<PAGE> 1
As filed with the Securities and Exchange Commission on
July 23, 1996
Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
COMMUNITY FINANCIAL HOLDING CORPORATION
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(Exact name of Registrant as Specified in its Charter)
NEW JERSEY 52-1712224
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(State of Incorporation) (I.R.S. Employer Identification No.)
222 HADDON AVENUE, WESTMONT, NEW JERSEY 08108
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(Address of Principal Executive Offices) (Zip Code)
COMMUNITY FINANCIAL HOLDING CORPORATION
1994 EMPLOYEE AND DIRECTOR STOCK OPTION PLAN
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(Full Title of the Plan)
ROBERT T. PLUESE, CHAIRMAN OF THE BOARD
COMMUNITY FINANCIAL HOLDING CORPORATION
222 HADDON AVENUE
WESTMONT, NEW JERSEY 08108
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(Name and address of Agent for Service)
(609) 869-7900
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(Telephone Number, including Area Code, of Agent for Service)
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Copies To:
SUSAN E. PENDERY, ESQUIRE
Earp, Cohn, Leone & Pendery
A Professional Corporation
222 Haddon Avenue
Westmont, New Jersey 08108
<PAGE> 2
<TABLE>
<CAPTION>
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CALCULATION OF REGISTRATION FEE
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Title of Amount Proposed Proposed Amount of
Securities to be Maximum Maximum Registra-
to be Registered Offering Aggregate tion Fee
Registered (1) Price per Offering
Share(4) Price(4)
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<S> <C> <C> <C> <C>
Common Stock, 116,587(2) $10.00 $1,165,870.00 $402.02
par value $5.00 39,000(2) 12.25 477,750.00 164.74
per share
155,252(3) 1,921,243.50 662.50
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310,839 shs. $3,564,863.50 $1,229.26
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</TABLE>
(1) Pursuant to Rule 416 under the Securities Act of 1933, as amended, an
indeterminate number of additional shares of Common Stock, which may
become issuable pursuant to the anti-dilution provisions of the
Community Financial Holding Corporation, 1994 Employee and Director
Stock Option Plan, are also being registered hereunder.
(2) Consists of shares of Common Stock which may be sold upon the exercise
of options which have previously been granted under the Community
Financial Holding Corporation, 1994 Employee and Director Stock Option
Plan, the number of shares issuable under some of which options have
been adjusted to reflect two stock dividends since the date of grant.
(3) Consists of shares of Common Stock which may be sold upon the exercise
of options which may hereafter be granted under the Community
Financial Holding Corporation 1994 Employee and Director Stock
Option Plan.
(4) The proposed maximum aggregate offering price, calculated solely for
the purpose of determining the registration fee, has been computed
pursuant to Rule 457(h) under the Securities Act of 1933, as amended,
as follows: (i) in the case of shares of Common Stock which may be
purchased upon the exercise of outstanding options, the fee is
calculated on the basis of the price at which such options may be
exercised; and (ii) in the case of shares of Common Stock for which
options have not yet been granted, the fee is calculated on the basis
of the average of the bid and asked price reported for a share of
Community Financial Holding Corporation Common Stock on July 18,
1996.
<PAGE> 3
PART I. INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I of the
instructions to SEC Form S-8 constituting the Section 10(a) Prospectus will be
sent or given to employees of the Registrant as specified by Rule 428(b) (1) of
the Act. In accordance with the instructions to Part I of the Form S-8, such
documents have not been filed with the Commission either as part of this
Registration Statement or as prospectuses or prospectus supplements pursuant to
Rule 424 of the Act.
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The Registrant's latest Annual Report on Form 10-K for the year ended
December 31, 1995, all other reports filed pursuant to Section 13(a) or 15(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act") since
December 31, 1995, the description of the Registrant's capital stock as
included in the Registrant's Registration Statement on Form 8-A filed pursuant
to Section 12(g) of the Exchange Act, as amended from time to time, are
incorporated herein by reference. All reports and documents filed by the
Registrant pursuant to Section 13(a), 13(c), 14 and 15(d) of the Exchange Act
subsequent to the date of this Registration Statement and prior to the filing
of a post-effective amendment which indicates that all securities offered
hereby have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated herein by reference and to be part
hereof from the date of filing of such reports and documents. Any statement or
information contained in a report or document incorporated by reference herein
shall be deemed to be modified or superseded for purposes hereof to the extent
that a statement or information contained herein (or in any other subsequently
filed report or document which also is incorporated by reference herein)
modifies or supersedes such statement or information. Any such statement or
information so modified shall not be deemed to constitute a part hereof, except
as so modified, and any statement so superseded shall not be deemed to
constitute a part hereof.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
<PAGE> 4
Item 6. Indemnification of Directors and Officers.
Section 3-5 of the New Jersey Business Corporation Act authorizes and
permits, subject to the conditions and limitations set forth therein,
indemnification of officers, directors and other persons. Pursuant to this
statutory provision, the Registrant's Certificate of Incorporation provides,
within such limits, for broad indemnification of such persons when acting on
behalf of the Registrant, or who, at the request of the Registrant, served in
the capacity of officer or director of any other enterprise. In addition, the
Registrant has purchased insurance to indemnify officers and directors against
liabilities that may result from such capacities and from their actions
thereas. The indemnification thus provided may protect officers and directors
from liabilities arising under the Securities Act.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
4.1 Certificate of Incorporation of the Registrant, as amended, previously
filed with the Securities and Exchange Commission on May 6, 1994, as
Exhibit 3.1 to the Registrant's Registration Statement on Form S-1,
No. 33-78696 (the "Registration Statement"), incorporated herein by
reference.
4.2 By-Laws of the Registrant, as amended, previously filed with the
Securities and Exchange Commission on May 6, 1994 as Exhibit 3.2 to
the Registration Statement, and incorporated herein by reference.
4.3 COMMUNITY FINANCIAL HOLDING CORPORATION 1994 EMPLOYEE AND DIRECTOR
STOCK OPTION PLAN (filed herewith).
5 Opinion of Earp, Cohn, Leone & Pendery, A Professional Corporation, as
to the legality of the securities being registered (filed herewith).
23.1 Consent of Earp, Cohn, Leone & Pendery, A Professional Corporation
(contained in Exhibit 5).
23.2 Consent of KPMG Peat Marwick L.L.P. (filed herewith).
Item 9. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
<PAGE> 5
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933 ("Securities Act");
(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 (1)(i) and (ii) above do
not apply if 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 Section 15(d) of the Exchange Act that are incorporated
by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act 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.
Insofar as indemnification for liabilities arising under the
Securities Act 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
Securities 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
<PAGE> 6
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 Securities Act and will be governed
by the final adjudication of such issue.
<PAGE> 7
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act,
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 Township of Westmont, State of New Jersey, on July 17,
1996.
COMMUNITY FINANCIAL HOLDING CORPORATION
By:/s/Gerard M. Banmiller
-------------------------------------
Gerard M. Banmiller, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act, this registration statement
has been signed by the following persons in the capacities and on the dates
indicated.
/s/Gerard M. Banmiller /s/Robert T. Pluese
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GERARD M. BANMILLER, ROBERT T. PLUESE, Director and
Director, President and Chairman of the Board
Chief Executive Officer Dated: July 17, 1996
Dated: July 17, 1996
/s/Kevin L. Kutcher /s/Michael G. Brennan
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KEVIN L. KUTCHER, Executive MICHAEL G. BRENNAN, Director
Vice President, Treasurer and Dated: July 17, 1996
Secretary, Chief Financial and Chief
Accounting Officer
Dated: July 17, 1996
/s/Letitia G. Colombi /s/Gerard J. DeFelicis
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LETITIA G. COLOMBI, Director GERARD J. DeFELICIS, Director
Dated: July 17, 1996 Dated: July 17, 1996
/s/Joseph A. Riggs, Sr., M.D. /s/Doris Damm
------------------------------ ------------------------------
JOSEPH A. RIGGS, SR., M.D., Director DORIS DAMM, Director
Dated: July 17, 1996 Dated: July 17, 1996
/s/Marvin Samson /s/Frank B. Smith
------------------------------ ------------------------------
MARVIN SAMSON, FRANK B. SMITH, Director
Director Dated: July 17, 1996
Dated: July 17, 1996
/s/Elizabeth Burns
------------------------------
ELIZABETH BURNS, Director
Dated: July 17, 1996
<PAGE> 8
COMMUNITY FINANCIAL HOLDING CORPORATION
INDEX TO EXHIBITS FILED WITH
FORM S-8 REGISTRATION STATEMENT
<TABLE>
<CAPTION>
Sequential
Exhibit No. Description Page No.
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4.1 Certificate of Incorporation of the Registrant, as amended, previously filed with the
Securities and Exchange Commission on May 6, 1994, as Exhibit 3.1 to the Registrant's
Registration Statement on Form S-1, No. 33-78696 (the "Registration Statement"),
incorporated herein by reference.
4.2 By-Laws of the Registrant, as amended, previously filed with the Securities and
Exchange Commission on May 6, 1994 as Exhibit 3.2 to the Registration Statement,
and incorporated herein by reference.
4.3 COMMUNITY FINANCIAL HOLDING CORPORATION, 1994 EMPLOYEE AND DIRECTOR STOCK OPTION PLAN
(filed herewith).
5 Opinion of Earp, Cohn, Leone & Pendery, A Professional Corporation, as to the legality of
the securities being registered (filed herewith).
23.1 Consent of Earp, Cohn, Leone & Pendery, A Professional Corporation (contained in Exhibit 5
filed herewith).
23.2 Consent of KPMG Peat Marwick L.L.P. (filed herewith).
</TABLE>
<PAGE> 1
Exhibit 4.3
COMMUNITY FINANCIAL HOLDING CORPORATION
1994 EMPLOYEE AND DIRECTOR STOCK OPTION PLAN
Section 1. Purposes.
The purposes of the Plan are (a) to recognize and compensate selected
employees of the Company and its Subsidiaries and members of the Board of
Directors of the Company who contribute to the development and success of the
Company and its Subsidiaries; (b) to maintain the competitive position of the
Company and its Subsidiaries by attracting and retaining employees and members
of the Board of Directors; and (c) to provide incentive compensation to such
employees and members of the Board of Directors based upon the Company's
performance as measured by the appreciation in Common Stock. The Options
granted pursuant to the Plan are intended to constitute either incentive stock
options within the meaning of Section 422 of the Code, or non-qualified stock
options, as determined by the Board of Directors or a Committee of the Board,
if established, at the time of grant. The type of Options granted will be
specified in the Option Agreement between the Company and the recipient of the
Options. The terms of this Plan shall be incorporated in the Option Agreement
to be executed by the Optionee.
Section 2. Definitions.
(a) "Board" shall mean the Board of Directors of the
Company, as constituted from time to time.
(b) "Change of Control" shall mean the occurrence of any
of the following events:
(i) the acquisition in one or more transactions by
any "Person" (as the term person is used for purposes of Sections 13(d) or
14(d) of the Securities Exchange Act of 1934, as amended (the "1934 Act")) of
"Beneficial Ownership" (as the term beneficial ownership is used for the
purposes of Rule 13d-3 promulgated under the 1934 Act) of fifty percent (50%)
or more of the combined voting power of the Company's then outstanding voting
securities (the "Voting Securities"), provided that for purposes of this
Section 2 (b)(i) , the Voting Securities acquired directly from the Company by
any Person shall be excluded from the determination of such Person's Beneficial
Ownership of Voting Securities (but such Voting Securities shall be included in
the calculation of the total number of Voting Securities then outstanding); or
(ii) Approval by shareholders of the Company of (A)
a merger, reorganization or consolidation involving the Company if the
shareholders of the Company immediately before such merger,
<PAGE> 2
reorganization or consolidation do not or will not own directly or indirectly
immediately following such merger, reorganization or consolidation, more than
fifty percent (50%) of the combined voting power of the outstanding voting
securities of the corporation resulting from or surviving such merger,
reorganization or consolidation in substantially the same proportion as their
ownership of the Voting Securities immediately before such merger,
reorganization or consolidation, or (B) (1) a complete liquidation or
dissolution of the Company or (2) an agreement for the sale or other
disposition of all or substantially all of the assets of the Company; or
(iii) Acceptance by shareholders of the Company of
shares in a share exchange if the shareholders of the Company immediately
before such share exchange do not or will not own directly or indirectly
immediately following such share exchange more than fifty percent (50%) of the
combined voting power of the outstanding voting securities of the corporation
resulting from or surviving such share exchange in substantially the same
proportion as the ownership of the Voting Securities outstanding immediately
before such share exchange.
(c) "Code" shall mean the Internal Revenue Code of 1986,
as amended.
(d) "Committee" shall mean the Committee, if any,
established by the Board in accordance with Section 4(a) of the Plan.
(e) "Company" shall mean Community Financial Holding
Corporation, a New Jersey corporation.
(f) "Common Stock" shall mean common stock of the
Company, $5.00 par value per share.
(g) "Disability" or "Disabled" shall mean the inability
of a Participant or Optionee, as the case may be, to perform his or her normal
employment duties or services for the Company resulting from a mental or
physical illness, impairment or any other similar occurrence which can be
expected to result in death or which has lasted or can be expected to last for
a period of twelve (12) consecutive months, as determined by the Board of
Directors.
(h) "Exchange Act" shall mean the Securities Exchange Act
of 1934, as in effect from time to time.
(i) "Fair Market Value" shall mean the fair market value
of a share of Common Stock, as determined pursuant to Section 7 hereof.
(j) "Option" shall mean an incentive stock option or
non-qualified stock option to purchase Common Stock that is granted pursuant to
the Plan.
<PAGE> 3
(k) "Option Agreement" shall mean a written agreement in
such form or forms as the Committee (subject to the terms and conditions of
this Plan) may from time to time approve evidencing and reflecting the terms of
an Option.
(l) "Optionee" shall mean a Participant to whom an Option
is granted.
(m) "Participant" shall mean any person who at the time
of grant is or within the twelve (12) month period preceding the time of grant
was an employee of the Company or a Subsidiary or a member of the Board, to
whom an Option is granted.
(n) "Plan" shall mean the 1994 Employee and Director
Stock Option Plan, as amended from time to time.
(o) "Proprietary Information" shall mean any and all
confidential, proprietary, business and technical information or trade secrets
of the Company or any Subsidiary or affiliate of the Company revealed, obtained
or developed in the course of Optionee's employment with the Company or in the
course of Optionee's performance of services for the Company in any other
capacity. Such Proprietary Information shall include but shall not be limited
to, methods of production and manufacture, research, marketing and development
plans and efforts, cost information, pricing information, marketing methods and
plans, identities of customers and suppliers, the Company's relationship with
actual or potential customers and the needs and requirements of any such actual
or potential customers, and any other confidential information relating to the
business of the Company. Proprietary Information shall not include (i) such
information as may be necessary or appropriate for an Optionee to disclose in
the course of his employment for the effective and efficient discharge of his
duties as an employee of the Company or as may be required by law to be
disclosed; and (ii) such information as is readily available to the general
public so long as such information did not become available to the general
public as a direct or indirect result of Optionee's breach of his obligation to
maintain confidentiality.
(p) "Securities Act" shall mean the Securities Act of
1933, as in effect from time to time.
(q) "Shares" shall mean shares of Common Stock.
(r) "Stock Purchase Agreement" shall mean an agreement in
such form as the Committee may from time to time approve (subject to the terms
and conditions of this Plan), which an Optionee may be required to execute as a
condition of purchasing Shares upon exercise of an Option.
(s) "Subsidiary" shall mean an subsidiary corporation of
the Company, whether now or hereafter existing, as defined in Sections 424(f)
and (g) of the Code.
<PAGE> 4
Section 3. Participation.
The Board or the Committee, if one is established, may grant Options
at any time and from time to time to Participants who shall be selected by the
Board or the Committee. Options may be granted only to Participants. Any
grant of Options may include or exclude any Participant, as the Board or the
Committee shall determine in its sole discretion. A Participant who has been
granted an Option, if he or she is otherwise eligible, may be granted
additional Options.
Section 4. Administration.
(a) Procedure. The Plan shall be administered by either
the Board or, if desired by the Board, by a Committee consisting of not less
than two of the members of the Board. The Committee, if established, shall
have the power to administer the Plan. Members of the Committee, if
established, shall serve for such period of time as the Board may determine.
From time to time the Board may increase the size of the Committee and appoint
additional members thereto, remove members (with or without cause) and appoint
new members in substitution therefor and fill vacancies on the Committee
however caused.
(b) Powers of the Committee. Subject to the provisions
of the Plan, the Board or the Committee, if established, shall have the
authority, in its discretion: (i) to grant Options; (ii) to determine the Fair
Market Value per Share in accordance with Section 7 of the Plan; (iii) to
determine the exercise price of the Options to be granted in accordance with
Sections 6 and 7 of the Plan; (iv) to determine the Participants to whom, and
the time or times at which, Options shall be granted, and the number of Shares
to be subject to each Option; (v) to prescribe, amend and rescind rules and
regulations relating to the Plan; (vi) to determine the terms and provisions of
each Option granted under the Plan, each Option Agreement and each Stock
Purchase Agreement (which need not be identical with the terms of other
Options, Option Agreements, and Stock Purchase Agreements) and, with the
consent of the Optionee, to modify or amend an outstanding Option, Option
Agreement, or Stock Purchase Agreement; (vii) to accelerate the exercise date
of any Option; (viii) to determine whether any Participant will be required to
execute a stock repurchase agreement or other agreement as a condition to the
exercise of an Option, and to determine the terms and provisions of any such
agreement (which need not be identical with the terms of any other such
agreement) and, with the consent of the Optionee, to amend any such agreement;
(ix) to interpret the Plan or any agreement entered into with respect to the
grant or exercise of Options; (x) to authorize any person to execute on behalf
of the Company any instrument required to effectuate the grant of an Option
previously granted under the Plan or to take such other actions as may be
necessary or appropriate with respect to the Company's rights pursuant to
Options or agreements relating to the grant or exercise thereof; and (xi) to
make such other determinations and establish
<PAGE> 5
such other procedures as it deems necessary or advisable for the administration
of the Plan.
(c) Effect of the Committee's Decision. All decisions,
determinations and interpretations of the Board or the Committee, if
established, shall be final and binding on all Optionees and any other holders
of any Options granted under the Plan.
(d) Limitation of Liability. Notwithstanding anything
herein to the contrary, no member of the Board or the Committee, if
established, shall be liable for any good faith determination, act or failure
to act in connection with the Plan or any Option granted hereunder.
Section 5. Stock Subject to the Plan.
Subject to this Section 5 and to the provisions of Section 8 of the
Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is Three Hundred Thousand (300,000). Options may be either
incentive stock options or non-qualified stock options, as determined by the
Board or the Committee, if established. If an Option expires or becomes
unexercisable for any reason without having been exercised in full, the Shares
subject to such Option shall, unless the Plan shall have been terminated,
return to the Plan and become available for future grant under the Plan.
Section 6. Terms and Conditions of Options.
Each Option granted pursuant to the Plan shall be authorized by the
Board or the Committee, if established, and shall be evidenced by an Option
Agreement. Each Option Agreement shall incorporate by reference all other
terms and conditions of the Plan, and shall contain the following terms and
conditions:
(a) Number of Shares. The number of shares subject to
the Option.
(b) Option Price. The price per share payable on the
exercise of any Option shall be stated in the Option Agreement and shall be no
less than the Fair Market Value per share of the Common Stock on the date such
option is granted, without regard to any restriction other than a restriction
which will never lapse. Notwithstanding the foregoing, if an Option which is
an incentive stock Option shall be granted under this Plan to any person who,
at the time of the grant of such Option, owns capital stock possessing more
than 10% of the total combined voting power of all classes of the Company's
capital stock, the price per share payable upon exercise of such incentive
stock Option shall be no less than 110 percent (110%) of the Fair Market Value
per share of the Common Stock on the date such Option is granted.
(c) Consideration. The consideration to be paid for the
Share to be issued upon exercise of an Option, including the method
<PAGE> 6
of payment, shall be determined by the Board or the Committee, if established,
and may consist entirely of cash, check, promissory notes or Shares having a
Fair Market Value on the date of surrender equal to the aggregate exercise
price of the Shares as to which said Option shall be exercised, or any
combination of such methods of payment, or such other consideration and method
of payment permitted under any laws to which the Company is subject which is
approved by the Board or the Committee, if established. In making its
determination as to the type of consideration to accept, the Board or the
Committee, if established, shall consider if acceptance of such consideration
may be reasonably expected to benefit the Company.
(i) If the consideration for the exercise of an
Option is a promissory note, it may, in the discretion of the Board or the
Committee, if established, be either full recourse or nonrecourse and shall
bear interest at a per annum rate which is not less than the applicable federal
rate determined in accordance with Section 1274(d) of the Code as of the date
of exercise. In such an instance, the Company may, in its sole discretion,
retain the Shares purchased upon exercise of the Option in escrow as security
for payment of the promissory note.
(ii) If the consideration for the exercise of an
Option is the surrender of previously acquired and owned Shares, the Optionee
will be required to make representations and warranties satisfactory to the
Company regarding his title to the Shares used to effect the purchase (the
"Payment Shares"), including without limitation, representations and warranties
that the Optionee has good and marketable title to such Payment Shares free and
clear of any and all liens, encumbrances, charges, equities, claims, security
interests, options or restrictions, and has full power to deliver such Payment
Shares without obtaining the consent or approval of any person or governmental
authority other than those which have already given consent or approval in a
manner satisfactory to the Company. The value of the Payment Shares shall be
the Fair Market Value of such Payment Shares on the date of exercise as
determined by the Board or the Committee, if established, in its sole
discretion, exercised in good faith. If such Payment Shares were acquired upon
previous exercise of incentive stock options granted within two years prior to
the exercise of the Option or acquired by the Optionee within one year prior to
the exercise of the Option, such Optionee shall be required, as a condition to
using the Payment Shares in payment of the exercise price of the Option, to
acknowledge the tax consequences of doing so, in that such previously exercised
incentive stock options may have, by such action, lost their status as
incentive stock options, and the Optionee may have to recognize ordinary income
for tax purposes as a result.
(d) Form of Option. The Option Agreement will state
whether the Option granted is an incentive stock option or a non-qualified
stock option, and will constitute a binding determination as to the form of
Option granted.
<PAGE> 7
(e) Exercise of Options. Any Option granted hereunder
shall be exercisable at such times and under such conditions as shall be set
forth in the Option Agreement (as may be determined by the Board or the
Committee, if established, and as shall be permissible under the terms of the
Plan), which may include performance criteria with respect to the Company
and/or the Optionee, and as shall be permissible under the terms of the Plan.
An Option may be exercised in accordance with the provisions
of this Plan as to all or any portion of the Shares then exercisable under an
Option from time to time during the term of the Option. An Option may not be
exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice
of such exercise has been given to the Secretary of the Company at the
Company's principal executive office in accordance with the terms of the Option
Agreement by the person entitled to exercise the Option and full payment for
the Shares with respect to which the Option is exercised has been received by
the Company, accompanied by any agreements required by the terms of the Plan
and/or Option Agreement, including an executed Stock Purchase Agreement. Full
payment may consist of such consideration and method of payment allowable under
Section 6 of the Plan. No adjustment shall be made for a dividend or other
right for which the record date is prior to the date the Option is exercised,
except as provided in Section 8 of the Plan.
As soon as practicable after any proper exercise of an Option
in accordance with the provisions of the Plan, the Company shall, without
transfer or issue tax to the Optionee, deliver to the Optionee at the principal
executive office of the Company or such other place as shall be mutually agreed
upon between the Company and the Optionee, a certificate or certificates
representing the Shares for which the Option shall have been exercised. The
time of issuance and delivery of the certificate(s) representing the Shares for
which the Option shall have been exercised may be postponed by the Company for
such period as may be required by the Company, with reasonable diligence, to
comply with any applicable listing requirements of any national or regional
securities exchange or any law or regulation applicable to the issuance or
delivery of such Shares.
Exercise of an Option in any manner shall result in a decrease
in the number of Shares which thereafter may be available, both for purposes of
the Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(f) Term and Vesting of Options.
(i) Notwithstanding any other provision of this
Plan, no Option shall be (A) granted under this Plan after ten (10) years from
the date on which this Plan is adopted by the Board, or (B) exercisable more
than ten (10) years from the date of grant;
<PAGE> 8
provided, however, that if an incentive stock Option shall be granted under
this Plan to any person who, at the time of the grant of such Option, owns
stock possessing more than 10% of the total combined voting power for all
classes of the Company's stock, the foregoing clause (B) shall be read by
substituting "five (5) years" for the term "ten (10) years" that appears
therein.
(ii) No Option granted to any Optionee shall be
treated as an incentive stock option, to the extent such Option would cause the
aggregate Fair Market Value (determined as of the date of grant of each such
Option) of the Shares with respect to which incentive stock Options are
exercisable by such Optionee for the first time during any calendar year to
exceed $100,000. For purposes of determining whether an incentive stock Option
would cause the aggregate Fair Market Value of the stock to exceed the $100,000
limitation, such incentive stock Options shall be taken into account in the
order granted. For purposes of this subsection, incentive stock Options
include all incentive stock options under all plans of the Company that are
incentive stock option plans within the meaning of Section 422 of the Code.
Except as provided in Section 6(g)(iv), Options
granted hereunder shall mature and become exercisable in whole or in part, in
accordance with such vesting schedule as the Board or the Committee, if
established, shall determine, which schedule shall be stated in the Option
Agreement. Options may be exercised in any order elected by the Optionee
whether or not the Optionee holds any unexercised Options under this Plan or
any other plan of the Company.
(g) Termination of Options.
(i) Unless sooner terminated as provided in this
Plan, each Option shall be exercisable for the period of time as shall be
determined by the Board or the Committee, if established, and set forth in the
Option Agreement, and shall be void and unexercisable thereafter.
(ii) Except as otherwise provided herein or in the
Option Agreement, upon the termination of the Optionee's employment with the
Company or a Subsidiary or service as a member of the Board for any reason,
Options which are not then exercisable shall automatically be terminated and
Options exercisable on the date of termination of employment or service on the
Board shall be exercisable by the Optionee (or in the case of the Optionee's
death subsequent to termination of employment or service on the Board, by the
Optionee's executor(s) or administrator(s)) for a period of ninety (90) days
from the date of the Optionee's termination of employment or service on the
Board. This Section 6(g)(ii) shall not be applicable to any Option made to a
person who was not at the time of grant of such Option an employee of the
Company or a Subsidiary or a member of the Board.
<PAGE> 9
(iii) Except as otherwise provided herein or in the
Option Agreement, upon the Disability or death of an Optionee while an employee
of the Company or a Subsidiary or member of the Board, and upon the death of an
Optionee who was not an employee or member of the Board at the time of grant,
Options held by such Optionee which are not then exercisable shall
automatically be terminated and Options which are exercisable on the date of
Disability or death shall be exercisable for a period of 12 months commencing
on the date of the Optionee's Disability or death, by the Optionee or his legal
guardian or, in the case of death, by his executor(s) or administrator(s);
provided, however, that if such disabled Optionee shall commence any employment
during such one year period with a competitor of the Company (including, but
not limited to, full or part-time employment or independent consulting work),
as determined solely in the judgment of the Board or the Committee, if
established, all Options held by such Optionee which have not yet been
exercised shall terminate immediately upon the commencement thereof.
(iv) Options may be terminated at any time by
agreement between the Company and the Optionee.
(h) Forfeiture. Notwithstanding any other provision of
this Plan, upon the termination of the Optionee's employment with the Company
or a Subsidiary or service as a member of the Board for any reason, in the
event the Board or the Board or the Committee, if established, makes a
determination that the Optionee (i) has engaged in any type of disloyalty to
the Company, including without limitation, fraud, embezzlement, theft, or
dishonesty in the course of his employment, or (ii) has been convicted of a
felony or (iii) has disclosed Proprietary Information without the consent of
the Company or (iv) has breached the terms of any written confidentiality
agreement or any non-competition agreement with the Company in any material
respect, all unexercised Options held by such Optionee shall terminate upon the
earlier date of termination or service for "cause" or the date of such a
determination.
Section 7. Determination of Fair Market Value of Common Stock.
(a) Except to the extent otherwise provided in this
Section 7, the Fair Market Value of a share of Common Stock shall be determined
by the Board or the Committee, if established, in its sole discretion.
(b) In the event that Shares are traded in the
over-the-counter market, the Fair Market Value of a share of Common Stock shall
be the mean of the bid and asked prices for a share of Common Stock on the
relevant valuation date as reported in The Wall Street Journal (or, if not so
reported, as otherwise reported by the National Association of Securities
Dealers Automated Quotation System ("Nasdaq") or another source believed by the
Board or the Committee, if established, to be reliable), as applicable or, if
there is no trading on such date, on the next preceding trading date. In the
event Shares are listed on a national or regional
<PAGE> 10
securities exchange or traded in the Nasdaq National Market ("NNM"), the Fair
Market Value of a share of Common Stock shall be the closing price of a share
of Common Stock on the exchange or on the NNM, as reported in The Wall Street
Journal on the relevant valuation date, or if there is no trading on that date,
on the next preceding trading date. In the event that Shares are not traded in
one of the foregoing markets, the Fair Market Value of a share of Common Stock
shall be determined by the Board or the Committee, if established, in its sole
discretion.
(c) "Adjusted Fair Market Value" shall mean in the event
of a Change of Control, the greater of (A) the highest price per share of
Common Stock paid or payable to holders of the Common Stock in any transaction
(or series of transactions) constituting or resulting (or as to which approval
by shareholders of the Company constitutes or results) in the Change of Control
or (B) the highest Fair Market Value of a share of Common Stock on any business
day during the 90 day period ending on the date of the Change of Control.
Section 8. Adjustments.
(a) Subject to required action by the shareholders, if
any, the number of shares of Common Stock as to which Options may be granted
under this Plan and the number of shares subject to outstanding Options and the
option prices thereof shall be adjusted proportionately for any increase or
decrease in the number of outstanding shares of Common Stock of the Company
resulting from stock splits, reverse stock splits, stock dividends,
reclassifications and recapitalizations.
(b) No fractional shares of Common Stock shall be
issuable on account of any action mentioned in paragraph 8(a) above, and the
aggregate number of shares into which Shares then covered by the Option, when
changed as the result of such action, shall be reduced to the number of whole
shares resulting from such action, unless the Board or the Committee, if
established, in its sole discretion, shall determine to issue scrip
certificates with respect to any fractional shares, which scrip certificates,
in such event, shall be in a form and have such terms and conditions as the
Board or the Committee, if established, in its discretion shall prescribe.
Section 9. Rights as a Shareholder.
The Optionee shall have no rights as a shareholder of the Company and
shall have neither the right to vote nor receive dividends with respect to any
Shares subject to an Option until such Option has been exercised.
Section 10. Time of Granting Options.
The date of grant of an Option shall, for all purposes, be the date on
which the Board or the Committee, if established, authoriz-
<PAGE> 11
es the granting of such Option. Notice of the grant shall be given to each
Participant to whom an Option is so granted within a reasonable time after the
date of such grant.
Section 11. Modification, Extension and Renewal of Option.
Subject to the terms and conditions of the Plan, the Board or the
Committee, if established, may modify, extend or renew an Option, or accept the
surrender of an Option (to the extent not theretofore exercised).
Notwithstanding the foregoing, (a) no modification of an Option which adversely
affects an Optionee shall be made without the consent of such Optionee, and (b)
no incentive stock Option may be modified, extended or renewed if such action
would cause it to cease to be an "incentive stock option" under the Code,
unless the Optionee specifically acknowledges and consents to the tax
consequences of such action.
Section 12. Conditions to Issuance of Shares Upon Exercise.
(a) The obligation of the Company to issue and sell
Shares to an Optionee upon the exercise of an Option granted under the Plan is
conditioned upon (i) the Company obtaining any required permit or order from
appropriate governmental agencies, authorizing the Company to issue and sell
such Shares, and (ii) such issuance and sale complying with all relevant
provisions of law, including without limitation, the Securities Act, the
Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the Shares may then be listed.
(b) At the option of the Board or the Committee, if
established, the obligation of the Company to issue and sell Shares to an
Optionee upon the exercise of an Option granted under the Plan may be
conditioned upon obtaining appropriate representations, warranties and
agreements of the Optionee set forth in the Stock Purchase Agreement. Among
other representations, warranties, restrictions and agreements, the Optionee
may be required to represent and agree that the purchase of Shares of Common
Stock under the Option Agreement shall be for investment, and not with a view
to the public resale or distribution thereof, unless the Shares subject to the
Option are registered under the Securities Act and the issuance and sale of the
Shares complies with all other laws, rules and regulations applicable thereto.
Unless the issuance of such Shares is registered under the Securities Act, the
Optionee shall acknowledge that the Shares purchased on exercise of the Option
are not registered under the Securities Act and may not be sold or otherwise
transferred unless such Shares have been registered under the Securities Act in
connection with the sale or other transfer, or counsel satisfactory to the
Company has issued an opinion satisfactory to the Company that the sale or
other transfer is exempt from registration under the Securities Act, and unless
said sale or other transfer is in compliance with any other applicable laws,
rules and regulations including all applicable federal and state securities
laws, rules and regulations. Unless the Shares subject to an Option are
registered under the Securities
<PAGE> 12
Act, the certificates representing all Shares issued upon exercise of such
Option shall contain the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR ANY
APPLICABLE STATE SECURITIES LAWS. THESE SHARES HAVE NOT BEEN
ACQUIRED WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE
SOLD, ASSIGNED, EXCHANGED, MORTGAGED, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED OR DISPOSED OF, BY GIFT OR OTHERWISE, OR
IN ANY WAY ENCUMBERED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SHARES UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS, OR A
SATISFACTORY OPINION OF COUNSEL TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS.
Section 13. Transferability.
No Option shall be assignable or transferable otherwise than by will
or by the laws of descent and distribution. During the lifetime of the
Optionee, the Optionee's Options shall be exercisable only by such Optionee, or
in the event of his or her legal incapacity, then by the Optionee's legal
representative.
Section 14. Other Provisions.
The Option Agreement and Stock Purchase Agreement may contain such
other provisions as the Board or the Committee, if established, in its
discretion deems advisable and which are not inconsistent with the provisions
of this Plan.
Section 15. Change of Control.
(a) For purposes of the Plan, "Option Cancellation Date"
shall mean, as to each option, the later of: (i) the first business day after
the expiration of a period of six months from the date of grant of the option;
(ii) in the event of a Change of Control as defined in Section 2(b)(ii)(A) or
2(b)(ii)(B)(2), the date on which the transaction approved by shareholders of
the Company (as provided in Section 2(b)(ii)) is consummated; and (iii) in the
event of a Change of Control as defined in Section 2(b)(i) or 2(b)(iii), the
first business day after the expiration of a period of 60 days after the
occurrence of such event.
(b) Upon a Change of Control, all Options (whenever
granted) outstanding on the date of such Change of Control shall be or become
immediately and fully exercisable.
(c) In the event of a Change of Control as defined in
Section 2(b)(i), 2(b)(ii)(A), 2(b)(ii)(B)(2) or 2(b)(iii), all Options
(whenever granted) outstanding on the Option Cancellation
<PAGE> 13
Date which are not exercised on or before the Option Cancellation Date shall be
cancelled on such date by the Company, and the Company shall on such date pay
to each holder of each such cancelled Option a cash amount equal to the excess,
if any, in respect of each Option cancelled, of (i) the Adjusted Fair Market
Value of the shares of Common Stock subject to the Option over (ii) the
aggregate purchase price for such shares of Common Stock (the "Spread");
provided, however, that in the event of a Change of Control as defined in
Section 2(b)(ii)(A) or 2(b)(iii) which is to be accounted for as a
"pooling-of-interests" such holder shall receive, in lieu of such cash payment,
the securities that would have been receivable in the Change of Control
transaction with respect to that number of shares of Common Stock having an
Adjusted Fair Market Value equal to the Spread.
Section 16. Amendment of the Plan.
Insofar as permitted by law, the Board may from time to time suspend,
terminate or discontinue the Plan or revise or amend it in any respect
whatsoever with respect to any Shares at the time not subject to an Option.
Section 17. Application of Funds.
The proceeds received by the Company from the sale of shares pursuant
to the exercise of Options shall be used for general corporate purposes.
Section 18. No Obligation to Exercise Option.
The granting of an Option shall impose no obligation upon the Optionee
to exercise such Option.
Section 19. Reservation of Shares.
The Company, during the term of this Plan, shall at all times reserve
and keep available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.
The Company, during the term of this Plan, shall use its best efforts
to seek to obtain from appropriate regulatory agencies any requisite
authorization in order to issue and sell such number of Shares as shall be
sufficient to satisfy the requirements of the Plan. The inability of the
Company to obtain from any such regulatory agency having jurisdiction the
requisite authorization(s) deemed by the Company's counsel to be necessary for
the lawful issuance and sale of any Shares hereunder, or the inability of the
Company to confirm to its satisfaction that any issuance and sale of any Shares
hereunder will meet applicable legal requirements, shall relieve the Company of
any liability in respect to the failure to issue or sell such Shares as to
which such requisite authority shall not have been obtained.
<PAGE> 14
Section 20. Taxes, Fees, Expenses and Withholding of Taxes.
(a) The Company shall pay all original issue and transfer
taxes (but not income taxes, if any) with respect to the grant of Options
and/or the issue and transfer of Shares pursuant to the exercise thereof, and
all other fees and expenses necessarily incurred by the Company in connection
therewith, and will from time to time use its best efforts to comply with all
laws and regulations which, in the opinion of counsel for the Company, shall be
applicable thereto.
(b) The grant of Options hereunder and the issuance of
Shares pursuant to the exercise thereof is conditioned upon the Company's
reservation of the right to withhold in accordance with any applicable law,
from any compensation or other amounts payable to the Optionee, any taxes
required to be withheld under federal, state or local law as a result of the
grant of exercise of such Option or the sale of the Shares issued upon exercise
thereof. To the extent that compensation or other amounts, if any, payable to
the Optionee is insufficient to pay any taxes required to be so withheld, the
Company may, in its sole discretion, require the Optionee, as a condition of
the exercise of an Option, to pay in cash to the Company an amount sufficient
to cover such tax liability or otherwise to make adequate provision for the
Company's satisfaction of its withholding obligations under federal, state and
local law.
Section 21. Notices.
Any notice to be given to the Company pursuant to the provision of
this Plan shall be addressed to the Company in care of its Secretary (or such
other person as the Company may designate from time to time) at its principal
executive office, and any notice to be given to an Optionee shall be delivered
personally or addressed to him or her at the address given beneath his or her
signature on his or her Option Agreement, or at such other address as such
Participant or his or her transferee (upon the transfer of the Shares purchased
upon exercise) may hereafter designate in writing to the Company. Any such
notice shall be deemed duly given when enclosed in a properly sealed envelope
or wrapper addressed as aforesaid, registered or certified, and deposited,
postage and registry or certification fee prepaid, in a post office or branch
post office regularly maintained by the United States Postal Service. It shall
be the obligation of each Optionee and each transferee holding Shares purchased
upon exercise of an Option to provide the Secretary of the Company, by letter
mailed as provided herein, with written notice of his or her direct mailing
address.
Section 22. No Enlargement of Optionee Rights.
This Plan is purely voluntary on the part of the Company, and the
continuance of the Plan shall not be deemed to constitute a contract between
the Company and any Optionee, or to be consideration for or a condition of the
employment of any Optionee.
<PAGE> 15
Nothing contained in this Plan shall be deemed to give any Optionee the right
to be retained in the employ of the Company or any Subsidiary, or to interfere
with the right of the Company or any such corporation to discharge or retire
any Optionee thereof at any time, subject to applicable law. No Optionee shall
have any right to or interest in Options authorized hereunder prior to the
grant thereof to such Optionee, and upon such grant he shall have only such
rights and interests as are expressly provided herein, subject, however, to all
applicable provisions of the Company's Certificate of Incorporation, as the
same may be amended from time to time.
Section 23. Invalid Provisions.
In the event that any provision of this Plan is found to be invalid or
otherwise unenforceable under any applicable law, such invalidity or
unenforceability shall not be construed as rendering any other provisions
contained herein as invalid or unenforceable, and all such other provisions
shall be given full force and effect to the same extent as though the invalid
or unenforceable provision was not contained herein.
Section 24. Applicable Law.
This Plan shall be governed by and construed in accordance with the
laws of the State of New Jersey.
<PAGE> 1
Exhibit 5
Exhibit 23.1
EARP, COHN, LEONE & PENDERY
July 23, 1996
Community Financial Holding Corporation
222 Haddon Avenue
Westmont, NJ 08108
RE: COMMUNITY FINANCIAL HOLDING CORPORATION
1994 EMPLOYEE AND DIRECTOR STOCK OPTION PLAN
Gentlemen:
We have acted as counsel to Community Financial Holding Corporation
(the "Company") in connection with the Company's Registration Statement on Form
S-8 (the "Registration Statement") under the Securities Act of 1933, as
amended, pertaining to the registration of 310,839 shares (the "Shares") of the
Company's Common Stock, par value $5.00 per share (the "Common Stock"),
underlying stock options granted and which may in the future be granted under
the Community Financial Holding Corporation 1994 Employee and Director Stock
Option Plan (the "Plan").
In that connection, we have examined all such corporate records of the
Company, and such other instruments, certified by public officials or officers
of the Company, and other documents as we deemed necessary as a basis for the
opinion hereinafter expressed. We have assumed the genuineness of all
signatures on, and the authenticity of, all documents so examined and the
conformity to original documents of all documents submitted to us as copies.
We have also assumed that: (i) all Shares issued upon the exercise of an option
granted under the Plan will be issued only upon receipt by the Company of the
consideration required under the Plan and that no Shares will be issued except
upon payment to the Company in cash of no less than the amount of consideration
determined to constitute capital under the New Jersey Business Corporation Act,
but in no event less than $5.00 per share; and (ii) at the time of exercise of
an option, a sufficient number of authorized shares of Common Stock shall be
available and reserved for issuance thereunder.
Based upon and subject to the foregoing, we are of the opinion that
the Shares will be, if and when issued upon exercise of an
<PAGE> 2
Community Financial Holding Corporation
July 23, 1996
Page 2
option and paid for in accordance with the terms and conditions of the Plan,
legally issued, fully paid and non-assessable.
The foregoing opinion is delivered to you in connection with the
Registration Statement, and may not be relied upon by any other person or for
any other purpose.
We consent to the use of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
EARP, COHN, LEONE & PENDERY
By:/s/Steven R. Kanes
------------------------
Steven R. Kanes
SRK:al
<PAGE> 1
Exhibit 23.2
The Board of Directors
of Community Financial Holding Corporation:
We consent to incorporation by reference in the registration statement on Form
S-8 of Community Financial Holding Corporation (the Corporation) of our report
dated February 29, 1996, relating to the consolidated balance sheets of the
Corporation as of December 31, 1995 and 1994, and the related consolidated
statements of income, changes in shareholders' equity, and cash flows for each
of the years in the three-year period ended December 31, 1995, which report
appears in the December 31, 1995 annual report on Form 10-K of the Corporation.
KPMG PEAT MARWICK
/s/ KPMG Peat Marwick
- --------------------------
Philadelphia, Pennsylvania
July 15, 1996
