<PAGE> 1
As Filed With the Securities and Exchange Commission on September 30, 1998
Registration No. 333-57345
==============================================================================
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) P.O. Box 524 Identification No.)
St. Louis, Missouri 63166-0524
(Address of Principal Executive Offices)
FIRST FINANCIAL BANCORPORATION
1997 STOCK COMPENSATION PLAN
(Full title of the plan)
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 W. MCCLURE 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 aggregate offering price registration fee
unit
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 par value 35,673 N/A N/A <F2>
<F1>
============================================================================================================================
<FN>
(1) Includes one attached Preferred Share Purchase Right per share.
(2) The registrant previously paid $18,075.54 with the original filing on June
19, 1998 to register 3,194,844 shares of Mercantile Bancorporation Inc.
Common Stock, including the 35,673 shares which may be issued pursuant to
the First Financial Bancorporation 1997 Stock Compensation 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 35,673
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.
333-57345) incorporated herein by reference, for issuance pursuant to options
granted under the First Financial Bancorporation 1997 Stock Compensation Plan
(the "Plan"), pursuant to the terms and conditions of the Agreement and Plan
of Merger dated May 7, 1998 by and among the Company, Ameribanc, Inc. and
First Financial Bancorporation (such transaction was consummated on September
28, 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 10K for the year ended December 31,
1997, as amended by Form 10-K/A.
(b) MBI's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1998 and June 30, 1998.
(c) MBI's Current Reports on Form 8-K dated January 10, 1998,
January 30, 1998 and July 16, 1998.
(d) The description of the Company's Common Stock set forth in
Item 1 of the Company's Registration Statement on Form 8A, dated
March 5, 1993, and any amendment or report filed for the purpose
of updating such description.
(e) The description of the Company's Preferred Share Purchase Rights
set forth in Item 1 of the Company's Registration Statement on
Form 8-A, dated May 27, 1998.
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.
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 Plan is delivered, upon
written or oral request of such person, a copy of any and all of the
information
- 2 -
<PAGE> 3
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 Section 351.355(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.
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 Sections 351.355(1) and
(2) and the additional indemnification authorized in Section 351.355(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 $45,000,000, 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.
Item 8. Exhibits.
--------
See Exhibit Index located at page 8 hereof.
- 3 -
<PAGE> 4
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 (File No.
333-57345) to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of St. Louis, State of Missouri, on the 29th day of
September 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/ Thomas H. Jacobsen
-------------------------------
Thomas H. Jacobsen
Chairman of the Board, President
and Chief Executive 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>
/s/ Thomas H. Jacobsen Chairman of the Board, September 29, 1998
- --------------------------------- President and Chief Executive
Thomas H. Jacobsen Officer
Principal Executive Officer
/s/ John W. McClure Vice Chairman and September 29, 1998
- ---------------------------------- Chief Financial Officer
John W. McClure
Principal Financial Officer
/s/ Michael T. Normile Senior Vice President - Finance September 29, 1998
- --------------------------------- and Control
Michael T. Normile
Principal Accounting Officer
- 5 -
<PAGE> 6
<F*> Director September 29, 1998
- ---------------------------------
Richard E. Beumer
Director
- ---------------------------------
Harry M. Cornell, Jr.
<F*> Director September 29, 1998
- ---------------------------------
Dr. Henry Givens, Jr.
<F*> Director September 29, 1998
- ---------------------------------
William A. Hall
<F*> Director September 29, 1998
- ---------------------------------
Thomas A. Hays
<F*> Director September 29, 1998
- ---------------------------------
Frank Lyon, Jr.
<F*> Director September 29, 1998
- ---------------------------------
Robert W. Murray
<F*> Director September 29, 1998
- ---------------------------------
Harvey Saligman
<F*> Director September 29, 1998
- ---------------------------------
Craig D. Schnuck
<F*> Director September 29, 1998
- ---------------------------------
Alvin J. Siteman
<F*> Director September 29, 1998
- ---------------------------------
Robert L. Stark
<F*> Director September 29, 1998
- ---------------------------------
Patrick T. Stokes
- 6 -
<PAGE> 7
<F*> Director September 29, 1998
- ---------------------------------
John A. Wright
</TABLE>
<F*>By /s/ Thomas H. Jacobsen
---------------------------------
Thomas H. Jacobsen
[FN]
<F*> Thomas H. Jacobsen, 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.
- 7 -
<PAGE> 8
<TABLE>
EXHIBIT INDEX
-------------
<CAPTION>
Exhibit No.
-----------
<C> <C>
4.1 Form of Indenture Regarding Subordinated Securities between the
Company and The First National Bank of Chicago, Trustee, filed
on March 31, 1992 as Exhibit 4.1 to the Company's Report on Form
8-K dated September 24, 1992, is incorporated herein by reference.
4.2 Rights Agreement, dated as of May 20, 1998, between the Company and
Harris Trust and Savings Bank, as Rights Agent (including as exhibits
thereto the form of Certificate of Designation, Preferences and Rights
of Series B Junior Participating Preferred Stock and the form of Right
Certificate), filed as Exhibit 4-2 to the Company's Report on Form 10-Q
dated August 12, 1998, is incorporated herein by reference.
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.
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.
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.
5.1 Opinion of Thompson Coburn as to the legality of the securities being
registered.
23.1 Consent of KPMG Peat Marwick LLP with regard to use of its report on
the Company's financial statements.
23.2 Consent of Thompson Coburn (included in Exhibit 5.1).
24.1 Power of Attorney.<F*>
99.1 First Financial Bancorporation 1997 Stock Compensation Plan.
<FN>
- ----------------
<F*>previously filed on June 19, 1998.
</TABLE>
- 8 -
<PAGE> 1
[letterhead of Thompson Coburn]
September 30, 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 - 35,673 Shares of
Mercantile Bancorporation Inc. Common Stock, $0.01 Par Value
------------------------------------------------------------
Gentlemen:
We refer you to the post-effective amendment on Form S-8 to Form
S-4 (File No. 333-57345) filed by Mercantile Bancorporation Inc. (the
"Company") on September 30, 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
35,673 shares of the Company's common stock, $0.01 par value (the "Shares"),
pursuant to the First Financial Bancorporation 1997 Stock Compensation Plan
(the "Plan"), pursuant to the terms and conditions of the Agreement and Plan
of Merger, dated May 7, 1998, by and among the Company, Ameribanc, Inc. and
First Financial Bancorporation (such transaction was consummated on September
28, 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 Plan,
certificates received from state officials and statements we have received
from officers and representatives of the Company. In delivering this
opinion, the undersigned 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, the undersigned is 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 Plan, 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. 333-57345) on Form S-8 of Mercantile Bancorporation Inc. of our
report dated January 21, 1998, with respect to the consolidated balance
sheets of Mercantile Bancorporation Inc. and subsidiaries as of December 31,
1997, 1996, and 1995, 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, 1997, which report is incorporated by
reference in the Form S-8 of Mercantile Bancorporation Inc. dated
September 30, 1998.
/s/ KPMG Peat Marwick LLP
St. Louis, Missouri
September 30, 1998
<PAGE> 1
FIRST FINANCIAL BANCORPORATION
1997 STOCK COMPENSATION PLAN
ADOPTED BY FIRST FINANCIAL BANCORPORATION BOARD OF DIRECTORS FERUARY 12, 1997
ADOPTED BY SHAREHOLDERS OF FIRST FINANCIAL BANCORPORATION APRIL 8, 1997
AMENDED AUGUST 26, 1997
1. Purpose The purpose of the Plan is to provide additional incentive
-------
to those officers, employees and nonemployee members of the Board of
Directors of the Company and its Subsidiaries whose substantial contributions
are essential to the continued growth and success of the Company's business
in order to strengthen their commitment to the Company and its Subsidiaries,
to motivate such officers and employees to faithfully and diligently perform
their assigned responsibilities and to attract and retain competent and
dedicated individuals whose efforts will result in the long-term growth and
profitability of the Company. An additional purpose of the Plan is to build
a proprietary interest among the Company's Nonemployee Directors and thereby
secure for the Company's stockholders the benefits associated with common
stock ownership by those who will oversee the Company's future growth and
success. To accomplish such purposes, the Plan provides that the Company may
grant either Incentive Stock Options or Nonqualified Stock Options. The
provisions of the Plan are intended to satisfy the requirements of Section
16(b) of the Exchange Act.
2. Definitions For purposes of this Plan:
-----------
(a) "Agreement" means the written agreement evidencing the grant of an
Award and setting forth the terms and conditions thereof.
(b) "Award" means, individually or collectively, a grant of Options under
this Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Change in Capitalization" means any increase, reduction, or change
or exchange of Shares for a different number or kind of shares or other
securities of the Company by reason of a reclassification, recapitalization,
merger, consolidation, reorganization, issuance of warrants or rights, stock
dividend, stock split or reverse stock split, combination or exchange of
Shares, repurchase of Shares, change in corporate structure or otherwise.
(e) "Change in Control" means one of the following events:
(i) Any "person" (as defined in Sections 13(d) and 14(d) of the
Exchange Act), other than the Company, any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any
Subsidiary, or any corporation owned, directly or indirectly, by the
stockholders of the Company, in substantially the same proportions as
their ownership of stock of the Company, acquires "beneficial
ownership" (as defined in rule 13d-3 under the Exchange Act) of
securities representing 50% of the combined voting power of the
Company; or (ii) during any period of not more than two consecutive
years, individuals who at the beginning of such period constitute the
Board and any new directors (other than any director designated by a
person who has entered into an agreement with the Company to effect
transaction described in subsections 2(e)(i), 2(e)(iii), or 2(e)(iv) of
this Plan) whose election by the Board or nomination for election by
the Company's stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any
reason to constitute a majority thereof; or (iii) the stockholders of
the Company approve a merger other than (A) a merger that would result
in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity), in
combination with the ownership of any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any
Subsidiary, at least 50% of the combined voting power of all classes of
stock of the Company or such surviving entity outstanding immediately
after such merger or (B) a merger effected to implement a
recapitalization of the Company (or similar transaction) in which no
person acquires more than 50% of the combined voting power of the
Company's then outstanding securities; or (iv) the stockholders of the
Company approve a plan of complete liquidation of the Company or a sale
of all or substantially all of the assets of the Company.
<PAGE> 2
(f) "Code" means the Internal Revenue Code of 1986, as amended.
(g) "Committee means a committee of two or more Nonemployee Directors (or
such other composition of membership which shall be in compliance with the
applicable provisions of Rule 16b-3 under the Exchange Act) appointed by the
Board to administer the Plan to perform the functions set forth herein.
(h) "Company" means First Financial Bancorporation, an Iowa corporation,
or any successor thereto.
(i) "Disability" means the inability, due to illness or injury, to engage
in any gainful occupation for which the individual is suited by education,
training or experience, which condition continues for at least six (6)
months.
(j) "Eligible Employee" means any officer or employee of the Company or a
Subsidiary or Parent of the Company designated by the Committee as eligible
to receive Awards subject to the conditions set forth herein.
(k) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(l) "Executive Officer" shall mean an officer of the Company named by the
Board of Directors as an executive officer for purposes of required reporting
under Section 16 of the Exchange Act.
(m) "Fair Market Value" means the fair market value of the Shares as
determined as follows: (A) if the Shares are admitted to trading on a
national securities exchange, the Fair Market Value on any date shall be the
last sales price reported for the Shares on such exchange on such date or if
no sales of shares were reported for such date on the last date preceding
such date on which a sale was reported, (B) if the Shares are admitted to
quotation on the National Association of Securities Dealers Automated
Quotation System ("NASDAQ") or other comparable quotation system and have
been designated as a National Market System ("NMS") security, the Fair Market
Value on any date shall be the last sale price reported for the Shares on
such system on such date or if no sales of shares were reported for such date
on the last day preceding such date on which a sale was reported, (C) if the
Shares are admitted to quotation on NASDAQ and have not been designated an
NMS security, or the Shares are traded in the non-NASDAQ "over the counter"
market, the Fair Market Value on any date shall be the average of the highest
bid and lowest asked prices of the shares on such system or market on such
date, or (D) if none of the foregoing methods of determining Fair Market
Value are applicable to the Company, then the Committee in its sole
discretion shall determine the Fair Market Value using such methods as it
determines to be appropriate.
(n) "Incentive Stock Option" means an Option within the meaning of
Section 422 of the Code.
(o) "Nonemployee Director" means a member of the Board who is not an
employee of the Company or a Subsidiary and who meets the definition of
"Nonemployee Director" as set forth in Rule 16b-3 under the Exchange Act.
(p) "Nonqualified Stock Option" means an Option is not an Incentive Stock
Option.
(q) "Option" means an Incentive Stock Option, a Nonqualified Stock
Option, or either or both of them, as the context requires.
(r) "Participant" means a person to whom an Award has been granted under
the Plan.
(s) "Parent" means any corporation in an unbroken chain of corporations
ending with the Company, if each of the corporations other than the Company
owns stock possessing 50% or more of the total combined voting power of all
classes of stock of one of the other corporations in such chain.
(t) "Plan" means the First Financial Bancorporation 1997 Stock
Compensation Plan, as amended from time to time.
(u) "Securities Act" means the Securities Act of 1933, as amended.
(v) "Shares" means shares of the common stock, $1.25 par value per share,
of the Company (including any new, additional or different stock or
securities resulting from a Change in Capitalization), as the case may be.
(w) "Subsidiary" means any corporation in an unbroken chain of
corporations, beginning with the Company, if each of the corporations other
than the last corporation in the unbroken chain owns stock possessing 50% or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
(x) "Ten-Percent Stockholder" means an Eligible Employee, who, at the
time an Incentive Stock Option is to be granted to such Eligible Employee,
owns (within the meaning of Section 422(b)(6) of the Code) stock possessing
more than ten percent (10%) of the total combined voting power of all classes
of stock of the Company, a Parent or a Subsidiary within the meaning of
<PAGE> 3
Sections 424(e) and 424(f), respectively, of the Code.
3. Administration
--------------
(a) The Plan shall be administered by the Committee, which Committee
shall at all times satisfy the provisions of Rule 16b-3 under the Exchange
Act. The Committee shall hold meetings at such times as may be necessary for
the proper administration of the Plan. The Committee shall keep minutes of
its meetings. A majority of the Committee shall constitute a quorum and a
majority of a quorum may authorize any action. Any decision reduced to
writing and signed by a majority of the members of the Committee shall be
fully effective as if it had been made at a meeting duly held. No member of
the Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan and Awards, and
all members of the Committee shall be fully indemnified by the Company with
respect to any such action, determination or interpretation. The Company
shall pay all expenses incurred in the administration of the Plan.
(b) Subject to the express terms and conditions set forth herein, the
Committee shall have the power from time to time:
(i) to determine those Eligible Employees to whom Awards shall be
granted under the Plan and the number of Shares subject to such
Awards to be granted to each Eligible Employee and to prescribe the
terms and conditions (which need not be identical) of each Award,
including the purchase price per share of each Award;
(ii) to construe and interpret the Plan, the Awards granted
hereunder and to establish, amend and revoke rules and regulations
for the administration of the Plan, including, but not limited to,
correcting any defect or supplying any omission, or reconciling any
inconsistency in the Plan or in any Agreement, and (subject to the
provisions of Section 13 below) to amend the terms and conditions of
any outstanding Award to the extent such terms and conditions are
within the discretion of the Committee as provided in the Plan, in
the manner and to the extent it shall deem necessary or advisable to
make the Plan fully effective, and all decisions and determinations
by the Committee in the exercise of this power shall be final and
binding upon the Company or a Subsidiary or Parent, and the
Participants, as the case may be;
(iii) to determine the duration and purposes of leaves of absence
which may be granted to a Participant without constituting a
termination of employment or service for purposes of the Plan; and
(iv) generally, to exercise such powers and to perform such acts as
are deemed necessary or advisable to promote the best interests of
the Company with respect to the Plan.
4. Stock Subject to Plan
---------------------
(a) The maximum number of Shares that may be issued or transferred
pursuant to Awards granted under this Plan is two hundred sixty-two thousand
five hundred (262,500) (or the number and kind of shares of stock or other
securities that are substituted for those Shares or to which those Shares are
adjusted upon a Change in Capitalization), and the Company shall reserve for
the purposes of the Plan, out of its authorized but unissued Shares or out of
Shares held in the Company's treasury, or partly out of each, such number of
Shares as shall be determined by the Board.
(b) Whenever any outstanding Award or portion thereof expires, is
canceled or is otherwise terminated (other than by exercise of the Award),
the Shares allocable to the unexercised portion of such Award may again be
the subject of Awards hereunder, to the extent permitted by Rule 16b-3 under
the Exchange Act.
5. Eligibility
-----------
Subject to the provisions of the Plan, the Committee shall have full and
final authority to select those Eligible Employees who will receive Awards.
<PAGE> 4
6. Options
-------
The Committee may grant Options in accordance with the Plan, the terms and
conditions of which shall be set forth in an Agreement. Each Option and
Agreement shall be subject to the following conditions:
(a) Purchase Price. The purchase price per Share purchasable under
--------------
Options granted to Eligible Employees shall be the Fair Market Value on the
date of grant and 110% of Fair Market Value in the case of an Incentive Stock
Option granted to a Ten-Percent Stockholder.
(b) Duration. Options granted hereunder shall be for such term as the
--------
Committee shall determine; provided, however, that no Option shall be
exercisable after the expiration of ten (10) years from the date it is
granted (five (5) years in the case of an Incentive Stock Option granted to a
Ten-Percent Stockholder). The Committee may, subsequent to the granting of
any Option, extend the term thereof but in no event shall the term as so
extended exceed the maximum term provided for in the preceding sentence.
(c) Non-transferability. No Option granted hereunder shall be
-------------------
transferable by the Participant to whom such Option is granted otherwise than
by will or the laws of descent and distribution, and an Option may be
exercised during the lifetime of such Participant only by the Participant or
such Participant's guardian or legal representative. The terms of such
Option shall be binding upon the beneficiaries, executors, administrators,
heirs and successors of the Participant.
(d) Vesting. Subject to subsection 6(e) below, unless otherwise set
-------
forth in the Agreement, each Option shall become exercisable as to 25 percent
of the Shares covered by the Option on the last business day of January after
the date the Option was granted and as to an additional 25 percent of the
Shares covered by the Option on the last business day of January in each of
the following three (3) years. To the extent not exercised, installments
shall accumulate and be exercisable, in whole or in part, at any time after
becoming exercisable, but not later than the date the Option expires. The
Committee may accelerate the exercisability of any Option or portion thereof
at any time.
(e) Accelerated Vesting. Notwithstanding the provisions of subsection
-------------------
6(d) above, each Option granted to a Participant shall become immediately
exercisable in full upon the occurrence of a Change in Control.
(f) Termination of Employment. In the event that a Participant ceases to
-------------------------
be employed by the Company or any Subsidiary, any outstanding Options held by
such Participant shall, unless the Agreement evidencing such Option provides
otherwise, terminate as follows:
(i) If the Participant's termination of employment is due to his
death or Disability, the Option (to the extent exercisable at the
time of the Participant's termination of employment) shall be
exercisable for a period of one (1) year following such termination
of employment, or for the remaining portion of the original exercise
period, whichever period is less, and shall thereafter terminate; and
(ii) If the Participant's termination of employment is for any other
reason (including a Participant's ceasing to be employed by a
subsidiary as a result of the sale of such Subsidiary or an interest
in such Subsidiary), the Option (to the extent exercisable at the
time of the Participant's termination of employment) shall be
exercisable for period of three (3) months following such termination
of employment, or for the remaining portion of the original exercise
period, whichever period is less, and shall thereafter terminate.
Notwithstanding the foregoing, the Committee may provide, either at the time
an Option is granted or thereafter, that the Option may be exercised after
the periods provided for in this Section 6(f), but in no event beyond the
term of the Option.
(g) Method of Exercise. The exercise of an Option shall be made only by
------------------
a written notice delivered to the Secretary of the Company at the Company's
principal executive office, specifying the number of shares to be purchased
and accompanied by payment therefore and otherwise in accordance with the
Agreement pursuant to which the Option was granted. The purchase price for
any Shares purchased pursuant to the exercise of an Option shall be paid in
full upon such exercise in cash, by check, or, at the discretion of the
Committee and upon such terms and conditions as the Committee shall approve,
by transferring Shares to the Company or by such other method as the
Committee may determine. Any Shares transferred to the Company as payment of
<PAGE> 5
the purchase price under an Option shall be valued at their Fair Market Value
on the day preceding the date of exercise of such Option. If requested by
the Committee, the Participant shall deliver the Agreement evidencing the
Option to the Secretary of the Company who shall endorse thereon a notation
of such exercise and return such Agreement to the Participant. Not less than
100 Shares may be purchased at any time upon the exercise of an Option unless
the number of Shares so purchased constitutes the total number of Shares then
purchasable under the Option.
(h) Rights of Participants. No Participant shall be deemed for any
----------------------
purpose to be the owner of any Shares subject to any Option unless and until
(i) the Option shall have been exercised pursuant to the terms thereof, (ii)
the Company shall have issued and delivered the Shares to the Participant,
and (iii) the Participant's name shall have been entered as a stockholder of
record on the books of the Company. Thereupon, the Participant shall have
full voting, dividend and other ownership rights with respect to such Shares.
7. Loans
-----
(a) The Company or any Parent or Subsidiary may make loans to a
Participant in connection with the exercise of an Option, subject to the
following terms and conditions and such other terms and conditions not
inconsistent with the Plan including the rate of interest, if any, as the
Committee shall impose from time to time.
(b) No loan made under the Plan shall exceed the sum of (i) the aggregate
purchase price payable pursuant to the Option with respect to which the loan
is made, plus (ii) the amount of the reasonably estimated income taxes
payable by the Participant with respect to the exercise of the Option reduced
by (iii) the aggregate par value of the Shares being acquired pursuant to
exercise of the Option. In no event may any such loan exceed the Fair Market
Value, at the date of exercise, of the Shares received pursuant to such
exercise.
(c) No loan shall have an initial term exceeding ten (10) years;
provided, however, that loans under the Plan shall be renewable at the
discretion of the Committee; and provided, however, that the indebtedness
under each loan shall become due and payable, as the case may be, on a date
no later than (i) one (1) year after termination of the Participant's
employment due to death or disability, or (ii) the date of termination of the
Participant's employment for any reason other than death or disability.
(d) Loans under the plan may be satisfied by a Participant, as determined
by the Committee, in cash or, with the consent of the Committee, in whole or
in part by the transfer to the Company of Shares whose Fair Market Value on
the date of such payment is equal to part or all of the outstanding balance
of such loan.
(e) A loan shall be secured by a pledge of Shares with a Fair Market
Value of not less than the principal amount of the loan. After any repayment
of a loan, pledged Shares no longer required as security may be released to
the Participant.
(f) Every loan shall meet all applicable laws, regulations and rules of
the Federal Reserve Board and any other governmental agency having
jurisdiction.
8. Adjustment Upon Changes in Capitalization
-----------------------------------------
(a) In the event of a Change of Capitalization, the Committee shall
conclusively determine the appropriate adjustments, if any, to the maximum
number and class of shares of stock with respect to which Awards may be
granted under the Plan, and to the number and class of shares of stock as to
which Awards have been granted under the Plan, and the purchase price
thereof, if applicable.
(b) Any such adjustment in the Shares or other securities subject to
outstanding Incentive Stock Options (including any adjustments in the
purchase price) shall be made in such manner as not to constitute a
modification as defined by Section 424(h)(3) of the Code and only to the
extent otherwise permitted by Sections 422 and 424 of the Code.
9. Nonemployee Director Options
----------------------------
Notwithstanding any of the other provisions of the Plan to the contrary, the
provisions of this Section 9 shall apply only to grants of Options to
Nonemployee Directors. Except as set forth in this Section 9, the other
provisions of the Plan shall apply to grants of Options to Nonemployee
Directors to the extent not inconsistent with this Section. For purposes of
interpreting Section 6 of this Plan, a
<PAGE> 6
Nonemployee Director's service as a member of the Board shall be deemed to be
employment with the Company or its Subsidiaries.
(a) General. Nonemployee Directors shall receive Nonqualified Stock
-------
Options in accordance with this Section 9 and may not be granted Incentive
Stock Options under this Plan. The purchase price per Share purchasable
under Options granted to Nonemployee Directors shall be the Fair Market Value
of a Share on the date of grant. Options to Nonemployee Directors shall be
granted by the Board. The maximum number of Options that may be awarded to
any Nonemployee Director in any calendar year shall not exceed one thousand
five hundred (1,050) Shares and the maximum number of Shares that may be
issued or transferred pursuant to Awards under this plan to Nonemployee
Directors is ninety thousand (90,000) (or the number and kind of shares of
stocks or other securities that are substituted for those Shares or to which
those Shares are adjusted upon a Change in Capitalization) (the 90,000 shares
being a part of, and not in addition to, the total of two hundred sixty-two
thousand five hundred (262,500) Shares authorized under subsection 4(a)).
(b) Initial Grant. Grants of options under this Section 9 may be made
-------------
beginning on the Effective Date of this Plan.
(c) Vesting. Subject to accelerated vesting pursuant to Section 6(e)
-------
hereof, each Option granted to Nonemployee Directors shall be exercisable as
to twenty-five percent (25%) of the Shares covered by the Option on the last
business day of January following the date of grant and as to an additional
twenty-five percent (25%) of the Shares covered by the Option on the last
business day of January in each of the following three (3) years. To the
extent not exercised, installments shall accumulate and be exercisable, in
whole or in part, at any time after becoming exercisable. Section 6(d) of
this Plan shall not apply to Options granted to Nonemployee Directors.
(d) Duration. Subject to the provisions of Section 6(f) hereof, each
--------
Option granted to a Nonemployee Director shall be for a term of ten (10)
years. The Committee may not provide for an extended exercise period beyond
the periods set forth in this Section 9(d) by the terms of any Agreement
evidencing Options or otherwise.
10. Release of Financial Information
--------------------------------
A copy of the Company's annul report to stockholders shall be delivered to
each Participant if and at the time any such report is distributed to the
Company's stockholders. Upon request, by any Participant, the Company shall
furnish to such Participant a copy of its most recent annual report and each
quarterly report and current report filed under the Exchange Act since the
end of the Company's prior fiscal year.
11. Termination and Amendment of the Plan
-------------------------------------
The Plan shall terminate on the day preceding the seventh anniversary of its
effective date, except with respect to Awards outstanding on such date, and
no Awards may be granted thereafter. The Board may sooner terminate or amend
the Plan at any time, and from time to time; provided, however, that, except
as provided in Section 8 hereof, no amendment shall be effective unless
approved by the stockholders of the Company where stockholder approval of
such amendment is required (a) to comply with Rule 16b-3 under the Exchange
Act or (b) to comply with any other law, regulation or stock exchange rule.
Notwithstanding anything in this Section 11 to the contrary, subsequent to
the registration of a class of equity securities of the Company under Section
12 of the Exchange Act, Section 9 relating to Options for Nonemployee
Directors shall not be amended more than once in any six-month period, other
than to comport with changes in the Code, the Employee Retirement Income
Security Act of 1974, as amended, or the rules or regulations thereunder.
Except as provided in Section 8 hereof, rights and obligations under any
Award granted before any amendment of the Plan shall not be adversely altered
or impaired by such amendment, except with the consent of the Participant.
12. Non-Exclusivity of the Plan
---------------------------
The adoption of the Plan by the Board shall not be construed as amending,
modifying or rescinding any previously approved incentive arrangement or as
creating any limitations on the power of the Board to adopt such other
incentive arrangements as it may deem desirable,
<PAGE> 7
including, without limitation, the granting of stock options otherwise than
under the Plan, and such arrangements may be either applicable generally or
only in specific cases.
13. Limitation of Liability
-----------------------
As illustrative of the limitations of liability of the Company, but not
intended to be exhaustive thereof, nothing in the Plan shall be construed to:
(a) give any employee any right to be granted an Award other than at the
sole discretion of the Committee;
(b) give any person any rights whatsoever with respect to Shares except
as specifically provided in the Plan;
(c) limit in any way the right of the Company or its Parent or
Subsidiaries to terminate the employment of any person at any time; or
(d) be evidence of any agreement or understanding, expressed or implied,
that the Company, its Parent or Subsidiaries, will employ any person in any
particular position, at any particular rate of compensation or for any
particular period of time.
14. Regulations and Other Approvals; Governing Law
----------------------------------------------
(a) This Plan and the rights of all persons claiming hereunder shall be
construed and determined in accordance with the laws of the State of Iowa.
(b) The obligation of the Company to sell or deliver Shares with respect
to Options granted under the Plan shall be subject to all applicable laws,
rules and regulations, including all applicable federal and state securities
laws, and the obtaining of all such approvals by governmental agencies as may
be deemed necessary or appropriate by the Committee.
(c) Any provisions of the Plan inconsistent with Rule 16b-3 under
Exchange Act shall be inoperative and shall not affect the validity of the
Plan.
(d) Except as otherwise provided in Section 11, the Board may make such
changes as may be necessary or appropriate to comply with the rules and
regulations of any government authority or to obtain for Participants granted
Incentive Stock Options, the tax benefits under the applicable provisions of
the Code and regulations promulgated thereunder.
(e) Each Award is subject to the requirement that, if at any time the
Committee determines, in its absolute discretion, that the listing,
registration or qualification of Shares issuable pursuant to the Plan is
required by any securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with, the grant of an Award or
the issuance of Shares, no Awards shall be granted or payment made or Shares
issued, in whole or in part, unless listing, registration, qualification,
consent or approval has been effected or obtained free of any conditions as
acceptable to the Committee.
(f) In the event that the disposition of Shares acquired pursuant to the
Plan is not covered by a then current registration statement under the
Securities Act and is not otherwise exempt from such registration, such
Shares shall be restricted against transfer to the extent required by the
Securities Act or regulations thereunder, and the Committee may require a
Participant receiving Shares pursuant to the Plan, as a condition precedent
to receipt of such Shares, to represent to the Company in writing that the
Shares acquired by such Participant are acquired for investment only and not
with a view to distribution.
15. Miscellaneous
-------------
(a) Multiple Agreements. The terms of each Award may differ from other
-------------------
Awards granted under the Plan at the same time, or at any other time. The
Committee may also grant more than one Award to a given Participant during
the term of the Plan, either in addition to, or in substitution for, one or
more Awards previously granted to that Participant. The grant of multiple
Awards may be evidenced by a single Agreement or multiple Agreements, as
determined by the Committee.
(b) Withholding of Taxes. The Company shall have the right to deduct
--------------------
from any payment of cash to any Participant an amount equal to the federal,
state and local income taxes and other amounts required by law to be withheld
with respect to any Award. Notwithstanding anything to the contrary
contained herein, if a Participant is entitled to receive Shares upon
exercise of an Option,
<PAGE> 8
the Company shall have the right to require such Participant, prior to the
delivery of such Shares, to pay to the Company the amount of any federal,
state or local income taxes and other amounts that the Company is required by
law to withhold. Participants may elect, subject to the approval of the
Committee, to satisfy the withholding requirement, in whole or in part, by
having the Company withhold Shares having a Fair Market Value, on the date the
tax is to be determined, equal to the amount required to be withheld. All
elections shall be irrevocable, and be made in writing, signed by the
Participant in advance of the day that the transaction becomes taxable. The
Agreement evidencing any Incentive Stock Options granted under this Plan shall
provide that if the Participant makes a disposition, within the meaning of
Section 424(c) of the Code and regulations promulgated thereunder, of any
Share or Shares issued to such Participant pursuant to such Participant's
exercise of the Incentive Stock Option, and such disposition occurs within the
two-year period commencing on the day after the date of grant of such Option
or within the one-year period commencing on the day after the date of transfer
of the Share or Shares to the Participant pursuant to the exercise of such
Option, such Participant shall, within ten (10) days of such disposition,
notify the Company thereof and thereafter immediately deliver to the Company
any amount of federal, state or local income taxes and other amounts that the
Company informs the Participant the Company is required to withhold.
(c) Designation of Beneficiary. Each Participant may, with the consent
--------------------------
of the Committee, designate a person or persons to receive in the event of
such Participant's death, any Award or any amount of Shares payable pursuant
thereto, to which such Participant would then be entitled. Such designation
shall be made upon forms supplied by and delivered to the Company and may be
revoked or changed in writing. In the event of the death of a Participant
and in the absence of a beneficiary validly designated under the Plan who is
living at the time of such Participant's death, the Company shall deliver
such Options, and/or amounts payable to the executor or administrator of the
estate of the Participant, or if no such executor or administrator has been
appointed (to the knowledge of the Company), the Company, in its discretion,
may deliver such Options, and/or amounts payable to the spouse or to any one
or more dependents or relatives of the Participant, or if no spouse,
dependent or relative is known to the Company, then to such other person as
the Company may designate.
(d) Gender and Number. Except where otherwise indicated by the context,
-----------------
any masculine term used herein also shall include the feminine; the plural
shall include the singular and the singular shall include the plural.
(e) Severability. In the event any provision of the Plan shall be held
------------
illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.
(f) Successors. All obligations of the Company under the Plan, with
----------
respect to Awards granted hereunder, shall be binding on any successor to the
Company, whether the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business and/or assets of the Company.
16. Effective Date
--------------
The effective date of the Plan shall be the date it is adopted by the
shareholders of the Company.
