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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
FRONTEER FINANCIAL HOLDINGS, LTD.
----------------------------------------
(Name of Issuer)
$0.01 Par Value Common Stock
----------------------------------------
(Title of Class of Securities)
359031101
----------------
(CUSIP Number)
Robert L. Long, 935 Castle Ridge Road,
Golden, CO 80401 (303) 860-6445
--------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
November 6, 1996
------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-l(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Page 1 of 4 pages
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SCHEDULE 13D
CUSIP No. 359031101 Page 2 of 4 pages
1. NAME OF REPORTING PERSON
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Robert L. Long
S.S. No.: ###-##-####
-------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
-------------------------------------------------------------------------
3. SEC USE ONLY
-------------------------------------------------------------------------
4. SOURCE OF FUNDS*
N/A
-------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
-------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
USA
-------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES 923,125 shares--5.70% (includes 78,125 shares under-
BENEFICIALLY lying presently exercisable warrants and 320,000
OWNED BY shares underlying presently exercisable options)
EACH
REPORTING ----------------------------------------------------
PERSON 8. SHARED VOTING POWER
WITH 0
----------------------------------------------------
9. SOLE DISPOSITIVE POWER
923,125 shares--5.70% (includes 78,125 shares
underlying presently exercisable warrants and 320,000
shares underlying presently exercisable options)
----------------------------------------------------
10. SHARED DISPOSITIVE POWER
0
--------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
923,125 SHARES--5.70% (includes 78,125 shares underlying presently
exercisable warrants and 320,000 shares underlying presently
exercisable options)
-------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
-------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
5.70%
--------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON*
IN
-------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
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ITEM 1. SECURITY AND ISSUER.
This Amendment No. 2 to Schedule 13D relates to the $0.01 par value common
stock ("Common Stock") of Fronteer Financial Holdings, Ltd. ("Issuer"). The
Issuer's principal executive offices are located at 1700 Lincoln Street, 32nd
Floor, Denver, Colorado 80203.
ITEM 2. IDENTITY AND BACKGROUND.
(a) Name: Robert L. Long
(b) Business Address: 1700 Lincoln Street, 32nd Floor, Denver, Colorado
80203.
(c) Present Principal Occupation: Senior Vice President/Corporate Finance
of RAF Financial Corporation, 1700 Lincoln Street, 32nd Floor, Denver, Colorado
80203. RAF Financial Corporation is a securities broker and dealer. Mr. Long is
the Secretary and a director of the Issuer.
(d) During the last five years, Robert L. Long has not been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) During the last five years, Robert L. Long has not been a party to any
civil proceedings before any judicial or administrative body of competent
jurisdiction as a result of which he has been or is subject to any judgment,
decree or final order enjoining any violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation
with respect to such laws.
(f) Citizenship: U.S.A.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The Incentive Stock Options as described in Item 6 below were granted to
Robert L. Long as an incentive to remain an employee of the Issuer. There was no
monetary consideration associated with these transactions.
ITEM 4. PURPOSE OF TRANSACTION.
The purpose of the transactions described in this Amendment No. 2 to
Schedule 13D was to provide incentive to Robert L. Long to remain an employee of
the Issuer. The transactions do not involve any plans or proposals which might
be considered to be an extraordinary corporate transaction or which would result
in a material change in the business of the Issuer or its corporate structure.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Robert L. Long owns directly 923,125 shares (5.70% of the Issuer's
outstanding shares), which includes 78,125 shares underlying presently
exercisable warrants and 320,000 shares underlying presently exercisable
options. Mr. Long is deemed to have sole voting and dispositive power of the
shares.
During 1996, the Issuer granted two Incentive Stock Options ("Options") to
Robert L. Long, which Options were accepted by Mr. Long on November 6, 1996. The
first Option is for 128,500 shares of Common Stock which vested on September 10,
1996. The second Option is for a total of 671,500 shares of Common Stock, 31,500
shares of which vested on September 10, 1996, 160,000 shares of which vest on
January 1, 1997 and 160,000 shares of which vest on January 1 of each year
thereafter up to the year 2000.
The Incentive Stock Options were granted by the Issuer for good and
valuable consideration, including the incentive to Robert L. Long to remain as
an employee of the Issuer.
Robert L. Long has not ceased to be a beneficial owner of more than 5% of
the Common Stock of the Issuer.
Page 3 of 4 pages
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ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER.
As described in Item 5 above, on November 6, 1996, two Options were
accepted from the Issuer by Mr. Long. Copies of the Option Certificates are
attached hereto as Exhibits 1 and 2.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1 - Incentive Stock Option Certificate to Purchase 128,500 Shares
of Common Stock.
Exhibit 2 - Incentive Stock Option Certificate to Purchase 671,500 Shares
of Common Stock.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete, and
correct.
/s/ Robert L. Long
------------------------------------------
Robert L. Long
Date Signed: November 25, 1996
-----------------------------------------
Page 4 of 4 Pages
OPTION TO PURCHASE 128,500
SHARES OF COMMON STOCK
THIS OPTION IS NONTRANSFERABLE OTHER THAN BY WILL OR THE LAWS OF
DESCENT AND DISTRIBUTION AND THE SHARES UNDERLYING THIS OPTION
MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT, THE AVAILABILITY OF WHICH IS TO BE
ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
INCENTIVE STOCK OPTION CERTIFICATE
1996 INCENTIVE AND NONSTATUTORY STOCK OPTION PLAN
Fronteer Financial Holdings, Ltd., a Colorado corporation ("Company"), for
good an valuable consideration, including the incentive to the Optionee to
remain as an employee of the Company as a result of his ownership or increased
ownership of the Company's no par value common stock ("Common Stock"), the
receipt and sufficiency of which consideration hereby is acknowledged,
irrevocably grants to the Optionee the option ("Option") to purchase the
following number of shares of the Company's Common Stock, which shares shall
hereinafter be referred to as the "Stock":
Optionee Number of Shares Common Stock Vesting Date
- --------- ----------------------------- ------------
Robert L. Long 128,500 9/10/96
subject to (i) the terms and conditions of the Company's 1996 Incentive and
Nonstatutory Stock Option Plan ("Plan"), (ii) the rules and regulations for the
administration of the Plan which may be adopted from time to time and (iii) the
following terms and conditions:
1. Exercise Price. The purchase price ("Exercise Price") for shares of
Stock purchased pursuant to this Option is $.625 per share which shall be paid
in full at the time of exercise. The Exercise Price shall be paid in cash at the
time of exercise except that the Company's Board of Directors administering the
Plan ("Board") may, in its sole discretion, permit payment to the made with
Common Stock owned by the Optionee or by surrender of all or part of this Option
on terms and conditions determined by the Board. Optionee shall have no rights
with respect to dividends or have any other rights as shareholder with respect
to shares subject to this Option until he has given written notice of the
exercise of the Option and has paid in full for such shares.
<PAGE>
2. Exercise Period and Restrictions. Unless sooner terminated as hereby
provided, this Option shall continue until 2:30 p.m., Mountain Time on September
9, 2006. This Option is nontransferable other than by will or the laws of
descent and distribution. During the Option Holder's lifetime or upon the
expiration of this Option as provided herein, whichever occurs earlier, only the
Option Holder may exercise this Option.
3. Number of Shares. This Option shall be exercised only for 100 shares of
Stock or a multiple thereof or for the full number of shares of Stock for which
the Option is then exercisable.
4. Representation as to Stock Ownership. Optionee does not own stock
possessing more than 10% of the total combined voting power or value of all
classes of stock of the Company outstanding ("10% Ownership"). If Optionee has
more than 10% Ownership, the purchase price of the Stock upon exercise of the
Option will be adjusted to reflect an exercise price of 110% of the fair market
value of Common Stock at the close of business as of the date of the grant of
the option represented by this Option Certificate. For purposes of calculating
such stock ownership by Optionee, the attribution rules of stock ownership set
forth in Section 425(d) of the Internal Revenue Code of 1986, as amended,
("Code") shall apply.
5. Limitations on Exercise of Option. If the aggregate fair market value of
the Stock subject to this Option and all other options granted under the Plan
and any other incentive stock option plans ("other plans") of the Company which
are exercisable for the first time by Optionee during any calendar year, exceeds
$100,000, the exercise of this Option is subject to the following limitation:
The fair value of the options which first become exercisable under this and all
other incentive stock options of Optionee during any one calendar year shall not
exceed $100,000. Any portion of this Option which does not become exercisable in
any year in order to effect the foregoing limitation shall become exercisable on
the earliest date thereafter as shall be available consistent with the Plan and
all other stock options then held by Optionee. For purposes of this Section 5,
the fair market value of the Common Stock subject to the Plan or any other plan
shall be determined as of the date such options are granted.
6. Death of Optionee. If Optionee dies during Optionee's employment by the
Company, this Option shall be exercisable only as to that portion of the Stock
that was exercisable as of the date of death and only within one year after
Optionee's death or the last day of the Option Period, whichever is earlier, by
the personal representative or administrator of Optionee's estate, or by any
trustee, heir, legatee or beneficiary to whom Optionee's rights under this
Option shall pass by will or the laws of descent and distribution to the extent
that Optionee was entitled to exercise this Option at the time of Optionee's
death.
7. Retirement of Optionee. If Optionee's employment with the Company
terminates by reason of retirement, the Option shall be exercisable only within
three months after the date of such termination, but not later than the last day
of the Option Period and then only to the extent to which the Option was
exercisable at the time of such termination of employment by retirement.
However, if Optionee dies within three months, after termination by retirement,
the Option, to the extent it was exercisable at the time of Optionee's death,
shall thereafter be exercisable for one year after the date of Optionee's death,
but not later than the last day of the Option Period.
2
<PAGE>
8. Disability of Optionee. In the case of an Incentive Stock Option,
notwithstanding the provisions of Section 7 above, in the event an Optionee is
unable to continue his employment with the Company as a result of his total and
permanent disability (as defined in Section 22(e)(3) of the Code), he may, but
only within 12 months from the date of termination as a result of such
disability, exercise his Option to the extent he was entitled to exercise it at
the date of such termination. To the extent that he was not entitled to exercise
the Option at the date of termination, or if he does not exercise such Option
(which he was entitled to exercise) within the time specified herein, the Option
shall terminate.
9. Termination of Employment. If Optionee's employment is terminated for
any reason other than death, disability or retirement, this Option, if it is
exercisable at the time of termination, shall terminate on the date upon which
Optionee's employment terminates.
10. Nontransferability of Option. This Option may not be transferred by
Optionee otherwise than by will or the laws of descent and distribution. During
Optionee's lifetime, this Option shall be exercisable only by Optionee.
11. Leave of Absence. For purposes of this Option, (i) a leave of absence,
duly authorized in writing by the Company, for military service or sickness, or
for any other purpose approved by the Company, if the period of such leave does
not exceed 90 days, and (ii) a leave of absence in excess of 90 days, duly
authorized in writing by the Company, provided Optionee's right to reemployment
is guaranteed either by statute or by contract, shall not be deemed a
termination of employment.
12. Holding Period of Shares. No shares of Stock acquired upon exercise of
this Option shall be sold or otherwise disposed of, within the meaning of
Section 424(c) of the Code, at any time before the sooner of two years from the
date of this Option or one year after the date of exercise of this Option.
However, if the Optionee transfers such shares to a trustee, receiver, or other
similar fiduciary in any proceeding under Title 11 of the United States
Bankruptcy Law or any other similar insolvency proceeding at a time when the
Optionee is insolvent, the Optionee shall not have been deemed to have made a
transfer or disposition for purposes of this Section 12, nor shall one who
acquires the shares from the Company with another person in joint tenancy be
deemed to have made a transfer or disposition.
13. Manner of Exercise. Subject to the terms and conditions contained
herein and in the Plan, this Option may be exercised in whole or in part at any
time and from time to time within the Option Period by the delivery of written
notice to any officer or director of the Company other than Optionee, together
with full payment for the number of shares purchased. The notice (i) shall state
the election to exercise the Option, (ii) shall state the number of shares of
Stock in respect to which the Option is being exercised, (iii) shall state
Optionee's address, (iv) shall state Optionee's social security number, (v)
shall continue such representations and agreements concerning Optionee's
investment intent with respect to such shares of Stock as shall be satisfactory
to the Company's counsel, (vi) shall state that the Certificate evidencing the
shares may be stamped with a restrictive legend and the shares evidenced by such
Certificate will constitute "Restricted Securities" as defined in Rule 144
promulgated under the Securities Act of 1933, and (vii) shall be signed by
Optionee. As a further condition to the exercise of this Option, the Company may
require Optionee to make any representation and warranty to the Company as may
be required by any applicable law or regulation.
3
<PAGE>
14. Amendment and Administration. The Board shall have the authority,
consistent with the Plan, to interpret the Plan and this Option, to adopt, amend
and rescind rules and regulations for the administration of the Plan and this
Option, and generally to conduct and administer the Plan and to make all
determinations in connection therewith which may be necessary or advisable, and
all such actions of the Board shall be final and conclusive for all purposes and
binding upon Optionee.
15. Miscellaneous. This Option shall inure to the benefit of and be binding
upon each successor of the Company. All obligations imposed upon and all rights
granted to the Optionee and all rights reserved by the Company under this Option
shall be binding upon and inure to the benefit of Optionee, Optionee's heirs,
personal representatives, administrators and successors. Unless the context
requires otherwise, words denoting the singular may be construed as denoting the
plural, and words of the plural may be construed as denoting the singular and
words of one gender may be construed as denoting such other gender as is
appropriate.
16. Payment of the Exercise Price. The Board hereby determines that the
Optionee shall be permitted to pay the Exercise Price in the following manner:
a. In cash or by check.
b. By delivery to the Company of Common Stock having a fair
market value on the date of exercise equal to the aggregate Exercise
Price of the Stock as to which the Option is being exercised.
c. By exchanging all or part of this Option for the number of
shares of Stock which have an aggregate fair market value on the date
of exercise equal to the difference between (x) the fair market value
of the number of shares of Stock designated by the Optionee on the
date of exercise and (y) the aggregate Exercise Price payable under
the Option by the Optionee for such designated shares of Stock.
d. Any combination of the foregoing methods of payment.
17. Conversion. For purposes of this Section 17, all shares of Stock
subject to this Option which cannot be purchased by the Optionee or his legal
representative or beneficiary as a result of the limitations or restrictions
contained in Sections 4, 5, 6, 7, 8, or 9 hereof, shall be referred to as the
"Nonstatutory Stock." The Company and the Optionee agree as follows with respect
to the Nonstatutory Stock:
a. At any time after shares of Stock become Nonstatutory Stock
under this Section 17 and until September 9, 2006 ("Extension
Period"), the Optionee or his legal representative or beneficiary
shall have the right to purchase all or part of the Nonstatutory Stock
on terms set forth in Sections 1, 3, 12, 13, and 16 of this Option;
provided, however, during the Extension Period this Option shall be a
Nonstatutory Option with respect to the Nonstatutory Stock. The right
to purchase described in this Subsection 17.a. shall be referred to
hereinafter as the "Purchase Right."
b. The Company shall have the right to immediately terminate such
Purchase Right with respect to all or part of the Nonstatutory Stock
at anytime during the five business days prior to the beginning of, or
during, the Extension Period upon delivery of written notice of
4
<PAGE>
termination to the Optionee or his legal representative or beneficiary
and upon the concurrent payment to such person of an amount equal to
$1.00 for each share of Nonstatutory Stock which is covered by such
termination notice. Such termination right shall not exist with
respect to any Nonstatutory Stock which is subject to an exercise
notice hereunder.
Dated as of September 10, 1996.
FRONTEER FINANCIAL HOLDINGS, LTD.
By: /s/ R. A. Fitzner
----------------------------------------
R. A Fitzner, Jr., Chairman of the Board
Accepted by Optionee:
/s/ Robert L. Long
---------------------------------------------
6 Nov. 1996
OPTION TO PURCHASE 671,500
SHARES OF COMMON STOCK
THIS OPTION IS NONTRANSFERABLE OTHER THAN BY WILL OR THE LAWS OF
DESCENT AND DISTRIBUTION AND THE SHARES UNDERLYING THIS OPTION
MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT, THE AVAILABILITY OF WHICH IS TO BE
ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
INCENTIVE STOCK OPTION CERTIFICATE
SEPTEMBER 1996 INCENTIVE AND NONSTATUTORY STOCK OPTION PLAN
Fronteer Financial Holdings, Ltd., a Colorado corporation ("Company"),
for good an valuable consideration, including the incentive to the Optionee to
remain as an employee of the Company as a result of his ownership or increased
ownership of the Company's no par value common stock ("Common Stock"), the
receipt and sufficiency of which consideration hereby is acknowledged,
irrevocably grants to the Optionee the option ("Option") to purchase the
following number of shares of the Company's Common Stock, which shares shall
hereinafter be referred to as the "Stock":
Optionee Number of Shares Common Stock Vesting Date
- -------- ----------------------------- ------------
Robert L. Long 31,500 9/10/96
160,000 1/1/97
160,000 1/1/98
160,000 1/1/99
160,000 1/1/2000
subject to (i) the terms and conditions of the Company's September 1996
Incentive and Nonstatutory Stock Option Plan ("Plan"), (ii) the rules and
regulations for the administration of the Plan which may be adopted from time to
time and (iii) the following terms and conditions:
1. Exercise Price. The purchase price ("Exercise Price") for shares of
Stock purchased pursuant to this Option is $.625 per share which shall be paid
in full at the time of exercise. The Exercise Price shall be paid in cash at the
time of exercise except that the Company's Board of Directors administering the
Plan ("Board") may, in its sole discretion, permit payment to the made with
Common Stock owned by the Optionee or by surrender of all or part of this Option
on terms and conditions determined by the Board. Optionee shall have no rights
with respect to dividends or have any other rights as shareholder with respect
to shares subject to this Option until he has given written notice of the
exercise of the Option and has paid in full for such shares.
<PAGE>
2. Exercise Period and Restrictions. Unless sooner terminated as hereby
provided, this Option shall continue until 2:30 p.m., Mountain Time on September
9, 2006. This Option is nontransferable other than by will or the laws of
descent and distribution. During the Option Holder's lifetime or upon the
expiration of this Option as provided herein, whichever occurs earlier, only the
Option Holder may exercise this Option.
3. Number of Shares. This Option shall be exercised only for 100 shares of
Stock or a multiple thereof or for the full number of shares of Stock for which
the Option is then exercisable.
4. Representation as to Stock Ownership. Optionee does not own stock
possessing more than 10% of the total combined voting power or value of all
classes of stock of the Company outstanding ("10% Ownership"). If Optionee has
more than 10% Ownership, the purchase price of the Stock upon exercise of the
Option will be adjusted to reflect an exercise price of 110% of the fair market
value of Common Stock at the close of business as of the date of the grant of
the option represented by this Option Certificate. For purposes of calculating
such stock ownership by Optionee, the attribution rules of stock ownership set
forth in Section 425(d) of the Internal Revenue Code of 1986, as amended,
("Code") shall apply.
5. Limitations on Exercise of Option. If the aggregate fair market value of
the Stock subject to this Option and all other options granted under the Plan
and any other incentive stock option plans ("other plans") of the Company which
are exercisable for the first time by Optionee during any calendar year, exceeds
$100,000, the exercise of this Option is subject to the following limitation:
The fair value of the options which first become exercisable under this and all
other incentive stock options of Optionee during any one calendar year shall not
exceed $100,000. Any portion of this Option which does not become exercisable in
any year in order to effect the foregoing limitation shall become exercisable on
the earliest date thereafter as shall be available consistent with the Plan and
all other stock options then held by Optionee. For purposes of this Section 5,
the fair market value of the Common Stock subject to the Plan or any other plan
shall be determined as of the date such options are granted.
6. Death of Optionee. If Optionee dies during Optionee's employment by the
Company, this Option shall be exercisable only as to that portion of the Stock
that was exercisable as of the date of death and only within one year after
Optionee's death or the last day of the Option Period, whichever is earlier, by
the personal representative or administrator of Optionee's estate, or by any
trustee, heir, legatee or beneficiary to whom Optionee's rights under this
Option shall pass by will or the laws of descent and distribution to the extent
that Optionee was entitled to exercise this Option at the time of Optionee's
death.
7. Retirement of Optionee. If Optionee's employment with the Company
terminates by reason of retirement, the Option shall be exercisable only within
three months after the date of such termination, but not later than the last day
of the Option Period and then only to the extent to which the Option was
exercisable at the time of such termination of employment by retirement.
However, if Optionee dies within three months, after termination by retirement,
the Option, to the extent it was exercisable at the time of Optionee's death,
shall thereafter be exercisable for one year after the date of Optionee's death,
but not later than the last day of the Option Period.
2
<PAGE>
8. Disability of Optionee. In the case of an Incentive Stock Option,
notwithstanding the provisions of Section 7 above, in the event an Optionee is
unable to continue his employment with the Company as a result of his total and
permanent disability (as defined in Section 22(e)(3) of the Code), he may, but
only within 12 months from the date of termination as a result of such
disability, exercise his Option to the extent he was entitled to exercise it at
the date of such termination. To the extent that he was not entitled to exercise
the Option at the date of termination, or if he does not exercise such Option
(which he was entitled to exercise) within the time specified herein, the Option
shall terminate.
9. Termination of Employment. If Optionee's employment is terminated for
any reason other than death, disability or retirement, this Option, if it is
exercisable at the time of termination, shall terminate on the date upon which
Optionee's employment terminates.
10. Nontransferability of Option. This Option may not be transferred by
Optionee otherwise than by will or the laws of descent and distribution. During
Optionee's lifetime, this Option shall be exercisable only by Optionee.
11. Leave of Absence. For purposes of this Option, (i) a leave of absence,
duly authorized in writing by the Company, for military service or sickness, or
for any other purpose approved by the Company, if the period of such leave does
not exceed 90 days, and (ii) a leave of absence in excess of 90 days, duly
authorized in writing by the Company, provided Optionee's right to reemployment
is guaranteed either by statute or by contract, shall not be deemed a
termination of employment.
12. Holding Period of Shares. No shares of Stock acquired upon exercise of
this Option shall be sold or otherwise disposed of, within the meaning of
Section 424(c) of the Code, at any time before the sooner of two years from the
date of this Option or one year after the date of exercise of this Option.
However, if the Optionee transfers such shares to a trustee, receiver, or other
similar fiduciary in any proceeding under Title 11 of the United States
Bankruptcy Law or any other similar insolvency proceeding at a time when the
Optionee is insolvent, the Optionee shall not have been deemed to have made a
transfer or disposition for purposes of this Section 12, nor shall one who
acquires the shares from the Company with another person in joint tenancy be
deemed to have made a transfer or disposition.
13. Manner of Exercise. Subject to the terms and conditions contained
herein and in the Plan, this Option may be exercised in whole or in part at any
time and from time to time within the Option Period by the delivery of written
notice to any officer or director of the Company other than Optionee, together
with full payment for the number of shares purchased. The notice (i) shall state
the election to exercise the Option, (ii) shall state the number of shares of
Stock in respect to which the Option is being exercised, (iii) shall state
Optionee's address, (iv) shall state Optionee's social security number, (v)
shall continue such representations and agreements concerning Optionee's
3
<PAGE>
investment intent with respect to such shares of Stock as shall be satisfactory
to the Company's counsel, (vi) shall state that the Certificate evidencing the
shares may be stamped with a restrictive legend and the shares evidenced by such
Certificate will constitute "Restricted Securities" as defined in Rule 144
promulgated under the Securities Act of 1933, and (vii) shall be signed by
Optionee. As a further condition to the exercise of this Option, the Company may
require Optionee to make any representation and warranty to the Company as may
be required by any applicable law or regulation.
14. Amendment and Administration. The Board shall have the authority,
consistent with the Plan, to interpret the Plan and this Option, to adopt, amend
and rescind rules and regulations for the administration of the Plan and this
Option, and generally to conduct and administer the Plan and to make all
determinations in connection therewith which may be necessary or advisable, and
all such actions of the Board shall be final and conclusive for all purposes and
binding upon Optionee.
15. Miscellaneous. This Option shall inure to the benefit of and be binding
upon each successor of the Company. All obligations imposed upon and all rights
granted to the Optionee and all rights reserved by the Company under this Option
shall be binding upon and inure to the benefit of Optionee, Optionee's heirs,
personal representatives, administrators and successors. Unless the context
requires otherwise, words denoting the singular may be construed as denoting the
plural, and words of the plural may be construed as denoting the singular and
words of one gender may be construed as denoting such other gender as is
appropriate.
16. Payment of the Exercise Price. The Board hereby determines that the
Optionee shall be permitted to pay the Exercise Price in the following manner:
a. In cash or by check.
b. By delivery to the Company of Common Stock having a fair market
value on the date of exercise equal to the aggregate Exercise Price of the
Stock as to which the Option is being exercised.
c. By exchanging all or part of this Option for the number of shares
of Stock which have an aggregate fair market value on the date of exercise
equal to the difference between (x) the fair market value of the number of
shares of Stock designated by the Optionee on the date of exercise and (y)
the aggregate Exercise Price payable under the Option by the Optionee for
such designated shares of Stock.
d. Any combination of the foregoing methods of payment.
17. Shareholder Approval. The Plan is subject to approval by the
shareholders of the Company on or before September 9, 1997. This Option may not
be exercised until after the Plan has been approved by shareholders of the
Company. If the Plan is not approved by the Shareholders of the Company on or
before September 9, 1997, the Option shall be void and of no legal effect.
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<PAGE>
18. Conversion. For purposes of this Section 18, all shares of Stock
subject to this Option which cannot be purchased by the Optionee or his legal
representative or beneficiary as a result of the limitations or restrictions
contained in Sections 4, 5, 6, 7, 8, 9, or 17 hereof, shall be referred to as
the "Nonstatutory Stock." The Company and the Optionee agree as follows with
respect to the Nonstatutory Stock:
a. At any time after shares of Stock become Nonstatutory Stock
under this Section 18 and until September 9, 2006 ("Extension Period"),
the Optionee or his legal representative or beneficiary shall have the
right to purchase all or part of the Nonstatutory Stock on terms set
forth in Sections 1, 3, 12, 13, and 16 of this Option; provided,
however, during the Extension Period this Option shall be a
Nonstatutory Option with respect to the Nonstatutory Stock. The right
to purchase described in this Subsection 18.a. shall be referred to
hereinafter as the "Purchase Right."
b. The Company shall have the right to immediately terminate
such Purchase Right with respect to all or part of the Nonstatutory
Stock at anytime during the five business days prior to the beginning
of, or during, the Extension Period upon delivery of written notice of
termination to the Optionee or his legal representative or beneficiary
and upon the concurrent payment to such person of an amount equal to
$1.00 for each share of Nonstatutory Stock which is covered by such
termination notice. Such termination right shall not exist with respect
to any Nonstatutory Stock which is subject to an exercise notice
hereunder.
Dated as of September 10, 1996.
FRONTEER FINANCIAL HOLDINGS, LTD.
By: /s/ R. A. Fitzner
---------------------------------------
R. A Fitzner, Jr., Chairman of the Board
Accepted by Optionee:
/s/ Robert L. Long
--------------------------------------------
6 Nov 96
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