COMMERCIAL FEDERAL CORP, S-8, 1995-10-05

COMMERCIAL FEDERAL CORP
S-8, 1995-10-05
SAVINGS INSTITUTION, FEDERALLY CHARTERED

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<PAGE>

As filed with the Securities and Exchange Commission on October 5, 1995
Registration Statement No. 33-
-------
and Post-Effective Amendment No. 1 to
Registration Statement No. 33-1333 and No. 33-10396
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
---------------------------------------

COMMERCIAL FEDERAL CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)

Nebraska 47-0658852
---------------------------------- ------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

2120 South 72nd Street
Omaha, Nebraska 68124
(402) 554-9200
--------------------------------------------------------------
(Address of Principal Executive Office)

Railroad Financial Corporation 1994 Stock Option and Incentive Plan
Railroad Financial Corporation 1991 Directors' Stock Option Plan
Railroad Financial Corporation 1986 Stock Option and Incentive Plan,
as amended, on February 22, 1991
--------------------------------
(Full title of the plans)
----------------------------------

Gary R. Bronstein, Esquire
Howard S. Parris, Esquire
Housley Goldberg & Kantarian, P.C.
1220 19th Street N.W., Suite 700
Washington, D.C. 20036
- --------------------------------------------------------------------------------
(Name and address of agent for service)

(202) 822-9611
- --------------------------------------------------------------------------------
(Telephone number, including area code, of agent for service)

CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=================================================================================================
Title of Each Proposed Maximum Proposed Maximum Amount of
Class of Securities Amount to be Offering Price Aggregate Offering Registration
to be Registered Registered Per Share Price Fee
=================================================================================================
<S> <C> <C> <C> <C>
Common Stock
$.01 par value 62,239 Shares (1) (2) $756,978(2) $261.03
- -------------------------------------------------------------------------------------------------
</TABLE>

(1) Maximum number of shares of Commercial Federal Corporation (the
"Company") Common Stock issuable upon exercise of options granted under
the Railroad Financial Corporation ("Railroad") 1994 Stock Option and
Incentive Plan (41,214 shares), the Railroad 1991 Directors' Stock
Option Plan (15,347 shares) and the Railroad 1986 Stock Option and
Incentive Plan, as amended (5,678 shares), based upon exchange ratio of
one share of Railroad Common Stock equal to .6389 shares of Company
Common Stock (the "Exchange Ratio") as specified in the Reorganization
and Merger Agreement between the Company, Railroad and their respective
Savings Bank subsidiaries, dated April 18, 1995.
(2) Under Rules 457(f) and 457(h) the registration fee is based upon the
price at which the options may be exercised, as adjusted pursuant to
the Exchange Ratio, for (a) the Railroad 1994 Stock Option and
Incentive Plan, 41,214 shares at $14.12 per share ($581,942 in the
aggregate); (b) the Railroad 1991 Directors' Stock Option Plan, 15,347
shares at $7.28 per share ($111,726 in the aggregate); and (c) the
Railroad 1986 Stock Option and Incentive Plan, as amended, 5,678 shares
at $11.15 per share ($63,310 in the aggregate).
<PAGE>

PART I

INFORMATION REQUIRED IN THE SECTION
10(A) PROSPECTUS

ITEM 1. PLAN INFORMATION*
------

ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION*
------

*This Registration Statement relates to the registration of an
aggregate of 62,239 shares of Common Stock, $.01 par value per share, of
Commercial Federal Corporation (the "Company") reserved for issuance and
delivery under the Railroad Financial Corporation ("Railroad") 1994 Stock
Option and Incentive Plan (the "1994 Plan"), the Railroad 1991 Directors'
Stock Option Plan (the "Directors' Plan) and the Railroad 1986 Stock Option
and Incentive Plan, as amended on February 22, 1991 (the "1986/1991 Plan").
Together, the 1994 Plan, the Directors' Plan and the 1986/1991 Plan are
referred to herein as the "Plans." Documents containing the information
required by Part I of this Registration Statement will be sent or given to
participants in the 1994 Plan, Directors' Plan and the 1986/1991 Plan as
specified by Rule 428(b)(1). Such documents are not filed with the
Securities and Exchange Commission (the "Commission") either as part of this
Registration Statement or as prospectuses or prospectus supplements pursuant
to Rule 424 in reliance on Rule 428.

The shares of Company Common Stock being registered would be issued by
the Company pursuant to the exercise of stock options previously granted
under the Plans according to the terms of the Plans, as applicable to a
specific option, and pursuant to the Reorganization and Merger Agreement by
and among the Company and its principal subsidiary, Commercial Federal Bank,
a Federal Savings Bank (the "Bank"), and Railroad and its principal
subsidiary, Railroad Savings Bank, fsb ("Railroad Savings"), pursuant to
which Railroad, on October 2, 1995, merged into the Company (the "Merger")
and each outstanding share of Railroad Common Stock was converted into .6389
shares of Company Common Stock, and pursuant to which each outstanding option
for Railroad Common Stock will continue outstanding as an option to purchase
the corresponding number of shares (rounded down to the nearest whole share)
of Company Common Stock that would have been received in the Merger had the
option been exercised in full for shares of Railroad Common Stock immediately
prior to the Merger.

PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
------

The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "1934 Act") and, accordingly, files
periodic reports and other information with the Commission. Reports, proxy
statements and other information concerning the Company filed with the
Commission may be inspected and copies may be obtained (at prescribed rates)
at the Commission's Public Reference Section, Room 1024, 450 Fifth Street,
N.W., Washington, D.C. 20549.

The following documents are incorporated by reference in this
Registration Statement:

(1) The Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 1995 as filed with the Commission.

(2) The Company's Current Reports on Form 8-K dated August 8, 1995 and
August 18, 1995 as filed with the Commission.

(3) The description of the Common Stock set forth in the Company's
Registration Statements on Form 8-A dated July 17, 1995 and December 31, 1984
as filed with the Commission.

1
<PAGE>

(4) The description of the Company's Preferred Stock Purchase Rights
set forth in the Company's Registration Statement on Form 8-A dated April 24,
1989 as filed with the Commission.

ALL DOCUMENTS FILED BY THE COMPANY PURSUANT TO SECTIONS 13(A) OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934 AFTER THE DATE HEREOF AND PRIOR TO THE
TERMINATION OF THE OFFERING OF THE SHARES OF COMMON STOCK SHALL BE DEEMED TO
BE INCORPORATED BY REFERENCE IN THIS REGISTRATION STATEMENT HEREIN AND TO BE
A PART HEREOF FROM THE DATE OF FILING OF SUCH DOCUMENTS.

ITEM 4. DESCRIPTION OF SECURITIES
------

Not applicable, as the Common Stock is registered under Section 12
of the Securities Exchange Act of 1934.

ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
------

Not Applicable.

ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
------

Indemnification of directors and officers of the Company is provided
under Article VI of the Articles of Incorporation of the Company for
judgments, fines, settlements, and expenses, including attorney fees incurred
in connection with any threatened, pending, or completed action, suit, or
proceeding, whether civil, criminal, administrative, or investigative if such
director or officer acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Company and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful.

At the Company's 1992 annual meeting of stockholders, the stockholders
of the Company approved an amendment to the Company's Articles of
Incorporation limiting the personal liability of outside directors for
certain breaches of their fiduciary duties. As amended, Article VI of the
Articles of Incorporation provides that an outside director shall not be
personally liable to the Company or its stockholders for monetary damages for
breach of his fiduciary duty as a director and authorizes the Company to
indemnify such outside director against monetary damages for such breach to
the full extent permitted by law. This provision applies to acts or
omissions occurring after the effective date of the amendment, and does not
---
limit liability for (i) any act or omission not in good faith which involves
intentional misconduct or a knowing violation of law, (ii) any transaction
from which the outside director derived an improper financial benefit, (iii)
paying a dividend or approving a stock repurchase in violation of the
Nebraska Business Corporation Act or (iv) any act or omission which violates
a declaratory or injunctive order obtained by the Company or its
stockholders. For purposes of Article VI, "outside director" is defined as
any member of the Board of Directors who is not an officer or a person who
may control the conduct of the Company through management agreements, voting
trusts, directorships in related corporations or any other device or
relationship.

The Company has purchased director and officer liability insurance that
insures directors and officers against certain liabilities in connection with
the performance of their duties as directors and officers, including
liabilities under the Securities Act of 1933, as amended, and provides for
payment to the Company of costs incurred by it in indemnifying its directors
and officers.

Under Nebraska law, indemnification of directors and officers is
----------------------------------------------------------------
provided for judgments, fines, settlements, and expenses, including
-------------------------------------------------------------------
attorney's fees, incurred in connection with any threatened, pending, or
------------------------------------------------------------------------
completed action, suit, or proceeding. This applies to any civil, criminal,
----------------------------------------------------------------------------
investigative or administrative action provided that the director or officer
----------------------------------------------------------------------------
involved acted in good faith, 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.
---------------

2
<PAGE>

Indemnification of directors and officers is also provided for
judgments, fines, settlements, and expenses, including attorney's fees,
incurred in connection with any threatened, pending, or completed action, or
suit by or in the right of the corporation if such director or officer acted
in good faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the corporation. However, no indemnification shall
be made in respect of any claim, issue or matter in which such person is
adjudged negligent in the conduct of his duties to the corporation unless the
court in which the action is brought deems indemnity proper.

The grant of indemnification to a director or officer shall be
determined by a majority of a quorum of disinterested directors, by a written
opinion from independent legal counsel, or by the shareholders.

ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
------

Not Applicable.

ITEM 8. EXHIBITS
------

For a list of all exhibits filed or included as part of this
Registration Statement, see "Index to Exhibits" at the end of this
Registration Statement.

ITEM 9. UNDERTAKINGS
------

1. The undersigned Registrant hereby undertakes:

(a) 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)(i) and
(a)(ii) do not apply if the Registration Statement is on Form S-3,
Form S-8, and the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in
the Registration Statement.

(b) 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.

(c) 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.

3
<PAGE>

(d) If the Registrant is a foreign private issuer, to file a post-
effective amendment to the Registration Statement to include any financial
statements required by Rule 3-19 of Regulation S-X at the start of any
delayed offering or throughout a continuous offering.

2. 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 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.

3. 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 are 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. 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.

4
<PAGE>

SIGNATURES

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
Registration Statement to be signed on its behalf by the undersigned
thereunto duly authorized, in the City of Omaha, State of Nebraska, on
October 2, 1995.

COMMERCIAL FEDERAL CORPORATION

By: /s/ William A. Fitzgerald
-------------------------
Chairman and Chief Executive Officer
(Duly Authorized Representative)

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>

/s/ Robert F. Krohn Director October 2, 1995
-------------------
Robert F. Krohn

/s/ William A. Fitzgerald Chairman of the Board, October 2, 1995
------------------------- Chief Executive Officer
William A. Fitzgerald and Director

/s/ James A. Laphen President, Chief Operating October 2, 1995
------------------- Officer and Chief Financial
James A. Laphen Officer (Principal Financial
Officer)

/s/ Gary L. Matter Senior Vice President, October 2, 1995
------------------ Controller and Secretary
Gary L. Matter (Principal Accounting
Officer)

/s/ Talton K. Anderson Director October 2, 1995
----------------------
Talton K. Anderson

Director , 1995
----------------- ---------
Charles M. Lillis

/s/ Carl G. Mammel Director October 2, 1995
------------------
Carl G. Mammel

/s/ Sharon G. Marvin Director October 2, 1995
--------------------
Sharon G. Marvin

Director , 1995
------------------ ----------
Robert S. Milligan

/s/ James P. O'Donnell Director October 2, 1995
----------------------
James P. O'Donnell

/s/ Michael T. O'Neil Director October 2, 1995
---------------------
Michael T. O'Neil
</TABLE>

5
<PAGE>

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
Sequential
Exhibit Description Page Number
------- ----------- -----------
<S> <C> <C>
2.1 Reorganization and Merger Agreement by and among Commercial
Federal Corporation and Commercial Federal Bank, a Federal
Savings Bank, and Railroad Financial Corporation and Railroad
Savings Bank, fsb, dated as of April 18, 1995. (1)

4.1 Railroad Financial Corporation 1994 Stock Option and Incentive
Plan, as amended February 22, 1991 and related forms of Stock
Option Agreement entered into with Participants for Stock
Options Granted under the Plan.

4.2 Railroad Financial Corporation Directors' Stock Option Plan and
related forms of Stock Option Agreement entered into with
Participants for Stock Options granted under the Plan

4.3 Railroad Financial Corporation 1986 Stock Option and Incentive
Plan, as amended on February 22, 1991, and related forms of
Stock Option Agreement entered into with Participants for Stock
Options granted under the Plan.

5.1 Opinion of Housley Goldberg & Kantarian, P.C. as to the validity
of the Common Stock being registered.

23.1 Consent of Housley Goldberg & Kantarian, P.C. (appears in their
opinion filed as Exhibit 5.1).

23.2 Consent of Independent Auditors.
</TABLE>
- --------------------
(1) Incorporated by reference to the Form S-4 of Commercial Federal
Corporation (File No. 33-60589) filed with the Commission on June 26,
1995.

<PAGE>

RAILROAD FINANCIAL CORPORATION
1994 STOCK OPTION AND INCENTIVE PLAN

1. Purpose of the Plan.

The purpose of this Railroad Financial Corporation 1994 Stock Option and
Incentive Plan (the "Plan") is to advance the interests of the Company through
providing select key Employees and Directors of the Company and its Affiliates
with the opportunity to acquire Shares. By encouraging such stock ownership,
the Company seeks to attract, retain and motivate the best available personnel
for positions of substantial responsibility and to provide additional incentive
to Directors and key Employees of the Company or any Affiliate to promote the
success of the business.

2. Definitions.

As used herein, the following definitions shall apply.

(a) "Affiliate" shall mean any "parent corporation" or "subsidiary
corporation" of the Company, as such terms are defined in Section 424(e) and
(f), respectively, of the Code.

(b) "Agreement" shall mean a written agreement entered into in accordance
with Paragraph 5(c).

(c) "Awards" shall mean, collectively, Options, SARs, and Restricted Stock,
unless the context clearly indicates a different meaning.

(d) "Board" shall mean the Board of Directors of the Company.

(e) "Change in Control" shall mean any one of the following events
occurring after the Effective Date: (1) the acquisition ownership, holding, or
power to vote more than 25% of the Company's voting stock, (2) the acquisition
of control of the election of a majority of the Company's directors, (3) the
exercise of a controlling influence over the management or policies of the
Company by any person or by persons acting as a "group" (within the meaning of
Section 13(d) of the Securities Exchange Act of 1934) or (4) during any period
of two consecutive years, the failure of individuals who at the beginning of
such period constitute the Board (the "Continuing Directors") for any reason to
constitute at less than two-thirds thereof, provided that any individual whose
election or nomination for election as a member of the Board was approved by a
vote of at least two-thirds of the Continuing Directors then in office shall be
considered a Continuing Director. For purposes of this subparagraph only, the
term "person" refers to an individual or a corporation, partnership, trust,
association, joint venture, pool, syndicate, sole proprietorship, unincorporated
organization or any other form of entity not specifically listed
<PAGE>

herein. The decision of the Committee as to whether a change in control has
occurred shall be conclusive and binding.

(f) "Code" shall mean the Internal Revenue Code of 1986, as amended.

(g) "Committee" shall mean the Stock Option Committee appointed by the
Board in accordance with Paragraph 5(a) hereof.

(h) "Common Stock" shall mean the common stock, par value $.10 per share,
of the Company.

(i) "Company" shall mean Railroad Financial Corporation.

(j) "Continuous Service" shall mean the absence of any interruption or
termination of service as an Employee or Director of the Company or an
Affiliate. Continuous Service shall not be considered interrupted in the case
of sick leave, military leave or any other leave of absence approved by the
Company or in the case of transfers between payroll locations of the Company or
between the Company, an Affiliate, or a successor.

(k) "Director" shall mean any member of the Board or of the Board of
Directors of an Affiliate.

(l) "Disinterested Person" shall mean any member of the Board who, at the
time discretion under the Plan is exercised, is a "disinterested person" within
the meaning of Rule 16b-3.

(m) "Effective Date" shall mean the date specified in Paragraph 16 hereof.

(n) "Employee" shall mean any person employed by the Company or an
Affiliate.

(o) "Exercise Price" shall mean the price per Optioned Share at which an
Option or SAR may be exercised.

(p) "ISO" means an option to purchase Common Stock which meets the
requirements set forth in the Plan, and which is intended to be and is
identified as an "incentive stock option" within the meaning of Section 422 of
the Code.

(q) "Market Value" shall mean the fair market value of the Common Stock, as
determined under Paragraph 7(b) hereof.

(r) "Non-ISO" means an option to purchase Common Stock which meets the
requirements set forth in the Plan but which is not intended to be and is not
identified as an ISO.

(s) "Option" means an ISO and/or a Non-ISO.

-2-
<PAGE>

(t) "Optioned Shares" shall mean Shares subject to an Option granted
pursuant to this Plan.

(u) "Participant" shall mean any person who receives an Award pursuant to
the Plan.

(v) "Plan" shall mean the Railroad Financial Corporation 1994 Stock Option
and Incentive Plan.

(w) "Restricted Stock" means Common Stock which is subject to restrictions
against transfer and forfeiture and such other terms and conditions determined
by the Committee, as provided in Paragraph 11.

(x) "Rule 16b-3" shall mean Rule 16b-3 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended.

(y) "Share" shall mean one share of Common Stock.

(z) "SAR" (or "Stock Appreciation Right") means a right to receive the
appreciation in value, or a portion of the appreciation in value, of a specified
number of shares of Common Stock.

3. Term of the Plan and Awards.

(a) Term of the Plan. The Plan shall continue in effect for a term of ten
years from the Effective Date, unless sooner terminated pursuant to Paragraph 19
hereof. No Award shall be granted under the Plan after ten years from the
Effective Date.

(b) Term of Awards. The term of each Award granted under the Plan shall be
established by the Committee, but shall not exceed 10 years; provided, however,
that in the case of an Employee who owns Shares representing more than 10% of
the outstanding Common Stock at the time an ISO is granted, the term of such ISO
shall not exceed five years.

4. Shares Subject to the Plan.

(a) General Rule. Except as otherwise required by the provisions of
Paragraph 13 hereof, the aggregate number of Shares deliverable pursuant to
Awards shall not exceed 180,000 Shares, 30,000 Shares of which may be subject to
Options granted pursuant to Paragraph 9. Such Shares may either be authorized
but unissued Shares or Shares held in treasury. If Awards should expire, become
unexercisable or be forfeited for any reason without having been exercised or
become vested in full, the Optioned Shares shall, unless the Plan shall have
been terminated, be available for the grant of additional Awards under the Plan.

-3-
<PAGE>

(b) Special Rule for SARs. The number of Shares with respect to which an
SAR is granted, but not the number of Shares which the Company delivers or could
deliver to an Employee or individual upon exercise of an SAR, shall be charged
against the aggregate number of Shares remaining available under the Plan;
provided, however, that in the case of an SAR granted in conjunction with an
Option, under circumstances in which the exercise of the SAR results in
termination of the Option and vice versa, only the number of Shares subject to
the Option shall be charged against the aggregate number of Shares remaining
available under the Plan. The Shares involved in an Option as to which option
rights have terminated by reason of the exercise of a related SAR, as provided
in Paragraph 10 hereof, shall not be available for the grant of further Options
under the Plan.

5. Administration of the Plan.

(a) Composition of the Committee. The Plan shall be administered by the
Committee, which shall consist of not less than three (3) members of the Board
who are Disinterested Persons. Members of the Committee shall serve at the
pleasure of the Board. In the absence at any time of a duly appointed
Committee, the Plan shall be administered by those members of the Board who are
Disinterested Persons.

(b) Powers of the Committee. Except as limited by the express provisions
of the Plan or by resolutions adopted by the Board, the Committee shall have
sole and complete authority and discretion (i) to select Participants and grant
Awards, (ii) to determine the form and content of Awards to be issued in the
form of Agreements under the Plan, (iii) to interpret the Plan, (iv) to
prescribe, amend and rescind rules and regulations relating to the Plan, and (v)
to make other determinations necessary or advisable for the administration of
the Plan. The Committee shall have and may exercise such other power and
authority as may be delegated to it by the Board from time to time. A majority
of the entire Committee shall constitute a quorum and the action 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
deemed the action of the Committee.

(c) Agreement. Each Award shall be evidenced by a written agreement
containing such provisions as may be approved by the Committee. Each such
Agreement shall constitute a binding contract between the Company and the
Participant, and every Participant, upon acceptance of such Agreement, shall be
bound by the terms and restrictions of the Plan and of such Agreement. The
terms of each such Agreement shall be in accordance with the Plan, but each
Agreement may include such additional provisions and restrictions determined by
the Committee, in its discretion, provided that such additional provisions and
restrictions are not inconsistent with the terms of the Plan. In particular,
the Committee shall set

-4-
<PAGE>

forth in each Agreement (i) the Exercise Price of an Option or SAR, (ii) the
number of Shares subject to, and the expiration date of, the Award, (iii) the
manner, time and rate (cumulative or otherwise) of exercise or vesting of such
Award, and (iv) the restrictions, if any, to be placed upon such Award, or upon
Shares which may be issued upon exercise of such Award.

The Chairman of the Committee and such other officers as shall be
designated by the Committee are hereby authorized to execute Agreements on
behalf of the Company and to cause them to be delivered to the recipients of
Awards.

(d) Effect of the Committee's Decisions. All decisions, determinations
and interpretations of the Committee shall be final and conclusive on all
persons affected thereby.

(e) Indemnification. In addition to such other rights of indemnification
as they may have, the members of the Committee shall be indemnified by the
Company in connection with any claim, action, suit or proceeding relating to any
action taken or failure to act under or in connection with the Plan or any
Award, granted hereunder to the full extent provided for under the Company's
Charter or Bylaws with respect to the indemnification of Directors.

6. Grant of Options.

(a) General Rule. In its sole discretion, the Committee may grant Awards
only to Employees of the Company or its Affiliates. Non-Employee Directors
shall be granted Awards only in accordance with Paragraph 9 hereof.

(b) Special Rules for ISOs. The aggregate Market Value, as of the date the
Option is granted, of the Shares with respect to which ISOs are exercisable for
the first time by an Employee during any calendar year (under all incentive
stock option plans, as defined in Section 422 of the Code, of the Company or any
present or future Affiliate of the Company) shall not exceed $100,000.
Notwithstanding the prior provisions of this paragraph, the Committee may grant
Options in excess of the foregoing limitations, in which case such Options
granted in excess of such limitation shall be Options which are Non-ISOs.

7. Exercise Price for Options.

(a) Limits on Committee Discretion. The Exercise Price as to any
particular Non-ISO shall not be less than 50% of the Market Value of the
Optioned Shares on the date of grant. The Exercise Price as to any particular
ISO shall not be less than the Market Value of the Optioned Shares on the date
of grant. In the case of an Employee who owns Shares representing more than 10%
of the Company's outstanding Shares of Common Stock at the time an ISO is

-5-
<PAGE>

granted, the Exercise Price shall not be less than 110% of the Market Value of
the Optioned Shares at the time the ISO is granted.

(b) Standards for Determining Exercise Price. If the Common Stock is
listed on a national securities exchange (including the NASDAQ National Market
System) on the date in question, then the Market Value per Share shall be not
less than the average of the highest and lowest selling price on such exchange
on such date, or if there were no sales on such date, then the Exercise Price
shall be not less than the mean between the bid and asked price on such date.
If the Common Stock is traded otherwise than on a national securities exchange
on the date in question, then the Market Value per Share shall be not less than
the mean between the bid and asked price on such date, or, if there is no bid
and asked price on such date, then on the next prior business day on which there
was a bid and asked price. If no such bid and asked price is available, then
the Market Value per Share shall be its fair market value as determined by the
Committee, in its sole and absolute discretion.

(c) Reissuance of Options and SARs. Notwithstanding anything herein to
the contrary, the Committee shall have the authority to cancel outstanding
Options and/or SARs with the consent of the Participant and to reissue new
Options and/or SARs at a lower Exercise Price equal to the then Market Value per
share of Common Stock in the event that the Market Value per share of Common
Stock at any time prior to the date of exercise of outstanding Options and/or
SARs falls below the Exercise Price.

8. Exercise of Options.

(a) Generally. Any Option granted hereunder shall be exercisable at such
times and under such conditions as shall be permissible under the terms of the
Plan and of the Agreement granted to a Participant. An Option may not be
exercised for a fractional Share.

(b) Procedure for Exercise. A Participant may exercise Options, subject
to provisions relative to its termination and limitations on its exercise, only
by (1) written notice of intent to exercise the Option with respect to a
specified number of Shares, and (2) payment to the Company (contemporaneously
with delivery of such notice) in cash, in Common Stock, or a combination of cash
and Common Stock, of the amount of the Exercise Price for the number of Shares
with respect to which the Option is then being exercised. Each such notice (and
payment where required) shall be delivered, or mailed by prepaid registered or
certified mail, addressed to the Treasurer or Secretary of the Company at the
Company's executive offices. Common Stock utilized in full or partial payment
of the Exercise Price for Options shall be valued at its Market Value at the
date of exercise.

-6-
<PAGE>

(c) Period of Exercisability. Except to the extent otherwise provided in
the terms of an Agreement, an Option may be exercised by a Participant only
while he or she is an Employee and has maintained Continuous Service from the
date of the grant of the Option, or within three months after termination of
such Continuous Service (but not later than the date on which the Option would
otherwise expire), except if the Employee's Continuous Service terminates by
reason of --

(1) "Just Cause" which for purposes hereof shall have the meaning set
forth in any unexpired employment or severance agreement between the
Participant and the Company or an Affiliate (and, in the absence of any
such agreement, shall mean termination because of the Employee's personal
dishonesty, incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties,
willful violation of any law, rule or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order), then the
Participant's rights to exercise such Option shall expire on the date of
such termination;

(2) death, then to the extent that the Participant would have been
entitled to exercise the Option immediately prior to his death, such Option
of the deceased Participant may be exercised within two years from the date
of his death (but not later than the date on which the Option would
otherwise expire) by the personal representatives of his estate or person
or persons to whom his rights under such Option shall have passed by will
or by laws of descent and distribution;

(3) Permanent and Total Disability (as such term is defined in
Section 22(e)(3) of the Code), then to the extent that the Participant
would have been entitled to exercise the Option immediately prior to his
Permanent and Total Disability, such Option may be exercised within one
year from the date of such Permanent and Total Disability, but not later
than the date on which the Option would otherwise expire.

Notwithstanding the provisions of any Option which provides for its exercise in
installments as designated by the Committee, such Option shall become
immediately exercisable upon the Participant's death or Permanent and Total
Disability.

(d) Effect of the Committee's Decisions. The Committee's determination
whether a Participant's Continuous Service has ceased, and the effective date
thereof shall be final and conclusive on all persons affected thereby.

-7-
<PAGE>

9. Grants of Options to Non-employee Directors

(a) Automatic Grants. Notwithstanding any other provisions of this Plan,
for each calendar year that occurs after the Effective Date and before the
expiration date of the Plan, each Director who is not an Employee but is a
Director on the first Monday following the annual meeting of the Company's
stockholders shall receive, on said date, Non-ISOs to purchase a number of
shares equal to the value of the then current annual directors' fees at an
Exercise Price per Share equal to its Market Value on the date of grant.

(b) Terms of Exercise. Options received under the provisions of this
Paragraph may be exercised from time to time by (a) written notice of intent to
exercise the Option with respect to all or a specified number of the Optioned
Shares, and (b) payment to the Company (contemporaneously with the delivery of
such notice), in cash, in Common Stock, or a combination of cash and Common
Stock, of the amount of the Exercise Price for the number of the Optioned Shares
with respect to which the Option is then being exercised. Each such notice and
payment shall be delivered, or mailed by prepaid registered or certified mail,
addressed to the Treasurer of the Company at the Company's executive offices. A
Director who exercises Options pursuant to this Paragraph may satisfy all
applicable federal, state and local income and employment tax withholding
obligations, in whole or in part, by irrevocably electing to have the Company
withhold shares of Common Stock, or to deliver to the Company shares of Common
Stock that he already owns, having a value equal to the amount required to be
withheld; provided that to the extent not inconsistent herewith, such election
otherwise complies with those requirements of Paragraphs 8 and 22 hereof.

(c) Options granted under this Paragraph shall have a term of ten years,
and may be exercised only while the Participant is a Director of the Company, or
within one year after termination of the Participant's Continuous Service as a
Director. In the event of such Director's death during the term of his
directorship, Options granted under this Paragraph may be exercised within two
years from the date of his death by the personal representatives of his estate
or person or persons to whom his rights under such Option shall have passed by
will or by laws of descent and distribution, but in no event later than the date
on which such Options would otherwise expire. Unless otherwise inapplicable or
inconsistent with the provisions of this Paragraph, the Options to be granted to
Directors hereunder shall be subject to all other provisions of this Plan.

-8-
<PAGE>

10. SARs (Stock Appreciation Rights)

(a) Granting of SARs. In its sole discretion, the Committee may from time
to time grant SARs to Employees either in conjunction with, or independently of,
any Options granted under the Plan. An SAR granted in conjunction with an
Option may be an alternative right wherein the exercise of the Option terminates
the SAR to the extent of the number of shares purchased upon exercise of the
Option and, correspondingly, the exercise of the SAR terminates the Option to
the extent of the number of Shares with respect to which the SAR is exercised.
Alternatively, an SAR granted in conjunction with an Option may be an additional
right wherein both the SAR and the Option may be exercised. An SAR may not be
granted in conjunction with an ISO under circumstances in which the exercise of
the SAR affects the right to exercise the ISO or vice versa, unless the SAR, by
its terms, meets all of the following requirements:

(1) The SAR will expire no later than the ISO;

(2) The SAR may be for no more than the difference between the Exercise
Price of the ISO and the Market Value of the Shares subject to the ISO at
the time the SAR is exercised;

(3) The SAR is transferable only when the ISO is transferable, and under
the same conditions;

(4) The SAR may be exercised only when the ISO may be exercised; and

(5) The SAR may be exercised only when the Market Value of the Shares
subject to the ISO exceeds the Exercise Price of the ISO.

(b) Exercise Price. The Exercise Price as to any particular SAR shall not
be less than 50% of the Market Value of the Optioned Shares on the date of
grant.

(c) Timing of Exercise. Any election by a Participant to exercise SARs
shall be made during the period beginning on the 3rd business day following the
release for publication of quarterly or annual financial information and ending
on the 12th business day following such date. This condition shall be deemed to
be satisfied when the specified financial data is first made publicly available.
In no event, however, may an SAR be exercised within the six-month period
following the date of its grant.

The provisions of Paragraph 8(c) regarding the period of exercisability of
Options is incorporated by reference herein, and shall determine the period of
exercisability of SARs.

-9-
<PAGE>

(d) Exercise of SARs. An SAR granted hereunder shall be exercisable at
such times and under such conditions as shall be permissible under the terms of
the Plan and of the Agreement granted to a Participant, provided that an SAR may
not be exercised for a fractional Share. Upon exercise of an SAR, the
Participant shall be entitled to receive, without payment to the Company except
for applicable withholding taxes, an amount equal to the excess of (or, in the
discretion of the Committee if provided in the Agreement, a portion of) the
excess of the then aggregate Market Value of the number of Optioned Shares with
respect to which the Participant exercises the SAR, over the aggregate Exercise
Price of such number of Optioned Shares. This amount shall be payable by the
Company, in the discretion of the Committee, in cash or in Shares valued at the
then Market Value thereof, or any combination thereof.

(e) Procedure for Exercising SARs. To the extent not inconsistent
herewith, the provisions of Paragraph 8(b) as to the procedure for exercising
Options are incorporated by reference, and shall determine the procedure for
exercising SARs.

11. Restricted Stock Awards.

Any Share of Restricted Stock which the Committee may grant to key
Employees shall be subject to the following terms and conditions, and to such
other terms and conditions as are either applicable generally to Awards, or
prescribed by the Committee in the applicable Agreement:

(a) Restriction Period. At the time of each award of Restricted Stock,
there shall be established for the Restricted Stock a restriction period, which
shall be no less than 6 months and no greater than 5 years (the "Restriction
Period"). Such Restriction Period may differ among Participants and may have
different expiration dates with respect to portions of shares of Restricted
Stock covered by the same award.

(b) Vesting Restrictions. The Committee shall determine the
restrictions applicable to the award of Restricted Stock, including, but not
limited to, requirements of Continuous Service for a specified term, or the
attainment of specific corporate, divisional or individual performance standards
or goals, which restrictions may differ with respect to each Participant. The
Agreement shall provide for forfeiture of Shares covered thereby if the
specified restrictions are not met during the Restriction Period, and may
provide for early termination of any Restriction Period in the event of
satisfaction of the specified restrictions prior to expiration of the Restricted
Period.

-10-
<PAGE>

award of Restricted Stock which shall vest in the Participant in the event of
death, disability or retirement prior to the expiration of the Restriction
Period or the satisfaction of the restrictions applicable to an award of
Restricted Stock.

(d) Acceleration of Vesting. Notwithstanding the Restriction Period and
the restrictions imposed on the Restricted Stock, as set forth in any Agreement,
the Committee may shorten the Restriction Period or waive any restrictions, if
the Committee concludes that it is in the best interests of the Company to do
so.

(e) Ownership; Voting. Stock certificates shall be issued in respect of
Restricted Stock awarded hereunder and shall be registered in the name of the
Participant, whereupon the Participant shall become a stockholder of the Company
with respect to such Restricted Stock and shall, to the extent not inconsistent
with express provisions of the Plan, 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. Said stock certificates shall be
deposited with the Company or its designee, together with a stock power endorsed
in blank, and the following legend shall be placed upon such certificates
reflecting that the shares represented thereby are subject to restrictions
against transfer and forfeiture:

"The transferability of this certificate and the shares of stock
represented thereby are subject to the terms and conditions (including
forfeiture) contained in the Railroad Financial Corporation 1994 Stock
Option and Incentive Plan, and an agreement entered into between the
registered owner and Railroad Financial Corporation. Copies of such Plan
and Agreement are on file in the offices of the Secretary of Railroad
Financial Corporation, 110 South Main Street, Suite 900, Wichita, Kansas
67201-2933.

(f) Lapse of Restrictions. At the expiration of the Restricted Period
applicable to the Restricted Stock, the Company shall deliver to the
Participant, or the legal representative of the Participant's estate, or if the
personal representative of the Participant's estate shall have assigned the
estate's interest in the Restricted Stock, to the person or persons to whom his
rights under such Stock shall have passed by assignment pursuant to his will or
to the laws of descent and distribution, the stock certificates deposited with
it or its designee and as to which the Restricted Period has expired and the
requirements of the restrictions have been met. If a legend has been placed on
such certificates, the Company shall cause such certificates to be reissued
without the legend.

(g) Forfeiture of Restricted Stock. The Agreement shall provide for
forfeiture of any Restricted Stock which is not vested

-11-
<PAGE>

in the Participant or for which the restrictions have not been satisfied during
the Restriction Period.

12. Change in Control

(a) General Rule. Notwithstanding the provisions of any Award which
provides for its exercise or vesting in installments, all Shares of Restricted
Stock shall become fully vested upon a Change in Control, and for a period of 60
days beginning on the date of such Change in Control, all Options and SARs shall
be immediately exercisable and fully vested. With respect to Options, at the
time of a Change in Control, the Participant shall, at the discretion of the
Committee, be entitled to receive cash in an amount equal to the excess of the
Market Value of the Common Stock subject to such Option over the Exercise Price
of such Shares, in exchange for the cancellation of such Options by the
Participant.

(b) Exception to General Rule. Notwithstanding subparagraph (a) of this
Paragraph, in no event may an SAR be exercised, or an Option be cancelled in
exchange for cash, within the six-month period following the date of its grant.

13. Effect of Changes in Common Stock Subject to the Plan.

(a) Recapitalizations; Stock Splits, Etc. The number and kind of shares
reserved for issuance under the Plan, and the number and kind of shares subject
to outstanding Awards (and the Exercise Price thereof in the case of Options and
SARs), shall be proportionately adjusted for any increase, decrease, change or
exchange of Shares for a different number or kind of shares or other securities
of the Company which results from a merger, consolidation, recapitalization,
reorganization, reclassification, stock dividend, split-up, combination of
shares, or similar event in which the number or kind of shares is changed
without the receipt or payment of consideration by the Company.

(b) Transactions in which the Company is Not the Surviving Entity.
Subject to Paragraph 11 hereof, in the event of (i) the liquidation or
dissolution of the Company, (ii) a merger or consolidation in which the Company
is not the surviving entity, or (iii) the sale or disposition of all or
substantially all of the Company's assets (any of the foregoing to be referred
to herein as a "Transaction"), all outstanding Awards shall be surrendered.
With respect to each Award so surrendered, the Committee shall in its sole and
absolute discretion determine whether the holder of the surrendered Award shall
receive --

(1) for each Share then subject to an outstanding Award the number and
kind of shares into which each outstanding Share (other than Shares held by
dissenting stockholders) is changed or exchanged, together with an
appropriate adjustment to the Exercise Price in the case of Options and
SARs; or

-12-
<PAGE>

(2) a cash payment (from the Company or the successor corporation), in an
amount equal to the Market Value of the Shares subject to the Award on the
date of the Transaction, less the Exercise Price of the Award in the case
of Options and SARs.

(c) Special Rule for ISOs. Any adjustment made pursuant to subparagraphs
(a) or (b)(1) hereof shall be made in such a manner as not to constitute a
modification, within the meaning of Section 424(h) of the Code, of outstanding
ISOs.

(d) Conditions and Restrictions on New, Additional, or Different Shares or
Securities. If, by reason of any adjustment made pursuant to this Paragraph, a
Participant becomes entitled to new, additional, or different shares of stock or
securities, such new, additional, or different shares of stock or securities
shall thereupon be subject to all of the conditions and restrictions which were
applicable to the Shares pursuant to the Award before the adjustment was made.

(e) Other Issuances. Except as expressly provided in this Paragraph, the
issuance by the Company or an Affiliate of shares of stock of any class, or of
securities convertible into Shares or stock of another class, for cash or
property or for labor or services either upon direct sale or upon the exercise
of rights or warrants to subscribe therefor, shall not affect, and no adjustment
shall be made with respect to, the number, class, or Exercise Price of Shares
then subject to Awards or reserved for issuance under the Plan.

14. Non-Transferability of Awards.

Awards may not be sold, pledged, assigned, hypothecated, transferred or
disposed of in any manner other than by will or by the laws of descent and
distribution, or pursuant to the terms of a "qualified domestic relations order"
(within the meaning of Section 414(p) of the Code and the regulations and
rulings thereunder).

15. Time of Granting Awards.

The date of grant of an Award shall, for all purposes, be the later of the
date on which the Committee makes the determination of granting such Award, and
the Effective Date. Notice of the determination shall be given to each
Participant to whom an Award is so granted within a reasonable time after the
date of such grant.

16. Effective Date.

The Plan shall become effective upon the date of its adoption by the Board.
Awards may be made prior to approval of the Plan by

-13-
<PAGE>

the stockholders of the Company if the exercise of Awards in the form of Options
and/or SARs, and the vesting of Awards in the form of Restricted Stock, are
conditioned upon stockholder approval of the Plan.

17. Approval by Stockholders.

The Plan shall be approved by stockholders of the Company within twelve
(12) months before or after the Effective Date.

18. Modification of Awards.

At any time, and from time to time, the Board may authorize the Committee
to direct execution of an instrument providing for the modification of any
outstanding Award, provided no such modification shall confer on the holder of
said Award any right or benefit which could not be conferred on him by the grant
of a new Award at such time, or impair the Award without the consent of the
holder of the Award.

19. Amendment and Termination of the Plan.

(a) The Board may from time to time amend the terms of the Plan and, with
respect to any Shares at the time not subject to Awards, suspend or terminate
the Plan; provided that the provisions of Paragraph 9 may not be amended more
than once every six months (other than to comport with changes in the Code, the
Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder), and provided further that any amendment that is "material" within
the meaning of Rule 16b-3 shall be subject to stockholder approval.

(b) No amendment, suspension or termination of the Plan shall, without the
consent of any affected holders of an Award, alter or impair any rights or
obligations under any Award theretofore granted.

20. Conditions Upon Issuance of Shares.

(a) Compliance with Securities Laws. Shares of Common Stock shall not be
issued with respect to any Award unless the issuance and delivery of such Shares
shall comply with all relevant provisions of law, including, without limitation,
the Securities Act of 1933, as amended, the rules and regulations promulgated
thereunder, any applicable state securities law, and the requirements of any
stock exchange upon which the Shares may then be listed. The Plan is intended
to comply with Rule 16b-3, and any provision of the Plan which the Committee
determines in its sole and absolute discretion to be inconsistent with said Rule
shall, to the extent of such inconsistency, be inoperative and null and void,
and shall not affect the validity of the remaining provisions of the Plan.

-14-
<PAGE>

(b) Special Circumstances. The inability of the Company to obtain approval
from any regulatory body or authority deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder shall relieve
the Company of any liability in respect of the non-issuance or sale of such
Shares. As a condition to the exercise of an Option or SAR, the Company may
require the person exercising the Option or SAR to make such representations and
warranties as may be necessary to assure the availability of an exemption from
the registration requirements of federal or state securities law.

(c) Committee Discretion. The Committee shall have the discretionary
authority to impose in Agreements such restrictions on Shares as it may deem
appropriate or desirable, including but not limited to the authority to impose a
right of first refusal or to establish repurchase rights or both of these
restrictions.

21. Reservation of Shares.

The Company, during the term of the Plan, will reserve and keep available a
number of Shares sufficient to satisfy the requirements of the Plan.

22. Withholding Tax.

The Company's obligation to deliver dividends on Restricted Stock, or to
deliver Shares upon exercise of Options and/or SARs or upon the vesting of
Restricted Stock (or such earlier time that the Participant makes an election
under Section 83(b) of the Code) shall be subject to the Participant's
satisfaction of all applicable federal, state and local income and employment
tax withholding obligations. The Committee, in its discretion, may permit the
Participant to satisfy the obligation, in whole or in part, by irrevocably
electing to have the Company withhold Shares, or to deliver to the Company
Shares that he already owns, having a value equal to the amount required to be
withheld. The value of Shares to be withheld, or delivered to the Company,
shall be based on the Market Value of the Shares on the date the amount of tax
to be withheld is to be determined. As an alternative, the Company may retain,
or sell without notice, a number of such Shares sufficient to cover the amount
required to be withheld.

23. No Employment or Other Rights.

In no event shall an Employee's or Director's eligibility to participate or
participation in the Plan create or be deemed to create any legal or equitable
right of the Employee, Director, or any other party to continue service with the
Company or any Affiliate. No Employee or Director shall have a right to be
granted an Award or, having received an Award, the right to again be granted an
Award, except to the extent provided in Paragraph 9(a). However, an Employee or
Director who has been granted an

-15-
<PAGE>

Award may, if otherwise eligible, be granted an additional Award or Awards.

24. Governing Law.

The Plan shall be governed by and construed in accordance with the laws of
the State of Kansas, except to the extent that federal law shall be deemed to
apply.

-16-
<PAGE>

STOCK OPTION AGREEMENT

FOR INCENTIVE STOCK OPTIONS UNDER SECTION 422
OF THE INTERNAL REVENUE CODE
PURSUANT TO THE

RAILROAD FINANCIAL CORPORATION
1994 STOCK OPTION AND INCENTIVE PLAN

STOCK OPTION for a total of ____ shares of Common Stock, par value $.10 per
share, of Railroad Financial Corporation (the "Company"), which Option is
intended to qualify as an incentive stock option under Section 422 of the
Internal Revenue Code of 1986, as amended, is hereby granted to ________________
(the "Optionee") at the price set forth herein, and in all respects subject to
the terms, definitions and provisions of the 1994 Stock Option and Incentive
Plan (the "Plan") adopted by the Company which is incorporated by reference
herein, receipt of which is hereby acknowledged.

1. Option Price. The option price is $____ for each share, being 100% /*/
------------
of the fair market value, as determined by the Committee, of the Common Stock on
the date of grant of this Option.

2. Exercises of Option. This Option shall be exercisable in accordance
-------------------
with provisions of the Plan as follows:

(i) Schedule of rights to exercise.
------------------------------

<TABLE>
<CAPTION>
Percentage of Total Shares
Years of Continuous Employment Subject to Option Which May
After Date of Grant of Option Be Exercised
- ------------------------------- ---------------------------
<S> <C>
Upon Grant _________ %

1 year but less than 2 years _________ %

2 years but less than 3 years _________ %

3 years but less than 4 years _________ %

4 years but less than 5 years _________ %

Over 5 years _________ %
</TABLE>

- ------------------
/*/ 110% in the case of an Optionee who owns shares representing more than 10%
of the outstanding common stock of the Company on the date of grant of this
Option.
<PAGE>

ISO Agreement
Page 2

Notwithstanding any provisions in this section, in no event shall this
Option be exercisable prior to approval of the Plan by the Company's
stockholders as required by the Plan.

(ii) Method of Exercise. This Option shall be exercisable by a written
------------------
notice by the Optionee which shall:

(a) State the election to exercise the Option, the number of shares
with respect to which it is being exercised, the person in whose name the
stock certificate or certificates for such shares of Common Stock is to be
registered, his address and Social Security Number (or if more than one,
the names, addresses and Social Security Numbers of such persons);

(b) contain such representations and agreements as to the holder's
investment intent with respect to such shares of Common Stock as may be
satisfactory to the Company's counsel;

(c) be signed by the person or persons entitled to exercise the Option
and, if the Option is being exercised by any person or persons other than
the Optionee, be accompanied by proof, satisfactory to counsel for the
Company, of the right of such person or persons to exercise the Option; and

(d) be in writing and delivered in person or by certified mail to the
Treasurer of the Company.

Payment of the purchase price of any shares with respect to which the
Option is being exercised shall be by cash, Common Stock, or such combination of
cash and Common Stock as the Optionee elects. The certificate or certificates
for shares of Common Stock as to which the Option shall be exercised shall be
registered in the name of the person or persons exercising the Option.

(iii) Restrictions on exercise. This Option may not be exercised if the
------------------------
issuance of the shares upon such exercise would constitute a violation of any
applicable federal or state securities or other law or valid regulation. As a
condition to the Optionee's exercise of this Option, the Company may require the
person exercising this option to make any representation and warranty to the
Company as may be required by any applicable law or regulation.

3. Withholding. The Optionee hereby agrees that the exercise of the
-----------
Option or any installment thereof will not be effective, and no shares will
become transferable to the Optionee, until the Optionee makes appropriate
arrangements with the Company for such tax withholding as may be required of the
Company under federal, state or local law on account of such exercise.
<PAGE>

ISO Agreement
Page 3

4. Non-transferability of Option. This Option may not be transferred in
-----------------------------
any manner otherwise than by will or the laws of descent or distribution and may
be exercised during the lifetime of the Optionee only by the Optionee. The terms
of this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.

5. Term of Option. This Option may not be exercisable for more than
--------------
___________________/**/ years from the date of grant of this Option, as stated
below, and may be exercised during such term only in accordance with the Plan
and the terms of this Option.

RAILROAD FINANCIAL CORPORATION
1994 STOCK OPTION AND INCENTIVE
PLAN COMMITTEE

By_____________________________

- -------------
Date of Grant Attest: ______________________
(Seal)

- ---------------------
/**/ No more than ten years; five years in the case of an Optionee who owns
shares representing more than 10% of the outstanding common stock of the Company
on the date of grant of this Option.
<PAGE>

STOCK OPTION AGREEMENT

FOR NON-INCENTIVE STOCK OPTIONS PURSUANT TO THE

RAILROAD FINANCIAL CORPORATION
1994 STOCK OPTION AND INCENTIVE PLAN

STOCK OPTION for a total of _____ shares of Common Stock, par value $.10
per share, of Railroad Financial Corporation (the "Company") is hereby granted
to _____________ (the "Optionee") at the price set forth herein, and in all
respects subject to the terms, definitions and provisions of the Railroad
Financial Corporation 1994 Stock Option and Incentive Plan (the "Plan") adopted
by the Company which is incorporated by reference herein, receipt of which is
hereby acknowledged. Such Stock Options do not comply with Options granted under
---
Section 422 of the Internal Revenue Code of 1986, as amended.

1. Option Price. The option price is $_____ for each share, being 100% of
------------
the fair market value, as determined by the Committee, of the Common Stock on
the date of grant of this option.

2. Exercise of Option. This Option shall be exercisable in accordance
------------------
with provisions of the Plan as follows:

(i) Schedule of rights to exercise.
------------------------------

<TABLE>
<CAPTION>
Percentage of Total Shares
Years of Continuous Employment Subject to Option Which May
After Date of Grant of Option Be Exercised
------------------------------ ---------------------------
<S> <C>
Upon Grant __________%

1 year but less than 2 years __________%

2 years but less than 3 years __________%

3 years but less than 4 years __________%

4 years but less than 5 years __________%

Over 5 years __________%
</TABLE>

Notwithstanding any provisions in this section, in no event shall this
Option be exercisable prior to approval of the Plan by the Company's
stockholders as required by the Plan.

(ii) Method of Exercise. This Option shall be exercisable by a written
------------------
notice which shall:

(a) State the election to exercise the Option, the number of shares
with respect to which it is being exercised, the person in whose name the
stock certificate or certificates
<PAGE>

Non-ISO Agreement
Page 2

for such shares of Common Stock is to be registered, his address and Social
Security Number (or if more than one, the names, addresses and Social Security
Numbers of such persons);

(b) contain such representations and agreements as to the holders'
investment intent with respect to such shares of Common Stock as may be
satisfactory to the Company's counsel;

(c) be signed by the person or persons entitled to exercise the
Option and, if the Option is being exercised by any person or persons other
than the Optionee, be accompanied by proof, satisfactory to counsel for the
Company, of the right of such person or persons to exercise the Option; and

(d) be in writing and delivered in person or by certified mail to the
Treasurer of the Company.

(iii) Restrictions on exercise. The Option may not be exercised if the
------------------------
issuance of the shares upon such exercise would constitute a violation of any
applicable federal or state securities or other law or valid regulation. As a
condition to his exercise of this Option, the Company may require the person
exercising this Option to make any representation and warranty to the Company as
may be required by any applicable law or regulation.

4. Non-transferability of Option. This Option may not be transferred in
-----------------------------
any manner otherwise than by will or the laws of descent or distribution and may
be exercised during the lifetime of the Optionee only by him. The terms of this
Option shall be binding upon the executors, administrators, heirs, successors
and assigns of the Optionee.
<PAGE>

Non-ISO Agreement
Page 3

5. Term of Option. This Option may not be exercisable for more than
--------------
____________ years from the date of grant of this Option, as set forth below,
and may be exercised during such term only in accordance with the Plan and the
terms of this Option.

RAILROAD FINANCIAL CORPORATION
1994 STOCK OPTION AND INCENTIVE
PLAN COMMITTEE

_____________ By__________________________________________
Date of Grant
(Seal)
Attest________________________

<PAGE>

RAILROAD FINANCIAL CORPORATION

1991 DIRECTORS' STOCK OPTION PLAN

1. Purpose of the Plan. The Plan shall be known as the Railroad Financial
-------------------
Corporation 1991 Directors' Stock Option Plan (the "Plan"). The purpose of the
Plan is to attract and retain the best available individuals as directors of
Railroad Financial Corporation and to provide additional incentive to such
directors to promote the success of the business.

2. Definitions. As used herein, the following definitions shall apply.
-----------

(a) "Board" shall mean the Board of Directors of the Corporation.

(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.

(c) "Committee" shall mean the Stock Option Committee appointed by
the Board in accordance with paragraph 4(a) of the Plan.

(d) "Common Stock" shall mean common stock, par value $.10 per share,
of the Corporation.

(e) "Corporation" shall mean Railroad Financial Corporation.

(f) "Director" shall mean a non-employee director of the Corporation.

(g) "Effective Date" shall mean the date specified in Section 9
hereof.

(i) "Option" means an option to purchase shares of Common Stock
granted pursuant to the Plan.

(j) "Optionee" shall mean any person who receives an Option.

(k) "Plan" shall mean the Railroad Financial Corporation 1991
Directors' Stock Option Plan.

3. Shares Subject to the Plan. Except as otherwise required by the
--------------------------
provisions of Section 8 hereof, the aggregate number of shares to which Options
may be granted pursuant to the Plan shall not exceed 20,000 shares of Common
Stock. Such shares may either be authorized but unissued shares of Common Stock
or treasury shares.

An Option shall not be considered to have been granted under the Plan if it
expires unexercised, and a new Option or Options may be granted under the Plan
with respect to the number of shares that were underlying such expired Option.
<PAGE>

4. Administration of the Plan.
--------------------------

(a) Composition of the Committee. The Plan shall be administered by
the Committee, consisting of at least three Directors of the Corporation
appointed by the Board.

(b) Powers of the Committee. The Committee is authorized (but only to
the extent not contrary to the express provisions of the Plan or to resolutions
adopted by the Board) to interpret the Plan, to make other determinations
necessary or advisable for the administration of the Plan, and to exercise such
other power and authority as may be delegated to it by the Board from time to
time. A majority of the entire Committee shall constitute a quorum and the
action of a majority of the members at any meeting at which a quorum is present
shall be deemed the action of the Committee.

The Chairman of the Board or the President of the Corporation and
such other officers as shall be designated by the Committee are hereby
authorized to execute instruments evidencing Options on behalf of the
Corporation and to cause them to be delivered to the Optionees.

(c) Effect of Committee's Decision. All decisions, determinations and
interpretations of the Committee shall be final and conclusive on all persons
affected thereby.

5. Eligibility. Options under the Plan shall be awarded only to
-----------
Directors.

6. Term of Plan. The Plan shall continue in effect for a term of ten
------------
(10) years from the Effective Date, unless sooner terminated pursuant to Section
11. No Option shall be granted under the Plan after ten (10) years from the
Effective Date.

7. Terms and Conditions of Options. Each Option granted pursuant to the
-------------------------------
Plan shall be evidenced by an instrument in such form as the Committee shall
approve. Each and every Option granted pursuant to the Plan shall comply with
and be subject to the following terms and conditions:

(a) Option Price.

The exercise price as to any particular Option granted under the
Plan shall be the fair market value of the Common Stock on the date of grant. If
the Common Stock is listed on a national securities exchange (including the
NASDAQ National Market System) at the time of the grant of an Option, then the
exercise price per Option shall be the average of the highest and lowest selling
price of such Common Stock on such exchange on the date such Option is granted,
or if there were no sales of such Common Stock on said date, then the Option
exercise price shall be the mean between the bid and asked price on such date.
If the Common Stock is traded otherwise than on a national securities exchange
at the time of the granting of an Option, then the Option exercise price shall
be the mean between the bid and asked price on such date, or if there is no bid
and asked price on said date, then on the next prior business day on which

- 2 -
<PAGE>

there was a bid and asked price. If no such bid and asked price is available,
then the Option price per share shall be determined by the Committee.

(b) Number of Options Granted.

Upon the Effective Date, each non-employee Director will be
granted Options to purchase 4,000 shares of Common Stock.

The term of exercisability of each Option granted pursuant to the Plan
shall be ten (10) years from the date the Option is granted.

(d) Transferability.

Any Option granted pursuant to the Plan shall not be assignable
or transferable otherwise than by will or by the laws of descent and
distribution.

(e) Exercise of Option.

(i) Procedure for Exercise.

Any Option granted hereunder shall be exercisable upon
its grant, subject to Section 9 hereof, and under such conditions as shall be
permissible under the terms of the Plan. An Option may not be exercised for a
fractional share of Common Stock.

An Option granted pursuant to the Plan may be exercised,
subject to provisions relative to its termination and limitations on its
exercise, from time to time only by (a) written notice of intent to exercise the
Option with respect to a specified number of shares, and (b) payment to the
Corporation (contemporaneously with delivery of such notice), in cash, in Common
Stocks, or as a combination of cash and Common Stock, of the amount of the
Option exercise price for the number of shares with respect to which the Option
is then being exercised. Each such notice and payment shall be delivered, or
mailed by prepaid registered or certified mail, addressed to the Treasurer of
the Corporation at the Corporation's executive offices. Common Stock utilized in
full or partial payment of the Option exercise price shall be valued at its fair
market value at the date of exercise as determined pursuant to Section 7(a)
herein.

(iii) Exercise While a Director and Following Termination.

An Option may be exercised by an Optionee for a period of
ten years from the date of grant, except in the event of the death of the
Optionee such Option may be exercised by the personal representatives of his
estate or person or persons to whom his rights under such Option shall have
passed by will or by laws of descent and distribution at any time during the
remaining term of the Option.

- 3 -
<PAGE>

8. Effect of Change in Common Stock. In the event that each of the
--------------------------------
outstanding shares of Common Stock (other than shares held by dissenting
stockholders) shall be changed into or exchanged into or exchanged for a
different number or kind of shares of capital stock of the Corporation or of
another company (whether by reason of merger, consolidation, recapitalization,
reclassification, stock dividend, split-up, combination of shares, or
otherwise), then there shall be substituted for each share of Common Stock then
under Option available for Option the number and kind of shares of stock into
which each outstanding share of Common Stock (other than shares held by
dissenting stockholders) shall be so changed or for which each such share shall
be so exchanged, together with an appropriate adjustment of the exercise price.
In the event there shall be any change in the number of, or kind of, issued
shares of Common Stock, or of any capital stock or other securities into which
such Common Stock shall have been changed, or for which it shall have been
exchange, then if the Committee shall, in its discretion, determine that such
change equitably requires an adjustment in the number, or kind, or Option
exercise price of Shares then subject to an Option or available for Option, such
adjustment shall be made by the Board and shall be effective and binding for all
purposes of the Plan.

9. Effective Date. The Plan shall become effective upon the approval of
--------------
the Plan by the Board.

10. Modification of Options. At any time and from time to time, the Board
-----------------------
may authorize the Committee to direct the execution of an instrument providing
for the modification of any outstanding Option, provided no such modification
shall impair the Option without the consent of the holder of the Option.

-4-

<PAGE>

RAILROAD FINANCIAL CORPORATION
1986 STOCK OPTION AND INCENTIVE PLAN
as amended on February 22, 1991

1. Purpose of the Plan. The Plan shall be known as the Railroad Financial
-------------------
Corporation, 1986 Stock Option and Incentive Plan as amended (the "Plan"). The
purpose of the Plan is to attract and retain the best available personnel as
officers and key employees and to provide additional incentive to employees of
Railroad Financial Corporation (the "Corporation") or any present or future
parent or subsidiary of the Corporation to promote the success of the business.
The Plan is intended to provide for the grant of both "Incentive Stock Options,"
within the meaning of Section 422A of the Internal Revenue Code of 1954, as
amended (the "Code"), and Non-Incentive Stock Options. Each and every one of the
provisions of the Plan relating to Incentive Stock Options shall be interpreted
to conform to the requirements of Section 422A of the Code.

2. Definitions. As used herein, the following definitions shall apply:
-----------

(a) "Award means the grant by the Committee or the Board of Directors
of an Incentive Stock Option, a Non-Incentive Stock Option, or a Stock
Appreciation Right, or any combination thereof, as provided in the Plan.

(b) "Corporation" shall mean Railroad Financial Corporation.

(d) "Common Stock" shall mean common stock, par value $.10 per share,
of the Corporation.

(e) "Code" shall mean the Internal Revenue Code of 1954, as amended.

(f) "Committee" shall mean the Stock Option Committee appointed by
the Board in accordance with paragraph 4(a) of the Plan.

(g) "Continuous Employment" or "Continuous Status as an Employee"
shall mean the absence of any interruption or termination of employment by the
Corporation or any present or future Parent or Subsidiary of the Corporation.
Employment shall not be considered
<PAGE>

interrupted in the case of sick leave, military leave or any other leave of
absence approved by the Corporation or in the case of transfers between payroll
locations of the Corporation or between the Corporation, its Parent, its
Subsidiaries or a successor.

(h) "Effective Date" shall mean the date specified in Section 15
hereof.

(i) "Employee" shall mean any person employed on a full-time basis by
the Corporation or any present or future Parent or Subsidiary of the
Corporation.

(j) "Incentive Stock Option" means an option to purchase Shares
granted by the Committee pursuant to Section 7 hereof which is subject to the
limitations and restrictions of Section 7 hereof and is intended to qualify
under Section 422A of the Code.

(k) "Non-Incentive Stock Option" means an option to purchase Shares
granted by the Committee pursuant to Section 8 hereof, which option is not
intended to qualify under Section 422A of the Code.

(l) "Option" shall mean an Incentive or Non-Incentive Stock Option
granted pursuant to this Plan.

(m) "Optioned Stock" shall mean stock subject to an Option granted
pursuant to the Plan.

(n) "Optionee" shall mean any person who receives an Option.

(o) "Parent" shall mean any present or future corporation which would
be a "parent corporation" as defined in Subsections 425(e) and (g) of the Code.

(p) "Participant" means any full-time employee of the Corporation or
any Parent or Subsidiary of the Corporation.

(q) "Plan" shall mean the Railroad Financial Corporation, 1986 Stock
Option and Incentive Plan, as amended.

(r) "Related" means (i) in the case of a Stock Appreciation Right, a
Stock Appreciation Right which is granted in connection with, and to the extent
exercisable, in whole or in part, in lieu of, an Option and (ii) in the case of
an Option, an Option with respect to which and to the extent a Stock
Appreciation Right is exercisable, in whole or in part, in lieu thereof has been
granted.

(s) "Stock Appreciation Right" means a stock appreciation right with
respect to Shares granted by the Committee pursuant to Section 12 hereof.

-2-
<PAGE>

(t) "Share" shall mean one share of the Common Stock.

(u) "Subsidiary" shall mean any present or future corporation which
would be a "subsidiary corporation" as defined in Subsections 425(f) and (g) of
the Code.

3. Shares Subject to the Plan. Except as otherwise required by the
--------------------------
provisions of Section 13 hereof, the aggregate number of Shares with respect to
which Awards may be made pursuant to the Plan shall not exceed 74,750 shares.
Such Shares may either be authorized but unissued or treasury shares.

Shares which are subject to Stock Appreciation Rights and related Options
shall be counted only once in determining whether the maximum number of Shares
with respect to which Awards may be granted under the Plan has been exceeded. An
Award shall not be considered to have been made under the Plan with respect to
any Option or Stock Appreciation Right which terminates and new Awards may be
granted under the Plan with respect to the number of Shares as to which such
termination has occurred.

4. Administration of the Plan.
--------------------------

(a)(i) Composition of the Committee. The Plan shall be administered
by the Committee, consisting of three directors of the Corporation appointed by
the Board. Employees who are designated by the Committee shall be eligible to
receive Awards under the Plan. No person who shall have been or is a member of
the Committee shall be eligible to receive an Award under the Plan.

(b) Powers of the Committee. The Committee is authorized (but only
to the extent not contrary to the express provisions of the Plan or to
resolutions adopted by the Board) to interpret the Plan, to prescribe, amend and
rescind rules and regulations relating to the Plan, to determine the form and
content of Awards to be issued under the Plan and to make other determinations
necessary or advisable for the administration of the Plan, and shall have and
may exercise such other power and authority as may be delegated to it by the
Board from time to time. A majority of the entire Committee shall constitute a
quorum and the action of the majority of the members present at any meeting at
which a quorum is present shall be deemed the action of the Committee. In no
event may the Committee revoke outstanding Awards without the consent of the
Participant.

The President of the Corporation and such other officers as shall be
designated by the Committee are hereby authorized to execute instruments
evidencing Awards on behalf of the Corporation and to cause them to be delivered
to the Participants.

-3-
<PAGE>

and conclusive on all persons affected thereby.

5. Eligibility. Awards may be granted to such Employees of the
-----------
Corporation or any present or future Parent and Subsidiary as shall be
designated by the Committee. The Committee shall from time to time determine the
key employees who shall be granted Options or Awards under the Plan, the number
to be granted Plan, and whether Options granted to each such Employee under the
Plan shall be Incentive and/or Non-Incentive Stock Options. In selecting
Participants and in determining the number of shares of Common Stock to be
granted to each such Participant pursuant to each Award granted under the Plan,
the Committee may consider the nature of the services rendered by each such
Participant, each such Participant's current and potential contribution to the
Corporation, and such other factors as the Committee may, in its sole
discretion, deem relevant. Employees who have been granted an Award may, if
otherwise eligible, be granted additional Options or Awards.

The aggregate fair market value (determined as of the date the Option
is granted) of the Shares for which any Employee may be granted Options which
first become exercisable in any calendar year (under all Incentive Stock Option
Plans, as defined in Section 422A of the Code, of the Corporation or any present
or future Parent or Subsidiary of the Corporation) shall not exceed $100,000.
Notwithstanding the prior provisions of this Section 5, the Committee may grant
Options in excess of the foregoing limitations, provided said Options shall be
clearly and specifically designated as not being Incentive Stock Options, as
defined in Section 422A of the Code.

6. Term of Plan. The Plan shall continue in effect for a term of ten
------------
(10) years from the Effective Date, unless sooner terminated pursuant to Section
18. No Option shall be granted under the Plan after ten (10) years from the
Effective Date.

7. Terms and Conditions of Incentive Stock Options. Each Incentive Stock
-----------------------------------------------
Option granted pursuant to the Plan shall be evidenced by an instrument in such
form as the Committee shall from time to time approve. Each and every Incentive
Stock Option granted pursuant to the Plan shall comply with, and be subject to,
the following terms and conditions:

(a) Option Price.

(i) The price per share at which each Incentive Stock Option
granted under the Plan may be exercised shall not, as to any particular
Incentive Stock Option, be less than the fair market value of the Common Stock
at the time such Incentive Stock Option is granted. For such purposes, if the
Common Stock is traded otherwise than on a national securities exchange at the
time of the granting of an Option, then the price per share of the

-4-
<PAGE>

Optioned Stock shall be not less than the mean between the bid and asked price
on the date the Incentive Stock Option is granted or, if there be no bid and
asked price on said date, then on the next prior business day on which there was
a bid and asked price. If no such bid and asked price is available, then the
price per share shall be determined by the Committee. If the Common Stock is
listed on a national securities exchange at the time of the granting an
Incentive Stock Option, then the price per share shall be not less than the
average of the highest and lowest selling price on such exchange on the date
such Incentive Stock Option is granted or, if there were no sales on said date,
then the price shall be not less than the mean between the bid and asked price
on such date.

(ii) In the case of an Employee who owns Common Stock
representing more than ten percent (10%) of the outstanding Common Stock at the
time the Incentive Stock Option is granted, the Incentive Stock Option price
shall not be less than one hundred and ten percent (110%) of the fair market
value of the Common Stock at the time the Incentive Stock Option is granted.

(b) Payment.

Full payment for each share of Common Stock purchased upon the
exercise of any Incentive Stock Option granted under the Plan shall be made at
the time of exercise of each such Incentive Stock Option and shall be paid in
cash (in United States Dollars), Common Stock or a combination of cash and
Common Stock. Common Stock utilized in full or partial payment of the exercise
price shall be valued at its fair market value at the date of exercise. The
Corporation shall accept full or partial payment in Common Stock only to the
extent permitted by applicable law. No shares of Common Stock shall be issued
until full payment therefor has been received by the Corporation, and no
Optionee shall have any of the rights of a shareholder of the Corporation until
shares of Common Stock are issued to him.

The term of each Incentive Stock Option granted pursuant to the
Plan shall be not more than ten (10) years from the date each such Incentive
Stock Option is granted, provided that in the case of an Employee who owns stock
representing more than 10% of the Common Stock outstanding at the time the
Incentive Stock Option is granted, the term of the Incentive Stock Option shall
not exceed five (5) years.

(d) Exercise Generally.

Except as otherwise provided in Section 9 hereof, no Incentive
Stock Option may be exercised unless the Optionee shall have been in the employ
of the Corporation at all times during the

-5-
<PAGE>

period beginning with the date of grant of any such Incentive Stock Option and
ending on the date three (3) months prior to the date of exercise of any such
Incentive Stock Option. The Committee, may impose additional conditions upon the
right of an Optionee to exercise any Incentive Stock Option granted hereunder
which are not inconsistent with the terms of the Plan or the requirements for
qualification as an Incentive Stock Option under Section 422A of the Code.

(e) Transferability.

Any Incentive Stock Option granted pursuant to the Plan shall be
exercised during any Optionee's lifetime only by the Optionee to whom it was
granted and shall not be assignable or transferable otherwise than by will or by
the laws of descent and distribution.

8. Terms and Conditions of Non-Incentive Stock Options. Each Non-
---------------------------------------------------
Incentive Stock Option granted pursuant to the Plan shall be evidenced by an
instrument in such form as the Committee shall from time to time approve. Each
and every Non-Incentive Stock Option granted pursuant to the Plan shall comply
with and be subject to the following terms and conditions:

(a) Option Price.

The price per share at which each Non-Incentive Stock Option
granted under the Plan may be exercised shall not, as to any particular
Non-Incentive Stock Option, be less than the fair market value of the Common
Stock, as determined in accordance with Section 7(a) of the Plan, at the time
such Non-Incentive Stock Option is granted.

(b) Payment.

Full payment for each share of Common Stock purchased upon the
exercise of any Non-Incentive Stock Option granted under the Plan shall be made
at the time of exercise of each such Non-Incentive Stock Option and shall be
paid in cash (in United States Dollars), Common Stock or a combination of cash
and Common Stock. Common Stock utilized in full or partial payment of the
exercise price shall be valued at its fair market value at the date of exercise.
The Corporation shall accept full or partial payment in Common Stock only to the
extent permitted by an applicable law. No shares of Common Stock shall be issued
until full payment therefor has been received by the Corporation, and no
Optionee shall have any of the rights of a shareholder of the Corporation until
the shares of Common Stock are issued to him.

The term of each Non-Incentive Stock Option granted

-6-

<PAGE>

pursuant to the Plan shall be not more than ten (10) years from the date each
such Non-Incentive Stock Option is granted, provided that, in the case of an
Employee who owns stock representing more than 10% of the Common Stock at the
time the Incentive Stock Option is granted, the term of the Non-Incentive Stock
Option shall not exceed five (5) years.

(d) Exercise Generally.

The Committee may impose additional conditions upon the right of
any Participant to exercise any Non-Incentive Stock Option granted hereunder
which are not inconsistent with the terms of the Plan.

(e) Transferability.

Any Non-Incentive Stock Option granted pursuant to the Plan shall
be exercised during any Optionee's lifetime only by the Optionee to whom it was
granted and shall not be assignable or transferable otherwise than by will or by
the laws of descent and distribution.

9. Effect of Termination of Employment, Disability or Death on Incentive
---------------------------------------------------------------------
Stock Options.
- -------------

(a) Termination of Employment.

In the event that any Optionee's employment by the Company shall
terminate for any reason, other than Permanent and Total Disability (as such
term is defined in Section 105(d)(4) of the Code) or death, all of any such
Optionee's Incentive Stock Options, and all of any such Optionee's rights to
purchase or receive shares of Common Stock pursuant thereto, as the case may be,
shall automatically terminate on the date of such termination of employment.
However, no termination of an Optionee's Incentive Stock Options shall occur if,
and to the extent that, the Committee authorizes the Optionee to exercise any
such Incentive Stock Options at any time prior to the earlier of (i) the
respective expiration dates of any such Incentive Stock Options or (ii) the
expiration of not more than three (3) months after the date of such termination
of employment, but only if, and to the extent that, the Optionee was entitled to
exercise any such Incentive Stock Options at the date of such termination of
employment. In the event that a subsidiary ceases to be a subsidiary of the
Corporation, the employment of all of its employees who are not immediately
thereafter employees of the Corporation shall be deemed to terminate upon the
date such subsidiary so ceases to be a subsidiary of the Corporation.

(b) Disability.

In the event that any Optionee's employment by the

-7-

<PAGE>

Corporation shall terminate as the result of the Permanent and Total disability
of such Optionee, such Optionee may exercise any Incentive Stock Options granted
to him pursuant to the Plan at any time prior to the earlier of (i) the
respective expiration dates of any such Incentive Stock Options or (ii) the date
which is one (1) year after the date of such termination of employment, but only
if, and to the extent that, the Optionee was entitled to exercise any such
Incentive Stock Options at the date of such termination of employment.

In the event of the death of any Optionee, any Incentive Stock
Options granted to any such Optionee may be exercised by the person or persons
to whom the Optionee's rights under any such Incentive Stock Options pass by
will or by the laws of descent and distribution (including the Optionee's estate
during the period of administration) at any time prior to the earlier of (i) the
respective expiration dates of any such Incentive Stock Options or (ii) the date
which is six (6) months after the date of death of such Optionee (or such later
period not exceeding one (1) year to which the Committee may, in its discretion,
extend such period), but only if, and to the extent that, the Optionee was
entitled to exercise any such Incentive Stock Options at the date of death. For
purposes of this Section 9(c), any Incentive Stock Option held by an Optionee
shall be considered exercisable at the date of his death if the only unsatisfied
condition precedent to the exercisability of such Incentive Stock Option at the
date of death is the passage of a specified period of time.

(d) Incentive Stock Options Deemed Exercisable.

For purposes of Sections 9(a), 9(b) and 9(c) above, any Incentive
Stock Option held by any Optionee shall be considered exercisable at the date of
the termination of his employment if, but for the requirement of serial exercise
set forth in Section 7(e) hereof, any such Incentive Stock Option would have
been exercisable at such date of termination of employment. Any exercise of any
Incentive Stock Option granted pursuant to the Plan which is considered
exercisable pursuant to this Section 9(d) shall nevertheless be subject to the
provisions and restrictions contained in Section 7(e) hereof.

(e) Termination of Incentive Stock Options.

To the extent that any Incentive Stock Option granted under the
Plan to any Optionee whose employment by the Corporation terminates shall not
have been exercised within the applicable period set forth in this Section 9,
any such Incentive Stock Option, and all rights to purchase or receive shares of
Common Stock pursuant thereto, as the case may be, shall terminate on the last
day of the applicable period.

-8-

<PAGE>

10. Effect of Termination of Employment, Disability or Death on
-----------------------------------------------------------
Non-Incentive Stock Options. The terms and conditions of Non-Incentive
- ----------------------------
Stock Options relating to the effect of the termination of an Optionee's
employment, disability of an Optionee or his death shall be such terms and
conditions as the Committee shall, in its sole discretion; determine at the time
of termination.

11. Right of Repurchase and Restrictions on Disposition. The Committee, in
---------------------------------------------------
its sole discretion, may include, as a term of any Incentive Stock Option or
Non-Incentive Stock Option, the right (the "Repurchase Right"), but not the
obligation, to repurchase all or any amount of the Shares acquired by an
Optionee pursuant to the exercise of any such Options. The intent of the
Repurchase Right is to encourage the continued employment of the Optionee. The
Repurchase Right shall provide for, among other things, a specified duration of
the Repurchase Right, a specified price per Share to be paid upon the exercise
of the Repurchase Right and a restriction on the disposition of the Shares by
the Optionee during the period of the Repurchase Right. The Repurchase Right may
permit the Corporation to transfer or assign such right to another party. The
Corporation may exercise the Repurchase Right only to the extent permitted by
applicable law.

12. Stock Appreciation Rights. A Stock Appreciation Right shall, upon its
-------------------------
exercise, entitle the Participant to whom such Stock Appreciation Right was
granted to receive a number of Shares or cash or combination thereof, as the
Committee in its discretion, shall determine, the aggregate value of which
(i.e., the sum of the amount of cash and/or the fair market value of such Shares
on date of exercise) shall equal (as nearly as possible, it being understood
that the Corporation shall not issue any fractional shares) the amount by which
the fair market value per Share on the date of such exercise shall exceed the
exercise price of such Stock Appreciation Right, multiplied by the number of
Shares with respect of which such Stock Appreciation Right shall have been
exercised. A Stock Appreciation Right may be related to an Option or may be
granted independently of any Option as the Committee shall determine whether and
to what extent a Related Stock Appreciation Right shall be granted with respect
thereto; provided, however and notwithstanding any other provision of the Plan,
that if the Related Option is an Incentive Stock Option, the Related Stock
Appreciation Right shall satisfy all the restrictions and limitations of Section
7 hereof as if such Related Stock Appreciation Right were an Incentive Stock
Option. In the case of a Related Option, such Related Option shall cease to be
exercisable to the extent of the Shares with respect to which the Related Stock
Appreciation Right was exercised. Upon the exercise or termination of a Related
Option, any Related Stock Appreciation Right shall terminate to the extent to
the Shares with respect to which the Related Option was exercised or terminated.

-9-

<PAGE>

13. Recapitalization, Merger, Consolidation, Change in Control and Similar
----------------------------------------------------------------------
Transactions.
- ------------

(a) Adjustment.

Subject to any required action by the shareholders of the
Corporation, the aggregate number of share of Common Stock for which stock
options may be granted hereunder, the number of shares of Common Stock covered
by each outstanding stock option, and the exercise price per share of Common
Stock of each such stock option, shall all be proportionately adjusted for any
increase or decrease in the number of issued and outstanding shares of Common
Stock resulting from a subdivision or consolidation of shares or the payment of
a stock dividend (but only on the Common Stock) or any other increase or
decrease in the number of such shares of Common Stock effected without the
receipt of consideration by the Corporation.

(b) Change in Control.

In the event of a change in control of the Corporation, the
Optionee at his option may, on the date immediately prior to the consummation of
such change in control, exercise all of his outstanding options, or in lieu
thereof, may receive on such date, cash, in an amount equal to the aggregate
difference between the exercise price per share and the market price per share
of the stock underlying such outstanding options on the date immediately prior
to the consummation of such change in control of the Corporation. For purposes
of this Section, "change in control" shall mean: the acquisition of the
"beneficial ownership" (as that term is defined in Rule 13d-3 of the General
Rules and Regulations under the Securities Exchange Act of 1934) of twenty-five
percent (25%) or more of the voting securities of the Corporation by any person
or by persons acting as a group within the meaning of Section 13(d) of the
Securities Exchange Act of 1934; provided, however, that for the purpose of the
Option Plan to change in control shall be deemed to have occurred if prior to
the acquisition of, or offer to acquire 25 percent (25%) or more of the voting
securities of the Corporation, the full Board of Directors of the Corporation
shall be adopted by not less than a two-thirds vote a resolution specifically
approving such acquisition or offer. The term "person" refers to an individual
or a corporation, partnership, trust, association, joint venture, pool,
syndicate, sole proprietorship, unincorporated organization or any form of
entity not specifically listed herein.

Subject to any required action by the shareholders of the
Corporation, in the event of any Change in Control, recapitalization, merger,
consolidation, exchange of shares, spinoff, reorganization, tender offer,
liquidation or other

-10-

<PAGE>

extraordinary corporate action or event, the Committee, in its sole discretion,
shall have the power, prior or subsequent to such action or event to:

(i) appropriately adjust the number of shares of Common Stock
subject to each stock option, the exercise price per share of Common Stock, and
the consideration to be given or received by the Corporation upon the exercise
of any outstanding Option;

(ii) cancel any or all previously granted Options, provided that
appropriate consideration is paid to the Optionee in connection therewith;
and/or

(iii) make such other adjustments in connection with the Plan as
the Committee, in its sole discretion, deems necessary, desirable, appropriate
or advisable; provided, however, that no action shall be taken by the Committee
which would cause Incentive Stock Options granted pursuant to the Plan to fail
to meet the requirements of Section 422A of the Code.

Except as expressly provided in Section 13(a) and 13(b) hereof,
no Optionee shall have any rights by reason of the occurrence of any of the
events described in this Section 13.

(d) Acceleration.

The Committee shall at all times have the power to accelerate the
exercise date of Options previously granted under the Plan. In no event,
however, will such action permit Participants to exercise Incentive Stock
Options in an order other than provided in Section 7(e).

14. Time of Granting Options. The date of grant of an Option under the Plan
------------------------
shall, for all purposes, be the date on which the Committee makes the
determination of granting such Option. Notice of the determination shall be
given to each Employee to whom an Option is so granted within a reasonable time
after the date of such grant.

15. Effective Date. The Plan shall become effective upon the completion of
--------------
the Corporation's conversion from mutual to stock form. Options may be granted
prior to ratification of the Plan by the stockholders if the exercise of such
Options is subject to such stockholder ratification.

16. Approval by Shareholders. The Plan shall be approved by stockholders of
------------------------
the Corporation within twelve (12) months before or after the date it becomes
effective.

17. Modification of Options. At any time and from time to time, the Board
-----------------------
may authorize the Committee to direct the execution

-11-
<PAGE>

of an instrument providing for the modification of any outstanding Option,
provided no such modification, extension or renewal shall confer on the holder
of said Option any right or benefit which could not be conferred on him by the
grant of a new Option at such time, or shall not materially decrease the
Optionee's benefits under the Option without the consent of the holder of the
Option, except as otherwise permitted under Section 18 hereof.

Notwithstanding anything herein to the contrary, the Committee shall be
authorized to cancel outstanding Options granted pursuant to the Plan, with the
consent of the Optionee, and to reissue new Options at a lower exercise price
equal to the then fair market value per share of Common Stock at any time prior
to the date of the exercise of such Option falls below the exercise price of the
Options previously granted pursuant to the Plan. The number of new Options to be
granted upon cancellation and surrender of previously granted Options and the
other terms and conditions of such new Options shall be determined within the
sole discretion of the Committee.

18. Amendment and Termination of the Plan.
-------------------------------------

(a) Action by the Board.

The Board may alter, suspend or discontinue the Plan, except that no
action of the Board may increase (other than as provided in Section 13) the
maximum number of shares permitted to be optioned under the Plan, materially
increase the benefits accruing to participants under the Plan or materially
modify the requirements for eligibility for participation in the Plan unless
such action of the Board shall be subject to approval or ratification by the
shareholders of the Corporation.

(b) Change in Applicable Law.

Notwithstanding any other provision contained in the Plan, in the
event of a change in any federal or state law, rule or regulation which would
make the exercise of all or part of any previously granted Incentive and/or
Non-Incentive Stock Option unlawful or subject the Corporation to any penalty,
the Committee may restrict any such exercise without the consent of the Optionee
or other holder thereof in order to comply with any such law, rule or regulation
or to avoid any such penalty.

19. Conditions Upon Issuance of Shares. Shares shall not be issued with
----------------------------------
respect to any Option granted under the Plan unless the issuance and delivery of
such Shares shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, the rules and regulations
promulgated thereunder, any applicable state securities law and the requirements
of any stock exchange upon which the Shares may then be listed.

-12-
<PAGE>

The inability of the Corporation to obtain from any regulatory body or
authority deemed by the Corporation's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder shall relieve the Corporation of any
liability in respect of the non-issuance or sale of such Shares.

As a condition to the exercise of an Option, the Association may require
the person exercising the Option to make such representations and warranties as
may be necessary to assure the availability of an exemption from the
registration requirements of federal or state securities law.

20. Reservation of Shares. During the term of the Plan, the Corporation,
---------------------
will reserve and keep available a number of Shares sufficient to satisfy the
requirements of the Plan.

21. Unsecured Obligation. No Participant under the plan shall have any
--------------------
interest in any fund or special asset of the Association by reason of the Plan
or the grant of any Incentive or Non-Incentive Stock Option to him under the
Plan. No trust fund shall be created in connection with the Plan or any grant of
any Incentive or Non-Incentive Stock Option hereunder and there shall be no
required funding of amounts which may become payable to any participant.

22. Withholding Tax. The Corporation shall have the right to deduct from
---------------
all amounts paid in cash with respect to the exercise of a Stock Appreciation
Right under the Plan any taxes required by law to be withheld with respect to
such cash payments. Where a Participant or other person is entitled to receive
Shares pursuant to the exercise of an Option or Stock Appreciation Right
pursuant to the Plan, the Corporation shall have the right to require the
Participant or such other person to pay the Corporation the amount of any taxes
which the Corporation is required to withhold with respect to such Shares, or,
in lieu thereof, to retain, or sell without notice, a number of such Shares
sufficient to cover the amount required to be withheld.

23. Governing Law. The Plan shall be governed by and construed in
-------------
accordance with the laws of the State of Kansas.

-13-
<PAGE>

STOCK OPTION AGREEMENT

FOR INCENTIVE STOCK OPTIONS UNDER SECTION 422 A
OF THE INTERNAL REVENUE CODE
PURSUANT TO THE

RAILROAD FINANCIAL CORPORATION
1986 STOCK OPTION AND INCENTIVE PLAN, as amended

STOCK OPTION for a total of 500 shares of Common Stock, par value $.10 per
share, of Railroad Financial Corporation (the "Corporation"), which Option is
intended to qualify as an incentive stock option under Section 422A of the
Internal Revenue Code of 1954, as amended, is hereby granted to Sue Schmitt (the
"optionee") at the price determined as provided in, and in all respects
subject to the terms, definitions and provisions of, the 1986 Stock Option and
Incentive Plan, as amended (the "Plan") adopted by the Corporation which is
incorporated by reference herein, receipt of which is hereby acknowledged.

1. Option Price. The Option price is $8.00 for each share, being 100% of
------------
the fair market value, as determined by the Committee, of the Common Stock on
the date of grant of this option.

2. Exercise of Option. This Option shall be exercisable in accordance with
------------------
provisions of Section 7 of the Plan.

(A) Termination of Employment. Notwithstanding any
-------------------------

<PAGE>

provisions, in this section, and as more specifically set forth in Section 9(a)
of the Plan, if the Optionee's employment by the Corporation or any of its
subsidiaries shall terminate for any reason, other than Permanent and Total
Disability or death, all of any such Optionee's Incentive Stock Options shall
automatically terminate on the date of such termination of employment.

(B) Method of Exercise. This Option shall be exercisable by a written
------------------
notice which shall:

(i) state the election to exercise the Option, the number of
shares with respect to which it is being exercised, the person in
whose name the stock certificate or certificates for such shares of
Common Stock is to be registered, the person's address and Social
Security Number (or if more than one, the names, addresses and Social
Security Numbers of such persons);

(ii) contain such representations and agreements as to the
holder's investment intent with respect to such shares of Common
Stock as may be satisfactory to the Corporation's counsel;

(iii) be signed by the person or persons entitled to exercise the
Option and, if the Option is being exercised by any person or persons
other than the Optionee, be accom-

<PAGE>

panied by proof, satisfactory to counsel for the Corporation, of the
right of such person or persons to exercise the Option; and

(iv) be in writing and delivered in person or by certified mail
to the Chief Financial Officer of the Corporation.

Payment of the Purchase price of any share with respect to which the
Option is being exercised shall be by certified or bank cashier's or
teller's check. The certificate or certificates for shares of Common Stock
as to which the Option shall be exercised shall be registered in the name
of the person or persons exercising the Option.

(C) Restrictions or Exercise. This Option may not be exercise if the
------------------------
issuance of the shares on such exercise would constitute a violation of any
applicable federal or state securities or other law or valid regulation. As
a condition to the exercise of this Option, the Corporation may require the
person exercising this Option to make any representation and warranty to
the Corporation as may be required by any applicable law or regulation.

3. Nontransferability of Option. This Option may not be transferred in any
----------------------------
manner otherwise than by will or the laws of descent or distribution and may be
exercised during the lifetime of the Optionee only by the Optionee. The terms of
this Option shall
<PAGE>

be binding on the executors, administrators, heirs, successors and assigns of
the Optionee.

4. Order of Exercising Options. Any Option granted hereunder shall not be
---------------------------
exercisable while there is outstanding any incentive stock option which was
granted, before the granting of such Option, to the Optionee to purchase stock
in the Corporation.

5. Term of Option. This Option may not be exercised more than ten (10)
--------------
years from the date of grant of this Option, as set forth below, and may be
exercised during such term only in accordance with the Plan and the terms of
this Option.

RAILROAD FINANCIAL CORPORATION

By
------------------------------------
Robert D. Taylor, Chairman and CEO

Date of Grant: Attest:
-------------------------------
Kari S. Schmidt, Corporate Secretary

(SEAL APPEARS HERE]

<PAGE>

EXHIBIT 5.1

[LETTERHEAD OF HOUSLEY GOLDBERG KANTARIAN & BRONSTEIN, P.C. APPEARS HERE]

Board of Directors
Commercial Federal Corporation
2120 South 72nd Street
Omaha, Nebraska 68124

Re: Commercial Federal Corporation Registration Statement on Form S-8
-----------------------------------------------------------------
Railroad Financial Corporation 1994 Stock Option and Incentive Plan
Railroad Financial Corporation 1991 Directors' Stock Option Plan
Railroad Financial Corporation 1986 Stock Option and Incentive Plan,
as amended, on February 22, 1991

Gentlemen:

We have acted as special counsel to Commercial Federal Corporation, a
Nebraska corporation (the "Company"), in connection with the preparation of
the Registration Statement on Form S-8 filed with the Securities and
Exchange Commission (the "Registration Statement") under the Securities Act
of 1933, as amended, relating to 62,389 shares of common stock, par value
$.01 per share (the "Common Stock") of the Company which may be issued upon
the exercise of options granted under the Railroad Financial Corporation
1994 Stock Option and Incentive Plan, the Railroad Financial Corporation
1991 Directors' Stock Option Plan and the Railroad Financial Corporation
1986 Stock Option and Incentive Plan, as amended, on February 22, 1991 (the
"Plans"), and as more fully described in the Registration Statement. You
have requested the opinion of this firm with respect to certain legal
aspects of the proposed offering.

We have examined such documents, records and matters of law as we have
deemed necessary for purposes of this opinion and based thereon, we are of
the opinion that the Common Stock when issued pursuant to and in accordance
with the terms of the Plans (including but not limited to receipt of proper
payment therefor) and in accordance with the terms of the Reorganization
and Merger Agreement between the Company and Railroad Financial Corporation
and their respective Savings Bank subsidiaries, dated April 18, 1995, will
be duly and validly issued, fully paid and nonassessable.

We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form S-8 and to references to our firm included
under the caption "Legal Opinion" in the Registration Statement.

Very truly yours,

Housley Goldberg Kantarian & Bronstein, P.C.

By: /s/ Gary R. Bronstein
--------------------------
Gary R. Bronstein, Esquire
Washington, D.C.
October 5, 1995

<PAGE>

EXHIBIT 23.2

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in this Registration
Statement of Commercial Federal Corporation on Form S-8 of our report dated
August 25, 1995 (September 22, 1995 as to Note 27), incorporated by reference in
the Annual Report on From 10-K of Commercial Federal Corporation for the year
ended June 30, 1995.

DELOITTE & TOUCHE LLP

Omaha, Nebraska
October 3, 1995