MERCANTILE BANCORPORATION INC
S-8 POS, 1998-08-04
NATIONAL COMMERCIAL BANKS
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<PAGE> 1
      As Filed With the Securities and Exchange Commission on August 4, 1998
                                                      Registration No. 333-56639
================================================================================
                         SECURITIES AND EXCHANGE COMMISSION
                              Washington, D. C. 20549

                                  AMENDMENT NO. 1
                                 (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)

                   FINANCIAL SERVICES CORPORATION OF THE MIDWEST
             1996 COMBINED INCENTIVE AND NONSTATUTORY STOCK OPTION 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    aggregate offering price    registration fee
                                                            unit
- --------------------------------------------------------------------------------------------------------------------------
<S>                                   <C>            <C>                       <C>                       <C>
Common Stock, $0.01 par value<F1>       5,485               N/A                      N/A                     <F2>
==========================================================================================================================

<FN>
<F1>  Includes one attached Preferred Share Purchase Right per share.
<F2>  The registrant previously paid $10,284.90 with the original filing
      on June 11, 1998 to register 2,077,000 shares of Mercantile
      Bancorporation Inc. Common Stock, including the 5,485 shares
      which may be issued pursuant to the Financial Services
      Corporation of the Midwest 1996 Combined Incentive and
      Nonstatutory Stock Option 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 5,485
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.
333-56639) incorporated herein by reference, for issuance pursuant to options
granted under the Financial Services Corporation of the Midwest 1996 Combined
Incentive and Nonstatutory Stock Option Plan (the "Plan"), pursuant to the
terms and conditions of the Agreement and Plan of Merger dated April 13, 1998
by and among the Company, Ameribanc, Inc. and Financial Services Corporation
of the Midwest (such transaction was consummated on August 3, 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, 1997, as amended by Form 10-K/A.

            (b)   MBI's Quarterly Reports on Form 10-Q for the quarter ended
                  March 31, 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 8-A,
                  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 Plans 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 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.

            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 $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. 1 to the Registration Statement (File No.
333-56639) to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of St. Louis, State of Missouri, on the 4th day of
August 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. 1 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,              August 4, 1998
- --------------------------------    President and Chief Executive
Thomas H. Jacobsen                  Officer
Principal Executive Officer


/s/ John W. McClure                 Vice Chairman and                   August 4, 1998
- --------------------------------    Chief Financial Officer
John W. McClure
Principal Financial Officer


/s/ Michael T. Normile              Senior Vice President - Finance     August 4, 1998
- --------------------------------    and Control
Michael T. Normile
Principal Accounting Officer

                                    -5-
<PAGE> 6


             <F*>                   Director                            August 4, 1998
- --------------------------------
Richard E. Beumer


                                    Director                            August 4, 1998
- --------------------------------
Harry M. Cornell, Jr.


             <F*>                   Director                            August 4, 1998
- --------------------------------
Dr. Henry Givens, Jr.


             <F*>                   Director                            August 4, 1998
- --------------------------------
William A. Hall


             <F*>                   Director                            August 4, 1998
- --------------------------------
Thomas A. Hays


             <F*>                   Director                            August 4, 1998
- --------------------------------
Frank Lyon, Jr.


             <F*>                   Director                            August 4, 1998
- --------------------------------
Robert W. Murray


             <F*>                   Director                            August 4, 1998
- --------------------------------
Harvey Saligman


             <F*>                   Director                            August 4, 1998
- --------------------------------
Craig D. Schnuck


                                    Director                            August 4, 1998
- --------------------------------
Alvin J. Siteman


             <F*>                   Director                            August 4, 1998
- --------------------------------
Robert L. Stark


             <F*>                   Director                            August 4, 1998
- --------------------------------
Patrick T. Stokes

                                    -6-
<PAGE> 7


             <F*>                   Director                            August 4, 1998
- --------------------------------
John A. Wright


                                    <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.
</TABLE>

                                    -7-
<PAGE> 8

<TABLE>
                                   EXHIBIT INDEX
                                   -------------
<CAPTION>
  Exhibit No.
  -----------
<C>             <S>
      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 1 to the Company's Registration Statement on Form 8-A,
                dated May 27, 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      Financial Services Corporation of the Midwest 1996 Combined
                Incentive and Nonstatutory Stock Option Plan.

<FN>
- --------------------
<F*>previously filed on June 11, 1998.
</TABLE>


                                    -8-

<PAGE> 1
                        [letterhead of Thompson Coburn]





                              August 4, 1998

Mercantile Bancorporation Inc.
P.O. Box 524
St. Louis, Missouri  63166-0524

      Re:   Amendment No. 1 on Form S-8 to Form S-4 - 5,485 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. 333-56639) filed by Mercantile Bancorporation Inc. (the "Company")
on August 4, 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 5,485 shares of
the Company's common stock, $0.01 par value (the "Shares"), pursuant to the
Financial Services Corporation of the Midwest 1996 Combined Incentive and
Nonstatutory Stock Option Plan (the "Plan"), pursuant to the terms and
conditions of the Agreement and Plan of Merger, dated April 13, 1998, by and
by and among the Company, Ameribanc, Inc. and Financial Services Corporation
of the Midwest (such transaction was consummated on August 3, 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. 333-56639) 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 August 4, 1998.


                                            /s/ KPMG Peat Marwick LLP

St. Louis, Missouri
August 4, 1998




<PAGE> 1



                   FINANCIAL SERVICES CORPORATION OF THE MIDWEST

             1996 COMBINED INCENTIVE AND NONSTATUTORY STOCK OPTION PLAN

                  -----------------------------------------------

                                     ARTICLE I.
                                      GENERAL


I.1   DEFINITIONS.  As used in this Financial Services Corporation of the
      -----------
Midwest 1996 Combined Incentive and Nonstatutory Stock Option Plan, the
following definitions shall apply:

      A.    "ACCELERATION EVENT" means (i) any liquidation, dissolution
             ------------------
      or sale of all or substantially all of the assets of the Company,
      (ii) any merger of the Company into another corporation where
      the Company is not the survivor thereof, (iii) any transaction
      involving transfer of Company securities representing greater
      than 50 percent of the voting power of all issued and
      outstanding securities of the Company, or (iv) any other event
      which, in the opinion of the Board of Directors, is likely to
      lead to a change in control of the Company, whether or not
      such change in control actually occurs.

      B.    "AFFILIATE" means any "parent corporation" or "subsidiary
             ---------
      corporation" of the Company, as those terms are defined in
      Sections 424(e) 424(f) of the Code.

      C.    "BOARD OF DIRECTORS" means the Board of Directors of the Company.
             ------------------

      D.    "CODE" means the Internal Revenue Code of 1986, as amended.
             ----

      E.    "COMMON STOCK" means the common capital stock, par value $0.50
             ------------
      per share, of the Company.

      F.    "COMPANY" means Financial Services Corporation of the Midwest, a
             -------
      Delaware corporation.

      G.    "FAIR MARKET VALUE" means the value of the Common Stock
             -----------------
      determined by the Board of Directors, taking into consideration those
      factors affecting or reflecting the value of the Common Stock which
      they deem appropriate.

      H.    "INCENTIVE STOCK OPTION" means an Option to purchase shares of
             ----------------------
      Common Stock which is intended to qualify as an incentive
      stock option as defined in Section 422 of the Code.

      I.    "NON-STATUTORY OPTION" means an Option which is not an Incentive
             --------------------
      Stock Option.

      J.    "OPTION" means an Incentive Stock Option or a Non-Statutory
             ------
      Option.

      K.    "OPTION AGREEMENT" means the formal written agreement to be
             ----------------
      entered into by and between the Company and the Optionee which
      will contain the specific terms and conditions upon which an
      Option is granted to an Optionee, as determined by the Board
      of Directors.


<PAGE> 2
      L.    "OPTIONEE" means a holder of an Option granted pursuant to the
             --------
      Plan.

      M.    "PLAN" means the Financial Services Corporation of the Midwest
             ----
      1996 Combined Incentive and Nonstatutory Stock Option Plan
      outlined herein.

      N.    "SHAREHOLDERS" means the holders of outstanding shares of the
             ------------
      Company's Common Stock.

I.2   PURPOSE.  The purpose of the Plan is to promote the growth and general
      -------
prosperity of the Company and its Affiliates by permitting the Company to
grant Options to employees, officers, members of the Board of Directors and
others, thereby assisting the Company in its efforts to attract and retain
the best available persons for positions of substantial responsibility, and
to provide employees, officers, members of the Board of Directors and others
an additional incentive to contribute, by the performance of services, to the
future success of the Company and its Affiliates.

I.3   ADMINISTRATION.  Except as otherwise provided for in this Plan, the
      --------------
Plan shall be administered by the Board of Directors or any appropriately
appointed committee thereof.  Subject to the provisions of this Plan, the
Board of Directors shall have sole authority to do everything necessary or
appropriate to administer the Plan, including, without limitation,
interpreting the Plan.  All decisions, determinations and interpretations of
the Board of Directors regarding the Plan shall be final and binding on all
Optionees.  The day to day administrative duties for the Plan may be
delegated by the Board of Directors to one or more executive officers or
other employees of the Company.  All actions authorized to be taken by the
Board of Directors under this Plan may as well be taken by any appropriately
appointed committee thereof.

I.4   TERM OF THE PLAN.  The Plan was adopted by the Board of Directors on
      ----------------
July 25, 1996, and shall continue in effect for the grant of Options for ten
(10) years until July 25, 2006, unless sooner terminated under Section 1.10
hereof.  Any Option under the Plan must be granted on or prior to July 25,
2006.   The expiration of the term of the Plan with respect to any Options
granted under the Plan shall not affect Options then outstanding which have
not yet expired.

I.5   STOCK TO BE OPTIONED.  The maximum number of shares which may be
      --------------------
optioned and sold under the Plan is 20,000 shares of the Common Stock.
Shares subject to Options which terminate or expire prior to exercise shall
be available for future Options.

I.6   GRANTING OF OPTIONS.  The Board of Directors shall have the authority
      -------------------
to grant Options and to determine, among other things, who shall receive
Options, the time when Options shall be granted, the number of shares to be
optioned and the vesting schedule for the Options.  Each Option shall be
granted pursuant to a formal written Option Agreement to be entered into by
and between the Company and the Optionee, which Option Agreement shall be in
such form as the Board of Directors may deem appropriate.

I.7   EXERCISE PRICE.  Except as provided in Section 3.3, and subject to
      --------------
Section 2.4, the exercise price of an Option shall not be less than the
greater of (i) One Hundred and 00/100 Dollars ($100.00) per share or (ii) the
Fair Market Value (as determined by the Board of Directors) of the Common
Stock at the time the Option is granted, and Incentive Stock Options granted
on the same date shall have the same exercise price.  Should it be determined
that any Option was not issued with an exercise price at least equal to the
Fair Market Value of the Common Stock on the date of grant, such Option shall
remain nevertheless valid and in full force and effect.

                                    -2-
<PAGE> 3

I.8   OPTIONS NOT TRANSFERABLE.  Options are not transferable in any manner
      ------------------------
except by will or the laws of descent and distribution, and during the
lifetime of each Optionee shall be exercisable only by such Optionee.  In the
event of an Optionee's death, such Optionee's Option shall pass by will or
the laws of descent and distribution and may thereafter be exercised only by
such Optionee's personal representative, distributees or legatees, as the
case may be, to the extent determined by the Board of Directors at the time
of grant of the Option as shall be indicated in the Option Agreement
evidencing the grant of such Option.

I.9   ELIGIBLE OPTIONEES.  Incentive Stock Options may be issued to any
      ------------------
employees of the Company or any Affiliate, including, among others, employees
who are officers of the Company and/or members of the Board of Directors.  In
addition, Non-Statutory Options may be granted to either employees or
non-employees, including persons who are, at the time of such grant, members
of the Board of Directors or persons who are deemed by the Board of Directors
to be important to the future success of the Company or its Affiliates,
including, but not limited to, independent contractors to the Company or its
Affiliates, even though such persons are not then employees of the Company.

I.10  AMENDMENT OR TERMINATION OF THE PLAN.
      ------------------------------------

      A.    Except as provided in Section 1.10(c) below, notwithstanding
      anything to the contrary contained herein, the Board of Directors
      may amend the Plan from time to time in such respects as the Board
      of Directors may deem advisable, including, without limitation, the
      right to amend the Plan so as to affect Options already granted,
      other than to increase the Option price of Options already granted
      and/or other than to decrease or terminate the Options already
      granted.

      B.    The Board of Directors may at any time terminate the Plan.  Any
      such termination of the Plan shall not affect Options already
      granted, and such Options shall remain in full force and effect as
      if the Plan had not been terminated.

      C.    In the event of the occurrence of an Acceleration Event, the
      Board of Directors may elect to terminate all of the Options
      outstanding under the Plan as of the effective date of the
      Acceleration Event, provided that each of the following conditions
      are met:

            I.    Each Optionee shall be given at least thirty (30) calendar
            days written notice of such termination, which notice shall
            include an explanation of the rights of the Optionee as
            indicated below, and shall additionally describe in reasonable
            detail the relevant terms and conditions of the Acceleration
            Event, including the anticipated effective date of the
            Acceleration Event ("Acceleration Event Notice").

            II.   Upon receipt by an Optionee of the Acceleration Event
            Notice, assuming occurrence of the Acceleration Event, all
            Options held by the Optionee shall have their vesting
            accelerated and be exercisable in full.  Unless otherwise
            determined by the Board of Directors: (A) each Option held by
            the Optionee may thereafter be exercised only by the Optionee
            providing written notice to the Company at least fifteen (15)
            days prior to the anticipated effective date for the
            Acceleration Event specified in the Acceleration Event Notice,
            specifically stating the extent to which the Optionee will
            exercise the Option (the "15-Day Exercise Notice"); (B) any
            such exercise shall be further accomplished by the Optionee
            complying with the requirements of Section 1.13 of this Plan
            and shall be effective as of the actual effective date of the
            Acceleration Event; (C) if no 15-Day Exercise Notice is
            provided by the Optionee to the Company, assuming occurrence
            of the

                                    -3-
<PAGE> 4
            Acceleration Event, the Optionee shall have no right, and
            shall be presumed to have waived any right, to any further
            exercise of the Option; and (D) at 12:01 a.m. on the actual
            effective date of the Acceleration Event, the Option (to the
            extent not previously exercised) shall terminate.

            III.  Notwithstanding the provisions of Section 1.13 of this Plan
            (assuming an Optionee does not engage in a "cashless" exercise
            of his/her Option), payment in full of the Exercise Price
            shall not be required to be delivered in connection with
            delivery of the 15-Day Exercise Notice, but instead shall be
            required to be paid in full on the effective date of the
            Acceleration Event.

            IV.   If the anticipated Acceleration Event does not occur, the
            rights and obligations of all Optionees and the Company shall
            be as though the Acceleration Event Notice was never provided
            and any exercise of Options by Optionees pursuant to delivery
            of 15-Day Exercise Notices had never occurred, including, but
            not limited to, that (A) the vesting schedule for all Options
            shall be as otherwise provided in their respective stock
            option agreements, (B) any exercise of Options by Optionees
            pursuant to delivery of 15-Day Exercise Notices shall be void
            and of no effect, and (C) any shares issued to Optionees as a
            result of delivery of 15-Day Exercise Notices shall be
            considered cancelled and all certificates relating thereto
            immediately returned to the Company.

I.11  ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.  If an Optionee exercises
      ------------------------------------------
all or any portion of an Option subsequent to any change in the number of
outstanding shares of Common Stock of the Company occurring by reason of any
stock dividend, stock split, reverse stock split or other similar
recapitalization of the Company, there shall be an appropriate adjustment to
the number of shares of Common Stock underlying the Option so that the
Optionee shall then receive for the aggregate price paid by him on such
exercise of an Option the number of shares which he would have held at the
time of such exercise if such Option had been exercised to the same extent
prior to such stock dividend, stock split, reverse stock split or other
similar recapitalization.  Notwithstanding the foregoing, no fractional
shares shall be issued or paid for.

I.12  AGREEMENT AND REPRESENTATIONS OF OPTIONEE.  As a condition to the
      -----------------------------------------
exercise of any portion of an Option, the Optionee must represent and agree
that any and all shares of Common Stock purchased under an Option will be
acquired for investment and not for resale.  The Company may restrict the
transfer of the shares of Common Stock purchased and affix a legend to the
certificate representing such shares, stating that such shares may not be
transferred without (i) an opinion of counsel satisfactory to the Company
that the proposed transfer may lawfully be made without registration under
the federal Securities Act of 1933 and registration, notice or approval under
any applicable state securities laws, or (ii) such applicable
registration(s), notice(s) and approval(s).

I.13  EXERCISE OF OPTIONS.  Options can be exercised only by Optionees or
      -------------------
other proper parties delivering written notice to the Company at its
principal office within the Option period, stating the number of shares as to
which the Option is being exercised and accompanied by payment in full of the
Exercise Price for all shares designated in the notice (subject to the
possible inclusion of a "cashless" exercise provision in the Option
Agreement, in the discretion of the Board of Directors).  The Exercise Price
shall be paid in cash or by certified or cashier's check or, with the prior
written consent of the Company, by surrender to the Company of previously
acquired shares of Common Stock, such shares to be credited against the
Exercise Price based upon the fair market value thereof on the date of
exercise, as determined by the

                                    -4-
<PAGE> 5
Board of Directors.  Such notice shall further contain a representation that
such shares are being acquired for investment and not for resale.  The
Company shall then cause a certificate or certificates for such shares to be
delivered within a reasonable period.

                                    ARTICLE II.
                              INCENTIVE STOCK OPTIONS

II.1  TERM OF INCENTIVE STOCK OPTIONS.  Each Incentive Stock Option granted
      -------------------------------
under the Plan shall be exercisable only during the term for such Incentive
Stock Option as fixed by the Board of Directors; provided, however, that this
term may be no longer than 10 years from the date of grant (subject to
Section 2.4 below).

II.2  TERMINATION OF EMPLOYMENT.  Subject to the discretion of the Board of
      -------------------------
Directors to determine otherwise at the time of grant of the Incentive Stock
Option, upon termination of an Optionee's employment with the Company or an
Affiliate, whether such termination is due to death, voluntary termination,
involuntary termination or otherwise: (i) all Incentive Stock Options held by
the Optionee may thereafter be exercised only to the extent the Optionee was
entitled to exercise such Incentive Stock Options as of the date of such
termination of employment; (ii) and all Incentive Stock Options held by the
Optionee shall terminate three (3) months after the effective date of any
such termination of employment.

II.3  LIMIT ON EXERCISE.  The aggregate Fair Market Value, determined as of
      -----------------
the time the Incentive Stock Option is granted, of the shares of Common Stock
with respect to which Incentive Stock Options are exercisable for the first
time by an Optionee during any calendar year under the Plan, and any other
incentive stock option plan of the Company or an Affiliate under Section 422
of the Code, shall not exceed $100,000.  To the extent an Incentive Stock
Option exceeds this $100,000 limit, the portion of the Incentive Stock Option
in excess of such limit shall be deemed a Non-Statutory Option.

II.4  SPECIAL RULE FOR TEN PERCENT SHAREHOLDER.  If, at the time an Incentive
      ----------------------------------------
Stock Option is granted, an employee owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of
the Company or its Affiliates, as determined using the attribution rules of
Section 424(d) of the Code, then the terms of the Incentive Stock Option
shall specify that the option exercise price shall not be less than the
greater of (i) $100.00 per share or (ii) 110% of the Fair Market Value of the
Common Stock at the time the Option is granted, and that the term of such
Incentive Stock Option may be no longer than five (5) years from the date
such Incentive Stock Option is granted.

II.5  FAILURE TO MEET REQUIREMENTS.  In the event that an Option is granted
      ----------------------------
as an Incentive Stock Option but, for whatever reason, part or all of the
Option fails to meet all requirements to qualify as an Incentive Stock
Option, the Option shall nevertheless continue to be issued and valid except
that portion of the Option which does not qualify as an Incentive Stock
Option shall be deemed a Non-Statutory Option.

                                    ARTICLE III.
                               NON-STATUTORY OPTIONS

III.1 TERM OF NON-STATUTORY OPTIONS.  Each Non-Statutory Option granted under
      -----------------------------
the Plan shall be exercisable only during the term for such Non-Statutory
Option as fixed by the Board of Directors.

III.2 TERMINATION OF RELATIONSHIP.  Subject to the discretion of the Board of
      ---------------------------

                                    -5-
<PAGE> 6
Directors to provide for otherwise at the time of grant of the Non-Statutory
Option, upon termination (as determined solely by the Board of Directors) of
the relationship between an Optionee and the Company (or the Affiliate, as
the case may be), whether such relationship consisted of such Optionee
serving as an employee of, a member of the Board of Directors of, or an
independent contractor providing services to the Company (or the Affiliate):
(i) all Non-Statutory Options held by the Optionee may thereafter be
exercised only to the extent the Optionee was entitled to exercise such
Non-Statutory Options as of the date of such relationship termination; and
(ii) all Non-Statutory Options held by the Optionee shall terminate three (3)
months after the effective date of any such relationship termination.

III.3 EXERCISE PRICE.  The Company may elect to grant Non-Statutory Options
      --------------
at a price less than the Fair Market Value of the Common Stock at the time
the Option is granted so long as the exercise price is equal to or greater
than $100.00 per share.

                                    ARTICLE IV.
                               ADDITIONAL PROVISIONS

IV.1  STOCKHOLDER APPROVAL.  The Plan shall be submitted for the approval of
      --------------------
the stockholders of the Company at the first meeting of stockholders held
subsequent to the adoption of the Plan and in all events within one year of
its approval by the Board of Directors.  If at said meeting the stockholders
of the Company do not approve the Plan, the Plan shall terminate.

IV.2  NO RIGHTS AS SHAREHOLDER.  No Optionee shall have any rights as a
      ------------------------
shareholder with respect to any shares subject to his or her Option prior to
the date of issuance to him or her of a certificate or certificates for such
shares.

IV.3  WITHHOLDING.  Whenever the Company proposes or is required to issue or
      -----------
transfer shares of Common Stock under the Plan, the Company shall have the
right to require the Optionee to remit to the Company an amount sufficient to
satisfy any federal, state or local withholding tax liability prior to the
delivery of any certificate or certificates for such shares.  Whenever under
the Plan payments are to be made in cash, such payments shall be made net of
an amount sufficient to satisfy any federal, state, or local withholding tax
liability.

IV.4  RESERVATION OF SHARES OF COMMON STOCK.  The Company, during the term of
      -------------------------------------
the Plan and all Options issued under the Plan, will at all times reserve and
keep available, and will use its commercially reasonable best efforts to seek
or obtain approval from any regulatory body having jurisdiction over the
transactions contemplated by this Plan necessary in order to issue and sell,
such number of shares of Common Stock as shall be sufficient to satisfy the
requirements of the Plan.

IV.5  INCOME TAX TREATMENT.  Government jurisdiction, income reporting and
      --------------------
tax withholding requirements will be complied with by the Company whenever
the Options are exercised and any income tax payment and any income tax
prepayment requirements (including any tax withholding requirements imposed
upon the Company) will be effectively borne by the Optionee.  SINCE FEDERAL
INCOME TAX LAW IS SUBJECT TO CHANGE AND INCOME TAX LAWS VARY FROM STATE TO
STATE, THE COMPANY STRONGLY RECOMMENDS THAT OPTIONEES CONSULT WITH THEIR
INDIVIDUAL TAX ADVISORS PRIOR TO EXERCISE OF AN OPTION.

IV.6  EXCEPTIONS TO TERMINATION OF EMPLOYMENT.  Whether military, government
      ---------------------------------------
or other service or other leave of absence shall constitute a termination of
employment shall be determined in each case by the Board of Directors at its
discretion, and any

                                    -6-
<PAGE> 7
determination by the Board of Directors shall be final and conclusive.  A
termination of employment shall not occur where the Optionee transfers from
the Company to one of its Affiliates or transfers from an Affiliate to the
Company or another Affiliate.

IV.7  NO RIGHT TO CONTINUED EMPLOYMENT.  Agreements entered into in
      --------------------------------
accordance with the Plan shall not confer on Optionees any right to
continuance of employment by or with the Company or its Affiliates, nor shall
such agreements interfere in any way with the Optionee's or the Company's
right to terminate such employment at any time for any reason or no reason.

IV.8  SUCCESSORS AND ASSIGNS.  Agreements entered into in accordance with the
      ----------------------
Plan shall be binding upon the heirs, successors and assigns of the Company
and the Optionees.

IV.9  ILLINOIS LAW.  Agreements entered into in accordance with the Plan
      ------------
shall be construed according to the laws of the State of Illinois, U.S.A.

IV.10 REGULATORY APPROVAL.  All obligations of the Company to issue shares of
      -------------------
the Common Stock in connection with the exercise of Options shall be subject
to the ability of the Company to obtain necessary approvals from state and/or
federal regulatory agencies, and any time frames relating to the purchase of
stock by the Company (or its assigns) from an Optionee (as may be provided in
the stock option agreements evidencing the grant of Options) shall be
extended as reasonably necessary to allow the Company (or its assigns) to
obtain necessary approvals from state and/or federal regulatory agencies.

                                    -7-


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