Registration No. 333-46837
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
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POST-EFFECTIVE AMENDMENT NO. 1
ON
FORM S-8
TO
REGISTRATION STATEMENT ON FORM S-4
UNDER
THE SECURITIES ACT OF 1933
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CNB BANCSHARES, INC.
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(Exact Name of Registrant as Specified in Charter)
Indiana 35-1568731
- -------------------------- ------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
20 N.W. Third Street, Evansville, Indiana 47739 (812) 456-3400
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(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
INDIANA FEDERAL CORPORATION 1986 STOCK OPTION AND INCENTIVE PLAN
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(Full title of plan)
-----------------------------------------
JOHN R. SPRUILL
Executive Vice President and Chief Financial Officer
CNB Bancshares, Inc.
20 N.W. Third Street
Evansville, Indiana 47739
(812) 456-3400
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(Name, address, including zip code,
and telephone number, including
area code, of agent for service)
Copies to:
THOMAS C. ERB, Esq.
Lewis, Rice & Fingersh, L.C.
500 North Broadway
St. Louis, Missouri 63102
(314) 444-7600
This Post-Effective Amendment No. 1 covers shares of the Registrants' Common
Stock originally registered on the Registration Statement on Form S-4 to which
this is an amendment. The registration fees in respect of such shares of Common
Stock were paid at the time of the original filing of the Registration Statement
on Form S-4 relating thereto.
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PART I - INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
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The documents constituting a Prospectus (a "Prospectus") with respect to
this Post-Effective Amendment No. 1 on Form S-8 to the Registration Statement on
Form S-4 of CNB Bancshares, Inc. (the "Registrant") are kept on file at the
offices of the Registrant in accordance with Rule 428 promulgated pursuant to
the Securities Act of 1933, as amended (the "Securities Act"). The Registrant
will provide without charge to participants in the Indiana Federal Corporation
1986 Stock Option and Incentive Plan, on the written or oral request of any such
person, a copy of any or all of the documents constituting a Prospectus.
Written requests for such copies should be directed to Ms. Kathryn P. Williams,
CNB Bancshares, Inc., 20 N.W. Third Street, Evansville, Indiana 47739.
Telephone requests may be directed to (812) 456-3416.
PART II - INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
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ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which the Registrant has previously filed with
the Securities and Exchange Commission (the "Commission") pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), are
incorporated by reference herein:
(a) The Annual Report of the Registrant on Form 10-K for the fiscal year
ended December 31, 1997, as filed with the Commission pursuant to Section 13(a)
of the Exchange Act;
(b) All other reports filed by the Registrant pursuant to Section 13(a)
or 15(d) of the Exchange Act since December 31, 1997;
(c) The description of the Registrant's common stock (the "Common Stock")
contained in the Registrant's Registration Statement on Form 8-A, dated April 1,
1996, filed pursuant to Section 12 of the Exchange Act and including any
amendments or reports filed by the Registrant under the Securities Act of 1933,
as amended, or the Exchange Act for purpose of updating such description.
All reports and other documents subsequently filed by the Registrant
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, subsequent to
the effectiveness of this Registration Statement and prior to the filing of a
post-effective amendment hereto that either indicates that all securities
offered hereby have been sold or that deregisters all securities then remaining
unsold shall be deemed to be incorporated by reference herein and to be a part
hereof from the date of the filing of such reports and documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document that also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
The Registrant will provide without charge to each person to whom a
Prospectus constituting a part of this Registration Statement is delivered, on
the written or oral request of any such person, a copy of any or all of the
documents incorporated herein by reference (other than exhibits to such
documents which are not specifically incorporated by reference in such
documents). Written requests for such copies should be directed to Ms. Kathryn
P. Williams, CNB Bancshares, Inc., 20 N.W. Third Street, Evansville, Indiana
47739. Telephone requests may be directed to (812) 456-3416.
ITEM 4. DESCRIPTION OF SECURITIES.
This item is inapplicable as the securities to be offered are registered
under Section 12 of the Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Certain legal matters in connection with the Plan and the shares of Common
Stock to be issued through the Plan have been passed upon for the Registrant by
Lewis, Rice & Fingersh, L.C., St. Louis, Missouri 63102. Lewis, Rice &
Fingersh, L.C. was not employed for such purposes on a contingent basis. Lewis,
Rice & Fingersh, L.C. did not have or receive nor will it receive a substantial
interest, direct or indirect, in the Registrant or any of its subsidiaries in
connection with the offering. Lewis, Rice & Fingersh, L.C. was not connected
with the Registrant or any of its subsidiaries as a promoter, managing
underwriter, voting trustee, director, officer, or employee.
The consolidated financial statements of the Registrant for the year ended
December 31, 1997, incorporated by reference in the Registrant's Annual Report
(Form 10-K), have been audited by KPMG Peat Marwick LLP, independent public
accountants, as set forth in their report thereon and included therein. KPMG
Peat Marwick LLP was not employed for such purpose on a contingent basis. KPMG
Peat Marwick LLP did not have or receive nor will it receive a substantial
interest, direct or indirect, in the Registrant or any of its subsidiaries in
connection with the offering. KPMG Peat Marwick LLP was not connected with the
Registrant or any of its subsidiaries as a promoter, managing underwriter,
voting trustee, director, officer, or employee.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Bylaws of the Registrant provide that the Registrant shall indemnify
any director or officer of the Registrant against any and all liability and
reasonable expense that said director or officer may incur in connection with or
resulting from any claim, action, suit or proceeding, or civil, criminal,
administrative or investigative action, or threat thereof, by reason of said
director's or officer's being or having been a director or officer of the
Registrant, or serving or having served at the request of the Registrant as a
director or officer of another corporation, partnership, joint venture, trust or
other enterprise, if either (i) the officer or director is wholly successful in
any such claim, action, suit or proceeding, or (ii) the officer or director is
not wholly successful but it is nevertheless determined that such officer or
director acted in good faith in what 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, either said officer or director had reasonable
cause to believe his conduct was lawful or had no reasonable cause to believe
his conduct was unlawful. The Bylaws further provide that the board of
directors may (i) authorize like indemnification of persons who are not
directors or officers of the Registrant but are employees of the Registrant or
are officers, directors or employees of any subsidiary of the Registrant, and
(ii) approve indemnification of directors, officers persons to the full extent
permitted by the Indiana Business Corporation Law (the "Indiana Law") in effect
at such time.
Section 23-1-37-9 of the Indiana Law provides for "mandatory
indemnification," unless limited by the articles of incorporation, by a
corporation against reasonable expenses incurred by a director who is wholly
successful, on the merits or otherwise, in the defense of any proceeding to
which the director was a party by reason of the director being or having been a
director of the corporation. Section 23-1-37-10 of the Indiana Law states that
a corporation may, in advance of the final disposition of a proceeding,
reimburse reasonable expenses incurred by a director who is a party to a
proceeding if the director furnishes the corporation with a written affirmation
of the director's good faith belief that the director has met the standard of
conduct required by Section 23-1-37-8 of the Indiana Law, that the director will
repay the advance if it is ultimately determined that he did not meet the
standard of conduct required by Section 23-1-37-8 of the Indiana Law, and that
those making the decision to reimburse the director determine that the facts
then known would not preclude indemnification under the Indiana Law.
The Registrant's Bylaws further provide, in accordance with the Indiana
Law, that the Registrant shall have the power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or agent of
the Registrant, or is or was serving at the request of the Registrant as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the Registrant would have power to indemnify him against such
liability under the Bylaws or the Indiana Law. Pursuant to a policy of
directors' and officers' liability insurance with total bi-annual limits of
$15,000,000, 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 breach of duty, neglect, error,
misstatement, misleading statement, omission or other act done or wrongfully
attempted while acting in their capacities as directors or officers of the
Registrant.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
This item is inapplicable.
ITEM 8. EXHIBITS.
The following exhibits are submitted herewith or incorporated by reference
herein.
Exhibit
Number Exhibit
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3(a) Restated Articles of Incorporation of CNB Bancshares,
Inc.
3(b) Amended Bylaws of CNB Bancshares, Inc., incorporated
herein by reference to Exhibit 3(ii) to CNB
Bancshares, Inc.'s 1995 Annual Report on Form 10-K.
5 Opinion of Lewis, Rice & Fingersh, L.C.*
10(a) Indiana Federal Corporation 1986 Stock Option and
Incentive Plan, as amended.
23(a) Consent of Lewis, Rice & Fingersh, L.C. (included
in Exhibit 5).
23(b) Consent of KPMG Peat Marwick LLP.
24 Powers of Attorney.*
- ---------------
* Previously filed as an exhibit to the Registrant's Registration Statement on
Form S-4 to which this is Post-Effective Amendment No. 1.
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information
set forth in the registration statement;
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in
the registration statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this section
do not apply if the registration statement is on Form S-3, Form S-8 or
Form F-3 and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with
or furnished to the Commission by the registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, as amended, 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 Post-Effective Amendment No. 1 to the Registration Statement on
Form S-4 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Evansville, State of Indiana, on May 15, 1998.
CNB BANCSHARES, INC.
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(Registrant)
/s/ James J. Giancola
By: --------------------------------------
James J. Giancola
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on May 15, 1998 by the following persons
in the capacities indicated.
Name Title/Position
- ---- --------------
*
- ------------------------------- Chairman of the Board
H. Lee Cooper III
*
- ------------------------------- President, Chief Executive Officer
James J. Giancola and Director (principal executive officer)
*
- ------------------------------- Executive Vice President
John R. Spruill (principal financial officer)
*
- ------------------------------- Senior Vice President and
Ralph L. Alley Controller, Treasurer (principal
accounting officer)
*
- ------------------------------- Director
John D. Engelbrecht
- ------------------------------- Director
Terrence A. Friedman
*
- ------------------------------- Director
Robert L. Koch, II
- ------------------------------- Director
Larry J. Kremer
*
- ------------------------------- Director
Edmund L. Hafer
- ------------------------------- Director
James E. Hutton
*
- ------------------------------- Director
Burkley F. McCarthy
*
- ------------------------------- Director
Robert K. Ruxer
*
- ------------------------------- Director
Thomas W. Traylor
- ------------------------------- Director
Alton C. Wendzel
*By --------------------
Attorney-in-fact
INDEX TO EXHIBITS
Reg. S-K
Item 601
Exhibit No. Exhibit
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3(a) Restated Articles of Incorporation of CNB Bancshares,
Inc.
3(b) Amended Bylaws of CNB Bancshares, Inc., incorporated
herein by reference to Exhibit 3(ii) to CNB
Bancshares, Inc.'s 1995 Annual Report on Form 10-K.
5 Opinion of Lewis, Rice & Fingersh, L.C.*
10(a) Indiana Federal Corporation 1986 Stock Option and
Incentive Plan, as amended.
23(a) Consent of Lewis, Rice & Fingersh, L.C. (included in
Exhibit 5).
23(b) Consent of KPMG Peat Marwick LLP.
24 Powers of Attorney.*
- -----------------------
* Previously filed as an exhibit to the Registrant's Registration Statement on
Form S-4 to which this is Post-Effective Amendment No. 1.
RESTATED ARTICLES OF INCORPORATION
OF
CNB BANCSHARES, INC.
ARTICLE I
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NAME
The name of the Corporation shall be CNB Bancshares, Inc.
ARTICLE II
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PURPOSES
The purposes for which the Corporation is formed are to engage in, conduct
and transact any or all lawful business for which corporations may be
incorporated under the Act.
ARTICLE III
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PERIOD OF EXISTENCE
The existence of the Corporation shall be perpetual.
ARTICLE IV
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RESIDENT AGENT AND PRINCIPAL OFFICE
SECTION 1. RESIDENT AGENT.
--------- ---------------
The name and address of the Corporation's Resident Agent for service of
process is David L. Knapp, 20 Northwest Third Street, Evansville, Indiana 47708.
Page
SECTION 2. PRINCIPAL OFFICE.
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The post office address of the principal office of the Corporation is 20
Northwest Third Street, Evansville, Indiana 47708.
ARTICLE V
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AUTHORIZED SHARES
SECTION 1. NUMBER OF SHARES.
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The total number of shares of all classes of stock which the Corporation
shall have authority to issue is one hundred and two million (102,000,000)
consisting of:
(a) Two million (2,000,000) shares of Preferred Stock, without par value
(hereinafter referred to as "Preferred Stock"); and
(b) One hundred million (100,000,000) shares of Common Stock, without par
value.
SECTION 2. PREFERRED STOCK.
---------- ----------------
Shares of Preferred Stock may be issued from time to time in one or more
series as may from time to time be determined by the Board of Directors, each of
said series to be distinctly designated. All shares of any one said series of
Preferred Stock shall be alike in every particular, except that there may be
different dates from which dividends, if any, thereon shall be cumulative, if
made cumulative. The voting powers and the preferences and relative
participating, optional and other special rights of each such series, and the
qualifications, limitations or restrictions thereof, if any, may differ from
those of any and all other series at any time outstanding; and subject to the
provisions of Article IX, the Board of Directors of the Corporation is hereby
expressly granted authority to fix by resolution or resolutions adopted and
filed with the Indiana Secretary of State prior to the issuance of any shares of
a particular series of Preferred Stock, the voting powers and the designations,
preferences and relative, optional and other special rights, and the
qualifications, limitations and restrictions of such series, including, but
without limiting the generality of the foregoing, the following:
(i) the distinctive designation of, and the number of shares of
Preferred Stock which shall constitute such series, which
number may be increased (except where otherwise provided by the
Board of Directors) or decreased (but not below the number of
shares thereof then outstanding) from time to time by like
action of the Board of Directors;
(ii) the rate and times at which, and the terms and conditions on
which, dividends, if any, on Preferred Stock of such series
shall be paid, the extent of the preference or relation, if
any, of such dividends to the dividends payable on any other
class or classes, or series of the same or other classes of
stock and whether such dividends shall be cumulative or non-
cumulative;
Page 2
(iii) the right, if any, of the holders of Preferred Stock of
such series to convert the same into or exchange the same for,
shares of any other class or classes or of any series of the
same or any other class or classes of stock of the Corporation
and the terms and conditions of such conversion or exchange;
(iv) whether or not Preferred Stock of such series shall be subject
to redemption, and the redemption price or prices and the time
or times at which, and the terms and conditions on which,
Preferred Stock of such series may be redeemed;
(v) the rights, if any, of the holders of Preferred Stock of such
series upon the voluntary or involuntary liquidation, merger,
consolidation, distribution or sale of assets, dissolution or
winding-up, of the Corporation;
(vi) the terms of the sinking fund or redemption or purchase account,
if any, to be provided for the Preferred Stock of such series;
and
(vii) the voting powers, if any, of the holders of such series of
Preferred Stock which may, without limiting the generality of
the foregoing, include the right of multiple votes per share of
Preferred Stock or the right, voting as a series or by itself or
together with other series of Preferred Stock or all series of
Preferred Stock as a class, to elect one or more directors of
the Corporation if there shall have been a default in the
payment of dividends on any one or more series of Preferred
Stock or under such other circumstances and on such conditions
as the Board of Directors may determine, provided that any and
all such voting powers shall be subject to, and limited by, any
and all other provisions of the Articles of Incorporation
dealing with voting rights and powers, including, without
limitation, the provisions of Article X.
ARTICLE VI
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REQUIREMENTS PRIOR TO DOING BUSINESS
The Corporation will not commence business until consideration of the
value of at least One Thousand Dollars ($1,000.00) has been received for the
issuance of shares.
Page 3
ARTICLE VII
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DIRECTORS
SECTION 1. NUMBER, ELECTION AND TERMS.
---------- ---------------------------
The Board of Directors of the Corporation shall consist of that number of
directors as may be fixed in the Bylaws, which number may not be increased or
decreased except by a majority of the entire Board of Directors or by
affirmative vote of the holders of at least eighty percent (80%) of the shares
of the Corporation then entitled to vote in an election of directors. In the
election of directors at the first Annual Meeting of Shareholders following
effectiveness of this Section 1, the directors shall be divided into three (3)
classes, as nearly equal in number as possible, with the term of office of the
first class to expire at the first subsequent Annual Meeting of Shareholders,
the term of office of the second class to expire at the second subsequent Annual
Meeting of Shareholders, and the term of office of the third class to expire at
the third subsequent Annual Meeting of Shareholders. At each Annual Meeting of
Shareholders following such initial classification and election, the number of
directors equal to the number of the class whose term expires at the time of
such meeting shall be elected to hold office until the third succeeding Annual
Meeting of Shareholders. Each director thus elected shall hold office until his
successor is elected and qualified, or until his earlier death, resignation or
removal.
SECTION 2. REMOVAL.
---------- --------
Subject to applicable provisions of law, at a special meeting of
shareholders called expressly for that purpose, any director, or the entire
Board of Directors, may be removed from office at any time, without cause, but
only by the affirmative vote of the holders of at least eighty percent (80%) of
the shares of the Corporation then entitled to vote in an election of directors.
At a special meeting of shareholders called expressly for that purpose, a
director may be removed by the shareholders for cause by the affirmative vote of
the holders of a majority of the shares then entitled to vote in an election of
directors. Except as may otherwise be provided by law, cause for removal shall
be construed to exist only if the director whose removal is proposed (i) has
been convicted of a felony by a court of competent jurisdiction and such
conviction is no longer subject to direct appeal or (ii) has been adjudged by a
court of competent jurisdiction to be liable for negligence or misconduct in the
performance of his duty to the Corporation in a matter of substantial importance
to the Corporation, and such adjudication is no longer subject to direct appeal.
SECTION 3. NEWLY-CREATED DIRECTORSHIPS AND VACANCIES.
---------- -----------------------------------------
Any newly-created directorship resulting from an increase in the number of
directors and any vacancy occurring in the Board of Directors for any reason,
including resignation, death, incapacity, or removal with or without cause,
shall be filled by a majority vote of the remaining or existing members of the
Board, and each such newly-appointed or newly-elected director shall serve for
the remainder of the full term of the class of directors to which such director
is then appointed or elected and until his successor shall have been elected and
shall qualify, or until his earlier death, resignation or removal.
Page 4
SECTION 4. QUALIFICATIONS OF DIRECTORS.
---------- ----------------------------
Any person who has reached the age of seventy (70) years as of the date of
any annual shareholders' meeting shall not be eligible for election or re-
election to the Board of Directors of the Corporation at such meeting, and any
such person who is a director and whose term does not expire at that meeting
shall resign effective as of the meeting date.
SECTION 5. DIRECTORS' QUALIFYING SHARES.
---------- -----------------------------
Each director of the Corporation who also is a director of any bank which
is a subsidiary of the Corporation, by virtue of the fact that a majority of the
outstanding shares of any class of voting equity security of such bank is owned
or controlled, directly or indirectly, by the Corporation, shall own in his own
name a number of shares of stock of the Corporation sufficient to satisfy any
shareholding requirements under applicable law relating to the qualification of
directors of such bank, if shareholdings of stock of the Corporation may
lawfully satisfy such requirements.
SECTION 6. AMENDMENT AND REPEAL.
---------- ---------------------
Notwithstanding any other provision of these Articles of Incorporation or
any provision of law or preferred stock designation of the Corporation to the
contrary, the affirmative vote of the holders of at least eighty percent (80%)
of the shares of the Corporation then entitled to vote in an election of
directors shall be required to alter, amend or repeal, or to adopt any provision
inconsistent with, Sections 1, 2, 3 or 6 of this Article VII.
ARTICLE VIII
------------
INCORPORATOR
The name and address of the incorporator of the Corporation are William J.
Curtis, 20 Northwest Third Street, Evansville, Indiana 47708.
ARTICLE IX
----------
PROVISIONS FOR REGULATION OF BUSINESS AND
CONDUCT OF AFFAIRS OF CORPORATION
SECTION 1. NO PREEMPTIVE RIGHTS.
---------- ---------------------
No holder of any stock in this Corporation shall be entitled to any
preemptive right to purchase any stock or other securities of this Corporation.
SECTION 2. LOCATION OF MEETINGS OF SHAREHOLDERS.
---------- -------------------------------------
Any meeting of the shareholders of the Corporation may be held at any place
within the State of Indiana as may be determined by resolution of the Board of
Directors.
SECTION 3. ISSUANCE AND SALE OF STOCK
---------- --------------------------
Shares of the stock of Corporation shall be issued or sold in such manner
and for such amount of consideration as may be fixed from time to time by the
Board of Directors.
Page 5
SECTION 4. SHAREHOLDINGS REQUIRED TO CALL SPECIAL MEETING OF
SHAREHOLDERS.
---------- ------------------------------------------------
A shareholder or shareholders, in order to call a special meeting of the
shareholders, must hold not less than eighty percent (80%) of all of the shares
outstanding and entitled by the Articles of Incorporation to vote on business
proposed to be transacted at such meeting, subject to the right of any officer
of the Corporation or other person who is specifically authorized by the Bylaws
to call a special meeting of the shareholders to call such a meeting.
Notwithstanding any other provision of these Articles of Incorporation or any
provision of law or preferred stock designation of the Corporation to the
contrary, the affirmative vote of the holders of at least eighty percent (80%)
of the shares of the Corporation then entitled to vote in an election of
directors shall be required to alter, amend or repeal, or to adopt any provision
inconsistent with, this Section of Article IX.
ARTICLE X
---------
BUSINESS COMBINATIONS
SECTION 1. SHAREHOLDER APPROVAL OF BUSINESS COMBINATIONS - MAXIMUM
VOTE.
---------- -------------------------------------------------------
(A) Except as otherwise expressly provided in Section 2 of this Article X,
the approval of any Business Combination (as hereinafter defined)
shall, in addition to any affirmative vote required by law or any
other provisions of these Articles of Incorporation or any preferred
stock designation of the Corporation, require the affirmative vote of
the holders of not less than eighty percent (80%) of the shares of the
Corporation then entitled to vote generally in the election of
directors of the Corporation (hereinafter in this Article X referred
to as "Voting Stock"), voting together as a single class, with each
share of Voting Stock to have one (1) vote.
(B) The term "Business Combination" as used in this Article X shall mean:
(i) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with (a) any Substantial
Shareholder (as hereinafter defined) or (b) any other
corporation which, after such merger or consolidation, would be
a Substantial Shareholder, regardless of which entity survives;
(ii) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of
transactions) to or with any Substantial Shareholder of all or
any significant part of the assets of the Corporation or any
Subsidiary, or both, with a "significant part of the assets" of
an entity to be defined as more than ten percent (10%) of the
total assets of such entity, as shown on its certified balance
sheet as of the end of the most recent fiscal year ending prior
to the time the particular transaction is announced;
Page 6
(iii) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of any
Substantial Shareholder; or
(iv) any transaction involving the Corporation or any Subsidiary,
including any issuance, transfer or reclassification of any
securities of, or any recapitalization of, the Corporation or
any Subsidiary, or any merger or consolidation of the
Corporation with any Subsidiary (whether or not involving a
Substantial Shareholder), if the transaction would have the
effect, directly or indirectly, of increasing the proportionate
share of the outstanding shares of any class of equity or
convertible securities of the Corporation or any Subsidiary
which is owned directly or indirectly by any Substantial
Shareholder.
SECTION 2. EXCEPTIONS TO MAXIMUM VOTE REQUIREMENT.
---------- ---------------------------------------
The provisions of Section 1 of this Article X shall not be applicable to
any Business Combination, and such Business Combination shall require only such
affirmative shareholder vote as is required by law or otherwise, if, in the case
of a Business Combination which does not involve any cash or other consideration
being received by shareholders of the Corporation (in their capacities as
shareholders), the condition specified in the following paragraph (i) is met,
or, in the case of any other Business Combination, either the condition
specified in the following paragraph (i) is met or the condition specified in
the following paragraph (ii) is met:
(i) The Business Combination shall have been approved by a
majority of the Continuing Directors (as hereinafter
defined), it being understood that this condition shall not
be capable of satisfaction unless there is at least one
Continuing Director.
(ii) The consideration to be received per share by holders of
Common Stock of the Corporation and by holders of each other
class of Voting Stock outstanding, if any, shall be Fair
Consideration (as hereinafter defined).
SECTION 3. DEFINITIONS.
---------- ------------
For purposes of this Article X:
(A) "Fair Consideration" shall mean,
(i) in the case of shares of Common Stock, an amount in cash or
readily available funds at least equal to the highest of the
following (whether or not the Substantial Shareholder has
previously acquired any such shares):
Page 7
(a) the highest per share price paid by the Substantial
Shareholder for any such shares acquired by it within
the four-year period immediately preceding the first
public announcement of the proposal of the Business
Combination (hereinafter referred to as the
"Announcement Date"), plus an "Adjustment" of such
price, as defined hereafter in this Section 3(A);
(b) the highest reported per share price at which such
shares were publicly traded during the four-year
period immediately preceding the Announcement Date,
plus an "Adjustment" of such price, as defined
hereafter in this Section 3(A);
(c) the per share fair market value of such shares on the
Announcement Date, plus an "Adjustment" of such value,
as defined hereafter in this Section 3(A); or
(d) the book value per share of Common Stock as of the end
of the latest fiscal quarter preceding the Announcement
Date, plus an "Adjustment" of such value, as defined
hereafter in this Section 3(A);
(ii) and in the case of shares of any other class of Voting Stock
of the Corporation outstanding, an amount in cash or readily
available funds at least equal to the highest of the
following (whether or not the Substantial Shareholder has
previously acquired any such shares):
(a) the highest per share price paid by the Substantial
Shareholder for any such shares acquired by it within
the four-year period immediately preceding the
Announcement Date, plus an "Adjustment" of such price,
as defined hereafter in this Section 3(A);
(b) the highest reported per share price at which such
shares were publicly traded during the four-year period
immediately preceding the Announcement Date, plus an
"Adjustment" of such price, as defined hereafter in
this Section 3(A);
(c) the per share fair market value of such shares on the
Announcement Date, plus an "Adjustment" of such value,
as defined hereafter in this Section 3(A); or
Page 8
(d) the highest preferential amount per share to which the
holders of such shares are entitled in the event of
voluntary or involuntary liquidation or dissolution of
the Corporation.
An "Adjustment" of any price or value per share for a class of shares under this
Section 3(A) shall equal an amount of interest on such price or value compounded
annually from the Announcement Date until the consummation date of the Business
Combination (the "Consummation Date"), or, in the case of subdivisions (a) and
(b) in each of subsections (A)(i) and (A)(ii) in this Section 3, from the date
the Substantial Shareholder first became a Substantial Shareholder (the
"Determination Date") until the Consummation Date, at a market prime rate of
interest as may be determined from time to time by a majority of the Continuing
Directors, less the aggregate amount of any cash dividends per share paid on
such class of shares during such period up to but not in excess of such amount
of interest.
(B) "Substantial Shareholder" shall mean and include any individual,
corporation, partnership or other person or entity (other than the
Corporation or any Subsidiary) which, together with its "Affiliates"
and "Associates" (as such terms were defined as of December 11, 1984,
in Rule 12b-2 under the Securities Exchange Act of 1934), is the
"Beneficial Owner" (as determined in accordance with the criteria set
forth as of December 11, 1984, under Rule 13d-3 under the Securities
Exchange Act of 1934) in the aggregate of more than ten percent (10%)
of the voting power of the then-outstanding Voting Stock of the
Corporation, and any Affiliate or Associate of any such individual,
corporation, partnership or other person or entity.
(C) "Subsidiary" shall mean any corporation of which a majority of any
class of equity security is owned, directly or indirectly, by the
Corporation.
(D) "Continuing Director" shall mean any member of the Board of Directors
of the Corporation (the "Board") who is unaffiliated with the
Substantial Shareholder and who was a member of the Board prior to the
Determination Date or became a member of the Board after the
Determination Date and was recommended or elected by a majority of
Continuing Directors then on the Board.
SECTION 4. INTERPRETATIVE POWER OF CONTINUING DIRECTORS.
---------- ---------------------------------------------
A majority of the Continuing Directors from time to time shall have the
power and duty to determine, on the basis of facts known to them after
reasonable inquiry, all facts necessary to determine compliance with this
Article X, including, without limitation, (1) whether a person or entity is a
Substantial Shareholder, (2) whether the price in a proposed Business
Combination is Fair Consideration, (3) the number of shares of Voting Stock
beneficially owned by any person or entity at any given time, and (4) the fair
market value as of any given date of the shares of any class of Voting Stock.
Page 9
SECTION 5. ALTERATION, AMENDMENT AND REPEAL.
---------- ---------------------------------
Notwithstanding any other provision of these Articles of Incorporation or
any provision of law or any preferred stock designation of the Corporation which
might otherwise permit a lesser vote or no vote, but in addition to any
affirmative vote of the holders of any particular class or series of the Voting
Stock required by law or these Articles of Incorporation or any preferred stock
designation of this Corporation, the affirmative vote of the holders of at least
eighty percent (80%) of the voting power of the then-outstanding shares of
Voting Stock, voting together as a single class, shall be required to alter,
amend or repeal, or to adopt any provision inconsistent with, this Article X or
any provision of this Article X.
INDIANA FEDERAL CORPORATION
1986 STOCK OPTION AND INCENTIVE PLAN
1. Plan Purpose.
-------------
The purpose of the Plan is to promote the long-term interests of the
Corporation and its stockholders by providing a means for attracting and
retaining directors, officers and key employees of the Corporation and its
Affiliates. This plan is the third amendment and restatement of the Indiana
Federal Savings and Loan Association 1986 Stock Option and Incentive Plan. No
change has been made to the Indiana Federal Savings and Loan Association 1986
Stock Option and Incentive Plan which (i) materially increases the aggregate
number of Shares with respect to which Awards may be made under such Plan;
(ii) materially increases the benefits accruing to Participants under the Plan;
(iii) changes the class of employees eligible to receive Options; or
(iv) creates an extension or modification (as such term is defined at
Section 425 of the Code) of an existing Incentive Stock Option.
2. Definitions.
------------
The following definitions are applicable to the Plan:
(a) "Affiliate" -- means any "parent corporation" or "subsidiary
corporation" of the Corporation as such terms are defined in Section 425(e) and
(f), respectively, of the Code.
(b) "Association" -- means Indiana Federal Savings and Loan Association, a
capital stock savings and loan association.
(c) "Award" -- means the grant by the Committee of an Incentive Stock
Option, a Non-Qualified Stock Option, or Restricted Stock, or any combination
thereof, as provided in the Plan.
(d) "Code" -- means the Internal Revenue Code of 1954, as amended.
(e) "Committee" -- means the Committee referred to in Section 3 hereof.
(f) "Continuous Service" shall mean the absence of any interruption or
termination of service as a director, officer or employee of the Corporation or
an Affiliate, except that when used with respect to persons granted an Incentive
Option shall mean the absence of any interruption or termination of service as
an employee of the Corporation or an Affiliate. Service shall not be considered
interrupted in the case of sick leave, military leave or any other leave of
absence approved by the Corporation or in the case of transfers between payroll
locations of the Corporation or between the Corporation, its subsidiaries or its
successor.
(g) "Corporation" -- means Indiana Federal Corporation, a Delaware
corporation and savings association holding company of the Association.
(h) "Disinterested Person" -- means any person who, at the time discretion
under the Plan is exercised, is not eligible, and who has not at any time within
one year prior thereto been eligible, for selection as a Participant in the Plan
or as a person to whom stock may be allocated or to whom stock options may be
granted pursuant to any other plan of the Corporation or any of its affiliates
(as that term is used in the Securities Exchange Act of 1934) entitling the
participants therein to acquire stock or stock options of the Corporation or of
any such affiliates.
(i) "Employee" -- means any person, including an officer, who is employed
on a full-time basis by the Corporation or any Affiliate.
(j) "Exercise Price" -- means the price per Share at which Shares subject
to an Option may be purchased upon exercise of such Option.
(k) "Incentive Stock Option" -- means an option to purchase Shares granted
by the Committee pursuant to Section 6 hereof which is subject to the
limitations and restrictions of Section 8 hereof and is intended to qualify
under Section 422 of the Code.
(l) "Market Value" -- means the average of the high and low quoted sales
price on the date in question (or, if there is no reported sale on such date, on
the last preceding date on which any reported sale occurred) of a Share on the
Composite Tape for the New York Stock Exchange-Listed Stocks, or, if on such
date the Shares are not quoted on the Composite Tape, on the New York Stock
Exchange, or, if the Shares are not listed or admitted to trading on such
Exchange, on the principal United States securities exchange registered under
the Securities Exchange Act of 1934 on which the Shares are listed or admitted
to trading, or, if the Shares are not listed or admitted to trading on any such
exchange, the mean between the closing high bid and low asked quotations with
respect to a Share on such date on the National Association of Securities
Dealers, Inc., Automated Quotations System, or any similar system then in use,
or, if no such quotations are available, the fair market value on such date of a
Share as the Committee shall determine.
(m) "Non-Qualified Stock Option" -- means an option to purchase Shares
granted by the Committee pursuant to Section 6 hereof, which option is not
intended to qualify under Section 422 of the code.
(n) "Option" -- means an Incentive Stock Option or a Non-Qualified Stock
Option.
(o) "Participant" -- means any director, officer or key employee of the
Corporation or any Affiliate who is selected by the Committee to receive an
Award.
(p) "Plan" -- means the 1986 Stock Option and Incentive Plan of the
Corporation.
(q) "Restricted Period" -- means the period of time selected by the
Committee for the purpose of determining when restrictions are in effect under
Section 9 hereof with respect to Restricted Stock awarded under the Plan.
(r) "Restricted Stock" -- means Shares which have been contingently
awarded to a Participant by the Committee subject to the restrictions referred
to in Section 9 hereof, so long as such restrictions are in effect.
(s) "Shares" -- means the shares of capital stock, par value $.01 per
share, of the Corporation.
3. Administration.
---------------
The Plan shall be administered by a Committee consisting of three or more
members, each of whom shall be a Disinterested Person. The members of the
Committee shall be appointed by the Board of Directors of the Corporation.
Except as limited by the express provisions of the Plan, the Committee shall
have sole and complete authority and discretion to (i) select Participants and
grant Awards; (ii) determine the number of Shares to be subject to types of
Awards generally, as well as to individual Awards granted under the Plan;
(iii) determine the terms and conditions upon which Awards shall be granted
under the Plan; (iv) prescribe the form and terms of instruments evidencing such
grants; and (v) establish from time to time regulations for the administration
of the Plan, interpret the Plan, and make all determinations deemed necessary or
advisable for the administration of the Plan. The Committee may maintain, and
update from time to time as appropriate, a list designating selected directors,
officers and employees as Disinterested Persons. The purpose of such list shall
be to evidence the status of such individuals as Disinterested Persons, and the
Board of Directors may appoint to the Committee any individual actually
qualifying as a Disinterested Person, regardless of whether identified as such
on said list.
A majority of the Committee shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is present, or
acts approved in writing by a majority of the Committee without a meeting, shall
be acts of the Committee.
4. Participants.
-------------
The Committee may select from time to time Participants in the Plan from
those directors, officers and key employees (other than Disinterested Persons),
of the Corporation or its Affiliates who, in the opinion of the Committee, have
the capacity for contributing in a substantial measure to the successful
performance of the Corporation or its Affiliates.
5. Shares Subject to Plan.
-----------------------
Subject to adjustment by the operation of Section 10 hereof, the maximum
number of Shares with respect to which Awards may be made under the Plan is
523,840. The Shares with respect to which Awards may be made under the Plan may
either be authorized and unissued shares or unissued shares heretofore or
hereafter reacquired and held as treasury shares. An Award shall not be
considered to have been made under the Plan with respect to any Option which
terminates or with respect to Restricted Stock which is forfeited, and new
Awards may be granted under the Plan with respect to the number of Shares as to
which such termination or forfeiture has occurred.
6. General Terms and Conditions of Options.
----------------------------------------
The Committee shall have full and complete authority and discretion,
except as expressly limited by the Plan, to grant Options and to provide the
terms and conditions (which need not be identical among Participants) thereof.
In particular, the Committee shall prescribe the following terms and conditions:
(i) the Exercise Price of any Option, which shall not be less than the Market
Value per Share at the date of grant of such Option, (ii) the number of Shares
subject to, and the expiration date of, any Option, which expiration date shall
not exceed ten years from the date of grant, (iii) the manner, time and rate
(cumulative or otherwise) of exercise of such Option, and (iv) the restrictions,
if any, to be placed upon such Option or upon Shares which may be issued upon
exercise of such Option. The Committee may, as a condition of granting any
Option, require that a Participant agree not to thereafter exercise one or more
Options previously granted to such Participant.
7. Exercise of Options.
--------------------
(a) An Option granted under the Plan shall be exercisable during the
lifetime of the Participant to whom such Option was granted only by such
Participant, and except as provided in paragraphs (c) and (d) of this Section 7,
no such Option may be exercised unless at the time such Participant exercises
such Option, such Participant has maintained Continuous Service since the date
of grant of such Option.
(b) To exercise an Option under the Plan, the Participant to whom such
Option was granted shall give written notice to the Corporation in form
satisfactory to the Committee (and, if partial exercises have been permitted by
the Committee, by specifying the number of Shares with respect to which such
Participant elects to exercise such Option) together with full payment of the
Exercise Price, if any and to the extent required. The date of exercise shall
be the date on which such notice is received by the Corporation. Payment, if
any is required, shall be made either (i) in cash (including check, bank draft
or money order) or (ii) if permitted by the Committee, by delivering (A) Shares
already owned by the Participant and having a fair market value equal to the
applicable exercise price, such fair market value to be determined in such
appropriate manner as may be provided by the Committee or as may be required in
order to comply with or to conform to requirements of any applicable laws or
regulations, or (B) a combination of cash and such Shares.
(c) If a Participant to whom an Option was granted shall cease to maintain
Continuous Service for any reason (including total and partial disability and
normal and early retirement, but excluding death and termination of employment
by the Corporation or any Affiliate for cause) such Participant may, but only
within the period of three months immediately succeeding such cessation of
Continuous Service and in no event after the expiration date of such Option,
exercise such Option to the extent that such Participant was entitled to
exercise such Option at the date of such cessation, provided, however, that such
right of exercise after cessation of Continuous Service shall not be available
to a Participant if the Committee otherwise determines and so provides in the
applicable instrument or instruments evidencing the grant of such Option. If a
Participant to whom an Option has been granted shall cease to maintain
Continuous Service by reason of death, total or partial disability or retirement
at age 65 or older, such Option shall become exercisable in full upon the
happening of such event and shall remain exercisable as determined by the
Committee and provided in the instrument or instruments evidencing such Option,
but in no event after the expiration date of such Option. If the Continuous
Service of a Participant to whom an Option was granted by the Corporation is
terminated for cause, all rights under any Option of such Participant shall
expire immediately upon the giving to the Participant of notice of such
termination.
(d) In the event of the death of a Participant while in the Continuous
Service of the Corporation or an Affiliate, within the three month period
referred to in the first sentence of paragraph (c) of this Section 7, or within
the three month period following cessation of Continuous Service by reason of
total or partial disability or retirement at age 65 or older, the person to whom
any Option held by the Participant at the time of his death is transferred by
will or by the laws of descent and distribution may exercise such Option with
respect to all Shares as to which the Option has not previously been exercised
at any time and from time to time, in whole or in part, within a period of one
year succeeding the date of death of such Participant, but in no event later
than ten years from the date of grant of such Option. Following the death of
any Participant to whom an Option was granted under the Plan, the Committee may,
as an alternative means of settlement of such Option, elect to pay to the person
to whom such Option is transferred by will or by the laws of descent and
distribution the amount by which the Market Value per Share on the date of
exercise of such Option shall exceed the Exercise Price of such Option,
multiplied by the number of Shares with respect to which such Option is properly
exercised. Any such settlement of an Option shall be considered an exercise of
such Option for all purposes of the Plan.
8. Incentive Stock Options.
------------------------
Incentive Stock Options may be granted only to Participants who are
Employees. Any provision of the Plan to the contrary notwithstanding, (i) no
Incentive Stock Option shall be granted more than ten years from the date the
Plan is adopted by the Board of Directors of the Association and no Incentive
Stock Option shall be exercisable more than ten years from the date such
Incentive Stock Option is granted, (ii) the Exercise Price of any Incentive
Stock Option shall not be less than the Market Value per share on the date such
Incentive Stock Option is granted, (iii) any Incentive Stock Option shall not be
transferable by the Participant to whom such Incentive Stock Option is granted
other than by will or the laws of descent and distribution and shall be
exercisable during such Participant's lifetime only by such Participant, (iv) no
Incentive Stock Option shall be granted to any individual who, at the time such
Incentive Stock Option is granted, owns stock possessing more than 10% of the
total combined voting power of all classes of stock of the Corporation or any
Affiliate unless the Exercise Price of such Incentive Stock Option is at least
110% of the Market Value per Share at the date of grant and such Incentive Stock
Option is not exercisable after the expiration of five years from the date such
Incentive Stock Option is granted, and (v) the aggregate Market Value
(determined as of the time any Incentive Stock Option is granted) of the Shares
with respect to which Incentive Stock Options are exercisable for the first time
by a Participant in any calendar year shall not exceed $100,000.
9. Terms and Conditions of Restricted Stock.
-----------------------------------------
The Committee shall have full and complete authority, subject to the
limitations of the Plan, to grant awards of Restricted Stock and, in addition to
the terms and conditions contained in paragraphs (a) through (f) of this
Section 9, to provide such other terms and conditions (which need not be
identical among Participants) in respect of such Awards, and the vesting
thereof, as the Committee shall determine and provide in the agreement referred
to in paragraph (d) of this Section 9.
(a) At the time of an award of Restricted Stock, the Committee shall
establish for each Participant a Restricted Period during which or at the
expiration of which, as the Committee shall determine and provide, in the
agreement referred to in paragraph (d) of this Section 9, the shares awarded as
Restricted Stock shall vest, and subject to any other terms and conditions as
the Committee shall provide shares of Restricted Stock may not be sold,
assigned, transferred, pledged or otherwise encumbered by the Participant,
except as hereinafter provided, during the Restricted Period. Except for such
restrictions, and subject to paragraphs (c), (d) and (e) of this Section 9 and
Section 10 hereof, the Participant as owner of such shares shall have all the
rights of a stockholder including but not limited to the right to receive all
dividends paid on such shares and the right to vote such shares. The Committee
shall have the authority, in its discretion, to accelerate the time at which any
or all of the restrictions shall lapse with respect to any shares of Restricted
Stock prior to the expiration of the Restricted Period with respect thereto, or
to remove any or all of such restrictions, whenever it may determine that such
action is appropriate by reason of changes in applicable tax or other laws or
other changes in circumstances occurring after the commencement of such
Restricted Period.
(b) Except as provided in Section 12 hereof, if a Participant ceases to
maintain Continuous Service for any reason (other than death, total or partial
disability or normal or early retirement) unless the Committee shall otherwise
determine and provide in the agreement referred to in paragraph (d) of this
Section 9, all shares of Restricted Stock theretofore awarded to such
Participant and which at the time of such termination of Continuous Service are
subject to the restrictions imposed by paragraph (a) of this Section 9 shall
upon such termination of Continuous Service be forfeited and returned to the
Corporation. Unless the Committee shall have provided in the agreement referred
to in paragraph (d) of this Section 9 for a ratable lapse of restrictions with
respect to an award of shares of Restricted Stock during the Restricted Period,
if a Participant ceases to maintain Continuous Service by reason of death, total
or partial disability or normal or early retirement, such portion of such shares
of Restricted Stock awarded to such Participant which at the time of such
termination of Continuous Service are subject to the restrictions imposed by
paragraph (a) of this Section 9 as shall be equal to the portion of the
Restricted Period with respect to such shares which shall have elapsed at the
time of such termination of Continuous Service shall be free of restrictions and
shall not be forfeited.
(c) Each certificate issued in respect of shares of Restricted Stock
awarded under the Plan shall be registered in the name of the Participant and
deposited by the Participant, together with a stock power endorsed in blank,
with the Corporation and shall bear the following (or a similar) legend:
"The transferability of this certificate and the shares
of stock represented hereby are subject to the terms and
conditions (including forfeiture) contained in the 1986
Stock Option and Incentive Plan of Indiana Federal
Corporation and an Agreement entered into between the
registered owner and Indiana Federal Corporation. Copies of
such Plan and Agreement are on file in the office of the
Secretary of Indiana Federal Corporation, Washington at
Lincolnway, Valparaiso, Indiana 46383."
(d) At the time of an award of shares of Restricted Stock, the Participant
shall enter into an Agreement with the Corporation in a form specified by the
Committee, agreeing to the terms and conditions of the award and such other
matters as the Committee shall in its sole discretion determine.
(e) At the time of an award of shares of Restricted Stock, the Committee
may, in its discretion, determine that the payment to the Participant of
dividends declared or paid on such shares by the Corporation or specified
portion thereof, shall be deferred until the earlier to occur of (i) the lapsing
of the restrictions imposed under paragraph (a) of this Section 9 or (ii) the
forfeiture of such shares under paragraph (b) of this Section 9, and shall be
held by the Corporation for the account of the Participant until such time. In
the event of such deferral, there shall be credited at the end of each year (or
portion thereof) interest on the amount of the account at the beginning of the
year at a rate per annum as the Committee, in its discretion, may determine.
Payment of deferred dividends, together with interest accrued thereon as
aforesaid, shall be made upon the earlier to occur of the events specified in
(i) and (ii) of the immediately preceding sentence.
(f) At the expiration of the restrictions imposed by paragraph (a) of this
Section 9, the Corporation shall redeliver to the Participant (or where the
relevant provision of paragraph (b) of this Section 9 applies in the case of a
deceased Participant, to his legal representative, beneficiary or heir) the
certificate(s) and stock power deposited with it pursuant to paragraph (c) of
this Section 9 and the Shares represented by such certificate(s) shall be free
of the restrictions referred to in paragraph (a) of this Section 9.
10. Adjustments Upon Changes in Capitalization.
------------------------------------------
In the event of any change in the outstanding Shares subsequent to the
effective date of the Plan by reason of any reorganization, recapitalization,
stock split, stock dividend, combination or exchange of shares, merger,
consolidation or any change in the corporate structure of Shares of the
Corporation, the maximum aggregate number and class of shares as to which Awards
may be granted under the Plan and the number and class of shares with respect to
which Awards theretofore have been granted under the Plan shall be appropriately
adjusted by the Committee, whose determination shall be conclusive. Any shares
of stock or other securities received, as a result of any of the foregoing, by a
Participant with respect to Restricted Stock shall be subject to the same
restrictions and the certificate(s) or other instruments representing or
evidencing such shares or securities shall be legended and deposited with the
Corporation in the manner provided in Section 9 hereof.
11. Effect of Merger on Options.
----------------------------
In the case of any merger, consolidation or combination of the
Corporation (other than a merger, consolidation or combination in which the
Corporation is the continuing entity and which does not result in the
outstanding Shares being converted into or exchanged for different securities,
cash or other property, or any combination thereof), any Participant to whom an
Option has been granted under the Plan shall have the right (subject to the
provisions of the Plan and any limitation applicable to such Option), thereafter
and during the term of each such Option, to receive different securities, cash
or other property, or any combination thereof), any Participant to whom an
Option has been granted under the Plan shall have the right (subject to the
provisions of the Plan and any limitation applicable to such Option), thereafter
and during the term of each such Option, to receive upon exercise of any Option
an amount equal to the excess of the fair market value on the date of such
exercise of the securities, cash or other property, or combination thereof,
receivable upon such merger, consolidation or combination in respect of a Share
over the Exercise Price of such Option, multiplied by the number of Shares with
respect to which such Option shall have been exercised. Such amount may be
payable fully in cash, fully in one or more of the kind or kinds of property
payable in such merger, consolidation or combination, or partly in cash and
partly in one or more such kind or kinds of property, all in the discretion of
the Committee.
12. Effect of Change in Control.
----------------------------
Each of the events specified in the following clauses (i) through (iii)
of this Section 12 shall be deemed a "change in control": (i) an event of a
nature that results in a change in control of the Corporation within the meaning
of the Change in Bank Control Act or the Home Owner's Loan Act of 1933 and 12
C.F.R. Part 574 as in effect on the date hereof; (ii) individuals who are
members of the board of directors of the Corporation on the date hereof (the
"Incumbent Board") cease for any reason to constitute at least a majority
thereof, provided that any person becoming a director subsequent to the date
hereof whose election was approved by a vote of at least three-quarters of the
directors comprising the Incumbent Board, or whose nomination for election by
the Corporation's stockholders was approved by the nominating committee serving
under an Incumbent Board, shall be considered a member of the Incumbent Board;
or (iii) approval by the Corporation's stockholders or consummation of a plan of
reorganization, merger, consolidation, sale of all or substantially all of the
assets of the Corporation or a similar transaction in which the Corporation is
not the resulting entity. The term "Change in Control" shall not include an
acquisition of securities by an employee benefit plan of the Bank or the
Corporation or a transaction in which the Bank merges or consolidates with or
into another subsidiary of the Corporation in the absence of a change in control
of the Corporation. In the application of 12 C.F.R. Part 574 to a determination
of a Change in Control, determinations to be made by the Office of Thrift
Supervision ("OTS") or its Director under such regulations shall be made by the
Board of Directors. If the Continuous Service of any Participant of the
Corporation or any Affiliate is involuntarily terminated, for whatever reason,
at any time within eighteen months after a change in control, unless the
Committee shall have otherwise provided in the agreement referred to in
paragraph (d) of Section 9 hereof, any Restricted Period with respect to
Restricted Stock theretofore awarded to such Participant shall lapse upon such
termination and all Shares awarded as Restricted Stock shall become fully vested
in the Participant to whom such Shares were awarded. The term "involuntarily
terminated" in this Plan shall refer to the termination of the employment of
Employee without his express written consent.
In addition, a material diminution of or interference with the
Participant's duties, responsibilities and benefits shall be deemed and shall
constitute an involuntary termination of employment to the same extent as
express notice of such involuntary termination. By way of example and not by
way of limitation, any of the following actions, if materially adverse to the
Participant, shall constitute such diminution or interference unless consented
to in writing by the Participant: (1) a change in the principal workplace of
the Participant to a location outside of Valparaiso, Indiana; (2) a material
reduction in the secretarial or other administrative support of the Participant;
(3) a material demotion of the Participant, a reduction in the number or
seniority of other Company personnel reporting to the Participant, or a
reduction in the frequency with which, or in the nature of the matters with
respect to which, such personnel are to report to the Participant, other than as
part of a Company-wide reduction in staff; (4) a reduction or adverse change in
the salary, perquisites, benefits, contingent benefits or vacation time which
had theretofore been provided to the Participant, other than as part of an
overall program applied uniformly and with equitable effect to all members of
the senior management of the Corporation; and (5) a material increase in the
required hours of work or the workload of the Participant.
If a tender offer or exchange offer for Shares (other than such an offer
by the corporation) is commenced, or if any event specified in clauses (i)
through (iii) above shall occur, unless the Committee shall have otherwise
provided in the instrument evidencing the grant of an Option, all Options
theretofore granted and not fully exercisable shall become exercisable in full
upon the happening of such event and shall remain so exercisable in accordance
with their terms; provided, however, that no Option shall be exercisable by a
directors or officer of the Corporation within six months of the date of grant
of such Option and no Option which as previously been exercised or otherwise
terminated shall become exercisable.
13. Assignments and Transfers.
--------------------------
No Award nor any right or interest of a Participant under the Plan in
any instrument evidencing any Award under the Plan may be assigned, encumbered
or transferred except, in the event of the death of a Participant, by will or
the laws of descent and distribution.
14. Employee Rights Under the Plan.
-------------------------------
No director, officer or key employee shall have a right to be selected
as a Participant nor, having been so selected, to be selected again as a
Participant and no director, officer, employee or other person shall have any
claim or right to be granted an Award under the Plan or under any other
incentive or similar plan of the Corporation or any Affiliate. Neither the Plan
nor any action taken thereunder shall be construed as giving any employee any
right to be retained in the employ of the Corporation or any Affiliate.
15. Delivery and Registration of Stock.
-----------------------------------
The Corporation's obligation to deliver Shares with respect to an Award
shall, if the Committee so requests, be conditioned upon the receipt of a
representation as to the investment intention of the Participant to whom such
Shares are to be delivered, in such form as the Committee shall determine to be
necessary or advisable to comply with the provision of the Securities Act of
1933 or any other Federal, state or local securities legislation. It may be
provided that any representation requirement shall become inoperative upon a
registration of the Shares or other action eliminating the necessity of such
representation under such Securities Act or other securities legislation. The
Corporation shall not be required to deliver any Shares under the Plan prior to
(i) the admission of such shares to listing on any stock exchange or system on
which Shares may then be listed, and (ii) the completion of such registration or
other qualification of such Shares under any state or Federal law, rule or
regulation, as the Committee shall determine to be necessary or advisable.
This Plan is intended to comply with Rule 16b-3 under the Securities
Exchange Act of 1934. Any provision of the Plan which is inconsistent with said
Rule shall, to the extent of such inconsistency, be inoperative and shall not
affect the validity of the remaining provisions of the Plan.
16. Withholding Tax.
----------------
Upon the termination of the Restricted Period with respect to any
shares of Restricted Stock (or at any such earlier time, if any, that an
election is made by the Participant under Section 83(b) of the Code, or any
successor provision thereto, to include the value of such shares in taxable
income), the Corporation shall have the right to require the Participant or
other person receiving such shares to pay the Corporation the amount of any
taxes which the Corporation is required to withhold with respect to such shares
or, in lieu thereof, to retain, or sell without notice, a sufficient number of
shares held by it to cover the amount required to be withheld. The Corporation
shall have the right to deduct from all dividends paid with respect to shares of
Restricted Stock the amount of any taxes which the Corporation is required to
withhold with respect to such dividend payments.
Where a Participant or other person is entitled to receive Shares
pursuant to the exercise of an Option pursuant to the Plan, the Corporation
shall have the right to require the Participant or such other person to pay the
Corporation the amount of any taxes which the Corporation is required to
withhold with respect to such Shares, or, in lieu thereof, to retain, or sell
without notice, a number of such Shares sufficient to cover the amount required
to be withheld.
17. Amendment or Termination.
-------------------------
The Board of Directors of the Corporation may amend, suspend or
terminate the Plan or any portion thereof at any time, but (except as provided
in Section 10 hereof) no amendment shall be made without approval of the
stockholders of the Corporation which shall (i) materially increase the
aggregate number of Shares with respect to which Awards may be made under the
Plan, (ii) materially increase the benefits accruing to Participants under the
Plan or (iii) change the class of persons eligible to participate in the Plan;
provided, however, that no such amendment, suspension or termination shall
impair the rights of any Participant, without his consent, in any Award
theretofore made pursuant to the Plan.
18. Effective Date and Term of Plan.
--------------------------------
The Plan became effective upon its adoption by the Board of Directors of
the Association, the predecessor in interest of the Corporation, and was
approved by a vote of the holders of a majority of the outstanding shares of the
Association entitled to vote on the adoption of the Plan. The Plan was assumed
by the Corporation pursuant to the reorganization of the Association to holding
company form effective November 30, 1988. This Plan shall continue in effect
for a term of ten years unless sooner terminated under Section 17 hereof.
19. Formula Awards to Non-Employee Directors.
-----------------------------------------
Subject to the conditions of this Section 19, on each February 1, each
non-employee director of the Corporation who served in such capacity for the
entirety of the immediately preceding fiscal year and continues to so serve on
such February 1 shall receive a Non-Qualified Stock Option to purchase the
number of Shares corresponding the Corporation's actual return on equity ("ROE")
for the immediately preceding fiscal year according to the schedule set forth
below:
Corporation's Shares Subject
Actual ROE to Option
---------- ---------
[AT LEAST] 10% 1,500
11 2,250
12 3,000
13 3,750
14 4,500
provided, however, that no awards pursuant to this Section 19 shall be granted
relating to any fiscal year in which the Corporation does not achieve a return
on assets of at least .80%. The Exercise Price for the Non-Qualified Stock
Options granted pursuant to this Section 19 shall be the Market Value of the
Shares on the date of grant.
INDEPENDENT AUDITORS' CONSENT
-----------------------------
The Board of Directors and Stockholders
CNB Bancshares, Inc.:
We consent to the incorporation by reference in this Post-Effective Amendment
No. 1 on Form S-8 to registration statement No. 333-46837 on Form S-4 of CNB
Bancshares, Inc. of our report dated January 14, 1998, relating to the
consolidated balance sheets of CNB Bancshares, Inc. and subsidiaries as of
December 31, 1997 and 1996 and the related consolidated statements of income,
changes in stockholders' 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 December 31, 1997 annual report on Form 10-K of CNB Bancshares,
Inc.
KPMG Peat Marwick LLP
St. Louis Missouri
April 28, 1998
