As filed with the Securities and Exchange Commission on March 22, 1999
Registration No. 333-____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------------
THE FINOVA GROUP INC.
(Exact name of registrant as specified in its charter)
DELAWARE 86-069-5381
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
1850 North Central Avenue
P.O Box 2209
Phoenix, Arizona 85002-2009
(Address of principal executive offices) (Zip Code)
OPTIONS TO BE ISSUED BY THE FINOVA GROUP INC. IN REPLACEMENT OF OPTIONS ISSUED
AND OUTSTANDING PURSUANT TO SIRROM CAPITAL CORPORATION'S (I) AMENDED AND
RESTATED 1994 STOCK OPTION PLAN, (II) 1995 STOCK OPTION PLAN FOR NON-EMPLOYEE
DIRECTORS AND (III) 1996 INCENTIVE STOCK OPTION PLAN
(Full title of the plan)
Samuel L. Eichenfield
Chairman, President and Chief Executive Officer
The FINOVA Group Inc.
1850 North Central Avenue
P.O. Box 2209
Phoenix, Arizona 85002-2009
(Name and address of agent for service)
(602) 207-6900
(Telephone number, including area code, of agent for service)
---------------------------
COPY OF ALL COMMUNICATIONS TO:
RICHARD LIEBERMAN, ESQ. KARA L. MACCULLOUGH, ESQ.
THE FINOVA GROUP INC. MORGAN, LEWIS & BOCKIUS LLP
1850 NORTH CENTRAL AVENUE 5300 FIRST UNION FINANCIAL CENTER
P.O. BOX 2209 200 SOUTH BISCAYNE BOULEVARD
PHOENIX, ARIZONA 85002-2009 MIAMI, FLORIDA 33131-2339
(602) 207-5234 (305) 579-0446
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=================================================================================================
Proposed maximum Proposed maximum
Title of securities Amount to be offering price aggregate Amount of
to be registered registered per share (1) offering price (1) registration fee
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par 874,833 $54.8125 $47,951,783.81 $13,330.60
value
=================================================================================================
</TABLE>
(1) Estimated pursuant to paragraphs (c) and (h) of Rule 457 solely for the
purpose of calculating the registration fee, based upon the average of the
reported high ($55.50) and low ($54.125) sales prices for a share of Common
Stock on March 17, 1999, as reported on The New York Stock Exchange, Inc.
(2) Pursuant to Rule 416 under the Securities Act of 1933, this Registration
Statement also covers such additional shares as may hereinafter be offered
or issued to prevent dilution resulting from stock splits, stock dividends,
recapitalizations or certain other capital adjustments.
This Registration Statement on Form S-8 (the "Registration Statement")
filed by The FINOVA Group Inc. (the "Registrant") relates to 874,833 shares (the
"Shares") of the Registrant's Common Stock, par value $0.01 per share (the
"Common Stock"), issuable upon the exercise of certain options (the "Options")
granted under the Options issued by the Registrant to Certain Former Officers
and Directors of Sirrom Capital Corporation.
================================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, as filed by the Registrant with the Securities
and Exchange Commission (the "Commission"), are incorporated by reference in
this Registration Statement:
(a) Annual Report on Form 10-K/A, filed with the Commission on March 8,
1999, for the fiscal year ended December 31, 1998;
(b) Current Report on Form 8-K, filed with the Commission on January
19, 1999; and
(c) The description of the Common Stock of the Registrant set forth in
the Registration Statement on 8-A/A filed with the Commission on September 22,
1995.
All reports and other documents filed by the Registrant and the Plan
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act
of 1934, after the date of this registration statement and prior to the filing
of a post-effective amendment that indicates that all securities offered hereby
have been sold or that deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference herein and to be part hereof from the
date of filing of such documents.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes hereof to the extent
that a statement contained herein (or in any other subsequently filed document
that is also incorporated by reference herein) modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part hereof.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The Registrant has retained Morgan, Lewis & Bockius LLP to render a
legal opinion regarding the validity of the securities offered hereby and to
provide legal advice in matters related to the offering of such securities.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Delaware General Corporation Law (the "DGCL"), the state of
incorporation of the Registrant, and the Certificate of Incorporation and Bylaws
of the Registrant provides for indemnification of directors and officers.
Section 145 of the DGCL provides generally that a person sued as a director,
officer, employee or agent of a corporation may be indemnified by the
corporation for reasonable expenses, including attorneys' fees, if, in cases
other than actions brought by or in the right of the corporation, he or she has
acted in good faith and in a manner he or she reasonably believed to be in, or
not opposed to, the best interests of the corporation (and in the case of a
criminal proceeding, had no reasonable cause to believe that his or her conduct
was unlawful). Section 145 provides that no indemnification for any claim or
matter may be made, in the case of an action
<PAGE>
brought by or in the right of the corporation, if the person has been adjudged
to be liable, unless the Court of Chancery or other court determines that
indemnity is fair and reasonable despite the adjudication of liability.
Indemnification is mandatory in the case of a director, officer, employee or
agent who has been successful on the merits, or otherwise, in defense of a suit
against him or her.
Directors and officers of the Registrant are covered under policies of
directors' and officers' liability insurance with coverage aggregating
$100,000,000. The directors serving the Registrant are parties to
Indemnification Agreements with the Registrant (the "Indemnification
Agreements"). The Indemnification Agreements provide substantially the same
scope of coverage afforded by provisions in the Certificate of Incorporation and
Bylaws and are designed to provide greater assurance to the directors that
indemnification will be available because as contracts, the Indemnification
Agreements may not be unilaterally modified by the Registrant's Board of
Directors or stockholders. The Indemnification Agreements generally are intended
to provide indemnification for any amounts a director is legally obligated to
pay because of claims arising out of the director's service to the Registrant or
any subsidiary of the Registrant.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The exhibits filed as part of this Registration Statement are as
follows:
EXHIBIT EXHIBIT
NUMBER
5.1 Opinion of Morgan, Lewis & Bockius LLP regarding legality of
securities being registered
23.1 Consent of Morgan, Lewis & Bockius LLP (included in its opinion
filed as Exhibit 5)
23.2 Consent of Deloitte & Touche LLP
99.01 The FINOVA Group Inc./Sirrom 1994 Stock Option Plan, as
amended.
99.02 The FINOVA Group Inc./Sirrom 1995 Directors' Stock Option Plan,
as amended.
99.03 The FINOVA Group Inc./Sirrom 1996 Stock Option Plan, as
amended.
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 to include
any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
<PAGE>
(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; and
(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 subparagraphs (1)(i) and (1)(ii) above
do not apply if the information required to be included in a post-effective
amendment by those subparagraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for the purpose of determining any liability under
the Securities Act of 1933, each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 (and each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in this registration statement shall be deemed to be a new
registration statement relating to the securities offered herein 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 of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Phoenix, State of Arizona on March 22, 1999.
THE FINOVA GROUP INC.
By: /s/ Samuel L. Eichenfield
----------------------------------
Samuel L. Eichenfield
CHAIRMAN OF THE BOARD, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the date indicated.
EACH PERSON IN SO SIGNING ALSO MAKES, CONSTITUTES AND APPOINTS SAMUEL L.
EICHENFIELD, WILLIAM J. HALLINAN, BRUNO A. MARSZOWSKI AND RICHARD LIEBERMAN, AND
EACH OF THEM ACTING ALONE, AS HIS TRUE AND LAWFUL ATTORNEYS-IN-FACT, IN HIS
NAME, PLACE AND STEAD, TO EXECUTE AND CAUSE TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION ANY OR ALL AMENDMENTS TO THIS REPORT, AND GENERALLY TO DO
ALL SUCH THINGS IN OUR NAME AND BEHALF IN OUR CAPACITIES AS OFFICERS AND
DIRECTORS TO ENABLE THE FINOVA GROUP INC. TO COMPLY WITH THE PROVISIONS OF THE
SECURITIES ACT OF 1933, AND ALL REQUIREMENTS OF THE SECURITIES AND EXCHANGE
COMMISSION, HEREBY RATIFYING AND CONFIRMING OUR SIGNATURES AS THEY MAY BE SIGNED
BY OUR ATTORNEYS OR ANY OF THEM, TO SAID REGISTRATION STATEMENT AND ANY AND ALL
AMENDMENTS THERETO.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ Samuel L. Eichenfield Director, Chairman, President and March 22, 1999
- --------------------------- Chief Executive Officer (Principal
Samuel L. Eichenfield Executive Officer)
/s/ Bruno A. Marszowski Senior Vice President -- Controller March 22, 1999
- --------------------------- and Chief Financial Officer
Bruno A. Marszowski (Principal Financial and Accounting
Officer)
/s/ Robert H. Clark, Jr. Director March 22, 1999
- ---------------------------
Robert H. Clark, Jr.
/s/ Constance R. Curran Director March 22, 1999
- ---------------------------
Constance R. Curran
/s/ G. Robert Durham Director March 22, 1999
- ---------------------------
G. Robert Durham
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
/s/ James L. Johnson Director March 22, 1999
- ---------------------------
James L. Johnson
/s/ Kenneth R. Smith Director March 22, 1999
- ---------------------------
Kenneth R. Smith
/s/ Shoshana B. Tancer Director March 22, 1999
- --------------------------
Shoshana B. Tancer
/s/ John W. Teets Director March 22, 1999
- ---------------------------
John W. Teets
</TABLE>
<PAGE>
INDEX TO EXHIBITS
EXHIBIT EXHIBIT
NUMBER
5.1 Opinion of Morgan, Lewis & Bockius LLP regarding legality of
securities being registered
23.1 Consent of Morgan, Lewis & Bockius LLP (included in its
opinion filed as Exhibit 5)
23.2 Consent of Deloitte & Touche LLP
99.01 The FINOVA Group Inc./Sirrom 1994 Stock Option Plan, as
amended.
99.02 The FINOVA Group Inc./Sirrom 1995 Directors' Stock Option Plan,
as amended.
99.03 The FINOVA Group Inc./Sirrom 1996 Stock Option Plan, as
amended.
EXHIBIT 5.1
[Morgan, Lewis & Bockius LLP Letterhead]
March 22, 1999
The FINOVA Group Inc.
1850 North Central Avenue
P.O. Box 2209
Phoenix, Arizona 85002-2209
RE: The FINOVA Group Inc. -- Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel to The FINOVA Group Inc., a Delaware corporation (the
"Company"), in connection with the preparation of a Registration Statement on
Form S-8 (the "Registration Statement") filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Act"), relating to
the registration of up to 874,833 shares of Common Stock, par value $.01 per
share (the "Shares") of the Company to be issued pursuant to options granted by
the Company to officers and directors of Sirrom Capital Corporation ("Sirrom")
in connection with the Agreement and Plan of Merger, dated as of January 6, 1999
among the Company, FINOVA Newco Inc. and Sirrom (the "Merger Agreement"). In
rendering the opinion set forth below, we have reviewed (a) the Registration
Statement; (b) the Company's Articles of Incorporation and Bylaws; (c) certain
records of the Company's corporate proceedings as reflected in its minute books;
(d) the Merger Agreement; and (e) such records, documents, statutes and
decisions as we have deemed relevant. In our examination, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals and the conformity with the original of all documents submitted to
us as copies thereof.
Our opinions set forth below is limited to the General Corporation Law of the
State of Delaware.
Based upon the foregoing, we are of the opinion that the Shares will, when
issued in the manner and on the terms described in the Registration Statement
and the Merger Agreement, will be duly authorized, validly issued, fully paid
and non-assessable.
We hereby consent to the use of this opinion as Exhibit 5.1 to the Registration
Statement. In giving such opinion, we do not thereby admit that we are acting
within the category of persons whose consent is required under Section 7 of the
Act or the rules or regulations of the Securities and Exchange Commission
thereunder.
The opinion expressed herein is solely for your benefit, and may be relied upon
only by you.
Very truly yours,
/s/ Morgan, Lewis & Bockius LLP
Morgan, Lewis & Bockius LLP
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
The FINOVA Group Inc. on Form S-8 of our report dated February 10, 1999,
appearing in the Annual Report on Form 10-K/A of The FINOVA Group Inc. for the
year ended December 31, 1998.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Phoenix, Arizona
March 18, 1999
EXHIBIT 99.01
THE FINOVA GROUP INC./SIRROM
1994 STOCK OPTION PLAN
WHEREAS, the 1994 Stock Option Plan adopted by the Board of Directors
of Sirrom Capital Corporation by Action Taken On Written Consent of the Board of
Directors on November 18, 1994 is hereby amended and restated by the Stock
Option Committee.
1. PURPOSE. The purpose of the Sirrom Capital Corporation 1994
Stock Option Plan (the "Plan") is to advance the growth and prosperity of Sirrom
(the "Company") by providing key employees with an additional incentive to
contribute to the best interests of the Company. Without prejudice to other
compensation programs approved from time to time by the Board of Directors (the
"Board") and/or shareholders of the Company, such additional incentive is to be
given key employees by means of stock options provided for under the Plan.
2. ADMINISTRATION OF THE PLAN.
(a) The Plan shall be administered by a special Stock Option
Committee (the "Committee") comprised of at least two (2) members of the
Company's Board of Directors who are "disinterested persons" as defined in Rule
16b-3 promulgated under the Securities Exchange Act of 1934, as amended. The
Board at any time may remove members from or add members to the Committee or may
abolish the Committee and revest in the Board the administration of the Plan.
Vacancies on the Committee, howsoever caused, shall be filled by the Board.
(b) The Committee shall have the power, subject to, and
within, the limits of the express provisions of the Plan:
(i) To determine from time to time which of the
eligible persons shall be granted options under the Plan, the
term of each granted option, the time or times during the term
of each option within which all or portions of each option may
be exercised and the number of shares for which each option
shall be granted.
(ii)To construe and interpret the Plan and options
granted under it, and to establish, amend and revoke rules and
regulations for its administration. The Committee, in the
exercise of this power, shall generally determine all
questions of policy and expediency that may arise and may
correct any defect, omission or inconsistency in the Plan or
in any option agreement in a manner and to the extent it shall
deem necessary or expedient to make the Plan fully effective.
(iii) To prescribe the terms and provisions of each
option granted (which need not be identical).
(iv)To amend the Plan as provided herein.
(v) Generally, to exercise such powers and to perform
such acts as are deemed necessary or expedient to promote the
best interests of the Company.
(c) The interpretation and construction by the Committee of
any provisions of the Plan or of any option granted under it shall be final. No
member of such Committee or of the Board shall be liable for any action or
determination made in good faith with respect to the Plan or any option granted
under it.
3. ELIGIBLE EMPLOYEES. The Committee shall determine from time to
time those officers and key
<PAGE>
employees of the Company to whom options shall be granted and, pursuant to the
provisions of the Plan, the amount thereof and the terms and conditions,
including requirements as to continued employment by the participant, upon which
such options or rights are granted and are exercisable. Directors of the Company
who are not also employees of the Company shall not be eligible to participate
in the Plan.
4. THE STOCK. The stock subject to the options and other
provisions of the Plan shall be shares of the Company's authorized and unissued
Common Stock, or reacquired Common Stock held in the treasury. Subject to the
provisions hereof concerning adjustment, the total number of shares of the
Company's Common Stock that may be transferred pursuant to the exercise of stock
options under the Plan shall not exceed in the aggregate 500,000 shares. Shares
subject to options which terminate or expire prior to exercise shall be
available for further option hereunder.
5. TERMS AND CONDITIONS OF OPTIONS. All stock options granted
pursuant to the Plan shall be in such form as the Committee shall from time to
time determine and shall be subject to the following terms and conditions:
(a) OPTION PRICE. The price per share for Common Stock under
each option granted under the Plan shall be no less than 100% of the fair market
value of the Common Stock on the date of grant of such option.
(b) OPTION PERIOD. The period during which an option may be
exercised shall be determined by the Committee, provided, however, that in no
event shall an option granted hereunder be exercisable after the expiration of
10 years from the date such option was granted. Options may be made exercisable
in installments, and such options or installments thereof may be exercised in
part from time to time after they become exercisable. The maturity of any
installment or installments may be accelerated at the discretion of the
Committee. Options may be subject to a vesting schedule in the discretion of the
Committee.
In the event that a participant shall cease to be employed by the
Company or one of its subsidiaries for any reason (including disability and
retirement with the consent of the Company) other than his death, all options
held by him pursuant to the Plan and not previously exercised at the date of
such termination shall be exercisable for three months following the date of
termination of the participant's employment, subject to the further condition,
however, that no option shall be exercisable after the expiration of 10 years
from the date it is granted. Whether termination of employment is due to
disability or is to be considered retirement with the consent of the Company
shall be determined by the Committee which determination shall be final and
conclusive.
If the participant should die while in the employ of the Company or
within a period of three months after the termination of his employment by
retirement and shall not have fully exercised options granted under the Plan,
such options may be exercised in whole or in part at any time within 12 months
after the participant's death by the executors or administrators of the
participant's estate or by any person or persons who shall have acquired the
options directly from the participant by bequest or inheritance, subject to the
condition that no option shall be exer cisable after the expiration of 10 years
from the date it is granted, and subject to the further condition that in the
case of the grant of an option to an individual who, at the time of the grant,
owns more than 10% of the total combined voting power of all classes of stock of
the Company, in no event shall such option be exercisable more than five years
from the date of the grant.
The exercise of an option granted under the Plan shall not affect the
optionee's right or ability to exercise any other option granted under the Plan
or any other stock option plan of the Company or its subsidiaries.
(c) HOLDING PERIOD. Upon such time as the Company has a class
of equity security registered under Section 12 of the Exchange Act, in order for
the grant of an option under the Plan to be exempt from Section 16(b) of the
Exchange Act, the optionee must make no disposition of the option (other than
upon exercise) or the shares acquired pursuant to the exercise of the option,
for a period of six months after the date of grant of such option.
<PAGE>
6. PAYMENT FOR STOCK. Payment for shares subject to options
granted under the Plan shall be made by the optionee in the form of cash or by
means of unrestricted shares of the Company's Common Stock or any combination
thereof. Payment shall be made upon the exercise of the option. Payment in
currency or by check, bank draft, cashier's check or postal money order shall be
considered payment in cash. In the event of payment in the Company's Common
Stock, the shares used in payment of the purchase price shall be considered
payment to the extent of their fair market value on the date of exercise of the
option. Upon the exercise of any option, the Company may, at the request of the
optionee and subject to the approval of the Company's Board of Directors, lend
to such optionee, as of the date of exercise, an amount equal to the exercise
price of such option, provided that such loan (a) has a term of not more than
ten years, (b) becomes due within sixty days after the recipient of the loan
ceases to be an employee of the Company, (c) bears interest at a rate not less
than the prevailing applicable federal rate at the time the loan is made, and
(d) is fully collateralized at all times, which collateral may include
securities issued by the Company. Loan terms and conditions may be changed by
the Company's Board of Directors to comply with applicable regulations of the
Internal Revenue Service and Securities and Exchange Commission.
7. NON-ASSIGNABILITY. No option shall be transferable otherwise
than by will or the laws of descent and distribution and an option is
exercisable during the lifetime of the optionee only by the optionee.
8. ADJUSTMENT UPON CHANGES IN STOCK.
(a) The number of shares of Common Stock available for the
granting of options under the Plan and the number of shares and price per share
of Common Stock subject to outstanding options granted pursuant to the Plan may
be adjusted by the Committee in an equitable manner to reflect changes in the
capitalization of the Company, including, but not limited to, such changes as
result from merger, consolidation, reorganization, recapital ization, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares and change in corporate
structure. If any adjustment under this subparagraph 8(a) would create a
fractional share of Common Stock or a right to acquire a fractional share of
Common Stock, such fractional share shall be disregarded and the number of
shares available under the Plan and the number covered under any options granted
pursuant to the Plan shall be the next lower number of shares, rounding all
fractions downward.
(b) The Committee may provide in the terms of an option that,
in the event of: (1) a dissolution or liquidation of the Company; (2) a sale of
all or substantially all of the assets of the Company; (3) a merger or share
exchange in which the Company is not the surviving corporation; (4) other
capital reorganization in which more than fifty percent (50%) of the shares of
the Company entitled to vote are exchanged; or (5) such other corporate
reorganization as may be described by the Committee, any outstanding options
thereunder immediately shall be fully exercisable by an optionee.
(c) Any adjustment made by the Committee under this paragraph
8 shall be conclusive and binding on all affected persons.
9. AMENDMENT. The Board from time to time may amend this Plan,
but except as provided above with respect to dilutions or other adjustments or
mergers or share exchanges, or with the approval of the Company's shareholders,
may not (a) increase the aggregate number of shares available for option
hereunder, (b) change the price at which options may be granted, (c) extend the
maximum period during which an option may be exercised, (d) materially increase
the benefits accruing to participants under the Plan, or (e) materially change
the eligibility requirements for options hereunder. Rights and obligations under
any option granted before amendment of the Plan shall not be altered or impaired
by amendment of the Plan, except with the consent of the person to whom the
option was granted.
10. FAIR MARKET VALUE OF STOCK. Whenever pursuant to the terms of
the Plan the fair market value of the Company's Common Stock is required to be
determined as of a particular date, such fair market value shall equal the last
sale price of the Common Stock on the principal exchange on which the Common
Stock is then listed, or if the Common Stock is not then listed on any exchange,
on the National Association of Securities Dealers Automated
<PAGE>
Quotation National Market System ("NMS"), or, if price quotations for the Common
Stock are not available on NMS, the mean between the closing bid and asked price
of the Common Stock on the National Association of Securities Dealers Automated
Quotation System ("NASDAQ"), or if no bid quotation is available on NASDAQ, the
fair value of such Common Stock as determined by the Board, in each case, on the
business day immediately preceding the date on which the determination is made.
11. NO RIGHTS AS SHAREHOLDER. A participant in the Plan shall have
no rights as a shareholder with respect to any shares covered by his option
until the date of the issuance of a stock certificate to him. No adjustment
shall be made for dividends (ordinary or extraordinary, whether in cash,
securities or other property) or distributions or other rights for which the
record date is prior to the date such stock certificate is issued.
12. INDEMNIFICATION OF COMMITTEE. In addition to such other rights
of indemnification as they may have as directors or as members of the Committee,
the members of the Committee shall be indemnified by the Company against the
reasonable expenses, including attorneys' fees actually and necessarily incurred
in connection with the defense of any action, suit or proceeding, or in
connection with any appeal therein, to which they or any of them may be a party
by reason of any action taken or failure to act under or in connection with the
Plan or any option granted thereunder, and against all amounts paid by them in
settlement thereof (provided such settlement is approved by independent legal
counsel selected by the Company) or paid by them in satisfaction of a judgment
in any such action, suit or proceeding, except in relation to matters as to
which it shall be adjudged in such action, suit or proceeding that such
Committee member is liable for negligence or misconduct in the performance of
his duties; provided that within 60 days after institution of any such action,
suit or proceeding, the Committee member shall in writing offer the Company the
opportunity, at its own expense, to handle and defend the same.
13. TERMINATION. This Plan shall terminate ten years from the date
on which the Board adopts this Plan or the shareholders of the Company approve
the Plan, whichever is earlier, unless sooner terminated by action of the Board.
No option may be granted hereunder after termination of the Plan, but such
termination shall not affect the validity of any option then outstanding.
14. EFFECTIVE DATE. This Plan shall become effective upon adoption
by the Board of Directors.
15. MISCELLANEOUS.
(a) No option may be issued if exercise of all warrants,
options and rights of the Company outstanding immediately after issuance of such
option would result in the issuance of voting securities in excess of twenty
percent (20%) of the Company's outstanding voting securities.
(b) This plan and all actions taken by those acting for the
Plan shall be governed by the laws of the State of Tennessee without regard to
conflicts of law regulations.
<PAGE>
AMENDMENT NO. 1 TO THE FINOVA GROUP INC./SIRROM 1994 STOCK OPTION PLAN
1. The term "Board" means the Board of Directors of The FINOVA Group Inc.
2. The term "Committee" means the Human Resources Committee of The FINOVA
Group Inc. Board of Directors or any other committee designated by this
Board to administer that plan.
3. The term "Company" means The FINOVA Group Inc.
4. The term "Current Market Value" or comparable terms will be determined
with reference to the price of this Corporation's stock as quoted on
the New York Stock Exchange, rather than NASDAQ, so long as the stock
is quoted on the NYSE.
5. The term "Plan" means The FINOVA Group Inc./Sirrom 1994 Stock Option
Plan.
6. The term "Stock" or "shares" means the common stock of The FINOVA Group
Inc. As it may be adjusted from time to time.
7. The plans shall be governed by the laws of the State of Delaware,
without regard to that state's conflict of law principles.
8. Any restrictions in those plans requiring compliance with the
Investment Company Act of 1940 will cease to the extent those
restrictions no longer govern the activities of this Corporation.
EXHIBIT 99.02
THE FINOVA GROUP INC./SIRROM
1995 DIRECTORS' STOCK OPTION PLAN
1. PURPOSE
The purposes of this Plan are to advance the interests of the Company
and its shareholders by attracting and retaining the highest quality of
experienced persons as Outside Directors and to align the interests of the
Outside Directors more closely with the interests of the Company's shareholders.
2. DEFINITIONS
For purposes of this Plan, the following terms shall have the meanings
indicated below:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and any successor thereto.
(c) "Committee" shall mean those members of the Board that are not
eligible to participate in this Plan.
(d) "Company" shall mean Sirrom Capital Corporation, a corporation
organized under the laws of the State of Tennessee, or any
successor corporation.
(e) Current Market Value" shall mean, as of a given date, (i) the
closing price for the Stock at closing on The New York Stock
Exchange ("NYSE"), or other national exchange or quotation
market on which the Company's stock is traded for the last
preceding date on which there was a sale of the Stock, or (ii)
if the Stock is no longer authorized for trading on the NYSE,
or other national exchange or quotation market, the then
current net asset value of a share of Stock as determined by
the Committee in good faith.
(f) "Disability" means permanent and total disability within the
meaning of Section 22(e)(3) of the Code, as determined by the
Committee.
(g) "Exercise Date" shall mean the date on which the Company
receives the notice of exercise of an Option from an Optionee
as set forth in Section 7(b).
(h) "Option" shall mean an option granted to an Outside Director
pursuant to this Plan.
(i) "Optionee" shall mean an Outside Director who has been granted
an Option pursuant to this Plan.
(j) "Outside Director" shall mean any member of the Board who has
not served as an employee or officer of the Company at any
time during the two-year period preceding the date on which an
Option is granted to such Optionee.
(k) "Plan" shall mean this Amended and Restated Sirrom Capital
Corporation 1995 Stock Option Plan for Non-Employee Directors,
as adopted by the Board (subject to the approvals described in
Section 10) on December 19, 1997.
<PAGE>
(l) "Stock" shall mean the Common Stock, no par value, of the
Company.
3. ADMINISTRATION
This Plan shall be administered by the Committee. The Committee is
authorized to interpret this Plan and may from time to time adopt such rules and
regulations, not inconsistent with the provisions of this Plan, as it may deem
advisable to carry out this Plan; provided, however, that the Committee shall
have no discretion with respect to designating the recipient of an Option, the
number of shares of Stock that are subject to an Option or the per share
exercise price for an Option. All decisions made by the Committee in construing
the provisions of this Plan shall be final.
The Company intends that this Plan shall comply with the requirements
of Rule 16b-3 of the Securities Exchange Act of 1934. Should any provision of
this Plan not comply with the requirements of such Rule (as the same may be
amended), the Board may amend this Plan to add to or modify the provisions of
this Plan accordingly.
4. ELIGIBILITY
Each Outside Director shall be eligible to participate in this Plan.
5. STOCK SUBJECT TO THIS PLAN
Subject to adjustment as provided in Section 9, not more than 492,000
shares of Stock may be issued with respect to the Options granted under this
Plan. Such shares that are reserved for issuance under this Plan are authorized
but unissued shares of Stock. Shares of Stock subject to an Option shall, upon
the expiration or termination of any such Option to the extent unexercised,
again be available for grant under this Plan.
6. GRANT OF OPTIONS
(a) INITIAL GRANTS
Except for John A. Morris, Jr., M.D., each director who is an Outside
Director as of April 19, 1996 (the "Initial Effective Date"), shall
automatically, as of the Initial Effective Date, be granted an award of Options
under this Plan as follows: (i) each Outside Director who was elected to the
Company's Board of Directors before December 1, 1994 shall automatically receive
an Option grant for the purchase of 18,000 shares (pre-split) of Stock (subject
to adjustment as provided in Section 9); and (ii) each Outside Director who was
elected to the Company's Board of Directors after December 1, 1994, but prior to
the date of adoption of this Plan by the Board, shall automatically receive an
Option grant for the purchase of 12,000 shares (pre-split) of Stock (subject to
adjustment as provided in Section 9). Each Outside Director elected after the
Initial Effective Date shall automatically receive as of the date of his or her
election to the Board of Directors an Option grant for the purchase of 12,000
shares of Stock (subject to adjustment as provided in Section 9).
(b) GRANTS UPON RE-ELECTION
Except for John A. Morris, Jr., M.D., (i) each Outside Director who was
re-elected to the Company's Board of Directors on April 4, 1997 shall
automatically receive on the Effective Date (as defined in Section 10) an Option
grant for the purchase of 4,000 shares of Stock (subject to adjustment as
provided in Section 9); and (ii) each Outside Director who is re-elected to the
Company's Board of Directors in the future, commencing with the annual meeting
of shareholders of the Company in 1998, shall automatically receive, as of the
date of his or her re-election to the Board of Directors, an Option grant for
the purchase of 4,000 shares of Stock (subject to adjustment, as provided in
Section 9).
<PAGE>
(c) EXERCISE PRICE
The exercise price of each Option granted under this Plan shall be the
Current Market Value on the date of grant.
7. TERMS AND CONDITIONS OF OPTIONS
(a) TERM
Subject to the provisions hereof, options shall vest on the
first anniversary of the date of grant and shall be
exercisable in whole or part at any time upon fulfillment of
the vesting period. In no event may an Option be exercised
after ten years from the date of grant.
In the event of the death or Disability of an Optionee during
his service as a director, all his unexercised Options shall
immediately become exercisable and may be exercised (by his
personal representative in the event of such death) for a
period of three years following the date of such death or one
year following the date of such Disability, but in no event
after the respective expiration dates of such Options. In the
event of the termination of an Optionee's service as a
director for cause, any Options held by him under this Plan
not theretofore exercised shall terminate immediately upon
such termination of service as a director and may not be
exercised thereafter, unless otherwise determined by the
Committee. The Committee in its sole discretion may determine
that an Optionee's service as a director was terminated for
cause, if it finds that the Optionee willfully violated any of
the Company's policies on ethical business conduct or engaged
in any activity or conduct during his service as a director
which was inimical to the best interests of the Company. If an
Optionee's service as a director is terminated for any reason
other than by his death or Disability or by the Company for
cause, his Options, to the extent then exercisable, may be
exercised within one year immediately following the date of
termination, but in no event after the respective expiration
dates of such Options.
(b) EXERCISE OF OPTIONS
An Option shall be exercised by delivering to the Corporate
Secretary of the Company a written notice of exercise in the
form prescribed by the Corporate Secretary for use from time
to time. Such notice of exercise shall indicate the number of
shares for which the Option is to be exercised and shall be
accompanied by the full exercise price for the portion of the
Option to be exercised.
(c) FORM OF PAYMENT
The exercise price may be paid in cash (including certified or
cashier's check, bank draft or money order), Stock which is
free and clear of all liens, claims or other encumbrances by
third parties, or a combination of Stock and cash. The Stock
so delivered shall be valued at the Current Market Value as of
the Exercise Date. No shares of Stock shall be issued or
delivered until full payment therefor has been made.
(d) NON-TRANSFERABILITY
No Option shall be assignable or transferable by the Optionee,
except by will or pursuant to applicable laws of descent and
distribution. During the life of an Optionee, an Option shall
be exercisable only by such Optionee or such Optionee's legal
representative.
(e) NO RIGHTS AS SHAREHOLDERS
Neither an Optionee nor an Optionee's legal representative
shall have any rights as shareholders of the Stock unless and
until certificates for shares of Stock are registered in his
or her name in satisfaction of a duly exercised Option.
<PAGE>
8. WITHHOLDING TAXES
Whenever the Company grants, issues or transfers shares of Stock under
this Plan, the Company shall have the right to require the Optionee to remit to
the Company an amount sufficient to satisfy any federal, state and local
withholding tax requirements prior to the delivery of any certificate for such
shares. The Company shall have the right to retain sufficient shares of Stock to
cover the amount of any tax required by any government to be withheld or
otherwise deducted or paid with respect to the exercise of the Options. The
Stock so retained shall be valued at the Current Market Value as of the date of
such retention.
9. CAPITAL ADJUSTMENTS AND CORPORATE REORGANIZATIONS
In the event of any change in the outstanding shares of Stock by reason
of a stock dividend, split or combination, or recapitalization or
reclassification, or reorganization, merger or consolidation, in which the
Company is the surviving corporation, or other similar change affecting the
Stock, the number of shares then subject to Options and for which Options may
thereafter be granted and the price per share of Stock payable upon exercise or
surrender of such Options shall be appropriately adjusted by the Committee to
reflect such change. No fractional shares shall be issued as a result of such
adjustment. In the event of a dissolution of the Company or a reorganization,
merger or consolidation in which the Company is not the surviving corporation,
the Company by action of its Board shall either (i) terminate outstanding and
unexercised Options as of the effective date of such dissolution, merger or
consolidation by giving notice to each Optionee of its intention to do so and
permitting the exercise, during the period prior to such effective date to be
specified by the Board, of all outstanding and unexercised Options or portions
thereof (provided, however, that no Option shall become exercisable hereunder
either after the expiration date thereof or prior to six (6) months from the
date of grant thereof), or (ii) in the case of such reorganization, merger or
consolidation, arrange for an appropriate substitution of shares or other
securities of the corporation with which the Company is reorganized, merged or
consolidated in lieu of the shares which are subject to any outstanding and
unexercised Options.
10. EFFECTIVE DATE AND TERM OF THIS PLAN
The Plan shall be effective as of the later of (a) the date of approval
of the amendments reflected in this Plan, which were approved by the Board on
December 19, 1997 (the "Amendments") by the shareholders of the Company, and (b)
the date of the approval of the Amendments by order of the Securities and
Exchange Commission (the "Effective Date"). Subject to Section 11 hereof, the
Board in its discretion may terminate this Plan at any time with respect to any
shares for which Options have not theretofore been granted. Except with respect
to Options then outstanding, if not sooner forfeited or terminated, this Plan
shall terminate upon, and no Options shall be granted after, ten years from the
Effective Date.
11. AMENDMENTS
The Board shall have the right to alter or amend this Plan or any part
thereof from time to time provided that:
(a) no change in any Option theretofore granted may be made which
would impair the rights of an Optionee without the consent of
such Optionee;
(b) Plan provisions may not be amended more than once every (6)
six months, other than to comport with changes in the Code,
the Employee Retirement Income Security Act, or the rules
thereunder; and
(c) the Board may not make any alteration or amendment which would
materially increase the benefits accruing to participants
under this Plan, increase the aggregate number of shares of
Stock which may be issued pursuant to provisions of this Plan
or extend the terms of this Plan, without the approval of the
shareholders of the Company.
<PAGE>
AMENDMENT NO. 1 TO THE FINOVA GROUP INC./SIRROM
1995 DIRECTORS' STOCK OPTION PLAN
1. The term "Board" means the Board of Directors of The FINOVA Group Inc.
2. The term "Committee" means the Human Resources Committee of The FINOVA
Group Inc. Board of Directors or any other committee designated by this
Board to administer that plan.
3. The term "Company" means The FINOVA Group Inc.
4. The term "Current Market Value" or comparable terms will be determined
with reference to the price of this Corporation's stock as quoted on
the New York Stock Exchange, rather than NASDAQ, so long as the stock
is quoted on the NYSE.
5. The term "Plan" means The FINOVA Group Inc./Sirrom 1995 Directors'
Stock Option Plan
6. The term "Stock" or "shares" means the common stock of The FINOVA Group
Inc. As it may be adjusted from time to time.
7. The plans shall be governed by the laws of the State of Delaware,
without regard to that state's conflict of law principles.
8. Any restrictions in those plans requiring compliance with the
Investment Company Act of 1940 will cease to the extent those
restrictions no longer govern the activities of this Corporation.
EXHIBIT 99.03
THE FINOVA GROUP INC./SIRROM
1996 INCENTIVE STOCK OPTION PLAN
SECTION 1. PURPOSE; DEFINITIONS.
(a) PURPOSE. The purpose of the Plan is to advance the growth and
prosperity of the Company by providing key employees with an additional
incentive to contribute to the best interests of the Company and its
Subsidiaries, and strengthen the mutuality of interests between such individuals
and the Company's shareholders, by offering such key employees Options with
respect to shares of Common Stock of the Company. The creation of the Plan shall
not diminish or prejudice other compensation programs approved from time to time
by the Board.
Except as otherwise provided herein, Options granted under the Plan are
intended to qualify as Incentive Stock Options under Section 422 of the Code.
(b) DEFINITIONS. For purposes of the Plan, the following terms are
defined as set forth below:
(i) "Board" means the Board of Directors of the Company.
(ii) "Cause" has the meaning provided in Section 5(b)(v) of the Plan.
(iii) "Common Stock" means the Company's Common Stock, without par
value.
(iv) "Code" means the Internal Revenue Code of 1986, as amended from
time to time, and any successor thereto.
(v) "Commission" means the Securities and Exchange Commission.
(vi) "Committee" has the meaning provided in Section 2 of the Plan.
(vii) "Company" means Sirrom Capital Corporation, a corporation
organized under the laws of the State of Tennessee, or any successor
corporation.
(viii) "Current Market Value" means the last sale price of the Common
Stock on the principal exchange on which the Common Stock is then listed, or if
the Common Stock is not then listed on any exchange, on the National Association
of Securities Dealers Automated Quotation National Market System ("NMS"), or, if
price quotations for the Common Stock are not available on NMS, the mean between
the closing bid and asked price of the Common Stock on the National Association
of Securities Dealers Automated Quotation System ("NASDAQ"), or if no bid
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<PAGE>
quotation is available on NASDAQ, the fair value of such Common Stock as
determined by the Committee, in each case, on the date the determination is
made, or if such day is not a business day, the business day immediately
preceding the date on which the determination is made.
(ix) "Disability" means disability as determined under the Company's
long-term disability insurance policy or, if there is no such definition, as
reasonably determined by the Committee.
(x) "Disinterested Person" has the meaning set forth in Rule
16b-3(c)(2)(i) as promulgated by the Commission under the Exchange Act, or any
successor definition adopted by the Commission.
(xi) "Early Retirement" means retirement, for purposes of this Plan
with the express consent of the Company at or before the time of such
retirement, from active employment with the Company and any Subsidiary prior to
age 65, in accordance with any applicable early retirement policy of the Company
then in effect.
(xii) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor thereto.
(xiii) "Incentive Stock Option" means any Option granted under the Plan
that qualifies as an "Incentive Stock Option" within the meaning of Section 422
of the Code.
(xiv) "Non-Qualified Stock Option" means any Option that is not an
Incentive Stock Option.
(xv) "Normal Retirement" means retirement from active employment with
the Company and any Subsidiary or Affiliate on or after age 65.
(xvi) "Option" means any option to purchase shares of Common Stock
granted pursuant to Section 5 below.
(xvii) "Plan" means this Sirrom Capital Corporation 1996 Incentive
Stock Option Plan, as amended from time to time in accordance herewith.
(xviii) "Retirement" means Normal Retirement or Early Retirement.
(xix) "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations (other than the last corporation in the unbroken chain) owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in the chain.
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<PAGE>
SECTION 2. ADMINISTRATION.
(a) THE COMMITTEE. The Plan shall be administered by a special Stock
Option Committee (the "Committee") of not less than two Disinterested Persons,
who shall be appointed by the Board and who shall serve at the pleasure of the
Board. The functions of the Committee specified in the Plan may be exercised by
an existing Committee of the Board composed exclusively of Disinterested
Persons.
(b) AUTHORITY OF THE COMMITTEE. The Committee shall have the power,
subject to, and within, the limits of the express provisions of the Plan:
(i) To determine from time to time which of the
eligible persons shall be granted options under the Plan, the
term of each Option, and the number of shares for which each
Option shall be granted.
(ii)To determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award granted
hereunder (including, but not limited to, the time or times
during the term of each Option within which all or portions of
each Option may be exercised and any restriction or
limitation, or any vesting, acceleration of vesting or waiver
of forfeiture restrictions regarding any Option, based in each
case on such factors as the Committee shall determine, in its
sole discretion) and to amend or waive any such terms and
conditions to the extent permitted by Section 6 hereof.
(iii) To construe and interpret the Plan and Options
granted under it, and to establish, amend and revoke rules and
regulations for its administration. The Committee, in the
exercise of this power, shall generally determine all
questions of policy and expediency that may arise and may
correct any defect, omission or inconsistency in the Plan or
in any option agreement in a manner and to the extent it shall
deem necessary or expedient to make the Plan fully effective.
(iv) Generally, to exercise such powers and to
perform such acts as are deemed necessary or expedient to
promote the best interests of the Company.
All decisions made by the Committee pursuant to the provisions of the
Plan shall be made in the Committee's sole discretion and shall be final and
binding on all persons, including the Company and Plan participants. No members
of the Committee or the Board shall be liable for any action or determination
made in good faith with respect to the Plan or any Option granted under it.
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<PAGE>
SECTION 3. SHARES OF COMMON STOCK SUBJECT TO PLAN.
(a) SHARES OF COMMON STOCK RESERVED UNDER PLAN. The aggregate number of
shares of Common Stock reserved and available for distribution under the Plan
shall be 5,707,098 shares. Such shares of Common Stock may consist, in whole or
in part, of authorized and unissued shares or treasury shares.
If any Option expires or is forfeited without exercise, the shares of
Common Stock subject to such Option immediately prior to its expiration or
forfeiture shall again be available for distribution in connection with future
awards under the Plan.
(b) ADJUSTMENT UPON CHANGES IN STOCK. The number of shares of Common
Stock available for the granting of Options under the Plan and the number of
shares and price per share of Common Stock subject to outstanding Options
granted pursuant to the Plan may be adjusted by the Committee in an equitable
manner to reflect changes in the capitalization of the Company, including, but
not limited to, such changes as result from merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares and change in corporate structure. If any adjustment under this Section
3(b) would create a fractional share of Common Stock or a right to acquire a
fractional share of Common Stock, such fractional share shall be disregarded and
the number of shares available under the Plan and the number covered under any
options granted pursuant to the Plan shall be the next lower number of shares,
rounding all fractions downward. In the event of any dispute as to any
substitution or adjustment made under this Section 3(b), the decision of the
Committee shall be final and binding on all persons, including the Company and
Plan participants.
(c) ACCELERATION ON THE OCCURRENCE OF CERTAIN EVENTS. The Committee may
provide in the terms of an Option that, in the event of: (1) a dissolution or
liquidation of the Company; (2) a sale of all or substantially all of the assets
of the Company; (3) a merger or share exchange in which the Company is not the
surviving corporation; (4) other capital reorganization in which more than fifty
percent (50%) of the shares of the Company entitled to vote are exchanged; or
(5) such other corporate reorganization as may be described by the Committee,
any outstanding Options thereunder immediately shall be fully exercisable by an
optionee.
SECTION 4. ELIGIBILITY.
Officers and other key employees of the Company and its Subsidiaries
(but excluding members of the Committee and any person who serves only as a
director or who is an officer but not an employee of either the Company or one
of its Subsidiaries) who are responsible for or contribute to the management,
growth or profitability of the business of the Company and its Subsidiaries are
eligible to be granted Options under the Plan.
4
<PAGE>
SECTION 5. OPTIONS.
(a) ADMINISTRATION. Any Option granted under the Plan shall be in such
form as the Committee may from time to time approve and, except as otherwise
provided in Section 5(b)(xi) below, shall clearly indicate that such Option is
intended to qualify as an Incentive Stock Option under Section 422 of the Code.
(b) TERMS AND CONDITIONS. Options granted under the Plan shall be
subject to the following terms and conditions and shall contain such additional
terms and conditions, not inconsistent with the terms of the Plan, as the
Committee shall deem desirable. The provisions of Options need not be the same
with respect to each recipient or each award.
(i) Option Price. The option price per share of Common Stock
purchasable under an Option shall be determined by the Committee at the
time of grant but shall be not less than 100% (or, in the case of any
employee who owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or of any of its
subsidiary or parent corporations, not less than 110%) of the Current
Market Value of the Common Stock at grant. The day on which the
Committee approves the granting of an Option to a particular individual
shall be considered the date on which such Option is granted, except
that if an Option is granted to a prospective employee conditioned on
his or her acceptance of an offer of employment, the date the
employment relationship commences shall be deemed to be the date of
grant.
(ii) Option Term. The term of each Option shall be fixed by
the Committee, but no Option shall be exercisable more than ten years
(or, in the case of an employee who owns stock possessing more than 10%
of the total combined voting power of all classes of stock of the
Company or any of its subsidiary or parent corporations, more than five
years) after the date the Option is granted.
(iii) Exercisability. Options shall be exercisable at such
time or times and subject to such terms and conditions as shall be
determined by the Committee at or after grant. The Committee may
provide that an Option shall vest over a period of future service at a
rate specified at the time of grant, or that the Option is exercisable
only in installments. If the Committee provides, in its sole
discretion, that any Option is exercisable only in installments, the
Committee may waive such installment exercise provisions at any time at
or after grant in whole or in part, based on such factors as the
Committee shall determine, in its sole discretion. The Committee may
condition the exercise of any Option upon the attainment of specified
performance goals or other factors as the Committee may determine, in
its sole discretion. Unless specifically provided in the Option
agreement, any such conditional Option shall vest immediately prior to
its expiration if the conditions to exercise have not theretofore been
satisfied.
(iv) Method of Exercise. Subject to whatever installment or
other exercise restrictions apply under Section 5(b)(iii) hereof,
Options may be exercised in whole or in
5
<PAGE>
part at any time during the option period, by giving written notice of
exercise to the Company specifying the number of shares to be
purchased.
(v) Payment for Stock. Payment for shares subject to Options
granted under the Plan shall be made by the optionee in the form of
cash or by means of unrestricted shares of Common Stock already owned
by the optionee or any combination of cash and any such unrestricted
shares of Common Stock. Payment shall be made upon the exercise of the
Option. Payment in currency or by check, bank draft, cashier's check or
postal money order shall be considered payment in cash. In the event of
payment in Common Stock, the shares used in payment of the purchase
price shall be considered payment to the extent of their fair market
value on the date of exercise of the Option. Upon the exercise of any
Option, the Company may, at the request of the optionee and subject to
the approval of the Company's Board of Directors, lend to such
optionee, as of the date of exercise, an amount equal to the exercise
price of such Option, provided that such loan (a) has a term of not
more than ten years, (b) becomes due within sixty days after the
recipient of the loan ceases to be an employee of the Company, (c)
bears interest at a rate not less than the prevailing applicable
federal rate at the time the loan is made, and (d) is fully
collateralized at all times, which collateral may include securities
issued by the Company. Loan terms and conditions may be changed by the
Company's Board of Directors to comply with applicable regulations of
the Internal Revenue Service and the Commission.
(vi) Non-Transferability of Options. No Option shall be
transferable by the optionee otherwise than by will or by the laws of
descent and distribution, and all Options shall be exercisable, during
the optionee's lifetime, only by the optionee. Notwithstanding the
foregoing, the Committee shall have the authority to permit transfer of
options to family members or trusts established for the benefit of
family members in accordance with federal income tax laws.
(vii) Termination by Death. If an optionee's employment by the
Company terminates by reason of death, any Option held by such optionee
may thereafter be exercised, to the extent such Option was exercisable
at the time of death (or to any greater extent determined by the
Committee in its sole and absolute discretion), by the legal
representative of the estate or by the legatee of the optionee under
the will of the optionee, for a period of one year (or such shorter
period as the Committee may specify at grant) from the date of such
death or until the expiration of the stated term of such Option,
whichever period is the shorter.
(viii) Termination by Reason of Disability. If an optionee's
employment by the Company and any Subsidiary terminates by reason of
Disability, any Option held by such optionee may thereafter be
exercised by the optionee, to the extent it was exercisable at the time
of termination (or to any greater extent determined by the Committee in
its sole and absolute discretion), for a period of one year from the
date of termination of employment or until the expiration of the stated
term of such Option, whichever period is shorter.
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<PAGE>
(ix) Termination by Reason of Retirement. Subject to Section
5(b)(xi)(C) hereof, if an optionee's employment by the Company
terminates by reason of Normal or Early Retirement, any Option held by
such optionee may thereafter be exercised by the optionee, to the
extent it was exercisable at the time of such Retirement (or to any
greater extent determined by the Committee in its sole and absolute
discretion), for a period of three months from the date of such
termination of employment or the expiration of the stated term of such
Option, whichever period is the shorter.
(x) Other Termination. Subject to Section 5(b)(xi)(C) hereof,
if an optionee's employment by the Company is involuntarily terminated
for any reason other than death, Disability or Normal or Early
Retirement, the Option shall thereupon terminate, except that such
Option may be exercised, to the extent otherwise then exercisable (or
to any greater extent determined by the Committee in its sole and
absolute discretion), for the lesser of three months or the balance of
such Option's term if the involuntary termination is without Cause. For
purposes of this Plan, "Cause" means (A) a felony conviction of a
participant or the failure of a participant to contest prosecution for
a felony, or (B) a participant's willful misconduct or dishonesty,
which is directly and materially harmful to the business or reputation
of the Company or any Subsidiary. If an optionee voluntarily terminates
employment with the Company (except for Disability, or Normal or Early
Retirement), the Option shall thereupon terminate; provided, however,
that the Committee at grant may extend the exercise period in this
situation for the lesser of three months or the balance of such
Option's term.
(xi) Qualification as Incentive Stock Options. Anything in the
Plan to the contrary notwithstanding, no term of this Plan relating to
Options shall be interpreted, amended or altered, nor shall any
discretion or authority granted under the Plan be so exercised, so as
to disqualify the Plan under Section 422 of the Code, or, without the
consent of the optionee(s) affected, to disqualify any Option under
such Section 422.
No Option shall be granted to any participant under the Plan
if such grant would cause the aggregate Current Market Value (as of the
date the Option is granted) of the shares of Common Stock with respect
to which all Options that are exercisable for the first time by such
optionee during any calendar year (under all such plans of the Company
and any Subsidiary) to exceed $100,000; provided, however, that the
Committee may grant such an Option if the optionee so consents and
acknowledges that such Option will not qualify as an Incentive Stock
Option under Section 422 of the Code.
To the extent permitted under Section 422 of the Code or the
applicable regulations thereunder or any applicable Internal Revenue
Service pronouncement:
(A) if the exercise of an Option is accelerated
pursuant to Section 3(c) hereof, any portion of such Option
that is not exercisable as an Incentive Stock Option under
Section 422 of the Code by reason of the $100,000 limitation
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contained in Section 422(d) of the Code shall be treated as a
Non-Qualified Stock Option;
(B) if for any other reason the portion of any Option
that is otherwise exercisable without regard to the $100,000
limitation contained in Section 422(d) of the Code, is greater
than the portion of such Option that is immediately
exercisable as an Incentive Stock Option under Section 422 of
the Code, such excess shall be treated as a Non-Qualified
Stock Option;
(C) if an Option cannot be exercised following
termination of employment (other than for Cause) as a result
of the provisions of Section 5(b)(ix) or Section 5(b)(x)
hereof, the Committee in its sole and absolute discretion
shall have the right to extend the exercisability of the
Option for a period of up to one year following termination of
employment, and the Option shall thereupon be treated as a
Non-Qualified Stock Option to the extent required under
Section 422 of the Code; and
(D) the Committee shall have the right, with the
consent of the optionee, to treat an Option that cannot be
exercised, for any other reason, as an "incentive stock
option" under Section 422 of the Code as a Non-Qualified Stock
Option.
(xii) Employment by a Subsidiary. For purposes of this Section
5, employment by a Subsidiary shall be deemed to be employment by the
Company and transfers of employment status between the Company and any
Subsidiary, or between two Subsidiaries, shall not be deemed to be a
termination of employment.
(c) NO PREJUDICE TO OTHER RIGHTS. The exercise of an option granted
under the Plan shall not affect the optionee's right or ability to exercise any
other option granted under the Plan or any other stock option plan of the
Company or its Subsidiaries.
(d) LIMITATIONS ON DISPOSITION. To obtain the tax benefits associated
with Incentive Stock Options, the optionee must make no disposition of shares
acquired pursuant to the exercise of an Incentive Stock Option within two years
from the granting of such Incentive Stock Option or within one year from the
date of the exercise of such Incentive Stock Option.
(e) HOLDING PERIOD. An optionee who is subject to Section 16(a) of the
Exchange Act must make no disposition of any shares acquired pursuant to the
exercise of the Option for a period of six months after the date of grant of
such option. The shares of Common Stock acquired pursuant to any Option that is
exercisable only upon the occurrence of certain conditions (other than the
passage of time or continued employment) shall not be transferable for a period
of six months after the date the Option first became exercisable.
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SECTION 6. AMENDMENTS.
The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration, or discontinuation shall be made which would impair the rights of an
optionee under an Option, theretofore granted, without the optionee's consent
except as provided in Section 3(b) of the Plan. In addition, no amendment or
alteration shall be made without the approval of the Company's shareholders, if
such amendment or alteration would:
(a) except as provided in Section 3(b) of the Plan, increase the total
number of shares of Common Stock reserved for the purpose of the Plan;
(b) change the exercise price at which Options may be granted;
(c) extend the maximum period during which an Option may be exercised;
(d) materially increase the benefits accruing to participants under the
Plan; or
(e) materially modify the requirements as to eligibility for
participation in the Plan.
The Committee may amend the terms of any Option or other award
theretofore granted, prospectively or retroactively, but, subject to Section
3(b) above, no such amendment shall impair the rights of any holder without the
holder's consent. The Committee may also substitute new Options for previously
granted Options (on a one for one or other basis), including previously granted
Options having higher Option exercise prices.
Subject to the above provisions, the Board shall have broad authority
to amend the Plan to take into account changes in applicable securities and tax
laws and accounting rules, as well as other developments.
SECTION 7. GENERAL PROVISIONS.
(a) SECURITIES LAW RESTRICTIONS. The Committee may require each person
purchasing shares of Common Stock pursuant to an Option under the Plan to
represent to and agree with the Company in writing that the optionee or is
acquiring the shares without a view to distribution thereof. The certificates
for such shares may include any legend which the Committee deems appropriate to
reflect any restrictions on transfer.
All certificates for shares of Common Stock or other securities
delivered under the Plan shall be subject to such stock-transfer orders and
other restrictions as the Committee may deem advisable under the rules,
regulations, and other requirements of the Commission, any stock exchange upon
which the Common Stock is then listed, and any applicable Federal or state
securities law, and the Committee may cause a legend or legends to be put on any
such certificates to make appropriate reference to such restrictions.
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(b) NO RIGHT TO CONTINUED EMPLOYMENT. The adoption of the Plan shall
not confer upon any employee of the Company or any Subsidiary any right to
continued employment with the Company or a Subsidiary, as the case may be, nor
shall it interfere in any way with the right of the Company or a Subsidiary to
terminate the employment of any of its employees at any time.
(c) WITHHOLDING. No later than the date as of which an amount first
becomes includible in the gross income of the participant for Federal income tax
purposes with respect to any Option under the Plan, the participant shall pay to
the Company, or make arrangements satisfactory to the Committee regarding the
payment of, any Federal, state, or local taxes of any kind required by law to be
withheld with respect to such amount. The obligations of the Company under the
Plan shall be conditional on such payment or arrangements and the Company and
its Subsidiaries shall, to the extent permitted by law, have the right to deduct
any such taxes from any payment of any kind otherwise due to the participant.
(d) GOVERNING LAW. The Plan and all awards made and actions taken
thereunder shall be governed by and construed in accordance with the laws of the
State of Tennessee, without regard to the principles of conflicts of law
thereof.
(e) LIABILITY AND INDEMNIFICATION OF BOARD AND COMMITTEE MEMBERS. The
members of the Committee and the Board shall not be liable to any employee or
other person with respect to any determination made hereunder in a manner that
is not inconsistent with their legal obligations as members of the Board. In
addition to such other rights of indemnification as they may have as directors
or as members of the Committee, the members of the Committee shall be
indemnified by the Company against the reasonable expenses, including attorneys'
fees actually and necessarily incurred in connection with the defense of any
action, suit or proceeding, or in connection with any appeal therein, to which
they or any of them may be a party by reason of any action taken or failure to
act under or in connection with the Plan or any Option granted thereunder, and
against all amounts paid by them in settlement thereof (provided such settlement
is approved by independent legal counsel selected by the Company) or paid by
them in satisfaction of a judgment in any such action, suit or proceeding,
except in relation to matters as to which it shall be adjudged in such action,
suit or proceeding that such Committee member is liable for negligence or
misconduct in the performance of his duties; provided that within 60 days after
institution of any such action, suit or proceeding, the Committee member shall
in writing offer the Company the opportunity, at its own expense, to handle and
defend the same.
(f) NO RIGHTS AS SHAREHOLDER. A participant in the Plan shall have no
rights as a shareholder with respect to any shares covered by an Option until
the date of the issuance of a stock certificate to such participant. No
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distributions or other rights for which
the record date is prior to the date such stock certificate is issued, except as
otherwise provided in Section 3(b) hereof.
(g) TWENTY PERCENT LIMITATION. No Option may be issued if exercise of
all warrants, options and rights of the Company outstanding immediately after
issuance of such option would
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result in the issuance of voting securities in excess of twenty percent (20%) of
the Company's outstanding voting securities.
(h) INVESTMENT COMPANY ACT LIMITATION. No Option granted hereunder
shall violate the provisions of the Investment Company Act of 1940, as amended.
SECTION 9. TERMINATION
This Plan shall terminate ten years from the date on which the Board
adopts this Plan or the shareholders of the Company approve the Plan, whichever
is earlier, unless sooner terminated by action of the Board. No Option may be
granted hereunder after termination of the Plan, but such termination shall not
affect the validity of any Option then outstanding.
SECTION 10. SHAREHOLDER APPROVAL
This Plan shall become effective upon (a) adoption by the Board of
Directors, and (b) approval of the Plan by the shareholders of the Company.
Approval by the shareholders must occur during the period beginning 12 months
before and ending 12 months after the date of this Plan is adopted by the Board.
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AMENDMENT NO. 1 TO THE FINOVA GROUP INC./SIRROM 1996 STOCK OPTION PLAN
1. The term "Board" means the Board of Directors of The FINOVA Group Inc.
2. The term "Committee" means the Human Resources Committee of The FINOVA
Group Inc. Board of Directors or any other committee designated by this
Board to administer that plan.
3. The term "Company" means The FINOVA Group Inc.
4. The term "Current Market Value" or comparable terms will be determined
with reference to the price of this Corporation's stock as quoted on
the New York Stock Exchange, rather than NASDAQ, so long as the stock
is quoted on the NYSE.
5. The term "Plan" means The FINOVA Group Inc./Sirrom 1996 Stock Option
Plan
6. The term "Stock" or "shares" means the common stock of The FINOVA Group
Inc. As it may be adjusted from time to time.
7. The plans shall be governed by the laws of the State of Delaware,
without regard to that state's conflict of law principles.
8. Any restrictions in those plans requiring compliance with the
Investment Company Act of 1940 will cease to the extent those
restrictions no longer govern the activities of this Corporation.
