<PAGE> 1
As Filed With the Securities and Exchange Commission on March 10, 1998
Registration No. 333-42557
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
AMENDMENT NO. 2
(Post-Effective)
ON FORM S-8
TO FORM S-4
Registration Statement Under
The Securities Act of 1933
MERCANTILE BANCORPORATION INC.
(Exact name of registrant as specified in its charter)
MISSOURI 43-0951744
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. Box 524
St. Louis, Missouri 63166-0524
(Address of Principal Executive Offices)
HOMECORP, INC.
1990 INCENTIVE STOCK OPTION PLAN
and
1996 PREMIUM PRICE STOCK OPTION AND INCENTIVE PLAN
(Full title of the plans)
JON W. BILSTROM, ESQ.
General Counsel and Secretary
Mercantile Bancorporation Inc.
P.O. Box 524
St. Louis, Missouri 63166-0524
(Name and address of agent for service)
Telephone: (314) 425-2525
Copy to:
JOHN Q. ARNOLD ROBERT M. LAROSE, ESQ.
Vice Chairman and Chief Financial Officer Thompson Coburn
Mercantile Bancorporation Inc. One Mercantile Center
P.O. Box 524 St. Louis, Missouri 63101
St. Louis, Missouri 63166-0524 (314) 552-6000
(314) 425-2525
<TABLE>
CALCULATION OF REGISTRATION FEE
=======================================================================================================================
<CAPTION>
Title of each class of Amount to be Proposed maximum Proposed maximum Amount of
securities to be registered registered offering price per unit aggregate offering price registration fee
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 par value<F1> 96,322 N/A N/A <F2>
=======================================================================================================================
<FN>
<F1> Includes one attached Preferred Share Purchase Right per share.
<F2> The registrant previously paid $13,671 with the original filing on
December 18, 1997 to register 951,380 shares of Mercantile
Bancorporation Inc. Common Stock, including the 96,322 shares which
may be issued pursuant to the HomeCorp, Inc. 1990 Incentive Stock
Option Plan and 1996 Premium Price Stock Option and Incentive Plan.
</TABLE>
This amendment shall become effective in accordance with the provisions of
Rule 464 promulgated under the Securities Act of 1933.
================================================================================
<PAGE> 2
The undersigned registrant hereby files this post-effective
amendment (the "Registration Statement") to register on Form S-8 96,322
shares of Mercantile Bancorporation Inc. (hereinafter the "Company" or the
"Registrant") Common Stock, $0.01 par value, and attached Preferred Share
Purchase Rights of the Company, previously registered on Form S-4 (File No.
333-42557) incorporated herein by reference, for issuance pursuant to options
granted under the HomeCorp, Inc. 1990 Incentive Stock Option Plan (the "1990
Plan") and the 1996 Premium Price Stock Option and Incentive Plan (the "1996
Plan" and, collectively with the 1990 Plan, the "Plans"), pursuant to the
terms and conditions of the Agreement and Plan of Merger dated October 29,
1997 by and among the Company, Ameribanc, Inc. and HomeCorp, Inc. (such
transaction was consummated on March 2, 1998).
Item 3. Incorporation of Documents by Reference.
---------------------------------------
The following documents filed by the Company with the Securities
and Exchange Commission under the Securities Exchange Act of 1934 are
incorporated herein by reference:
(a) MBI's Annual Report on Form 10-K for the year ended
December 31, 1996, as amended by Form 10-K/A.
(b) MBI's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997, June 30, 1997 and September 30, 1997.
(c) MBI's Current Reports on Form 8-K dated April 25, 1997 (as
amended by Form 8-K/A dated May 22, 1997), May 13, 1997,
July 1, 1997, January 10, 1998, January 30, 1998 and two
reports dated September 25, 1997.
(d) The description of the Company's Common Stock set forth in
Item 1 of the Company's Registration Statement on Form 8-A,
dated March 5, 1993, and any amendment or report filed for
the purpose of updating such description.
The following document filed with the Commission by Roosevelt
Financial Group, Inc. ("Roosevelt") under the Exchange Act is incorporated
herein by reference: Annual Report on Form 10-K for the year ended December
31, 1996, as amended on Form 10-K/A on March 14, 1997 and on Form 10-K/A-2 on
April 29, 1997.
Such incorporation by reference shall not be deemed to
incorporate by reference the information referred to in Item 402(a)(8) of
Regulation S-K.
All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act after the date hereof and prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities remaining
unsold, shall be deemed to be incorporated by reference herein and made a
part hereof from the date any such document is filed. The information
relating to the Company contained in this Registration Statement does not
purport to be complete and should be read together with the information in
the documents incorporated by reference herein. Any statement contained
herein or in a document incorporated herein by reference shall be deemed to
be modified or superseded for purposes hereof to the extent that a subsequent
statement contained herein or in any other subsequently filed document
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 hereof.
- 2 -
<PAGE> 3
Where any document or part thereof is incorporated by reference
in the Registration Statement, the Company will provide without charge to
each person to whom a Prospectus with respect to the Plans is delivered, upon
written or oral request of such person, a copy of any and all of the
information incorporated by reference in the Registration Statement,
excluding exhibits unless such exhibits are specifically incorporated by
reference.
Item 6. Indemnification of Directors and Officers.
-----------------------------------------
Sections 351.355(1) and (2) of The General and Business
Corporation Law of the State of Missouri provide that a corporation may
indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding by
reason of the fact that he is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the corporation as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses, judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful,
except that, in the case of an action or suit by or in the right of the
corporation, the corporation may not indemnify such persons against judgments
and fines and no person shall be indemnified as to any claim, issue or matter
as to which such person shall have been adjudged to be liable for negligence
or misconduct in the performance of his duty to the corporation, unless and
only to the extent that the court in which the action or suit was brought
determines upon application that such person is fairly and reasonably
entitled to indemnity for proper expenses. Section 351.355(3) provides that,
to the extent that a director, officer, employee or agent of the corporation
has been successful in the defense of any such action, suit or proceeding or
any claim, issue or matter therein, he shall be indemnified against expenses,
including attorneys' fees, actually and reasonably incurred in connection
with such action, suit or proceeding. Section 351.355(7) provides that a
corporation may provide additional indemnification to any person
indemnifiable under subsection (1) or (2), provided such additional
indemnification is authorized by the corporation's articles of incorporation
or an amendment thereto or by a shareholder-approved bylaw or agreement, and
provided further that no person shall thereby be indemnified against conduct
which was finally adjudged to have been knowingly fraudulent, deliberately
dishonest or willful misconduct or which involved an accounting for profits
pursuant to Section 16(b) of the Securities Exchange Act of 1934.
Article 12 of the Restated Articles of Incorporation of the
Registrant provides that the Registrant shall extend to its directors and
executive officers the indemnification specified in subsections (1) and (2)
and the additional indemnification authorized in subsection (7) and that it
may extend to other officers, employees and agents such indemnification and
additional indemnification.
Pursuant to directors' and officers' liability insurance
policies, with total annual limits of $30,000,000, the Registrant's directors
and officers are insured, subject to the limits, retention, exceptions and
other terms and conditions of such policy, against liability for any actual
or alleged error, misstatement, misleading statement, act or omission, or
neglect or breach of duty by the directors or officers of the Registrant,
individually or collectively, or any matter claimed against them solely by
reason of their being directors or officers of the Registrant.
- 3 -
<PAGE> 4
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling the Company pursuant to such provisions, the Company has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in such Act and is
therefore unenforceable.
Item 8. Exhibits.
--------
See Exhibit Index located at page 8 hereof.
Item 9. Undertakings.
------------
The undersigned Registrant hereby undertakes to deliver or cause
to be delivered with the Prospectus, to each person to whom the Prospectus is
sent or given, the latest annual report to security holders that is
incorporated by reference in the prospectus and furnished pursuant to and
meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information required to be
presented by Article 3 of Regulation S-X is not set forth in the prospectus,
to deliver, or cause to be delivered to each person to whom the prospectus is
sent or given, the latest quarterly report that is specifically incorporated
by reference in the prospectus to provide such interim financial information.
- 4 -
<PAGE> 5
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 Amendment No. 2 to the Registration Statement relating to
the acquisition of HomeCorp, Inc. to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of St. Louis, State of
Missouri, on the 5th day of March 1998.
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 date indicated.
MERCANTILE BANCORPORATION INC.
By /s/ John Q. Arnold
-----------------------------------------
John Q. Arnold
Vice Chairman and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 2 to Registration Statement has been signed by the following
persons in the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
<F*> Chairman of the Board, March 5, 1998
- ----------------------------------- President and Chief Executive
Thomas H. Jacobsen Officer
Principal Executive Officer
/s/ John Q. Arnold Vice Chairman and March 5, 1998
- ----------------------------------- Chief Financial Officer
John Q. Arnold
Principal Financial Officer
/s/ Michael T. Normile Senior Vice President - Finance March 5, 1998
- ----------------------------------- and Control
Michael T. Normile
Principal Accounting Officer
- 5 -
<PAGE> 6
<F*> Director March 5, 1998
- -----------------------------------
Richard E. Beumer
<F*> Director March 5, 1998
- -----------------------------------
Harry M. Cornell, Jr.
Director March 5, 1998
- -----------------------------------
Dr. Henry Givens, Jr.
<F*> Director March 5, 1998
- -----------------------------------
William A. Hall
<F*> Director March 5, 1998
- -----------------------------------
Thomas A. Hays
<F*> Director March 5, 1998
- -----------------------------------
Frank Lyon, Jr.
<F*> Director March 5, 1998
- -----------------------------------
Robert W. Murray
<F*> Director March 5, 1998
- -----------------------------------
Harvey Saligman
<F*> Director March 5, 1998
- -----------------------------------
Craig D. Schnuck
<F*> Director March 5, 1998
- -----------------------------------
Alvin J. Siteman
<F*> Director March 5, 1998
- -----------------------------------
Robert L. Stark
<F*> Director March 5, 1998
- -----------------------------------
Patrick T. Stokes
- 6 -
<PAGE> 7
<F*> Director March 5, 1998
- -----------------------------------
John A. Wright
<FN>
<F*>By /s/ John Q. Arnold
---------------------------
John Q. Arnold
<F*> John Q. Arnold, by signing his name hereto, does sign this document on
behalf of the persons named above, pursuant to a power of attorney duly
executed by such persons and previously filed.
</TABLE>
- 7 -
<PAGE> 8
<TABLE>
EXHIBIT INDEX
-------------
<CAPTION>
Exhibit No. Page
- ----------- ----
<C> <S> <C>
4.1 Form of Indenture Regarding Subordinated Securities
between the Company and The First National Bank of
Chicago, Trustee, filed as Exhibit 4.1 to the
Company's Report on Form 8-K dated September 24, 1992,
is incorporated herein by reference.<F*>
4.2 Rights Agreement dated as of May 23, 1988 between the
Company and Mercantile Bank, as Rights Agent
(including as exhibits thereto the form of Certificate
of Designation, Preferences and Rights of Series A
Junior Participating Preferred Stock and the form of
Right Certificate), filed as Exhibits 1 and 2 to the
Company's Registration Statement No. 0-6045 on Form
8-A, dated May 24, 1988, is incorporated herein by
reference.<F*>
4.3 Form of Indenture Regarding Senior Debt Securities,
filed as Exhibit 4.1 to the Company's Registration
Statement on Form S-3 (No. 333-25775), is incorporated
herein by reference.<F*>
4.4 Form of Indenture Regarding Subordinated Debt
Securities, filed as Exhibit 4.2 to the Company's
Registration Statement on Form S-3 (No. 333-25775), is
incorporated herein by reference.<F*>
4.5 Indenture, dated February 4, 1997, First Supplemental
Indenture, dated February 4, 1997, and Supplemental
Indenture of First Supplemental Indenture, dated May
22, 1997, between the Company, as issuer, and The
Chase Manhattan Bank, as Indenture Trustee, filed as
Exhibits 4.5, 4.6 and 4.12, respectively, to the
Company's Registration Statement on Form S-4
(No. 333-25131), are incorporated herein by reference.<F*>
5.1 Opinion of Thompson Coburn as to the legality of the
securities being registered.<F**>
23.1 Consent of KPMG Peat Marwick LLP with regard to use of
its report on the Company's financial statements.<F**>
23.2 Consent of KPMG Peat Marwick LLP with regard to the
use of its report on the financial statements of
Roosevelt Financial Group, Inc.<F**>
23.3 Consent of Thompson Coburn (included in Exhibit 5.1).
24.1 Power of Attorney.<F*>
99.1 HomeCorp, Inc. 1990 Incentive Stock Option Plan.<F**>
99.2 HomeCorp, Inc. 1996 Premium Price Stock Option and
Incentive Plan.<F**>
<FN>
-------------
<F*> Previously filed
<F**> Filed herewith
</TABLE>
- 8 -
<PAGE> 1
March 10, 1998
Mercantile Bancorporation Inc.
P.O. Box 524
St. Louis, Missouri 63166-0524
Re: Amendment No. 2 on Form S-8 to Form S-4 -- 96,322 Shares of
Mercantile Bancorporation Inc. Common Stock, $0.01 Par Value
------------------------------------------------------------
Ladies and Gentlemen:
We refer you to Amendment No. 2 (post-effective) on Form S-8 to Form
S-4 (File No. 333-42557) filed by Mercantile Bancorporation Inc. (the
"Company") on March 10, 1998 (the "Registration Statement") with the
Securities and Exchange Commission (the "SEC") under the Securities Act of
1933, as amended, pertaining to the proposed issuance by the Company of up to
96,322 shares of the Company's common stock, $0.01 par value (the "Shares"),
pursuant to the HomeCorp, Inc. 1990 Incentive Stock Option Plan (the "1990
Plan") and the 1996 Premium Price Stock Option and Incentive Plan (the "1996
Plan" and, collectively with the 1990 Plan, the "Plans"), pursuant to the
terms and conditions of the Agreement and Plan of Merger dated October 29,
1997 by and among the Company, Ameribanc, Inc. and HomeCorp, Inc. (such
transaction was consummated on March 2, 1998), all as provided in the
Registration Statement. In rendering the opinions set forth herein, 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
Articles of Incorporation and Bylaws, as amended and currently in effect, the
resolutions adopted by the Executive Committee of the Company's Board of
Directors relating to the Plans, certificates received from state officials
and statements we have received from officers and representatives of the
Company. In delivering this opinion, we 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; the authenticity of the originals of all such
latter documents; and the correctness of statements submitted to us by officers
and representatives of the Company.
Based only on the foregoing, we are of the opinion that:
1. The Company has been duly incorporated and is validly existing under
the laws of the State of Missouri; and
2. The Shares to be issued by the Company pursuant to the Registration
Statement have been duly authorized by the Company and, when issued by the
Company in accordance with the Plans, will be duly and validly issued and
will be fully paid and nonassessable.
We consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Thompson Coburn
<PAGE> 1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors and Stockholders
Mercantile Bancorporation Inc.:
We consent to the incorporation by reference in the registration statement
(No. 333-42557) on Form S-8 of Mercantile Bancorporation Inc. of our reports
dated January 15, 1997 and May 13, 1997, with respect to the consolidated
balance sheets of Mercantile Bancorporation Inc. and subsidiaries as of
December 31, 1996, 1995, and 1994, and the related consolidated statements
of income, changes in shareholders' equity, and cash flows for each of the
years in the three-year period ended December 31, 1996, which reports are
incorporated by reference in the Form S-8 of Mercantile Bancorporation Inc.
dated March 10, 1998.
/s/ KPMG Peat Marwick LLP
St. Louis, Missouri
March 10, 1998
<PAGE> 1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors and Stockholders
Mercantile Bancorporation Inc.:
We consent to the incorporation by reference in the registration statement
(No. 333-42557) on Form S-8 of Mercantile Bancorporation Inc. of our report
dated January 20, 1997, with respect to the consolidated balance sheets of
Roosevelt Financial Group, Inc. and subsidiaries as of December 31, 1996 and
1995, and the related consolidated statements of operations, stockholders'
equity, and cash flows for each of the years in the three-year period ended
December 31, 1996, which report is incorporated by reference in the Form S-8
of Mercantile Bancorporation Inc. dated March 10, 1998.
/s/ KPMG Peat Marwick LLP
St. Louis, Missouri
March 10, 1998
<PAGE> 1
HOMECORP, INC.
AMENDED 1990 STOCK OPTION AND INCENTIVE PLAN
1. Plan Purpose. The purpose of the Plan is to promote the long-term
------------
interests of the Corporation and its stockholders by providing a means for
attracting and retaining directors, officers and employees of the Corporation
and its Affiliates. It is intended that designated Options granted pursuant
to the provisions of this Plan to persons employed on a full-time basis will
qualify as Incentive Stock Options. Options granted to persons who are not
full-time employees will be Non-Qualified Stock Options.
2. Definitions. The following definitions are applicable to the Plan:
-----------
"Affiliate" - means any "parent corporation" or "subsidiary corporation"
of the Corporation, as such terms are defined in Section 424(e) and (f),
respectively, of the Code.
"Association" - means Homebanc, a federal savings bank.
"Award" - means the grant of an Incentive Stock Option, a Non-Qualified
Stock Option, a Stock Appreciation Right, a Limited Stock Appreciation Right,
or of Restricted Stock, or any combination thereof, as provided in the Plan.
"Code" - means the Internal Revenue Code of 1986, as amended.
"Committee" - means the Committee referred to in Section 3 hereof.
"Continuous Service" - means the absence of any interruption or
termination of service as a director, officer or employee of the Corporation
or an Affiliate, except that when used with respect to persons granted an
Incentive Option means the absence of any interruption or termination of
service as a full-time employee of the Corporation or an Affiliate. Service
shall not be considered interrupted in the case of sick leave, military leave
or any other leave of absence approved by the Corporation or in the case of
transfers between payroll locations of the Corporation or between the
Corporation, its parent, its subsidiaries or its successor.
"Corporation" - means Homecorp, Inc., a Delaware corporation.
"Disinterested Person" - means any member of the Board of Directors of
the Corporation who (A) is an outside director as defined under Section 162
(m) of the Code and the regulations
<PAGE> 2
thereunder and (B) a person who within the prior year has not been, and is
not being, granted any awards related to the Shares under this Plan or any
other plan of the Corporation or any of its Affiliates except for awards
which (i) are calculated in accordance with a formula as contemplated in
paragraph (c)(2)(ii) of Rule 16b-3 ("Rule 16b-3") under the Securities
Exchange Act of 1934; (ii) result from participation in an ongoing securities
acquisition plan meeting the conditions of paragraph (d)(2) of Rule 16b-3; or
(iii) arise from an election by a director to receive all or part of his
board fees in securities. No recipient of a stock award granted pursuant to
Section 21 hereof shall be deemed not to be a Disinterested Person solely by
reason of such grant.
"Employee" - means any person, including an officer or director, who is
employed by the Corporation or any Affiliate.
"ERISA" - means the Employee Retirement Income Security Act of 1974, as
amended.
"Exercise Price" - means (i) in the case of an Option, the price per
Share at which the Shares subject to such Option may be purchased upon
exercise of such Option and (ii) in the case of a Right, the price per Share
(other than the Market Value per Share on the date of exercise and the Offer
Price per Share as defined in Section 10 hereof) which, upon grant, the
Committee determines shall be utilized in calculating the aggregate value
which a Participant shall be entitled to receive pursuant to Sections 9, 10
or 13 hereof upon exercise of such Right.
"Incentive Stock Option" - means an option to purchase Shares granted by
the Committee pursuant to Section 6 hereof which is subject to the limitations
and restrictions of Section 8 hereof and is intended to qualify under Section
422 of the Code.
"Limited Stock Appreciation Right" - means a stock appreciation right
with respect to Shares granted by the Committee pursuant to Sections 6 and 10
hereof.
"Market Value" - means the average of the high and low quoted sales
price on the date in question (or, if there is no reported sale on such date,
on the last preceding date on which any reported sale occurred) of a Share on
the Composite Tape for the New York Stock Exchange-Listed Stocks, or, if on
such date the Shares are not quoted on the Composite Tape, on the New York
Stock Exchange, or, if the Shares are not listed or admitted to trading on
such Exchange, on the principal United States securities exchange registered
under the Securities Exchange Act of 1934 on which the Shares are listed or
admitted to trading, or, if the Shares are not listed or admitted to trading
on any such exchange, the mean between the closing high bid and low asked
quotations with respect to a Share on such date on the National Association
of
2
<PAGE> 3
Securities Dealers, Inc., Automated Quotations System, or any similar system
then in use, or, if no such quotations are available, the fair market value
on such date of a Share as the Committee shall determine.
"Non-Qualified Stock Option" - means an option to purchase Shares
granted by the Committee pursuant to Section 6 hereof, which option is not
intended to qualify under Section 422 of the Code.
"Option" - means an Incentive Stock Option or a Non-Qualified Stock
Option.
"Participant" - means any officer or employee of the Corporation or any
Affiliate who is selected by the Committee to receive an Award and any
director of the Corporation who is granted an Award pursuant to Section 21
hereof.
"Plan" - means the 1990 Stock Option and Incentive Plan of the
Corporation.
"Related" - means (i) in the case of a Right, a Right which is granted
in connection with, and to the extent exercisable, in whole or in part, in
lieu of, an Option or another Right and (ii) in the case of an Option, an
Option with respect to which and to the extent a Right is exercisable, in
whole or in part, in lieu thereof has been granted.
"Restricted Period" - means the period of time selected by the Committee
for the purpose of determining when restrictions are in effect under Section
11 hereof with respect to Restricted Stock awarded under the Plan.
"Restricted Stock" - means Shares which have been contingently awarded
to a Participant by the Committee subject to the restrictions referred to in
Section 11 hereof, so long as such restrictions are in effect.
"Right" - means a Limited Stock Appreciation Right or a Stock
Appreciation Right.
"Senior Officer" - means the Corporation's president, principal
financial officer or principal accounting officer, any vice president of the
Corporation in charge of a principal business unit, division or function
(such as sales, administration or finance), any other officer who performs a
policy-making function, or any other person who performs similar policy-making
functions for the Corporation. Officers of the Corporation's Affiliates shall
be deemed Senior Officers of the Corporation if they perform such policy-making
functions for the Corporation.
3
<PAGE> 4
"Shares" - means the shares of common stock of the Corporation.
"Stock Appreciation Right" - means a stock appreciation right with
respect to Shares granted by the Committee pursuant to Sections 6 and 9
hereof.
"Ten Percent Beneficial Owner" - means the beneficial owner of more than
ten percent of any class of the Corporation's equity securities registered
pursuant to Section 12 of the Securities Exchange Act of 1934.
3. Administration. The Plan shall be administered by a Committee
--------------
consisting of two or more members, each of whom shall be a Disinterested
Person. The members of the Committee shall be appointed by the Board of
Directors of the Corporation. Except as limited by the express provisions of
the Plan, the Committee shall have sole and complete authority and discretion
to (i) select Participants and grant Awards; (ii) determine the number of
Shares to be subject to types of Awards generally, as well as to individual
Awards granted under the Plan; (iii) determine the terms and conditions upon
which Awards shall be granted under the Plan; (iv) prescribe the form and
terms of instruments evidencing such grants; and (v) establish from time to
time regulations for the administration of the Plan, interpret the Plan, and
make all determinations deemed necessary or advisable for the administration
of the Plan. The Committee may maintain, and update from time to time as
appropriate, a list designating selected directors as Disinterested Persons.
The purpose of such list shall be to evidence the status of such individuals
as Disinterested Persons, and the Board of Directors may appoint to the
Committee any individual actually qualifying as a Disinterested Person,
regardless of whether identified as such on said list.
A majority of the Committee shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is present,
or acts approved in writing by a majority of the Committee without a meeting,
shall be acts of the Committee.
4. Participation in Committee Awards. The Committee may select from
---------------------------------
time to time Participants in the Plan from those directors, officers and
employees (other than Disinterested Persons), of the Corporation or its
Affiliates who, in the opinion of the Committee, have the capacity for
contributing to the successful performance of the Corporation or its
Affiliates.
5. Shares Subject to Plan. Subject to adjustment by the operation of
----------------------
Section 12 hereof, the maximum number of Shares with respect to which Awards
may be made under the Plan is 10% of the total Shares issued in the
Association's conversion to the capital stock form. The Shares with respect
to which Awards may be made under the Plan may be either authorized and
unissued shares or
4
<PAGE> 5
issued shares heretofore or hereafter reacquired and held as treasury shares.
Shares which are subject to Related Rights and Related Options shall be
counted only once in determining whether the maximum number of Shares with
respect to which Awards may be granted under the Plan has been exceeded. An
Award shall not be considered to have been made under the Plan with respect
to any Option or Right which terminates or with respect to Restricted Stock
which is forfeited, and new Awards may be granted under the Plan with respect
to the number of Shares as to which such termination or forfeiture has
occurred.
6. General Terms and Conditions of Options and Rights. The Committee
--------------------------------------------------
shall have full and complete authority and discretion, except as expressly
limited by the Plan, to grant Options and/or Rights and to provide the terms
and conditions (which need not be identical among Participants) thereof. In
particular, the Committee shall prescribe the following terms and conditions:
(i) the Exercise Price of any Option or Right, which shall not be less than
the Market Value per Share at the date of grant of such Option or Right, (ii)
the number of Shares subject to, and the expiration date of, any Option or
Right, which expiration date shall not exceed ten years from the date of
grant, (iii) the manner, time and rate (cumulative or otherwise) of exercise
of such Option or Right, and (iv) the restrictions, if any, to be placed upon
such Option or Right or upon Shares which may be issued upon exercise of such
Option or Right. The Committee may, as a condition of granting any Option or
Right, require that a Participant agree not to thereafter exercise one or
more Options or Rights previously granted to such Participant.
7. Exercise of Options or Rights.
-----------------------------
(a) An Option or Right granted under the Plan shall be
exercisable during the lifetime of the Participant to whom such Option or
Right was granted only by such Participant and, except as provided in
paragraphs (c) and (d) of this Section 7, no such Option or Right may be
exercised unless at the time such Participant exercises such Option or Right,
such Participant has maintained Continuous Service since the date of grant of
such Option or Right. Cash settlements of Rights may be made only in
accordance with any applicable restrictions pursuant to Rule 16b-3(e) under
the Securities Exchange Act of 1934 or any similar or successor provision.
(b) To exercise an Option or Right under the Plan, the
Participant to whom such Option or Right was granted shall give written
notice to the Corporation in form satisfactory to the Committee (and, if
partial exercises have been permitted by the Committee, by specifying the
number of Shares with respect to which such Participant elects to exercise
such Option or Right) together with full payment of the Exercise Price, if
any and to the extent required. The date of exercise shall be the date on
which such
5
<PAGE> 6
notice is received by the Corporation. Payment, if any is required, shall be
made either (i) in cash (including check, bank draft or money order) or (ii)
if permitted by the Committee, by delivering (A) Shares already owned by the
Participant and having a fair market value equal to the applicable exercise
price, such fair market value to be determined in such appropriate manner as
may be provided by the Committee or as may be required in order to comply
with or to conform to requirements of any applicable laws or regulations, or
(B) a combination of cash and such Shares.
(c) If a Participant to whom an Option or Right was granted
shall cease to maintain Continuous Service for any reason (including total or
partial disability and normal or early retirement, but excluding death and
termination of employment by the Corporation or any Affiliate for cause),
such Participant may, but only within the period of three months immediately
succeeding such cessation of Continuous Service and in no event after the
expiration date of such Option or Right, exercise such Option or Right to the
extent that such Participant was entitled to exercise such Option or Right at
the date of such cessation, provided, however, that such right of exercise
after cessation of Continuous Service shall not be available to a Participant
if the Committee otherwise determines and so provides in the applicable
instrument or instruments evidencing the grant of such Option or Right. If
the Continuous Service of a Participant to whom an Option or Right was
granted by the Corporation is terminated for cause, all rights under any
Option or Right of such Participant shall expire immediately upon the giving
to the Participant of notice of such termination.
(d) In the event of the death of a Participant while in the
Continuous Service of the Corporation or an Affiliate or within the three
month period referred to in paragraph (c) of this Section 7, the person to
whom any Option or Right held by the Participant at the time of his death is
transferred by will or the laws of descent and distribution may, but only to
the extent such Participant was entitled to exercise such Option or Right
immediately prior to his death, exercise such Option or Right at any time
within a period of one year succeeding the date of death of such Participant,
but in no event later than ten years from the date of grant of such Option or
Right. Following the death of any Participant to whom an Option was granted
under the Plan, irrespective of whether any Related Right shall have
theretofore been granted to the Participant or whether the person entitled to
exercise such Related Right desires to do so, the Committee may, as an
alternative means of settlement of such Option, elect to pay to the person to
whom such Option is transferred by will or by the laws of descent and
distribution or, in the case of an Award other than an Incentive Stock
Option, pursuant to a qualified domestic relations order as defined in the
Code or Title I of the ERISA or the rules thereunder, the amount by which the
Market Value per Share on the date of exercise of such Option shall exceed
the Exercise Price of such Option, multiplied by the number of Shares
6
<PAGE> 7
with respect to which such Option is properly exercised. Any such settlement
of an Option shall be considered an exercise of such Option for all purposes
of the Plan.
8. Incentive Stock Options. Incentive Stock Options may be granted
-----------------------
only to Participants who are Employees. Any provision of the Plan to the
contrary notwithstanding, (i) no Incentive Stock Option shall be granted more
than ten years from the date the Plan is adopted by the Board of Directors of
the Corporation and no Incentive Stock Option shall be exercisable more than
ten years from the date such Incentive Stock Option is granted, (ii) the
Exercise Price of any Incentive Stock Option shall not be less than the
Market Value per Share on the date such Incentive Stock Option is granted,
(iii) any Incentive Stock Option shall not be transferable by the Participant
to whom such Incentive Stock Option is granted other than by will or the laws
of descent and distribution, and shall be exercisable during such Participant's
lifetime only by such Participant, (iv) no Incentive Stock Option shall be
granted to any individual who, at the time such Incentive Stock Option is
granted, owns stock possessing more than ten percent of the total combined
voting power of all classes of stock of the Corporation or any Affiliate unless
the Exercise Price of such Incentive Stock Option is at least 110 percent of
the Market Value per Share at the date of grant and such Incentive Stock Option
is not exercisable after the expiration of five years from the date such
Incentive Stock Option is granted, and (v) the aggregate Market Value
(determined as of the time any Incentive Stock Option is granted) of the Shares
with respect to which Incentive Stock Options are exercisable for the first
time by a Participant in any calendar year shall not exceed $100,000.
9. Stock Appreciation Rights. A Stock Appreciation Right shall, upon
-------------------------
its exercise, entitle the Participant to whom such Stock Appreciation Right
was granted to receive a number of Shares or cash or combination thereof, as
the Committee in its discretion shall determine, the aggregate value of which
(i.e., the sum of the amount of cash and/or Market Value of such Shares on
date of exercise) shall equal (as nearly as possible, it being understood
that the Corporation shall not issue any fractional shares) the amount by
which the Market Value per Share on the date of such exercise shall exceed
the Exercise Price of such Stock Appreciation Right, multiplied by the number
of Shares with respect of which such Stock Appreciation Right shall have been
exercised. A Stock Appreciation Right may be Related to an Option or may be
granted independently of any Option as the Committee shall from time to time
in each case determine. At the time of grant of an Option the Committee
shall determine whether and to what extent a Related Stock Appreciation Right
shall be granted with respect thereto; provided, however, and notwithstanding
any other provision of the Plan, that if the Related Option is an Incentive
Stock Option, the
7
<PAGE> 8
Related Stock Appreciation Right shall satisfy all the restrictions and
limitations of Section 8 hereof as if such Related Stock Appreciation Right
were an Incentive Stock Option and as if other rights which are Related to
Incentive Stock Options were Incentive Stock Options. In the case of a
Related Option, such Related Option shall cease to be exercisable to the
extent of the Shares with respect to which the Related Stock Appreciation
Right was exercised. Upon the exercise or termination of a Related Option,
any Related Stock Appreciation Right shall terminate to the extent of the
Shares with respect to which the Related Option was exercised or terminated.
Notwithstanding the foregoing, no Stock Appreciation Right shall be
exercisable by a director, Senior Officer or Ten Percent Beneficial Owner of
the Corporation within six months of the date of its grant.
10. Limited Stock Appreciation Rights. At the time of grant of an
---------------------------------
Option or Stock Appreciation Right to any Participant, the Committee shall
have full and complete authority and discretion to also grant to such
Participant a Limited Stock Appreciation Right which is Related to such
Option or Stock Appreciation Right; provided, however and notwithstanding any
other provision of the Plan, that if the Related Option is an Incentive Stock
Option, the Related Limited Stock Appreciation Right shall satisfy all the
restrictions and limitations of Section 8 hereof as if such Related Limited
Stock Appreciation Right were an Incentive Stock Option and as if all other
Rights which are Related to Incentive Stock Options were Incentive Stock
Options. Notwithstanding any other provision of the Plan, a Limited Stock
Appreciation Right shall be exercisable only during the period beginning on
the first day following the date of expiration of any "offer" (as such term
is hereinafter defined) and ending on the forty-fifth day following such
date, provided, however, that no Limited Stock Appreciation Right shall be
exercisable by a director, Senior Officer or Ten Percent Beneficial Owner of
the Corporation within six months of the date of its grant.
A Limited Stock Appreciation Right shall, upon its exercise, entitle the
Participant to whom such Limited Stock Appreciation Right was granted to
receive an amount of cash equal to the amount by which the "Offer Price per
Share" (as such term is hereinafter defined) or the Market Value on the date
of such exercise, as shall have been provided by the Committee in its
discretion at the time of grant, shall exceed the Exercise Price of such
Limited Stock Appreciation Right, multiplied by the number of Shares with
respect to which such Limited Stock Appreciation Right shall have been
exercised. Upon the exercise of a Limited Stock Appreciation Right, any
Related Option and/or Related Stock Appreciation Right shall cease to be
exercisable to the extent of the Shares with respect to which such Limited Stock
Appreciation Right was exercised. Upon the exercise or termination of a Related
Option or Related Stock Appreciation Right, any Related Limited Stock
Appreciation Right shall terminate to the extent of the Shares with
8
<PAGE> 9
respect to which such Related Option or Related Stock Appreciation Right was
exercised or terminated.
For the purposes of this Section 10, the term "Offer" shall mean any
tender offer or exchange offer for Shares other than one made by the
Corporation, provided that the corporation, person or other entity making the
offer acquires pursuant to such offer either (i) 25% of the Shares
outstanding immediately prior to the commencement of such offer or (ii) a
number of Shares which, together with all other Shares acquired in any tender
offer or exchange offer (other than one made by the Corporation) which
expired within sixty days of the expiration date of the offer in question,
equals 25% of the Shares outstanding immediately prior to the commencement of
the offer in question. The term "Offer Price per Share" as used in this
Section 10 shall mean the highest price per Share paid in any Offer which
Offer is in effect any time during the period beginning on the sixtieth day
prior to the date on which a Limited Stock Appreciation Right is exercised
and ending on the date on which such Limited Stock Appreciation Right is
exercised. Any securities or property which are part or all of the
consideration paid for Shares in the Offer shall be valued in determining the
Offer Price per Share at the higher of (A) the valuation placed on such
securities or property by the corporation, person or other entity making such
Offer or (B) the valuation placed on such securities or property by the
Committee.
11. Terms and Conditions of Restricted Stock. The Committee shall
----------------------------------------
have full and complete authority, subject to the limitations of the Plan, to
grant awards of Restricted Stock and, in addition to the terms and conditions
contained in paragraphs (a) through (f) of this Section 11, to provide such
other terms and conditions (which need not be identical among Participants)
in respect of such Awards, and the vesting thereof, as the Committee shall
determine and provide in the agreement referred to in paragraph (d) of this
Section 11.
(a) At the time of an award of Restricted Stock, the Committee
shall establish for each Participant a Restricted Period of not less than six
months during which or at the expiration of which, as the Committee shall
determine and provide in the agreement referred to in paragraph (d) of this
Section 11, the Shares awarded as Restricted Stock shall vest, and subject to
any such other terms and conditions as the Committee shall provide, shares of
Restricted Stock may not be sold, assigned, transferred, pledged or otherwise
encumbered by the Participant, except as hereinafter provided, during the
Restricted Period. Except for such restrictions, and subject to paragraphs
(c), (d) and (e) of this Section 11 and Section 12 hereof, the Participant as
owner of such shares shall have all the rights of a stockholder, including
but not limited to the right to receive all dividends paid on such shares and
the right to vote such shares. The Committee shall have the authority, in
its discretion, to accelerate the time at which
9
<PAGE> 10
any or all of the restrictions shall lapse with respect to any shares of
Restricted Stock prior to the expiration of the Restricted Period with
respect thereto, or to remove any or all of such restrictions, whenever it
may determine that such action is appropriate by reason of changes in
applicable tax or other laws or other changes in circumstances occurring
after the commencement of such Restricted Period.
(b) Except as provided in Section 14 hereof, if a Participant
ceases to maintain Continuous Service for any reason (other than death, total
or partial disability or normal or early retirement) unless the Committee
shall otherwise determine and provide in the agreement referred to in
paragraph (d) of this Section 11, all shares of Restricted Stock theretofore
awarded to such Participant and which at the time of such termination of
Continuous Service are subject to the restrictions imposed by paragraph (a)
of this Section 11 shall upon such termination of Continuous Service be
forfeited and returned to the Corporation. Unless the Committee shall have
provided in the agreement referred to in paragraph (d) of this Section 11 for
a ratable lapse of restrictions with respect to an award of shares of
Restricted Stock during the Restricted Period, if a Participant ceases to
maintain Continuous Service by reason of death, total or partial disability
or normal or early retirement, such portion of such shares of Restricted
Stock awarded to such Participant which at the time of such termination of
Continuous Service are subject to the restrictions imposed by paragraph (a)
of this Section 11 as shall be equal to the portion of the Restricted Period
with respect to such shares which shall have elapsed at the time of such
termination of Continuous Service shall be free of restrictions and shall not
be forfeited.
(c) Each certificate in respect of shares of Restricted Stock
awarded under the Plan shall be registered in the name of the Participant and
deposited by the Participant, together with a stock power endorsed in blank,
with the Corporation and shall bear the following (or a similar) legend:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) contained in the Amended 1990 Stock Option and Incentive
Plan of Homecorp, Inc. and an Agreement entered into between the
registered owner and Homecorp, Inc. Copies of such Plan and Agreement
are on file in the offices of the Secretary of Homecorp, Inc., 1107 E.
State Street, Rockford, Illinois 61104."
(d) At the time of an award of shares of Restricted Stock, the
Participant shall enter into an Agreement with the Corporation in a form
specified by the Committee, agreeing to the terms and conditions of the award
and such other matters as the Committee shall in its sole discretion
determine.
10
<PAGE> 11
(e) At the time of an award of shares of Restricted Stock, the
Committee may, in its discretion, determine that the payment to the
Participant of dividends declared or paid on such shares, or specified
portion thereof, by the Corporation shall be deferred until the earlier to
occur of (i) the lapsing of the restrictions imposed under paragraph (a) of
this Section 11 or (ii) the forfeiture of such shares under paragraph (b) of
this Section 11, and shall be held by the Corporation for the account of the
Participant until such time. In the event of such deferral, there shall be
credited at the end of each year (or portion thereof) interest on the amount
of the account at the beginning of the year at a rate per annum as the
Committee, in its discretion, may determine. Payment of deferred dividends,
together with interest accrued thereon as aforesaid, shall be made upon the
earlier to occur of the events specified in (i) and (ii) of the immediately
preceding sentence.
(f) At the expiration of the restrictions imposed by paragraph
(a) of this Section 11, the Corporation shall redeliver to the Participant
(or where the relevant provision of paragraph (b) of this Section 11 applies
in the case of a deceased Participant, to his legal representative,
beneficiary or heir) the certificate(s) and stock power deposited with it
pursuant to paragraph (c) of this Section 11 and the Shares represented by
such certificate(s) shall be free of the restrictions referred to in
paragraph (a) of this Section 11.
12. Adjustments Upon Changes in Capitalization. In the event of any
------------------------------------------
change in the outstanding Shares subsequent to the effective date of the Plan
by reason of any reorganization, recapitalization, stock split, stock
dividend, combination or exchange of shares, merger, consolidation or any
change in the corporate structure or Shares of the Corporation, the maximum
aggregate number and class of shares as to which Awards may be granted under
the Plan and the number, class of shares and exercise price with respect to
which Awards theretofore have been granted under the Plan shall be
appropriately adjusted by the Committee, whose determination shall be
conclusive. Any shares of stock or other securities received, as a result of
any of the foregoing, by a Participant with respect to Restricted Stock shall
be subject to the same restrictions and the certificate(s) or other
instruments representing or evidencing such shares or securities shall be
legended and deposited with the Corporation in the manner provided in Section
11 hereof.
13. Effect of Merger on Options or Rights. In the event of any merger
-------------------------------------
or consolidation of the Corporation (other than a merger or consolidation in
which the Corporation is the continuing entity and which does not result in
the outstanding Shares being converted into or exchanged for different
securities, cash or other property, or any combination thereof) pursuant to a
plan or agreement the terms of which are binding upon all stockholders of the
Corporation (except to the extent that dissenting stockholders may be
entitled,
11
<PAGE> 12
under statutory provisions or provisions contained in the certificate of
incorporation, to receive the appraised or fair value of their holdings), any
Participant to whom an Option or Right has been granted at least 6 months
prior to such event shall have the right (subject to the provisions of the
Plan and any limitation applicable to such Option or Right), thereafter and
during the term of each such Option or Right, to receive upon exercise of any
such Option or Right an amount equal to the excess of the fair market value
on the date of such exercise of the securities, cash or other property, or
combination thereof, receivable upon such merger, consolidation or
combination in respect of a Share over the Exercise Price of such Right or
Option, multiplied by the number of Shares with respect to which such Option
or Right shall have been exercised. Such amount may be payable fully in
cash, fully in one or more of the kind or kinds of property payable in such
merger, consolidation or combination, or partly in cash and partly in one or
more of such kind or kinds of property, all in the discretion of the
Committee.
14. Effect of Change in Control. Each of the events specified in the
---------------------------
following clauses (i) through (iii) of this Section 14 shall be deemed a
"change of control": (i) any third person, including a "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, shall become the
beneficial owner of shares of the Corporation with respect to which 25% or
more of the total number of votes for the election of the Board of Directors
of the Corporation may be cast, (ii) as a result of, or in connection with,
any cash tender offer, merger or other business combination, sale of assets
or contested election, or combination of the foregoing, the persons who were
directors of the Corporation shall cease to constitute a majority of the
Board of Directors of the Corporation or (iii) the shareholders of the
Corporation shall approve an agreement providing either for a transaction in
which the Corporation will cease to be an independent publicly owned entity
or for a sale or other disposition of all or substantially all the assets of
the Corporation; provided, however, that the occurrence of any such events
shall not be deemed a "change in control" if, prior to such occurrence, a
resolution specifically approving such occurrence shall have been adopted by
at least a majority of the Board of Directors of the Corporation. If the
Continuous Service of any Participant of the Corporation or any Affiliate is
involuntarily terminated for whatever reason, at any time within eighteen
months after a change in control, unless the Committee shall have otherwise
provided in the agreement referred to in paragraph (d) of Section 11 hereof,
any Restricted Period with respect to Restricted Stock theretofore awarded to
such Participant shall lapse upon such termination and all Shares awarded as
Restricted Stock shall become fully vested in the Participant to whom such
Shares were awarded. If a tender offer or exchange offer for Shares (other
than such an offer by the Corporation) is commenced, or if the event
specified in clause (iii) above shall occur, unless the Committee shall have
otherwise
12
<PAGE> 13
provided in the instrument evidencing the grant of an Option or Stock
Appreciation Right, all Options and Stock Appreciation Rights theretofore
granted and not fully exercisable shall become exercisable in full upon the
happening of such event and shall remain so exercisable for a period of sixty
days following such date, after which they shall revert to being exercisable
in accordance with their terms; provided, however, that no Option or Stock
Appreciation Right shall be exercisable by a director, Senior Officer or Ten
Percent Beneficial Owner of the Corporation within six months of the date of
grant of such Option or Stock Appreciation Right and no Option or Stock
Appreciation Right which has previously been exercised or otherwise
terminated shall become exercisable.
15. Assignments and Transfers. No Award nor any right or interest of
-------------------------
a Participant under the Plan in any instrument evidencing any Award under the
Plan may be assigned, encumbered or transferred except, in the event of the
death of a Participant, by will or the laws of descent and distribution or,
in the case of Awards other than Incentive Stock Options, pursuant to a
qualified domestic relations order as defined in the Code or Title I of the
ERISA or the rules thereunder.
16. Employee Rights Under the Plan. No director, officer or employee
------------------------------
shall have a right to be selected as a Participant nor, having been so
selected, to be selected again as a Participant and no director, officer,
employee or other person shall have any claim or right to be granted an Award
under the Plan or under any other incentive or similar plan of the
Corporation or any Affiliate. Neither the Plan nor any action taken
thereunder shall be construed as giving any employee any right to be retained
in the employ of the Corporation or any Affiliate.
17. Delivery and Registration of Stock. The Corporation's obligation
----------------------------------
to deliver Shares with respect to an Award shall, if the Committee so
requests, be conditioned upon the receipt of a representation as to the
investment intention of the Participant to whom such Shares are to be
delivered, in such form as the Committee shall determine to be necessary or
advisable to comply with the provisions of the Securities Act of 1933 or any
other Federal, state or local securities legislation or regulation. It may
be provided that any representation requirement shall become inoperative upon
a registration of the Shares or other action eliminating the necessity of
such representation under such Securities Act or other securities
legislation. The Corporation shall not be required to deliver any Shares
under the Plan prior to (i) the admission of such shares to listing on any
stock exchange on which Shares may then be listed, and (ii) the completion of
such registration or other qualification of such Shares under any state or
Federal law, rule or regulation, as the Committee shall determine to be
necessary or advisable.
13
<PAGE> 14
This Plan is intended to comply with Rule 16b-3 under the Securities
Exchange Act of 1934. Any provision of the Plan which is inconsistent with
said Rule shall, to the extent of such inconsistency, be inoperative and
shall not affect the validity of the remaining provisions of the Plan.
18. Withholding Tax. Upon the termination of the Restricted Period
---------------
with respect to any shares of Restricted Stock (or at any such earlier time,
if any, that an election is made by the Participant under Section 83(b) of
the Code, or any successor provision thereto, to include the value of such
shares in taxable income), the Corporation shall have the right to require
the Participant or other person receiving such shares to pay the Corporation
the amount of any taxes which the Corporation is required to withhold with
respect to such shares, or, in lieu thereof, to retain or sell without
notice, a sufficient number of shares held by it to cover the amount required
to be withheld. The Corporation shall have the right to deduct from all
dividends paid with respect to shares of Restricted Stock the amount of any
taxes which the Corporation is required to withhold with respect to such
dividend payments.
The Corporation shall have the right to deduct from all amounts paid in
cash with respect to the exercise of a Right under the Plan any taxes
required by law to be withheld with respect to such cash payments. Where a
Participant or other person is entitled to receive Shares pursuant to the
exercise of an Option or Right pursuant to the Plan, the Corporation shall
have the right to require the Participant or such other person to pay the
Corporation the amount of any taxes which the Corporation is required to
withhold with respect to such Shares, or, in lieu thereof, to retain, or sell
without notice, a number of such Shares sufficient to cover the amount
required to be withheld.
19. Amendment or Termination. The Board of Directors of the
------------------------
Corporation may amend, suspend or terminate the Plan or any portion thereof
at any time, but (except as provided in Section 12 hereof) no amendment shall
be made without approval of the stockholders of the Corporation which shall
(i) materially increase the aggregate number of Shares with respect to which
Awards may be made under the Plan, (ii) materially increase the aggregate
number of Shares which may be subject to Awards to Participants who are not
Employees or (iii) change the class of persons eligible to participate in the
Plan; provided, however, that no such amendment, suspension or termination
shall impair the rights of any Participant, without his consent, in any Award
theretofore made pursuant to the Plan.
20. Effective Date and Term of Plan. The Plan shall become effective
-------------------------------
upon its adoption by the Board of Directors of the Corporation, subject to
the Association converting to a stock institution and approval of the Plan by
vote of the holders of a majority of the outstanding shares of the
Corporation entitled to
14
<PAGE> 15
vote on the adoption of the Plan. It shall continue in effect for a term of
ten years unless sooner terminated under Section 19 hereof.
21. Initial Grant. By, and simultaneously with, the adoption of this
-------------
Plan, each member of the Board of Directors of the Corporation at the time of
the Association's conversion to stock form who is not a full-time Employee is
hereby granted a Non-Qualified Stock Option to purchase an amount of shares
equal to .2% of the shares reserved for issuance under the Plan at an
Exercise Price per share equal to the per share price at which Shares are
sold in the conversion. Each such Option shall be evidenced by a
Non-Qualified Stock Option Agreement in a form approved by the Board of
Directors and shall be subject in all respects to the terms and conditions of
this Plan, which are controlling. All options and restricted stock granted
pursuant to this Section 21 shall be rounded down to the nearest whole share
to the extent necessary to ensure that no options to purchase or restricted
stock representing fractional shares are issued.
22. Notwithstanding anything else in this Plan to the contrary, to the
extent that the Plan provides for formula awards, as defined in Rule
16b-3(c)(2)(ii) under the Securities Exchange Act of 1934, such provision may
not be amended more than once every six months, other than to comport with
changes in the Code, ERISA or the rules thereunder.
15
<PAGE> 1
HOMECORP, INC.
1996 PREMIUM PRICE STOCK OPTION AND INCENTIVE PLAN
1. Plan Purpose. The purpose of the Plan is to promote the long-term
------------
interests of the Corporation and its stockholders by providing a means for
attracting and retaining directors, officers and employees of the Corporation
and its Affiliates. The Plan is intended to be an incentive stock option
plan within the meaning of Section 422 of the Code but not all Awards granted
hereunder are required to be Incentive Stock Options.
2. Definitions. The following definitions are applicable to the Plan:
-----------
"Affiliate" -- means any "parent corporation" or "subsidiary
corporation" of the Corporation as such terms are defined in Section 425(e)
and (f), respectively, of the Code.
"Award" -- means the grant by the Committee of an Incentive Stock
Option, a Non-Qualified Stock Option, a Right, or any combination thereof, as
provided in the Plan.
"Code" -- means the Internal Revenue Code of 1986, as amended.
"Committee" -- means the Committee referred to in Section 3 hereof.
"Continuous Service" -- shall mean the absence of any interruption or
termination of service as a director, advisory director, officer or employee
of the Corporation or an Affiliate, and, when used with respect to persons
granted an Incentive Stock Option, the absence of any interruption or
termination of service as an employee of the Corporation or an Affiliate.
Service shall not be considered interrupted in the case of sick leave,
military leave or any other leave of absence approved by the Corporation of
any of its Affiliates or in the case of transfers between payroll locations
of the Corporation, its Affiliates or the Corporation and an Affiliate.
"Corporation" -- means HomeCorp, Inc., a Delaware corporation and any
successor thereto.
"Early Retirement" -- means retirement from employment with the
Corporation or any of its Affiliates prior to the Participant's having
reached the age of 65, provided the Participant has maintained Continuous
Service for at least three years.
"Employee" -- means any person, including a director or officer, who is
employed by the Corporation or any Affiliate.
"ERISA" -- means the Employee Retirement Income Security Act of 1974,
as amended.
"Exercise Price" -- means (i) in the case of an Option, the price per
Share at which the Shares subject to such Option may be purchased upon
exercise of such Option and (ii) in the case of a Right, the price per Share
which, upon grant of the Right, the Committee determines shall be utilized in
calculating the aggregate value which a Participant shall be entitled to
receive pursuant to Sections 9 or 11 hereof upon exercise of such Right.
"Incentive Stock Option" -- means an option to purchase Shares granted
by the Committee pursuant to Section 6 hereof which is subject to the
limitations and restrictions of Section 8 hereof and is intended to qualify
under Section 422 of the Code.
"Market Value" -- means the average of the high and low quoted sales
prices on the date in question (or, if there is no reported sale on such
date, on the last preceding date on which any reported sale occurred) of a
Share on the Composite Tape for the New York Stock Exchange-Listed Stocks,
or, if on such date the Shares are not quoted on the Composite Tape, on the
New York Stock Exchange, or if the Shares are not listed or admitted to
trading on such Exchange, on the principal United States securities exchange
registered under the Securities Exchange Act of 1934 (the "Exchange Act") on
which the Shares are listed or admitted to trading, or, if the Shares are not
listed or admitted to trading on any such exchange, the mean between the
closing high bid and low asked
<PAGE> 2
quotations with respect to a Share on such date on the Nasdaq Stock Market,
or any similar system then in use, or, if no such quotations are available,
the fair market value on such date of a Share as the Committee shall
determine.
"Non-Qualified Stock Option" -- means an option to purchase Shares
granted by the Committee pursuant to Section 6 hereof, which option is not
intended to, or does not, qualify under Section 422(b) of the Code.
"Normal Retirement" -- means retirement from employment with the
Corporation or any of its Affiliates after the Participant has (i) reached
the age of 65 and (ii) maintained Continuous Service for at least three
years.
"Option" -- means an Incentive Stock Option or a Non-Qualified Stock
Option.
"Participant" -- means any officer or employee of the Corporation or any
Affiliate who is selected by the Committee to receive an Award or any director
of the Corporation who is granted an award pursuant to Section 19 of the Plan.
"Plan" -- means the 1996 Premium Price Stock Option and Incentive Plan
of the Corporation.
"Related Option" -- means an Option in connection with which a Right is
granted and which is exercisable, in whole or in part, in lieu of exercise of
such Right.
"Related Right" -- means a Right which is granted in connection with an
Option and which is exercisable, in whole or in part, in lieu of exercise of
such Option.
"Right" -- means a stock appreciation right granted by the Committee
with respect to Shares pursuant to Sections 6 and 9 hereof.
"Shares" -- means the shares of common stock of the Corporation.
3. Administration. The Plan shall be administered by a Committee
--------------
consisting of two or more members of the Board of Directors of the
Corporation, each of whom (i) shall be an outside director as defined under
Section 162(m) of the Code and the regulations thereunder and (ii) would not
by reason of his or her service on such Committee cause any Award to fail to
be exempt under Rule 16(b) under the Exchange Act or any similar or successor
provision. The members of the Committee shall be appointed by the Board of
Directors of the Corporation. Except as limited by the express provisions of
the Plan, the Committee shall have sole and complete authority and discretion
to (i) select Participants and grant Awards; (ii) determine the number of
Shares to be subject to types of Awards generally, as well as to individual
Awards granted under the Plan; (iii) determine the terms and conditions upon
which Awards shall be granted under the Plan; (iv) prescribe the form and
terms of instruments evidencing such grants; and (v) establish from time to
time regulations for the administration of the Plan, interpret the Plan, and
make all determinations deemed necessary or advisable for the administration
of the Plan.
A majority of the Committee shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is present,
or acts approved in writing by a majority of the Committee without a meeting,
shall be acts of the Committee.
4. Participation. The Committee may select from time to time
-------------
Participants in the Plan from those officers and employees of the Corporation
or its Affiliates who, in the opinion of the Committee, have the capacity for
contributing to the successful performance of the Corporation or its
Affiliates.
5. Shares Subject to Plan. Subject to adjustment by the operation of
----------------------
Section 10 hereof, the maximum number of shares with respect to which Awards
may be made under the Plan is 70,000 shares. Notwithstanding the foregoing,
no individual shall be granted awards in any calendar year with respect to
more than 25% of the total shares subject to the Plan. The Shares with
respect to which Awards may be made under the Plan may be either authorized
and unissued shares or previously issued shares reacquired and held as
treasury shares. Shares which are subject to Related Rights and Related
Options shall be counted only once in determining whether the maximum
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<PAGE> 3
number of Shares with respect to which Awards may be granted under the Plan
has been exceeded. An Award shall not be considered to have been made under
the Plan with respect to any Option or Right which terminates, and new Awards
may be granted under the Plan with respect to the number of Shares as to
which such termination has occurred.
6. General Terms and Conditions of Options and Rights. The Committee
--------------------------------------------------
shall have full and complete authority and discretion, except as expressly
limited by the Plan, to grant Options and/or Rights and to provide the terms
and conditions (which need not be identical among Participants) thereof. In
particular, the Committee shall prescribe the following terms and conditions:
(i) the Exercise Price of any Option or Right, which shall not be less than
120% of the Market Value per Share at the date of grant of such Option or
Right, (ii) the number of Shares subject to, and the expiration date of, any
Option or Right, which expiration date shall not exceed ten years from the
date of grant, (iii) the manner, time and rate (cumulative or otherwise) of
exercise of such Option or Right, and (iv) the restrictions, if any, to be
placed upon such Option or Right or upon Shares which may be issued upon
exercise of such Option or Right. The Committee may, as a condition of
granting any Option or Right, require that a Participant agree not to
thereafter exercise one or more Options or Rights previously granted to such
Participant.
7. Exercise of Options or Rights.
-----------------------------
(a) An Option or Right granted under the Plan shall be exercisable during
the lifetime of the Participant to whom such Option or Right was
granted only by such Participant, and except as provided in
paragraphs (c), (d), (e) and (f) of this Section 7, no such Option or
Right may be exercised unless at the time such Participant exercises
such Option or Right, such Participant has maintained Continuous
Service since the date of grant of such Option or Right. Cash
settlements of Rights may be made only in accordance with any
applicable restrictions pursuant to Rule 16b-3(e) under the Exchange
Act or any similar or successor provision.
(b) To exercise an Option or Right under the Plan, the Participant to whom
such Option or Right was granted shall give written notice to the
Corporation in form satisfactory to the Committee (and, if partial
exercises have been permitted by the Committee, by specifying the
number of Shares with respect to which such Participant elects to
exercise such Option or Right) together with full payment of the
Exercise Price, if any and to the extent required. The date of
exercise shall be the date on which such notice is received by the
Corporation. Payment, if any is required, shall be made either (i)
in cash (including check, bank draft or money order) or (ii) if
permitted by the Committee, by delivering (A) Shares already owned by
the Participant and having a fair market value equal to the
applicable exercise price, such fair market value to be determined in
such appropriate manner as may be provided by the Committee or as may
be required in order to comply with or to conform to requirements of
any applicable laws or regulations, or (B) a combination of cash and
such Shares.
(c) If a Participant to whom an Option or Right was granted shall cease to
maintain Continuous Service for any reason (including Early Retirement,
but excluding Normal Retirement, total or partial disability, death and
termination of employment by the Corporation or any Affiliate for cause),
such Participant may, but only within the period of three months
immediately succeeding such cessation of Continuous Service and in no
event after the expiration date of such Option or Right, exercise such
Option or Right to the extent that such Participant was entitled to
exercise such Option or Right at the date of such cessation, provided,
however, that such right of exercise after cessation of Continuous
Service shall not be available to a Participant if the Committee
otherwise determines and so provides in the applicable instrument or
instruments evidencing the grant of such Option or Right. If the
Continuous Service of a Participant to whom an Option or Right was
granted by the Corporation is terminated for cause, all rights under any
Option or Right of such Participant shall expire immediately upon the
giving to the Participant of notice of such termination.
(d) If a Participant to whom an Option or Right was granted shall cease to
maintain Continuous Service due to Normal Retirement or total or partial
disability, such Option shall become exercisable in full upon the
happening of such event and shall remain exercisable as determined by the
Committee and provided in the instrument or instruments evidencing such
Option, but in no event after the expiration date of such Option,
provided, however, that such right of exercise after cessation of
Continuous Service shall not be available
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<PAGE> 4
to a Participant if the Committee otherwise determines and so
provides in the applicable instrument or instruments evidencing the
grant of such Option or Right.
(e) Upon the death of a Participant while in the Continuous Service of the
Corporation or an Affiliate, such Option shall become exercisable in
full upon the happening of such event and shall remain exercisable as
determined by the Committee and provided in the instrument or instruments
evidencing such Option, but in no event after the expiration date of such
Option, provided, however, that such right of exercise after cessation of
Continuous Service shall not be available to a Participant if the
Committee otherwise determines and so provides in the applicable
instrument or instruments evidencing the grant of such Option or Right.
(f) In the event of the death of a Participant while in the Continuous
Service of the Corporation or an Affiliate or within the three month
period referred to in paragraph (c) of this Section 7 or following
cessation of Continuous Service as provided for in paragraph (d) of
this Section 7, the person to whom any Option or Right held by the
Participant at the time of his death is transferred by will or the
laws of descent and distribution or in the case of an Award other
than an Incentive Stock Option, pursuant to a qualified domestic
relations order, as defined in the Code or Title I of ERISA or the
rules thereunder, may, to the extent such Participant was entitled to
exercise such Option or Right upon his death, exercise such Option or
Right at any time within a period of one year succeeding the date of
death of such Participant, but in no event later than ten years from
the date of grant of such Option or Right. Following the death of
any Participant to whom an Option was granted under the Plan,
irrespective of whether any Related Right shall have been granted to
the Participant or whether the person entitled to exercise such
Option or Related Right desires to do so, the Committee may, as an
alternative means of settlement of such Option, elect to pay to the
person to whom such Option is transferred by will or by the laws of
descent and distribution or in the case of an Option other than an
Incentive Stock Option, pursuant to a qualified domestic relations
order, as defined in the Code or Title I of ERISA or the rules
thereunder, the amount by which the Market Value per Share on the
date of exercise of such Option shall exceed the Exercise Price of
such Option, multiplied by the number of shares with respect to which
such Option is properly exercised. Any such settlement of an Option
shall be considered an exercise of such Option for all purposes of
the Plan.
(g) Notwithstanding the provisions of subparagraphs (c) through (f) above,
the Committee may, in its sole discretion, establish different terms
and conditions pertaining to the effect of termination to the extent
permitted by applicable federal and state law.
8. Incentive Stock Options. Any provision of the Plan to the contrary
-----------------------
notwithstanding, (i) no Incentive Stock Option shall be granted more than ten
years from the date the Plan is adopted by the Board of Directors of the
Corporation and no Incentive Stock Option shall be exercisable more than ten
years from the date such Incentive Stock Option is granted, (ii) the Exercise
Price of any Incentive Stock Option shall not be less than the Market Value
per Share on the date such Incentive Stock Option is granted, (iii) any
Incentive Stock Option shall not be transferable by the Participant to whom
such Incentive Stock Option is granted other than by will or the laws of
descent and distribution and shall be exercisable during such Participant's
lifetime only by such Participant, (iv) no Incentive Stock Option shall be
granted to any individual who, at the time such Incentive Stock Option is
granted, owns stock possessing more than 10% of the total combined voting
power of all classes of stock of the Corporation or any Affiliate unless such
Incentive Stock Option is not exercisable after the expiration of five years
from the date such Incentive Stock Option is granted, and (v) the aggregate
Market Value (determined as of the time any Incentive Stock Option is
granted) of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by a Participant in any calendar year shall
not exceed $100,000. To the extent that the Option, or portion thereof, does
not qualify as an Incentive Stock Option for any reason, such Option (or
portion thereof) shall become a Non-Qualified Stock Option under the Plan.
9. Stock Appreciation Rights. A Right shall, upon its exercise,
-------------------------
entitle the Participant to whom such Right was granted to receive a number of
Shares or cash or combination thereof, as the Committee in its discretion
shall determine, the aggregate value of which (i.e., the sum of the amount of
cash and/or Market Value of such Shares on date of exercise) shall equal (as
nearly as possible, it being understood that the Corporation shall not issue
any fractional shares) the amount by which the Market Value per Share on the
date of such exercise shall exceed the
4
<PAGE> 5
Exercise Price of such Right, multiplied by the number of Shares with respect
to which such shall have been exercised. A Right may be a Related Right
granted in connection with an Option or may be granted independently of any
Option as the Committee shall from time to time in each case determine. At
the time of grant of an Option the Committee shall determine whether and to
what extent a Related Right shall be granted with respect thereto; provided,
however, and notwithstanding any other provision of the Plan, that if the
Related Option is an Incentive Stock Option, the Related Right shall satisfy
all the restrictions and limitations of Section 8 hereof as if such Related
Right were an Incentive Stock Option. In the case of a Related Option, such
Related Option shall cease to be exercisable to the extent of the Shares with
respect to which the Related Right was exercised. Upon the exercise or
termination of a Related Option, any Related Right shall terminate to the
extent of the Shares with respect to which the Related Option was exercised
or terminated.
10. Adjustments Upon Changes in Capitalization. In the event of any
------------------------------------------
change in the outstanding Shares subsequent to the effective date of the Plan
by reason of any reorganization, recapitalization, stock split, stock
dividend, combination or exchange of shares, merger, consolidation or any
change in the corporate structure or Shares of the Corporation, the maximum
aggregate number and class of shares as to which Awards may be granted under
the Plan and the number and class of shares with respect to which Awards have
been granted under the Plan shall be appropriately adjusted by the Committee,
whose determination shall be conclusive.
11. Effect of Merger on Options or Rights. In the case of any merger,
-------------------------------------
consolidation or combination of the Corporation (other than a merger,
consolidation or combination in which the Corporation is the continuing
corporation and which does not result in the outstanding Shares being
converted into or exchanged for different securities, cash or other property,
or any combination thereof), any Participant to whom an Option or Right has
been granted shall have, in addition to the rights of exercise pursuant to
Section 7 hereof, the right (subject to the provisions of the Plan and any
limitation applicable to such Option or Right imposed by the Committee in the
agreement evidencing the grant), thereafter and during the term of each such
Option or Right, to receive upon exercise of any such Option or Right an
amount equal to the excess of the fair market value on the date of such
exercise of the securities, cash or other property, or combination thereof,
receivable upon such merger, consolidation or combination in respect of a
Share over the Exercise Price of such Right or Option, multiplied by the
number of Shares with respect to which such Option or Right shall have been
exercised. Such amount may be payable fully in cash, fully in one or more of
the kind or kinds of property payable in such merger, consolidation or
combination, or partly in cash and partly in one or more of such kind or
kinds of property, all in the discretion of the Committee.
12. Effect of Change in Control. Each of the events specified in the
---------------------------
following clauses (i) through (iii) of this Section 12 shall be deemed a
"change of control": (i) any third person, including a "group" as defined in
Section 13(d)(3) of the Exchange Act, shall become the beneficial owner of
shares of the Corporation with respect to which 25% or more of the total
number of votes for the election of the Board of Directors of the Corporation
may be cast, (ii) as a result of, or in connection with, any cash tender
offer, merger or other business combination, sale of assets or contested
election, or combination of the foregoing, the persons who were directors of
the Corporation shall cease to constitute a majority of the Board of
Directors of the Corporation, or (iii) the stockholders of the Corporation
shall approve an agreement providing either for a transaction in which the
Corporation will cease to be an independent publicly-owned corporation or for
a sale or other disposition of all or substantially all the assets of the
Corporation. If a tender offer or exchange offer for Shares (other than such
an offer by the Corporation) is commenced, or if a change in control shall
occur, unless the Committee shall have otherwise provided in the instrument
evidencing the grant of an Option or Right, all Options and Rights granted
and not fully exercisable shall become exercisable in full upon the happening
of such event and shall remain so exercisable in accordance with their terms,
provided that no Option or Right which has previously been exercised or
otherwise terminated shall become exercisable, and provided further that no
Option or Right shall be exercisable by a director or officer of the
Corporation within six months of the date of grant of such Option.
13. Assignments and Transfers. No Award nor any right or interest of a
-------------------------
Participant under the Plan in any instrument evidencing any Award under the
Plan may be assigned, encumbered or transferred except, in the event of the
death of a Participant, by will or the laws of descent and distribution, or
in the case of Awards other than
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<PAGE> 6
Incentive Stock Options pursuant to a qualified domestic relations order, as
defined in the Code or Title I of ERISA or the rules thereunder.
14. Employee Rights Under the Plan. No officer or employee shall have
------------------------------
a right to be selected as a Participant nor, having been so selected, to be
selected again as a Participant and no officer, employee or other person
shall have any claim or right to be granted an Award under the Plan or under
any other incentive or similar plan of the Corporation or any Affiliate.
Neither the Plan nor any action taken thereunder shall be construed as giving
any employee any right to be retained in the employ of the Corporation or any
Affiliate.
15. Delivery and Registration of Stock. The Corporation's obligation
----------------------------------
to deliver Shares with respect to an Award shall, if the Committee so
requests, be conditioned upon the receipt of a representation as to the
investment intention of the Participant to whom such Shares are to be
delivered, in such form as the Committee shall determine to be necessary or
advisable to comply with the provisions of the Securities Act of 1933 or any
other federal, state or local securities legislation. It may be provided
that any representation requirement shall become inoperative upon a
registration of the Shares or other action eliminating the necessity of such
representation under such Securities Act or other securities legislation.
The Corporation shall not be required to deliver any Shares under the Plan
prior to (i) the admission of such shares to listing on any stock exchange on
which Shares may then be listed, and (ii) the completion of such registration
or other qualification of such Shares under any state or federal law, rule or
regulation, as the committee shall determine to be necessary or advisable.
This Plan is intended to comply with Rule 16b-3 under the Exchange Act.
Any provision of the Plan which is inconsistent with said Rule shall, to the
extent of such inconsistency, be inoperative and shall not affect the
validity of the remaining provisions of the Plan.
16. Withholding Tax. The Corporation shall have the right to deduct
---------------
from all amounts paid in cash with respect to the exercise of a Right under
the Plan any taxes required by law to be withheld with respect to such cash
payments. Where a Participant or other person is entitled to receive Shares
pursuant to the exercise of an Option or Right pursuant to the Plan, the
Corporation shall have the right to require the Participant or such other
person to pay the Corporation the amount of any taxes which the Corporation
is required to withhold with respect to such Shares, or, in lieu thereof, to
retain, or sell without notice, a number of such shares sufficient to cover
the amount required to be withheld.
17. Amendment or Termination. The Board of Directors of the
------------------------
Corporation may amend, suspend or terminate the Plan or any portion thereof
at any time, but (except pursuant to Section 10 hereof) no amendment shall be
made without approval of the stockholders of the Corporation which shall (i)
increase the aggregate number of Shares with respect to which Awards may be
made under the Plan, except pursuant to Section 10 hereof, (ii) materially
increase the benefits accruing to Participants, (iii) materially change the
change the requirements as eligibility for participation in the Plan or (iv)
change the class of persons eligible to participate in the Plan; provided,
however, that no such amendment, suspension or termination shall impair the
rights of any Participant, without his consent, in any Award theretofore made
pursuant to the Plan.
Notwithstanding anything else in this Plan to the contrary, to the
extent that the Plan provides for formula awards, as defined in Rule
16b-3(c)(2)(ii) under the Exchange Act, such provisions may not be amended
more than once every six months, other than to comport with changes in the
Code, ERISA or the rules thereunder.
18. Effective Date and Term of Plan. The Plan shall become effective
-------------------------------
upon its adoption by the Board of Directors of the Corporation, subject to
the approval of the Plan by the shareholders of the Corporation. It shall
continue in effect for a term of ten years unless sooner terminated under
Section 17 hereof.
19. Grants to Outside Directors. By and simultaneously with the
----------------------------
approval of this Plan by the shareholders of the Corporation, each member of
the Board of Directors of the Corporation who is not a full-time employee of
the Corporation or any of its Affiliates is hereby granted a Non-Qualified
Stock Option to purchase 3,000 Shares, at an exercise price of 120% of the
Market Value of such shares as of the date of such approval. Each such
option shall vest on the date of such approval as to 1,500 Shares, and shall
vest on each of the first and second
6
<PAGE> 7
anniversaries of such date as to 750 shares. In addition, subject to
availability of Shares, each non-employee director of the Corporation first
elected as such subsequent to the date on which the Corporation's
shareholders approve this Plan is hereby granted as of the date he or she is
elected a Non-Qualified Stock Option to purchase 3,000 Shares, at an exercise
price of 120% of the Market Value of such shares as of the date of such
election, which shall vest on such date as to 1,500 Shares and shall vest on
each of the first and second anniversaries of such date as to 750 shares.
Each Option granted pursuant to this Section 19 shall be evidence by a
Non-Qualified Stock Option Agreement in a form approved by the Board of
Directors and shall be subject in all respects to the terms and conditions of
this Plan, which are controlling.
7
