall have no rights as a shareholder with respect to any
shares covered by a Non-Statutory and/or Incentive Stock Option until the date
of issuance of a stock certificate for such shares. Nothing in this Plan or in
any Award granted confers on any person any right to continue in the employ of
the Bank or its affiliates or to continue to perform services for the Bank or
its affiliates or interferes in any way with the right of the Bank or its
affiliates to terminate his services as an officer or other employee at any
time.
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No Award under the Plan shall be transferable by the optionee other
than by will or the laws of descent and distribution and may only be exercised
during his lifetime by the optionee, or by a guardian or legal representative.
12. Agreement with Grantees
Each Award of Options, and/or Limited Rights will be evidenced by a
written agreement, executed by the Participant and the Bank or its affiliates
that describes the conditions for receiving the Awards including the date of
Award, the purchase price if any, applicable periods, and any other terms and
conditions as may be required by the Board of Directors or applicable securities
law.
13. Designation of Beneficiary
A Participant, with the consent of the Committee, may designate a
person or persons to receive, in the event of death, any stock option or Limited
Rights Award to which he would then be entitled. Such designation will be made
upon forms supplied by and delivered to the Bank and may be revoked in writing.
If a Participant fails effectively to designate a beneficiary, then his estate
will be deemed to be the beneficiary.
14. Dilution and Other Adjustments
In the event of any change in the outstanding shares of Common Stock of
the Bank by reason of any stock dividend or split, recapitalization, merger,
consolidation, spin-off, reorganization, combination or exchange of shares, or
other similar corporate change, or other increase or decrease in such shares
without receipt or payment of consideration by the Bank, the Committee will make
such adjustments to previously granted Awards, to prevent dilution or
enlargement of the rights of the Participant, including any or all of the
following:
(a) adjustments in the aggregate number or kind of shares of Common
Stock which may be awarded under the Plan;
(b) adjustments in the aggregate number or kind of shares of Common
Stock covered by Awards already made under the Plan;
(c) subject to Section 8.1(a) hereof, adjustments in the purchase price
of outstanding Incentive and/or Non-Statutory Stock Options, or any
Limited Rights attached to such options.
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No such adjustments, however, may change materially the value of
benefits available to a Participant under a previously granted Award.
15. Limitations upon Exercise of Options
Notwithstanding any other provision of the Plan, so long as the Company
remains in the mutual form of organization, an option granted under this Plan
may not be exercised if the exercise of such an option would result in the
Company owning less than a majority of the Common Stock of the Bank. Nothing
herein shall preclude the Bank from issuing additional authorized but unissued
shares of Common Stock to the Company to allow for the exercise of options which
would otherwise have resulted in the Company owning less than a majority of the
Common Stock of the Bank.
16. Treatment of Options in the Event of a Conversion Transaction
In the event that the Company converts to stock form in a Conversion
Transaction any options outstanding shall, at the option of the holder, (i) be
convertible into options for Common Stock of the Stock Holding Company, or (ii)
be exercised by the holder prior to the effective date of the Conversion
Transaction and the holder shall be entitled to exchange, in the same manner as
other minority stockholders of the Bank, the shares of Common Stock of the Bank
received upon such exercise for shares of Common Stock of the Stock Holding
Company. Provided, however, that if for any reason such options are not to be
converted or such shares are not exchanged, the holders of options under this
plan shall receive cash payment for the shares of stock represented by the
options in an amount equal to the initial offering price of the Common Stock of
the Stock Holding Company at the closing of the Conversion Transaction, less the
original exercise price of such options and, with respect to options that have
been exercised, the Stock Holding Company shall redeem such shares for cash in
the same manner as such redemption would occur for other minority stockholders
of the Bank. Any exchange, conversion of options, or cash payment for shares
shall be subject to applicable federal and state regulations and, if necessary,
subject to the approval of the appropriate regulatory authorities.
17. Withholding
There may be deducted from each distribution of cash and/or Common
Stock under the Plan the amount of tax required by any governmental authority to
be withheld.
18. Amendment of the Plan
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, the approval by a majority of the shares represented in person or by
proxy shall be required for any such modification or amendment that:
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(a) increases the maximum number of shares for which options may be
granted under the Plan (subject, however, to the provisions of Section
14 hereof;
(b) reduces the exercise price at which Awards may be granted (subject,
however, to the provisions of Sections 8.1(a) and 14 hereof):
(c) extends the period during which options may be granted or exercised
beyond the times originally prescribed (subject, however, to the
provisions of Section 8.1(a) hereof; or
(d) changes the persons eligible to participate in the Plan.
Failure to ratify or approve amendments or modifications to subsections
(a) through (d) of this Section 18 by shareholders shall be effective only as to
the specific amendment or modification requiring such ratification. Other
provisions, sections, and subsections of this Plan will remain in full force and
effect.
No such termination, modification or amendment may affect the rights of
a Participant under an outstanding Award.
19. Approval by Stockholders
The Plan shall be approved by stockholders of the Bank within 12 months
after the Plan has been adopted. No Options granted pursuant to the Plan shall
be exercisable prior to such shareholder approval.
20. Effective Date of Plan
The Plan shall become effective upon the consummation of the
Reorganization (the "Effective Date"). The Plan shall be presented to
shareholders for ratification for purposes of: (i) obtaining favorable treatment
under Section 16(b) of the Exchange Act; (ii) obtaining preferential tax
treatment for Incentive Stock Options; and, if applicable, (iii) maintaining
listing on the NASDAQ System. The failure to obtain shareholder ratification
will not affect the validity of the Plan and the options thereunder; provided,
however, that if the Plan is not ratified, the Plan shall remain in full force
and effect, and any Incentive Stock Options granted under the Plan shall be
deemed to be Non-Statutory Stock Options.
21. Termination of the Plan
The right to grant Awards under the Plan will terminate upon the
earlier of 10 years after the Effective Date of the issuance of Common Stock or
the exercise of options or related rights equaling the maximum number of shares
reserved under the Plan as set forth in Section 5 hereof. The Board of Directors
has the right to suspend or terminate the Plan at any time; provided that no
such action will, without the consent of a Participant, affect adversely his
rights under a previously granted Award.
11
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22. Applicable Law
The Plan will be administered in accordance with the laws of the State
of Illinois.
Adopted [ ], 1993.
CHARTER BANK, S.B.
--------------------------------
John A. Becker, President and
Chief Executive Officer
- -------------------------- --------------------------------
Date Approved by Linda M. Johnson, Secretary
Stockholders
12
<PAGE>
CHARTER BANK, S.B.
1993 INCENTIVE STOCK OPTION PLAN
STOCK OPTION AGREEMENT
A. A STOCK OPTION for a total of __________ shares of Common Stock, par
value $1.00, of Charter Bank, S.B. (the "Bank") is hereby granted to
_________________ (the "Participant"), subject in all respects to the terms and
provisions of the Charter Bank, S.B. 1993 Incentive Stock Option Plan (the
"Plan"), dated [ ], 1993, which has been adopted by the Bank and which is
incorporated herein by reference. The terms of this Agreement are subject to the
terms and conditions of the Plan.
B. The option price as determined by the Stock Option Committee for the
Plan is $10.00 per share, the fair market value of the Common Stock on the date
of the grant of this Option.
C. Twenty percent (20%) of the options granted hereunder shall be
exercisable each year beginning on the date of grant.
D. This Option may not be exercised if the issuance of shares of Common
Stock of the Bank upon such exercise would constitute a violation of any
applicable Federal or State securities or other law or valid regulation. The
Participant, as a condition to his exercise of this Option, shall represent to
the Bank that the shares of Common Stock of the Bank that he acquires under this
Option are being acquired by him for investment and not with a present view to
distribution or resale, unless counsel for the Bank is then of the opinion that
such a representation is not required under the Securities Act of 1933 or any
other applicable law, regulation, or rule of any governmental agency.
E. This Option may not be transferred in any manner otherwise than by
will or the laws of descent and distribution, and may be exercised during the
lifetime of the Participant only by him. The terms of this Option shall be
binding upon the executors, administrators, heirs, successors, and assigns of
the Participant.
F. A copy of the Charter Bank, S.B. 1993 Incentive Stock Option Plan
governing this Option granted to you is enclosed, and your attention is invited
to all the provisions of the Plan. You will observe that the Plan does not
require that you exercise this Option as to any particular number of shares at
one time, but this Option must be exercised, if at all and to the extent
1
<PAGE>
exercised, by you no later than ten years and one day from the date of this
Agreement. This Option may be exercised during such term only in accordance with
the terms of the Plan.
Dated: [ ], 1993
CHARTER BANK, S.B.
By:
President and Chief Executive Officer
ATTEST:
Secretary
The Participant acknowledges receipt of a copy of the Plan, a copy of
which is annexed hereto, and represents that he is familiar with the terms and
provisions thereof. The Participant hereby accepts this Option subject to all
the terms and provisions of the Plan. The Participant hereby agrees to accept as
binding, conclusive, and final all decisions and interpretations of the Stock
Option Committee upon any questions arising under the Plan. As a condition to
the issuance of shares of Common Stock of the Bank under this Option, the
Participant authorizes the Bank to withhold in accordance with applicable law
form any regular cash compensation payable to him any taxes required to be
withheld by the Bank under Federal, State, or Local law as a result of his
exercise of this Option.
Dated: [ ], 1993
By:
Participant
2
May 1, 1998
Board of Directors
Magna Group, Inc.
One Magna Place
1401 South Brentwood Boulevard
St. Louis, Missouri 63144-1401
Re: Registration Statement on Form S-8
Charter Financial, Inc. 1997 Stock Option Plan
Charter Bank, S.B. 1993 Incentive Stock Option Plan
Gentlemen:
We have served as counsel to Magna Group, Inc. (the "Company") in
connection with the various legal matters relating to the filing of
Post-Effective Amendment No. 1 on Form S-8 to the Company's Registration
Statement on Form S-4 (the "Registration Statement") filed under the Securities
Act of 1933, as amended, and the Rules and Regulations promulgated thereunder,
relating to 124,428 shares of common stock of the Company, par value $2.00 per
share (the "Shares"), reserved for issuance in accordance with the Charter
Financial, Inc. 1997 Stock Option Plan and the Charter Bank, S.B. 1993 Incentive
Stock Option Plan (collectively, the "Plans").
We have examined such corporate records of the Company, such laws and
such other information as we have deemed relevant, including the Company's
Restated Certificate of Incorporation, as amended, and Bylaws, as amended, the
Plans, certain resolutions adopted by the Board of Directors of the Company
relating to the Plans and certificates received from state officials and from
officers of the Company. In delivering this opinion, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals, the conformity to the originals of all documents submitted to us
as certified, photostatic or conformed copies, and the correctness of all
statements submitted to us by officers of the Company.
<PAGE>
Board of Directors
Magna Group, Inc.
May 1, 1998
Page 2
Based upon the foregoing, the undersigned is of the opinion that:
1. The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware.
2. The Shares available for issuance under the Plans, when issued in
accordance with the Plans, will be validly issued and outstanding
and will be fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and to the use of our name in the Registration Statement. We also
consent to your filing copies of this opinion as an exhibit to the Registration
Statement with agencies of such states as you deem necessary in the course of
complying with the laws of such states regarding the issuance of the Shares
pursuant to the Plans.
Very truly yours,
/s/ Gallop, Johnson & Neuman, L.C.
GALLOP, JOHNSON & NEUMAN, L.C.
Exhibit 23.1
Consent of Ernst & Young LLP
We consent to the incorporation by reference in the Registration
Statement (Form S-8) pertaining to the Charter Financial, Inc. 1997
Stock Option Plan and the Charter Bank S.B. 1993 Incentive Stock Option
Plan of our report dated January 21, 1998, except for Note 24, as to
which the date is February 22, 1998, with respect to the consolidated
financial statements of Magna Group, Inc. included in its Annual Report
(Form 10-K) for the year ended December 31, 1997, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
St. Louis, Missouri
April 30, 1998
